Episode #183 - "Keeping it Kleen" Series- True Costs of Contamination

Episode Notes: 

You know it’s costing your business, but do you realize exactly HOW MUCH it costs you in rework?

What if you could save thousands of dollars each month with just a few simple changes in your paint shop? 

Our latest episode in the "Keeping It Klean" series, promises to reveal how you can drastically reduce the costly impact of preventable dirt and fisheyes in your paint jobs. Drawing on my extensive background as a paint technician, instructor and jobber, alongside insights from leading industry experts, we expose the hidden financial pitfalls of rework. From the evolution of painting practices since the late '70s to the modern-day consumer expectations of perfection, we uncover the critical importance of cleanliness in your paint processes.
 
In this episode, we go beyond the surface to break down the actual costs associated with redos. You'll learn about the hidden expenses that add up, like your valuable Paint & Materials, unnecessary wasted utilities like gas and electricity, to the staggering monthly losses experienced in lost production. We also shed light on how these inefficiencies bite into the income of paint technicians. By understanding and addressing these issues, you'll be better equipped to minimize financial losses and boost your shop's efficiency, as well as the bottom line. 

Stay tuned as we preview the next chapter, focusing on preventative maintenance strategies that not only save money but also protect your valuable equipment. Whether you're a shop owner or a paint technician, this is essential listening for anyone serious about optimizing their paint shop operations and preserving their cash flow!

Link to video: 10 Secrets to Clean Paint Jobs! - Refinish Media - https://tinyurl.com/4ffbzbp7

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Chapters

• 0:00 Keeping It Clean
• 12:03 Understanding the Costs of Redos

Transcript

Rick: 0:00

And welcome back to my new series called Keeping it Clean, where I break down all the aspects of what really creates paint department rework, the main sources of dirt and contamination, how to minimize them and the real costs of rework from all perspectives and lastly, what a good preventative maintenance program has on reducing repaints and extending the life cycle of booth equipment, all captured in short, bite-sized episodes.

Rick: 0:24

Well, hopefully you've already checked out my first episode in this series, root Sources of Contamination, and maybe I was able to open your eyes a bit on where all that junk in your beautiful paintwork really comes from. If you missed that one, I would highly suggest you go back and listen to that episode first before you start on this one. It'll definitely make a whole lot more sense. This week we're going to do a deep dive into the costs of repainting a vehicle due to the avoidable dirt and fish eyes most painters have to contend with, and I would think most would be absolutely shocked at how much money is really involved here, not just for the shop ownership either, it's for the paint technicians as well.

Rick: 1:04

Welcome to the MindWrench Podcast with your host, rick Sellover, where minor adjustments produce major improvements in mindset, personal growth and success. This is the place to be every Monday, where we make small improvements and take positive actions in our business and personal lives that will make a major impact in our success, next-level growth and quality of life.

Rick: 1:33

Hey, what's up everybody? Welcome to the MindWrench Podcast. I'm your host, rick Silover. Thanks so much for stopping in. If you're a returning listener and haven't done so already, please take a minute and click the follow or subscribe button and then rate and review the show. When you rate and review the show, the algorithms for Apple, spotify, google Podcasts, iheartradio, amazon Music and all the other platforms will see that it's valuable and show it to more people that have never seen it before, and hopefully it can help them too. I would really really really appreciate your help, sharing this word with your friends and family as well, and if you're a brand new listener, welcome. I hope you find something of value here that helps you in your personal or professional life as well. Please make sure to click the subscribe or follow button so you never miss another episode. Hey, welcome back to the MindWrench Podcast so glad you're here with me today.

Rick: 2:21

And welcome back to my new series called Keeping it Clean, where I break down all the aspects of what really creates paint department rework, the main sources of dirt and contamination, how to minimize them and the real costs of rework from all perspectives, and, lastly, what a good preventative maintenance program has on reducing repaints and extending the life cycle of booth equipment, all captured in short, bite-sized episodes. Well, hopefully you've already checked out my first episode in this series Root Sources of Contamination and maybe I was able to open your eyes a bit on where all that junk and your beautiful paintwork really comes from. If you missed that one, I would highly suggest you go back and listen to that episode first before you start on this one. It'll definitely make a whole lot more sense If you did already check it out. Number one I hope it made sense to you. And number two welcome back to the second episode of the series.

