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Five easy steps to help improve paint and materials margins in your shop

Tuesday, May 19, 2015 - 06:00
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At body shops across the country, often the same types of frustrations and problems can arise. A common challenge for many shop owners is finding effective ways to improve their paint and material (P&M) margins. So are there truly quick fixes that will help to boost P&M margins? 

There are several steps that collision shop owners and their paint departments can utilize that are almost guaranteed to quickly improve profits.

Measure
Shops must have a strong measuring method in place so that accurate comparisons can be made. You can’t manage what you don’t measure. The first step to see an improvement in your margins is to measure everything the exact same way — consistently — each month. Be sure to exclude items that are not part of P&M — this can have a huge impact. Items that are billed as separate items or are the cost of goods sold in another department such as clips, cavity wax or seam sealers, should not be considered P&M costs.

Reports with a local or regional comparison can offer great insight. Paint jobbers and third-party companies can provide reports of and comparisons to local, regional and national key performance indicators (KPIs) to help you see where your shop stands.

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Being able to evaluate how your shop compares to similar shops in the same area — on paper — can spur effective action. If the shop across town can do this, why can’t you?

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