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Know When to Grow

For a collision repair shop owner, just handling the daily deluge of repairs, staff management, insurance relationships and financial issues is a significant challenge. Growing the business on top of that can be a daunting task.

Sponsored by CARSTAR

For a collision repair shop owner, just handling the daily deluge of repairs, staff management, insurance relationships and financial issues is a significant challenge. Growing the business on top of that can be a daunting task.

One of the best ways for a shop owner to grow their business is to open a new location or expand their production capacity at a current location. Once you have the right processes and people in place, it isn’t as hard to recreate that for another facility or to train additional staff for an expanded operation.

How do you know when you’re ready to grow with an expansion or new location?

Tom Martin, owner of three collision repair facilities in Ohio, offers advice on growing your footprint successfully. Martin started working in a collision repair shop at 15, then purchased the business. He opened his first location in 2003, then a second in 2014 and a third this year. Along the way, he’s learned a lot, faced some roadblocks, had a setback with a fire and a few growing pains, so he has a very hands-on perspective on the process.

Martin recommends this assessment to determine if you’re ready to expand:

  • Is the business running efficiently?
  • Do you have good processes and KPI performance?
  • Does your staff still need you?

“I put a lot of blood, sweat and tears in the first location, growing from $750,000 to $2.8 million in sales. I worked hard to create a learning culture and staff with good leaders and technicians. That’s the foundation you need in place to consider your next move.”

Another factor in determining a growth plan for many entrepreneurs is the need for something to do.

“I took a lot of time off, rode my bike, enjoyed life but I wanted to get back to work.”

Martin says growth in a family business is truly a family decision.

“You have to do a gut check with your spouse and family members, like having another baby or getting a puppy,” he notes. “My wife made me promise that I wouldn’t work more hours with a second location and it wouldn’t impact our life.”

Another learning moment on the path to growth was building a ground-up location, like the one Martin opened in Troy, OH. He offers five tips for building a shop:

  • Look at markets where you can grow and not cannibalize your business
  • Find good land – look at growing commercial areas and communities where you can be first in to serve them
  • Locate near a major artery for easy access
  • Build more than you think you’ll need and plan for growth
  • Hire a good general contractor you can trust who can guide you through zoning, construction, permitting and other challenges

“You learn with each one,” he says. “I opened Troy at 8,000 square feet and quickly grew to 15,000. It’s much cheaper to build it all the first time around. Now with my third location, I had more resources for real estate than before, so that accelerated the process.”

Speaking of acceleration, Martin had an opportunity to rebuild his Troy location after a fire last year. That also was a learning experience.

Staffing for growth is also key. Martin recommends hiring good people initially, invest in training and give them opportunities for growth.

“When you’re planning a new store, hire the manager and technicians in advance and have them work side-by-side with your staff at your current store. Then when your new store opens, send your seasoned team there to ensure everything is working efficiently.”

Martin also advises leveraging insurance partners and vendor networks for growth.

“That’s an advantage of a national network with strong partners – they can advise on areas of need in the community, help with new resources like equipment and supplies and help you get up and running more quickly.”

Bottom line, growth doesn’t happen by accident. It requires a solid foundation, a strategic plan, a strong leader and a constant effort to hire and retain the best team members.

 

This article was sponsored by CARSTAR. For more information, visit carstar.com

 

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