Rick: 3:12

This week we're going to do a deep dive into the costs of repainting a vehicle due to the avoidable dirt and fisheyes most painters have to contend with, and I would think most will be absolutely shocked at how much money is really involved here, not just for the shop ownership either, it's for the paint technicians as well. Once again, when doing my research for this realistic expose on the absolute time, suck and money wasted at rework, I tapped into not only my experience of living through this daily nightmare as a paint tech, but my 30 plus years as a jobber, visiting hundreds of shops every year, witnessing their battles, but used information gained from previously interviewed key people from top booth manufacturers as well their distributors that install and service and provide preventative maintenance for those booths, several paint manufacturers reps and some industry tech reps that deal with finding solutions for customers every single day, refinished instructors and some shop owners themselves. Now, before I start laying down the results of my dirt survey and spitting out some amazing numbers that impact a shop owner's bottom line every month in a very negative way, as well as the paint tech's ability to maximize their income, and it may cause you to think is this guy nuts? Does he even know what he's talking about? Well, let me assure you, I even know what he's talking about. Well, let me assure you, I do know what I'm talking about. But I think it'd be helpful to give you a little bit of my perspective. First, the time frame that I first started my paint career.

Rick: 4:33

In the mid to late 70s, acrylic lacquer was the predominant paint type used in most body shops, followed closely by acrylic enamels. In the late 70s, dirt was not so much a focus or concern in the lacquer finishes because after you pounded on four to five coats of color, another four to five coats of clear right there in the middle of the shop with maybe an exhaust fan on, because in the shops back then the booth if you had one was kind of reserved for the enamel job or the complete repaints. You're going to end up spending the next day wet sanding and rubbing those jobs anyways. I'll point out here the customer expectations of what the finished product looked like really consisted basically of if the panels were straight, the new bumper wasn't crooked, color looked okay, it was good enough. Customers did not nitpick the dirt in the paint back then. Now regular acrylic enamel jobs became commonplace. But you couldn't rub out a metallic enamel paint job without affecting the metallics. So actually trying to keep the job clean suddenly became important.

Rick: 5:34

A little while later paint companies started offering enamel clear coats to apply over lacquer-based coats as well as over enamel metallics, and it was definitely better for providing a finish. You didn't have to wet, sand and rub every inch of the panel. But the enamel clears were a little bit more challenging to nub and rub. Those jobs could not at least they weren't supposed to be sprayed outside of the booth wink, wink, nod, nod due to the isosciatides using the hardeners. But a lot of people didn't really realize that back then and just did it anyways hardners. But a lot of people didn't really realize that back then and just did it anyways.

Rick: 6:06

During the early to mid 80s, as better, more durable finishes like base coat, clear coat, urethane jobs became more commonplace, that's when the real never-ending battle for a clean job began.

Rick: 6:22

I couldn't count the number of shops that had a rub guy full-time, someone that the shop paid for or shared cost with the painter, and his job was to do nothing but sand and rub every single car that came out of that booth. Most booths at that time were cross-draft, but the new downdrafts were starting to hit the market and brought along not only the option of baking the clear for a quicker finish but a better, controlled spring atmosphere. But everybody seemed to struggle to get a job out of that booth and over the curb without a substantial amount of sanding and rubbing. Still, with the advent of urethane, base coat, clear coat finishes, the paint jobs from the factory were increasingly getting much nicer, more brilliant and higher gloss. The customer expectations also increased, as did the cost of a new vehicle. If you're looking for a competitive edge for your business or a more effective jumpstart to your personal development in 2024,. I'll make your first step super simple.

