ABRN's 2015 Top Shop: Chantilly Auto Body Group

Dec. 1, 2015
Chantilly Auto Body Group in Chantilly, Va., ABRN's 2015 Top Shops winner, has paved a long, successful path by flourishing in areas where many repairers either are reluctant to tread or may be overlooking.

One of the hallmarks of a great shop is the ability to succeed where others have faltered. Take, for example, solving the partnership puzzle.

Partnerships pose a dilemma a bit unlike any other ownership format. On one hand they offer significant financial benefits. A 2008 study from Small Business Trends determined that average revenue for partnerships have risen 157 percent since 1980, while sole proprietorships saw 51 percent declines during the same period. On the other, they tend to be more volatile than any other ownership type and usually are the quickest to dissolve.

Yet, some partner-owned shops find ways to thrive. Such is the case with Chantilly Auto Body Group in Chantilly, Va., ABRN's 2015 Top Shops winner. The growing six-location MSO is on its second partnership.

That's not the only way Chantilly Auto Body Group stands out. The shop has paved a long, successful path by flourishing in areas where many repairers either are reluctant to tread or may be overlooking.

Chantilly Auto Body Group is ABRN's 2015 Top Shop

Origins in the trenches

Chantilly's founding may have been the first sign the business was going to march to the beat of a different drum.

Chantilly Auto Body Group
Nedal Khatib, Ryan Roberts
Owners
Chantilly, VA
Main location
6
No. of locations
30,000 / 30
Square footage / no. of bays
160
Total no. of employees
$2100
Average repair ticket
$38 million
Annual revenue
17
No. DRPs
PPG
Paint supplier used
Chantillyautobody.com
Website

Original partners Nedal Khatib and Bob Ellison met while bidding against one another for rental company repairs. At the time, Khatib owned his own shop, and Ellison worked for a dealer shop. In 1990, after several years of getting to know one another, the pair decided to leverage their experience in the Washington DC metro area and go into business together. They targeted Chantilly based on the area's strong growth and leased a building. Khatib moved in equipment from his Manassas shop, and they started work (with Ellison remaining connected to the dealership).

For the next 10 years, the two gradually grew their business. Khatib says a reputation for quality repairs and personal service helped catch the attention of DRPs. After Chantilly landed its first program, other insurers caught wind of the shop's ability to meet customer expectations. Soon the business was working with multiple repair programs

"They couldn't believe our CSI scores. We had over 98 percent at the time, which was unheard of," explains Khatib. "Sometimes the insurance company would send over a corporate audit team to validate the results."

In 2000, Chantilly had so much work Ellison and Khatib built a new 30,000 sq. ft. building, complete with drive in estimating and on-site vehicle rental (the first of its kind in the region). The business began transitioning work over from the original to the new site, while keeping the first location open. Doing so set into motion one part of the process by which Chantilly would grow into an MSO, acquiring new sites for work overflows.

In 2005, Khatib and Ellison opened another shop nearby to handle the work the ultra-busy Chantilly shop couldn't schedule. Eventually, the business would open two more shops for overflow. Two additional locations would be brought on board based on their potential for growth.

Chantilly owner Nedal Khatib has formed two different partnerships to grow his business.

Along the way, Chantilly evolved into another partnership. Ellison retired three years ago and sold his shares in the three shops he helped start back to Khatib and his stepson Ryan Roberts. Khatib and Roberts own three of the business's current six locations together.

Today, the business repairs nearly 1000 vehicles each month, with an average $2100 ticket, generating $38 million in annual revenue. They're looking to grow. Currently, Chantilly is in discussions to purchase several more shops, with plans to consider further additions down the road.

Taking it to the streets

As Chantilly expands, it plans to continue leveraging its reputation for quality and service coupled with long-standing aggressive efforts to pursue business.   

"Our way of marketing from day one was to go out and get work," explains Rob Ellison, nephew of Bob and Chantilly's Manager of Business Development. That means continual bidding for rental repairs and fleet work, along with targeting new vehicle dealers. Since its beginning, Chantilly has approached nearby dealers who don't own shops and made arrangements to help service their customers.

Currently the business employs three staff members who work full time in the service lanes of three dealers, with two more working with multiple dealers in auto parks and another in Chantilly who makes regular visits to several nearby dealers. These employees work with dealer staffs, recommending work for customers and then scheduling it. "The dealers love it," says Ellison. "It provides a service they couldn't otherwise offer to their customers."

This formula provides the business with an additional 150-200 cars each month, or roughly 15-20 percent of its business. Beyond that, it also helps Chantilly's efforts to gain OEM certifications, which typically require a dealer sponsor. To date, Chantilly's is certified to work on Volkswagen, Nissan, Infiniti, Chrysler and GM vehicles. They're also certified to perform aluminum work on the new Ford F-150.

Of particular note, Volkswagen requested the business receive their certification because Chantilly's was already servicing their fleet at VW's nearby headquarters.

All these certifications don't come cheap since they require extensive training and specific, often expensive, equipment. Ellison notes that his business invested $125,000 in equipment just to earn VW certification, although that same investment can be used to earn certifications through other manufacturers.

The investment also is well worth the cost since it provides Chantilly with a direct path to dealer work and immediate access to highly sought after OEM training, "where the industry is heading," says Ellison.

Chantilly is equally active searching for work in other areas. The business keeps one person on staff to concentrate on insurer relations. That employee regularly visits over 700 local insurance agents dropping off cards, brochures and sometimes gift packages to continually remind these agents the shop wants their business.

