Seven ways to write better, more consistent and accurate estimates

In February of 1986, Mike Anderson had been working in his father's shop for about four months when the shop's manager quit. Today, Anderson owns and operates Wagonwork Collision Centers, a two-shop business in Alexandria, Va., with annual sales of about $5 million.

But 21 years ago, with little in the way of shop experience or training, Anderson found himself being asked to write estimates.

"Ignorance, in this case, was indeed bliss, because no one had yet brainwashed me as to what they would or wouldn't pay," Anderson says today in estimating seminars he conducts around the country.

His first step was to read the Mitchell International labor guides that the shop used back then.

"I read the P-pages like you read a book," he says. "It told me that a '#' sign means this, that 'OH' stands for this, and to calculate clearcoat like this."

That reading, and the estimating procedures he's subsequently developed for his business, has paid off. His average repair order is $3,900 at one of his shops, $4,200 at the other — with absolutely no embellishment of the estimate, just ensuring that the shop documents and gets paid for everything it does.

Here are seven tips that Anderson and other shop owners around the country have found can improve the accuracy, completeness and profitability of your shop's estimates.

Make sure you have read and understand the P-pages. Even if your shop uses only one estimating system, there's no excuse for not becoming familiar with the guides and procedure pages for all three major estimating systems. They can be viewed or downloaded and printed from each of the company's Web sites: Audatex, www.audatex.us; CCC Information Services, www.cccis.com; Mitchell International, www.mitchell.com.
Use a "sector-by-sector" approach to going over the vehicle. Anderson said his shop trains estimators to go over the vehicle several times, looking for certain things in a certain order. The first "sector" is essentially what you can see externally on the vehicle. From there, check for all structural related damage, and then check for mechanical. Next, check for "inertia damage" such as dashboard or trim damage caused by an airbag deployment. Next, note all needed refinish procedures, and conclude the estimate by looking for potential upsell items, such as buffing or touch-up of unrelated stone chips.
Create "consistency" pages, a listing that helps all estimators within your company consistently list on estimates how much, for example, your shop charges for an air conditioning recharge or solid or hazardous waste removal.
Create or use an "unforgettable list," non-included items that are often needed as line items on estimates but that can sometimes be overlooked. Items on such a list may include common R&I parts (mirrors, optional moldings or emblems), materials (panel bonding adhesive), refinish items (mask engine compartment), disassembly items (stripe/decal removal), reassembly items (caulk seams) and job completion items (glass cleanup).

The Automotive Service Association (ASA) offers two such lists, one for new parts and one for used parts. They are $10 each (or $15 for both) at the ASA online store (www.ASAstore.com), or by calling (800) 272-7467, ext. 295.

Don't rush into teardown. Too often, Anderson says, shops get vehicles torn down to find hidden damage before carefully looking over the vehicle for clues as to what to be looking for. "Gaps tell a story," Anderson repeats in his seminars. If the fender-to-door gap is wide on the left side and tight at the bottom, for example, you'll know the frame rail likely needs to be pulled down.

That's useful information to have, but the estimator won't have it if the vehicle is torn down before the gaps are checked. Similarly, if all options on the vehicle aren't identified prior to teardown, the estimator may miss emblems, fog lights or other variables that are often non-included items.

Detail out frame time. Even if your estimate lists a lump time for frame or unibody damage, make sure you have notes or a worksheet that breaks that time out: X hours for buckle, X hours for twist, X hours for floor pull, etc. This will make your labor time easier to understand (and for you to defend) when an insurer reviews it.
Consider using estimate review software. Run your estimates through such software to have it checked for items you may have missed (such as aiming the new headlamps listed on the estimate) or to alert you to items listed on the estimate that don't comply with a particular insurer DRP agreement.

Some of the estimate review software options are Decision Support Services' EMSReview (http:// www.emsreview.com); Fix Auto's Estimate Review Program (http:// www.fixauto.com/USA/Products/ERP.aspx); Mitchell's Estimate Review (http:// www.mitchell.com/mitch/products/product.asp?pf_id=382); and Summit Software's Estimate Profit System (http:// www.estimateprofits.com/index.html).

Anderson said he sees too many shop owners and estimators fail to educate themselves about the tools and techniques that will help them develop more accurate and complete estimates.

"If you know what you can charge for and you don't, then that's a business decision," Anderson sums up. "But, if you don't know what to charge for, that's just not good business."