Bellflower, Calif. -- While business at Greg's Collision Center is down by about 10 percent in 2008, Owner Greg Castro said he and his wife, Karen, recognized the slowdown early and have been able to adjust for it.
"I'm content with $6 million," Castro said. "I just need to make sure it's profitable and that we're staffed right for it.
"There is an opportunity right now for good business owners to true up and sharpen their skills," he said.
Castro said the shop has made a number of changes in business to adjust to the tighter climate. "We are watching our labor closely and have cut back our indirect labor hours," he said.
"We are buying smarter," Karen Castro said. "We are taking better advantage of volume discounts for shop supplies."
"We are monitoring our numbers on a weekly basis now rather than monthly so we can adjust quickly if we need to," Greg Castro said.
"We are also renegotiating almost every expense," Karen Castro said. "We have looked at our 401(k), health insurance, and our advertising."
"We're not cutting our advertising," Greg Castro said. "We're actually doing more than ever."
"But everything is negotiable right now," Karen Castro quickly added. "We're not backing off on our marketing, but we are getting more for our dollar."
Greg Castro said his early recognition of the downturn and understanding of the need to make early adjustments are actually the result of missing the signs the last time, which resulted in the company going through a very difficult period.
Castro said that in 2002 and 2003, the company experienced a sharp slowdown that he didn't recognize immediately and that he and his staff actually partially caused.
Castro said he and several of his managers were taking a very close look at the shop's production efficiency at the time and were looking for ways to move cars through the shop more quickly. "I had some employees that were going to some classes with me, and they were really buying into this," he said.
"We started forcing customers to make appointments," he said. "It wasn't a good time; we were chasing people away." The results of the unsteady economy, the changes in policy, and a struggle between him and several managers about the direction of the shop resulted in sales dropping from $5.2 million in 2001 to 5.06 million in 2002 and $4.7 million in 2003, he said.
"In 2002, we weren't on top of the numbers, and we kept spending like we were still growing, so once we realized that lull, it took a year and half to get out of it," Castro said.
"It's probably the best thing that has happened to me as a business owner," he added. "It taught me that I had to take responsibility for my company and run it. Despite where the numbers are going right now, I've never been more confident. When you know your numbers, you can see what's coming and be prepared for it."
One of the things Castro said he learned was that while scheduling was important -- and the shop continues to schedule the majority of its estimates today -- if customers drop in, take care of them.
Continuing his education has been a priority for Castro since the very earliest days of the company, he said, and as the business has grown, it has been necessary to keep pushing his own education to keep up with the complexities of running the larger business.
Castro said he began the shop in 1980 when he was 24 years old. It occupied three bays at the back of a building that is now one of four that the shop occupies, he said, adding that he had taken some bodywork classes through Cerritos College but had no management skills.
Before long, Castro said he recognized the weakness and signed up for a business course. "I maxed out my credit card to pay the $1,200 but it really paid off. With the basic skills, you can start to overcome all of the stuff that is always coming up. Everybody thinks that their business is unique -- but business is business."
That first seminar became one of many learning opportunities he said he would participate in over the next 27 years, including joining Carstar for a period and participating in the Coyote Vision group and the Wing's Performance group, among others.
"You can learn so much by meeting all of these people," he said. "I've had the chance to travel all over the country and see how other shops are run."
In the interim, the shop has grown to 28,000 square feet under in three buildings, with secure parking for about 100 vehicles, and employs 35 people, Castro said. The business was able to buy the building where it began, along with an adjoining lot that includes another small shop building and the offices, he said.
The company also owns a lot across the street that is primarily used for parking but has a 900-square-foot building set up as a training facility, he said. The shop also leases a 14,000-square-foot facility a few doors down the street that houses its paint department and a small metal department, he said.
"Because we are geographically challenged, we use two-way radios and golf carts," Castro said, adding that there are also 26 cameras that cover most areas of the shop. "In this day and age, you can almost run your business from your home office."
The metal department is equipped with four Car-O-Liner frame racks, two Chief EZLiners, and two Chief Vision electronic measuring systems. In addition, the shop has five ProSpot PR-10 resistance welders. "That was a move we made a few years ago," Castro said of the welders. "You have to have the equipment so guys aren't standing around waiting; that's the bottom line."
The shop's paint department has two Garmat paint booths equipped with the Junair supplemental air systems to assist in drying the PPG Envirobase waterborne system that the shop switched to in May. There are also six Garmat downdraft prep stations.
"Finishmaster and PPG have really done a good job of supporting us during the changeover," he said.
The costs with the waterborne products have been higher so far, Karen Castro said, but are "getting better."
"There's some trial and error with a new product," Greg Castro said. "The learning curve is always a little costly. We're a little challenged by what the insurance company allowances are versus what the real costs are."
Castro said he has been meeting with the general manager of his Finishmaster store and his PPG rep once a month to work out the kinks and try to improve the shop's use of the products.
While the size of the business has increased exponentially, Castro said success is still in the details. "Growing a facility up to $6 million for me has been about personalization," he said.
Castro said he makes sure he is at the shop on Mondays and Fridays, the two busiest days to help with customers. "I want customers to see that I'm a hands-on owner and that I take a personal interest."
Castro said that much of the employee's interaction with customers has been scripted to make sure that they are taken care of in the way he wants. "I don't let people bring in their own program," he said. "If you come to work, you use our system."
For example, Castro said that before a customer leaves the shop, he or she is told the specific date that the estimator will be following up with them. "Customer communication is everything," he said. "Our updates are as frequent as they need to be to keep the customer happy. If it's a small job, it may be every couple of days, while on a big job it may only need to be once a week."
The two CSI programs that the shop participates in have both shown him that communication is a key to customer satisfaction, Castro said.
Karen Castro said the shop has been referred to as the Nordstrom's of collision repair, so they decided to go with the theme and had shopping bags printed up with the shop's logo. "We give them to people who need to empty the things out of their car," she said. "They look like they're coming home from shopping."
"We are very grateful to every customer who comes through that door," Castro said.
Greg Castro said that when customers pick up their cars, they are given a little gift box with a nice key ring in it, and payment information is presented in a folder with the shop's logo. "We tell them, 'Thank you very much for your business. Is there anything else that we can do?" he said. "It's a million little things."
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