Technician Oscar Landriel stands in front of an aluminum workstation. Chantilly is certified to work on the new Ford F150, one of numerous OEM certifications it holds. Technicians like C.J. Kim all carry I-CAR platinum status.

Back to school and the information highway

Chantilly also takes aggressive business steps with marketing programs designed to attract customers through the Internet and its close relationship with local schools.

Before he came on board with Chantilly, Ellison worked in information technology. One of his first steps was building and upgrading the business's Web presence. Next, he started a reputation management initiative to respond to feedback on Internet review sites and set up social media accounts on Facebook and Twitter to connect with customers. To keep those accounts active and engaging, he brought in a specialty content firm and tied in Web reviews to help direct more Internet traffic to the sites for each Chantilly shop.

The business also worked with Google to purchase ad words to drive local repair searches. "The goal is always to get customers to the websites to request an estimate," explains Ellison. "That request is a call-to-action we respond to by contacting the customer to schedule an estimate, whether it's at one of the shops or somewhere the customer prefers."

Chantilly has grown quite adept at capturing this business. Ellison points to statistics that show 172 inquiries in the second quarter of 2013 resulting in 48 completed jobs. That 28 percent conversion rate produced  $79,939 revenue with a $1,665 repair average.

In the second quarter of 2015, 144 inquiries produced 63 completed jobs--a 44 percent conversion rate generating $88,704 revenue and a $1,408 average repair. "Our conversion rates have improved a great deal over the two year span," says Ellison. "Now we need to put more emphasis on increasing the number of inquiries." 

"Doing so should increase revenue and average repair numbers," he adds.  

As effective as its Web initiatives have been, Chantilly's outreach to local schools has produced an arguably more impressive boon. Like most small businesses, Chantilly's donated funds whenever it was contacted by nearby schools. "After years of them coming to us, we started going to them," says Ellison.

He began approaching all schools near Chantilly's locations offering sponsorships for sports, arts and music programs. The shop also donated signage featuring its name to hang on every possible sports venue and created electronic banners on school program websites.

The sponsorships aren't year-to-year propositions. Chantilly negotiates 5-year contracts that benefit both school and business significantly. Chantilly keeps its name in the community and the schools receive a long term, much needed financial commitment.

This close relationship is helping spawn one more mutual benefit, a body shop apprenticeship program. "Like everyone in the industry discovers, it's hard to find good, young employees," says Ellison. Youngsters interested in collision work aren't always presented with a direct path from school into the repair business. The apprenticeship program addresses both issues.

The program is in its beginning stages as Chantilly conducts talks with three vocational tech schools, two of which have applied for Collision Repair Education Foundation makeover grants. Chantilly is formulating ways to direct additional funds into these schools to build a training program.

In addition, Ellison sits on a school advisory committee and is arranging a Chantilly shop tour to allow students to see what a high production shop looks like. He's hoping engagements like these will allow Chantilly to better identify students interested in being an apprentice.

A full lot of work waits for repairs. Chantilly has frequently grown by adding new shops that handle overflow from existing locations.

Setting the stage for the next decade

With an infusion of youthful talent and more sites on the horizon, Chantilly seems well poised to continue building on a successful model. However, as it looks outward, the business is taking a renewed examination of its inner workings and expectations. While celebrating its 25th anniversary, Chantilly is putting together a development plan to cover the next 10 years and beyond.

Ellison says one goal in that plan will involve creating more uniform operations across sites while upgrading repair processes. Chantilly shops share the same management and paint systems and most vendors. But each shop also is a bit unique, especially in management styles since some locations maintained their existing managers and employees after they were brought into the Chantilly fold.

Procedures too can vary slightly from one location to another. Khatib reports Chantilly has started moving toward more homogeneous procedures, but notes there is still plenty of work to do. That might include working in a mix of lean procedures.

Ten years after much of the industry has embraced lean, Chantilly may seem a bit behind the times (especially for a Top Shop), but Khatib is quick to point out that shops in the DC region have been more reluctant to go lean. Some, he notes, adopted lean programs then returned to their previous procedures when they didn't get the results they wanted.

"Lean is fine, but you still have to have great quality and customer service," says Khatib. Chantilly is working with its paint vendor and other consultants to determine the best course for it to take.

Moving forward, Chantilly also is looking at bringing all of its locations under a single brand name. Currently, each site has its own identity. The five other location names are: Centreville Collision Center, Fairfax Collision Center, Metro Collision Center, Quantico Collision Center and Rick's Auto Body.

Chantilly took this route, in the case of new shops, to create shared identity for shops and their communities and to build on the familiarity of pre-existing businesses. "It also drives Internet searches to these shops since customers tend to search by location," says Ellison.

He says this could all change as Chantilly grows larger (10 locations or more) when a single brand could offer other benefits. This factor might become particularly important in the future as Chantilly goes head-to-head with much larger MSOs.

Ellison says part of the 10 year plan will involve surviving in that environment. While Chantilly competes with these large entities, Ellison says it also will look to emulate them. "We'll talk about getting investors of our own," he says.

Even if Chantilly decides to grow this large, don't expect them to be a mirror image of other MSOs. Being different is in their blood. They became a Top Shop by taking a road less traveled, and they're not looking to step off.

When the new Chantilly site was opened in 200 it was the first of its kind in the DC region, with 30,000 sq. ft. of space and drive-in estimating.

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