Rick: 7:14

It is a fact that an incredible number of the most successful business owners, nearly half of the Fortune 500 companies, top-earning professional athletes, entertainers and industry leaders like Microsoft's Bill Gates, former President Bill Clinton, richard Branson, amazon's Jeff Bezos and Salesforce's Mark Benioff all have one thing in common they all have at least one coach and some have several that they work with on a consistent basis, someone that helps, guide, mentor and support them, challenge them, help them set and achieve goals that move them forward and then hold them accountable to follow through driving personal and professional growth. Working with a coach has many substantial benefits. Just for an example, 80% of coaching clients report improved self-esteem or self-confidence thanks to coaching, 99% of individuals and companies that hire a coach report being very satisfied and 96% would do it again. If, deep down, you know it's time to make those improvements in your business, your personal life, that you've kicked down the road year after year. If you're tired of knowing there's a better version of you waiting to shine, but unsure of how to bring that version to light. If you're tired of wanting to enjoy a more successful business but not sure how to start. And if you don't want to go another 12 months without better results but you don't want to go another 12 months without better results, but you don't want to go it alone, then take the first step. It's super simple. Sometimes talking to the right person can make all the difference. Go to wwwrixelovercom contact and I'll set you up with a free consultation. Call with me to see if one-on-one coaching is right for you.

Rick: 8:47

Now here we are, a few decades later, and it seems we're still fighting the same battle against dirt, even though booth and spray technology has advanced. Masking materials are also vastly improved since then. Nobody's covering the car with rows and rows of green 36-inch paper anymore. Yet the vast majority of shops are still rubbing almost every one of the jobs to some degree. Did I mention how much I hate sanding and rubbing? Oh God, well, I did with a passion. I'd rather lay on the ground sanding chips out of a rocker than standing over a hood sanding and polishing, trying to get that dirt out, only to have to go and re-sand or repaint that job after all.

Rick: 9:24

Anyways, what's often not really taken into account was the actual cost of redoing your paintwork. The numbers add up pretty quickly. As a matter of fact, I've asked several shop owners over the years if they knew what that redo cost them? That I was looking at. Most of them do not. They usually ask their paint or job rep to help them with that, and there's a few that would just grab the RO.

Rick: 9:45

Look at the paint material reimbursement line and say, yeah, it looks like I lost $250 in paint materials in this one. Well, it's not really correct. There's always a loss on paint materials, but that's not it and there's much more to it than that. So I recently did a deep dive into those losses, crunched the numbers and the results were pretty startling. So let's break down our losses into a couple of different categories Paint material loss, utilities loss, production loss and employee retention loss. Yep, this one counts too. All these calculations are based on a national average RO value of $4,350, an average of 10 paint labor hours on that RO value and a labor rate of about 55 an hour and a low average of only two redos per month. So here we go.

Rick: 10:35

Number one cost of paint material loss. Now, when you have to redo a paint job, you do lose on paint materials, but you're only losing what your actual cost was on those materials. You know, after discounts, rebates, statement discounts, cash investments if any, on a paint contract, not what you would collect from the customer or the insurance. That's sales. That's got your markup in there. Now, obviously, it's hard to give an average number because of the variety of scenarios. The only one true way to measure is by what an industry standard cost percentage would be for your paint and also what the material's cost percentage would be as well. The paint companies have these numbers dialed in for years A good collision center. Today, their paint cost as a percent of sales would be about 3.9%. If you're much higher than that, then you've got some other areas of concern you need to address as well. Your material's cost as a percent of sales would be about 1.7%. These would be best verified by either your paint company, your servicing jobber or a business coach or consultant. All said, your loss in paint materials with these two parameters and two re-dos per month would be about $723, which includes two days of rental at $59 a day as well, because if you have somebody's car in for a job then you have to stop and repaint it. You're probably going to have to pay for the rental one way or the other.

