I got the labor line wrong in my own ADAS playbook

I founded a calibration company, and I still got this one wrong until two weekends ago.

In the ADAS Playbook I published last month, I wrote that Stage 2, simple calibrations in house, runs on existing techs with slack time who can be trained up. The math worked on paper. Labor stayed variable, breakeven landed around six jobs a month, and your people learned the work as they went.

Then I spent two days in Detroit with the people who do this work, and I heard the same thing over and over. ADAS technicians and body technicians are different profiles. A great body tech reads metal, gaps, and finish. A great calibration tech reads OEM position papers, scan data, and procedures that change monthly. Some people carry both. Most don't.

Honestly, I should have caught this sooner. The company I founded built standalone calibration centers, and we never trained up body techs. We hired calibration technicians and trained them on our process. The evidence was on my own payroll, and I still didn't carry it over when I wrote the Stage 2 assumption.

What it does to the Stage 2 math

Here is why this hits the number, not just the org chart. The whole reason Stage 2 breaks even at six jobs is that the labor is close to free. In the playbook, Stage 2 carries about $1,250 a month in software and OEM access, and each in-house calibration job throws off about $203 of margin over what subletting already pays you. Six jobs cover the fixed cost and you are past breakeven.

That only holds if the labor really is slack time. The minute the work demands a dedicated person, the labor stops being a rounding error and becomes a salary. Load a calibration tech at, say, $80,000 all in, and you have added roughly $6,700 a month of fixed cost on top of the $1,250. At $203 of margin per job, you now need about 39 in-house jobs a month to break even, not six. That is not a tweak. That is past Stage 3-4 territory, which in the playbook breaks even around 26 jobs and assumes a dedicated bay and tech from the start.

Now the part that keeps this honest. The simplest static calibrations really can sit on the techs you already have. The trap is penciling the whole calibration menu on slack-time labor. Whether that works depends on your shop's labor makeup and who you actually have who can do this work and learn what needs to be learned. If your market sends you work that demands a dedicated person, that person is a salary, and the breakeven moves with them.

The question to ask before you build the room

Before you buy the targets and clear the bay, answer one question honestly. Who is actually going to do this work? If the answer is the techs you already have, and the volume is light and static, Stage 2 at six jobs may still be right. If the honest answer is a new hire, run the math with that salary in it. If it still works, build. If it only works on free labor that isn't really free, that is your answer too.

Consider this the asterisk on my own playbook. The rest of it still stands, capture rate before volume, two numbers not one, equipment that pays back fast at Stage 2. This one line just needed to be honest about labor. It is about the size of a tech's salary, which is exactly why it belongs in the math.

If you want the full decision framework, the original playbook is here. And if you want this kind of operator finance read every Friday, my email is here: collisionadvisory.com/subscribe.