The company, which was acquired by Boyd Group in January 2012, actively solicits direct repair program (DRP) relationships and said it plans to expand in Tampa and Orlando in 2012.
"We want to grow Tampa and expand into Orlando," says Mitchell. "What I go after most is the location and the potential appearance" of the property to determine if it can be adapted to fit the standardized MCR branding elements."
Careful consideration of positioning around Tampa and its major thoroughfares and population centers means that "we have a location near to everyone" in need of body work. A neighborhood's ethnic makeup or income level is not necessarily as important as the traffic flow that can be generated.
During the review process of an existing shop, "reputation, location, current DRP business, equipment in place, staff and employees are always a consideration." Appraisals are handled in-house to analyze the business numbers; a consultant is retained to assess property and hard costs.
An owner wishing to sell to MCR is best served by being well thought-of in the community and keeping the business profitable. A physically spruced up facility is more attractive than one that appears to be in decline.
Maintaining "a local guy aspect" is an important element as well. Mitchell's business cards bear his cell phone number, and the business basks in a longtime positive presence dating back to the used-car operation that his parents, Ed and Thelma Mitchell, had established in 1967. Prior to becoming MCR, Dave Mitchell's early yet already-expanding network of body shops bore the moniker of "Dave Mitchell's Collision Centers."
Upon graduation from high school Dave went to work full-time in the bays, which included managing the tow truck operation. "My dad had been selling cars for many years, and my towing business brought many cars in the door."
As Ed and Thelma prepared for retirement with the intent of renting out the facility, Dave made a pitch to buy the enterprise. "I didn't have a dime to my name, so I scrambled; I went to a leasing company and got some credit. I made payroll the first week, I did it the next week and the week after that." Within six months he was ringing up $200,000 in sales.
Mitchell opened a second body shop that same year, another new site the next year and another shop was added during the third year of operation.
"I grew up in this community, and the shops I opened were in great locations – strategic areas. We were making a pretty good dent in the market. We hooked up with a couple of insurance companies," nurturing the DRP relationships by providing "great service, quick turnaround, a fair price and a lot of work. I worked 365 days a year."
Dealing with DRPs
Securing adequate payment from insurers is easier now as MCR has grown to become a major presence. Yet during those early years if a task was viewed as necessary he would occasionally have to tell an objecting insurance company representative, "You're not going to pay for this, but I'm going to do it anyway." As it turned out, "Most of the time they would go ahead and pay for it anyway."
Seeking out additional DRPs is a constant process – but one that's not pursued at the expense of making sound business decisions. "We always want to deal with insurance companies that will pay to do the job correctly."
More than 76 percent of the business is via referrals from the 14 DRPs.
In-house inspections of the vehicles and related documentation are an ongoing practice along with continual communication with insurers. "We solicit feedback from the DRPs to make sure we are compliant," says Mitchell.
Operations Director Steve Laszlo also is the local I-CAR instructor. "He is very proactive in dealing with all the DRPs on a regular basis." Given his I-CAR credentials, Laszlo helps train adjusters about technical issues and the continuing education needed for state licensing.
If questions arise about a particular procedure, "I will try to educate them on why it needs to be done," Mitchell says. "If you can explain why it needs to be done, very rarely do we get a 'no.' If it needs to be done, we expect to be paid for it, and we do get paid for it. But we don't go overboard."
Consolidation begins
Back when the Dave Mitchell's Collision Centers business was still a trio of shops, he was approached by out-of-state venture capitalists wishing to enter the repair realm. "I met with them, they liked me and I liked them. I sold them my three locations and stayed on to run this market."
A series of bad business decisions, such as overpaying on assorted overhead issues, by the MCR upper executive team eventually had the investors asking tough questions. The executives had obtained $10 million from the private equity group, Mitchell recounts, "and they bought shops in South Florida and North Florida – they were scattered all over the state" and traveling to and fro by air out of New England to oversee the operations. Plus they had multiple support staffs and other overwhelming expenses that sapped the cash flow.
"These guys managed to blow through the $10 million in a year, and they were scratching their heads." The investors wanted to declare the chain bankrupt and get out.
A conference was held in New York, and investors grilled Mitchell about the state of the enterprise amid a steady process of dismissals brought upon the now-former executive team.
Mitchell's answers apparently made a good impression. "The money guy walked me out of the room and asked me if I wanted to run the company until they figured out what to do. I really didn't want to run the company because it was a sinking ship, but I flew back to Tampa and tried to figure out what to do to save the company. I called a meeting of all the sellers of the body shops and one of the private equity guys."
Mitchell was granted six months to turn things around, and he was determined to succeed. The first order of business was paring down the widespread array of struggling locations. The goal was to position the chain within the vicinity of Tampa. As time passed, Mitchell bought out the private equity group and assumed the helm.
Wowing the customers
"Good performance and CSI drives customers to the front door," Mitchell says. Management and staffing is stable, with the workers averaging 10 years of employment at MCR.
A three-tier payment system for managers and estimators based on CSI scores is in place. "If they get a low CSI they know it can potentially affect their income." Everyone at the company is eager to please the clientele. "We provide income for more than 130 families, and if we don't provide for the customers it's going to put you and your co-workers out of a job," he says.
Out on the shop floor, "it's tough to get people to change what they do" as various "somewhat lean" production techniques are adopted. "If they don't agree we'll have a conversation about it, but at the end of the day if I decide to do it we do it," he says.
Standard operating procedures entail using the principles of 5S – sorting, straightening, systematic cleaning, standardizing and sustaining. Other phases include safety, security and satisfaction.
"This group has been together a long time, and they know what we're looking for," says Mitchell, such as painting parts off the cars to speed along production.
The transition to waterborne paint is to begin this year, and he anticipates a smooth changeover.
Aggressive marketing of MCR's benefits to drivers involved in a crash is another important strategy. "I firmly believe in advertising," he says. "Advertising is almost a science now because there are so many radio stations and cable television companies." Mitchell analyzes the ad buys and listener/viewer reach, favoring cable networks on the video side. "Compared to broadcast it is fairly inexpensive," he notes, citing the value of pre-shot spots from Jessen Productions in San Francisco.
Billboards have been erected throughout the marketplace, the firm is in top standing with the Better Business Bureau and a key longtime connection is in play with the National Football League's Tampa Bay Buccaneers. The publicity achieved through replaying the "Master Collision Hit of the Game" in each gridiron contest has fans awaiting the verdict on which block or tackle nets the nod. "We get a lot of mileage out of that."
Mitchell sees plenty of gains ahead for MCR as acquisitions continue and game-winning innovations are applied. One such upgrade "wows the customers" at the shop in Valrico, which has a large air conditioned warehouse-like building where patrons can pick up their repaired vehicles. The design is attractively clean, sterile and inviting. "It's really more of a showroom than a warehouse," Mitchell says.
