California shop owner Lorenzo Avila says many of the systems for parts and production he’s implemented at his two shops will work in any size single-location shop.Dan Stander says joining a “20 group” can help a single-location shop compare its performance to similar shops, much as MSOs can compare each of their locations against their others.Nebraska shop owner Doug Keller says private financing can help smaller companies grow just as private equity funds have invested in MSOs.

Independent collision repairers adapting ideas implemented by larger MSOs

Anyone who’s done any sort of racing — or even just made a long highway road trip — is familiar with the concept of “drafting,” positioning yourself just behind another vehicle to ride in that vehicle’s wake where’s there’s less resistance or required energy to keep up.

It’s an analogy some independent collision repairers are using in describing their relation to multi-shop operations: they’re learning from those larger organizations and finding creative ways to implement their ideas in their own businesses to help them continue to compete.

The FIX Auto USA organization, for example, is encouraging its franchises to upgrade their employee breakrooms, adding flat-screen TVs, foosball tables or other amenities to help set themselves apart when recruiting.

As a smaller, single-location shop operator, Mark Franklin of Touch of Class Auto Body in Battle Ground, Wash., may not be able to compete in terms of employee breakroom amenities, but his large lot in a more rural setting offers the company space for an outdoor employee area with a barbecue, picnic table and horseshoe pit.

What are some of the other things MSOs are doing that could be implemented by creative single-location shop owners?

Minnesota-based ABRA Auto Body & Glass has developed a 300-module “learning management system” to help train its employees on subjects ranging from how to greet a customer coming into the shop to preparing final billing of an insurer.

Smaller collision repair operations may not be able to duplicate such a sophisticated system, but they can build written SOPs (standard operating procedures) for the shop or office that can be used to train new employees and help them produce consistent outcomes. Many of the paint companies offer training or help with this process. Shops that have done it recommend starting out by choosing several commonly used procedures and have the employees who do those tasks document what they do in writing (and using photos as helpful), then see if others can repeat the task correctly using that documentation.

Although larger organizations may have more staff to cover all the bases when some employees are away, shops of all sizes can generally give employees some flexibility with hours, an increasingly popular benefit. It may mean allowing them to start a little later in the morning after getting their childern to school, for example, or starting earlier in the day in order to leave ahead of the worst traffic for their commute home.

Lorenzo Avila and Norberto Salas operate two Luxe Collision locations in the San Francisco Bay Area, but most of the systems they’ve implemented related to parts and production will work in any size single-location shop.

In the shop’s parts department, for example, all damaged parts are “mirror-matched” against their replacements when they are delivered to ensure they are correct. Every job is assigned a parts cart for both the removed and replacement parts, with the cart number included with other information written on the vehicle’s windshield.

“I don’t ever like to see parts on the floor,” Avila said. “We have racks and stands for all parts.”

In addition to the parts cart number, technicians have access to lots of other information on the vehicle itself. The windshields are labeled with information about when the car has been promised to the customer, who is working on it, and any sublet work it will require. Color-coded tags indicate if the job is for a dealership, or is insurance or customer pay. Color-coded markings on panels or parts indicate which damage is to be repaired.

Doug Keller, of Nebraska-based Eustis Body Shop, said he doesn’t have the private equity funds investing in his business like the large MSOs, but he’s found a variety of other ways to finance business growth, from refinancing his home to loans through family, suppliers and the SBA.

Keller said the economy and demographics give even single-location independent shops another viable financing option. He sees a lot of retired people who have money and might be interested in investing a good local business.

“They might not like the stock market and banks are paying very little interest right now,” he said. “If they can get 3 to 5 percent from you, they’d be better off.”

Independent shops might also be able learn about offering employees career paths the way that Enterprise Rent-a-Car and one of the largest MSOs, Gerber Collision & Glass, do. At both companies, entry-level employees for almost any position spend their first several weeks working as a porter or detailer. Kevin Burnett, Gerber’s vice president of operations, said it helps the new employee get a sense of the business — and allows the shop to get a preview of the employee’s chances for success.

“You get a good feel about whether they have a good attitude, if they show up on time, that kind of stuff,” Burnett said.

That can prevent both the shop (single-location or large MSO) and the employee from making a larger investment in training, etc., before they know if it’s a good fit for both.

MSOs have the luxury of being able to compare how one location’s performance numbers stack up against their others. A single-location collision repair business can similarly gauge how it is performing by joining a “20 group.” Such groups bring together as many as 20 shops, each from a different market, to share ideas and compare financial and other performance metrics. They can be a great source of ideas, and members tend to hold each accountable for the business goals that members are regularly required to set for themselves. Many of the paint companies sponsor 20 groups, and there are independent consultants who moderate groups as well.

“Not everything that works in other markets works as well here, but other solutions are so simple you kind of want to kick yourself for not thinking of it,” Dan Stander of Fix Auto Highlands Ranch in Littleton, Colo., said of his past experience with 20 groups.

Parts & People

Parts & People is published monthly by Automotive Counseling and Publishing Company, Inc., a Colorado corporation, P.O. Box 18731 Denver, CO 80203, 303-765-4664. President-Lance Buchner. Founded by Lance Buchner and Dave Lucia.

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