Rick: 12:03

Number two the cost of wasted utilities. Here's another cost that is incurred and should be accounted for under a re-do. But it's a hard number to qualify as the cost of gas and electric varies widely across the US. Shop owners that understand and review their P&Ls monthly. They know what their utilities costs are and they do know a redo adds to that cost, but they have no easy way to calculate it. That's right, there is no easy way, but I took that as a challenge, did some research and here's what I discovered. Now, based on some booth energy consumption stats I acquired from a booth manufacturer and some national utilities costs, I was able to come up with some data that would be helpful and I was surprised these numbers weren't higher, to be perfectly honest. So the national average cost for electricity is about $0.194 per kilowatt hour. The national average cost for natural gas is about $1.40 per therm and average booth runtime, including spraying, flashing, baking, cool down, was about 1.4 hours per average RO. So, without boring you with all the math involved, the average additional energy cost per redo was about $17.30. And based on two average redos per month, that's $34, let's call it $35 in wasted energy costs. I know it doesn't seem like it's worth worrying about, but if you think of it this way, it's an additional $5 off your bottom line for every 30 minutes your booth runs, and that's whether you're doing a job or not. So keep that in mind.

Rick: 13:39

Number three the cost of loss production. Now, this would be your highest impact loss to your business, bar none, unless you only produce one booth cycle a day or less. If that's the case, you got some bigger concerns to worry about, right. Loss production is simply this you lose the ability to run another booth cycle on a paying RO because you're using that boost cycle to redo a paint job a second time for free. Once again, using that sample RO value of $43.50 and two redos a month, you'll lose about $8,700 per month in lost production. So let's add all this together to really get an honest look at how those two little re-dos impact your business and your bottom line. So if we add a paint and material loss of $723, and a utilities loss of $35, and a production loss of $8,700, that's about $9,500 per month and that's a whopping $113,500 per year.

Rick: 14:41

I know that's a big number, right? So you might be thinking that sounds like bullshit, rick. I almost never have to redo paintwork, probably less than one per month. Well, if you're being honest with me and being honest with yourself and that's correct, then let's just say let's cut that in half. Then One redo a month still equals $4,729 a month, or $56,750 per year. Not really something to ignore, is it no?

Rick: 15:11

Lastly, there's another cost that nobody talks about, but it is critical to at least one person your paint tech and it should be important to the shop ownership as well and that is the cost of lost paint tech income. Now, lost paint tech income is income the painter misses out on while repainting a job for the second time for free. Based on that 4350 RO that would have approximately 10 hours of paint labor and an average rate of $55 per hour, they'd lose out on $550 of new paint labor as well as $77 of lost available working time. So I came up with that you got 1.4 hours of booth process time, which is all the time you'd spend in the booth final mask, wipe down, tack, spraying, base coat, clear coat, flash times, baking time and cool down time. So that's a $627 loss per redo. Annualized out, that's $7,500.

Rick: 16:14

Now, most painters know that they're losing their ass every time they redo a job, but most of them, if not all of them, probably don't even know how they would figure that out right? Well, this is as close as I could come. Obviously it's going to vary. These are averages based on a few numbers. Your local numbers are going to vary, your average RO is going to vary, but the point is this there's a great financial loss attributed to repainting a job due to avoidable contamination. Even if your shop only experienced a lower percentage of these redo costs, wouldn't you still want to reduce those costs as much as possible? I know I would, and I know so would many other shop owners I know. So that's all I got for you today, and hopefully this gives you a pretty good view of what those costs look like.

Rick: 17:04

Be sure to tune back in for the next episode, where we dive into what preventative maintenance is and how it not only helps mitigate these costs but also protects your very expensive equipment. Hopefully this little series and these episodes are helping you gain a better understanding on what's involved with redos and what that cost is and how much it impacts your business and why it's so important to really work on minimizing these costs. We'll wrap this series up next episode with preventative maintenance and what it does to help you minimize these costs and protect your equipment. Well, that's all I had help you minimize these costs and protect your equipment. Well, that's all I had for you today. Thanks again for tuning in. I really appreciate your support and I hope you have a great week. I can always be reached at wwwrickselovercom, where you can find all my social media links podcast episodes, blog posts and much more.