After many years of experience as a technician, Tom Reagan — who coowns Concept with his wife Sheila — has had no difficulty meeting and even exceeding those requirements.
"We have a really extensive quality inspection plan," Reagan says. "We check the vehicle at each stage before it goes to the next stage. We have more than one guy check it and managers initial off when all the checks are done. This lets us keep vehicles moving forward in a timely fashion without having to back up. If the car is not ready to go to the next section, we won't let the technician let the car go. It helps the technician know what's expected of him."
The Reagans actually chose to locate in the southern end of the Denver metro area because it appeared that people kept their cars in better condition there. "We noticed there were fewer wrecked cars driven around," Reagan says.
After beginning his career in a small town, Reagan learned the power of doing quality work. "If you didn't do really good work, word would spread and people would stop bringing cars there," he says. One of the factors that drove Reagan to open his own business was that he did not see the same concern for quality in a large metro area like Denver. Too many shops emphasize speed over quality, he said.
Concept Auto Body's demonstrated concern for quality was a key factor in landing its main DRP program. Reagan said customers like the program because they drop their car off at a central location, the insurance company writes the estimate and sends it to Concept over the Internet.
"We start working on parts right away and we have to be there within two hours to pick up the car," Reagan says."We look it over to see if it needs any more parts and we bring it to the shop for repair."When work is completed, Concept brings the car back to the insurance company's central location. "The advantage is we don't have to worry about collecting deductibles and our volume stays consistent," Reagan says.
Although some shop owners argue that DRP programs require them to cut corners, Reagan said he hasn't had that experience. The DRP program that offers the drop-off service insists on both quality work and on meeting estimated completion dates. "They ask us to put on an aftermarket part if we can," he says. "But if it doesn't fit or look right, they say go ahead and use an OE part."
Another key DRP program required a customer satisfaction index of 90 percent or better from previous customers. "We came back the highest in Denver with a 98-percent rating," Reagan says.
Prior to joining the DRP programs, Reagan says, "It was pretty tough because we didn't know where our work was coming from." Like other fledgling body shops, Concept took in rental cars for repair. Although the rental car companies paid only a little more than half of the labor rate that Concept gets on other work, the steady stream of work "kept the doors open," Reagan says. After joining the DRPs, however, Concept was able to drop the rental car work and replace it with higher-margin jobs.
Concept originally occupied 7,400 square feet in a former warehouse that also had been a frame and axle garage. As a result of the business boost it received from the DRPs, the shop soon exercised its option to occupy an additional 6,500 sq. ft. in the same location. During the same period, the total number of employees jumped from three to 14.
Initially, Concept experienced fairly high employee turnover. "I have really high standards," Reagan says. "I expect a lot from everybody." Before long, however, the employee situation stabilized." Now I have a really good crew."
When the Reagans opened the shop, they made a point of buying brand new equipment. "We bought a brand new frame machine, measurement system, paint booth and compressor," Reagan recalls. Although payments on the equipment have put some drag on profits, Reagan says the modern equipment has helped the company ensure quality work — and at the end of five years when the equipment is paid off, the company expects to see a boost in profits.
Another step Concept Auto Body has taken to improve its profit situation is to do mechanical work, which is billed at a substantially higher labor rate than collision repair. "We try to keep as much in-house as we can," Reagan says. "We can do all our light suspension work in-house and we pull all our own transmissions and dashboards. We also do our own airbag work."
Sheila Reagan left a career as a physical therapist assistant to join her husband in the collision repair business. Prior to purchasing the shop, she worked for a year in the office of a local body shop to learn the business, and today she runs the office at Concept Auto Body. Although she misses the rewards of helping to rehabilitate people, she likes being her own boss and appreciates being able to spend more time with the couple's young daughter.
Moving forward, the Reagans would like to build up some equity by moving out of their current lease arrangement. "We'd like to get through the first five years, then buy our own building, "Tom says. "We'd like to get a building with a better storefront. We're on a back street now, so there's not a lot of traffic."
Another goal for the Reagans is to join some additional DRP programs, including a motorcycle DRP. Tom and several of his employees are avid motorcyclists and he notes that motorcycles are faster to repair. On one occasion, Tom recalls, "Our painter did three at once."
