Over the past two years, many top shop operators have learned how to improve their systems, leading to stronger profits and teams. As a result, they have started thinking about adding a second auto body shop – or more.
At the same time, other shop operators did not keep up with changing technology, such as using auto repair software. Without a strong business culture to keep their people, they struggled to thrive. In the end, they put up a flag to signal that they would sell to get out or retire after 40-plus years in the shop.
Carm Capriotto has heard from them all as host of the Remarkable Results Radio podcast. He has also met young service advisors, managers, and technicians ready to step up to store ownership.
In his podcast for the aftermarket, he shares cues and lessons from senior leaders, so you do not make some of the same mistakes on your journey. It is harder than you think.
Are you ready to buy a second auto body shop?
What do you need to consider when making a move to a new location? A nice way to overcome a runaway train is to have a solid handle on these following business principles. These are not a complete list but will give you a strong launching point to consider if you are ready for location growth.
Build a strong company culture
Your culture keeps and attracts the people who want to work for you. It comprises your values, what we do, believe in and who we are. Also, your ethics rule inside your culture, including your mission and the work environment.
Established cultures attract people who want to work for you while customers also see and feel it. It means caring for each other personally and as members of the team. For some, it may sound sappy, but the top shop operators will point to culture as the glue for their organization.
If you don’t have a strong culture, you may find it challenging to add a second auto body shop. In that case, hire a coach or consultant to help you.
Create a stronger financial position
The pandemic taught us a great lesson about having three months’ worth of cash reserves to pay the bills. Yes, auto repair is a recession-proof and essential business, but cash helped many get through the uncertain times until business picked up again. Cash reserves don’t grow by accident. You put a percentage of your profits into a reserve account and use the “profit first” model to manage cash.
If you do not get a monthly financial statement, you are treating your business as a hobby. How can you manage gross profit, sales, debt, net profit, and costs if you don’t see those numbers? If you don’t know how to read a financial statement, get a coach, consultant or accountant who knows the auto repair industry.
Once you “see” where you are heading, you can maneuver your sales, margins, and costs to produce results that can sustain your auto body shop. Then, you can plan for a second shop.
Improve your processes and systems
Many owners have leaped into a second auto body shop only to discover they didn’t have processes and systems they could duplicate. So many great aftermarket coaches speak to the simplicity of creating great processes for marketing, team building and teaching the culture.
They need to be created by the people who are most affected. It only needs to be one page, bulleted and available online as a reference to teach when needed.
It goes without saying that modern, cloud-based shop management software can make a huge impact on your company. Access to repair shop analytics allows you to see critical metrics that show the team how the company's goals are being met. Today’s powerful shop management systems can become a competitive advantage for you, especially with a second auto body shop.
Commit to training
Using knowledge to build yourself and your team personally and professionally – not just for technicians but for owners, managers, office staff, and service advisors – gives you a competitive advantage.
Great companies pay for all training and the time away from work. What’s your training budget? You may need to start small if you are not financially strong.
Ask the shop owners who close down and take their entire team to events like Vision, ASTE, AAPEX, and others. They gain a huge advantage as a team and company. Anything can happen if you plan it.
Technology is ever-changing and moving faster than we can absorb. Staying on the cutting edge of new tech may not be a priority, but it will be here sooner than you think and could mow you over if you are not prepared.
Network with other shop owners
Joining a peer network or 20 Groups isn’t necessary to grow stores, but it can help. It can help if you are a single shop owner significantly. You discover that almost everyone has the same issue you have, has overcome it and will share their solution. This gives you intel that you would never get if you live on your own island. You can find these groups locally or regionally.
Many shop owners have learned so much inside their networking group that they love to give back and help others. Don’t worry about your competition since there is enough business for everyone. And don’t be bashful about sharing your ‘secret sauce.’ If nothing else, sit, listen and learn, then assess how to take those ideas and make them your own.
Grow into a stronger leader
Do you split your time between your operations? Will the store you leave to help jump-start the new one survive without you? If yes, then you’ve done well putting others in charge. (There is an art and science to elevating your people into leaders on their own account.)
If not, you must give decision-making power to others. But that does not just happen; you need to coach and lead your team to do business as you would.
Leaders are not born. They commit to reading, finding a coach and attending seminars to learn to be a good leader. They know how to be humble, have self-confidence, deal with stress, overcome fear, develop skills, guide change and stay positive.
Learn how to buy a second auto body shop
Many moving parts shape a deal. You need due diligence while assessing, evaluating and discovering all aspects of the business you want to buy. This is not just a day’s work of research and time spent with the seller.
If you plan to buy an existing shop, do a thorough review of finances, people, marketplace, customers, facility and equipment. Overturn every rock you find to understand just what you are buying with your second auto body shop.
Plan ahead to staff the new location while getting your entire team on board
Support from your current team will make for success or not at your second auto body shop. You may want to hire more staff while waiting for your deal to close or a new location to open. The operative word in this title is “plan.” Sure, you may want to keep the transaction confidential. However, having key people helping your dream come to life will help you hit the ground running on day one of the new shop.
During your due diligence, assess the current staff at the second auto body shop you are looking to buy.
Always market
Plan a marketing campaign for the new location. How will you embrace the current customer base? Are they your type of clients? What are the demographics of your market? Who will run your social media for the new location?
Always market to keep your name out there. Be sure to excite your social media sites with the new and the exciting things you do in the community. Consider hiring a marketing expert to drive your social presence and website to help drive new business.
Temper your excitement or decision with a five-year plan
Above all, take time to verify your numbers. Test the temperature of your team. Do some due diligence on your current operation to be sure they are ready. Remember just because you can doesn’t mean you should. Go in with your eyes wide open.
You will need many more pointers, but this is a good start. You can always learn more from your 20 Group or a multi-shop network. For more tips from Carm, listen to his podcast.
