News: Consolidator Report
66,000 (four shops)
Number of Employees:
85 (four shops)
907 cars per month (four shops)
Average Repair Cost:
It means different things to different people,
but one belief is often associated with it – it’s difficult to
Financial success is thought to be even more
of a challenge, and given the recent atmosphere of the collision-repair
world, making money may seem like a colossal feat.
Richard Cossette – owner of four locations
of Lehman’s Garage, Inc. in the Minneapolis, Minn., area – knows
all about success; his business was ranked No. 6 on Dun &
Bradstreet’s list of the "Top 100" U.S. independent
Flattered but surprised by the ranking, Cossette
makes success sound simple. His underlying philosophy: Make customers
happy and your business will grow.
It’s as simple as that.
In addition to his slogan for success, he
lists and elaborates on five areas – including customer service
– that are the most important contributing factors to a shop’s
success and continuing growth. The remaining four: a good working
relationship with employees, communication, "the team"
"Yes, it is simple," Cossette
says. "If you look at any business today, if the customers
are well taken care of and they’re happy, they’ll come back and
they’ll tell their friends."
This philosophy of taking care of customers
has proven successful for Cossette. Of course, the needed technological
changes (computers, frame equipment, spraybooths, etc.) were made
internally to streamline the operation, but the philosophy remains
with the customer. "[Customers] are the best salespeople
you can ever have," he says.
Lehman’s has, for the most part, enjoyed steady,
reasonable growth. An example of this growth is evident in the
numbers: 1996 was an exceptional year – Cossette says he expects
sales to exceed $9 million (final figures were not available at
With this business growth came the need to
expand. And with this expansion came a new procedure to ensure
customer service: When a car is brought into a Lehman’s that’s
too busy, the car is transported to another Lehman’s location
that can handle the work.
This expansion was done solely to serve customers
– not to pump up profits. As a matter of fact, Cossette warns
against acquiring multiple shops just to watch the money multiply.
He advises shop owners to take a good, hard look at owning more
than one shop. "[Owning] two shops doesn’t mean double profits,"
he says. "[Owning] three shops doesn’t mean triple profits."
Owning two or three shops does mean more concerns,
staffing problems, etc. "We did it because we felt it was
our customers demands, but a good shop owner who wants multiple
shops has to convince himself upfront that he’s a delegator."
Delegation Cossette learned to do;
dealing with people he likes to do. Not a surprising discovery,
Cossette describes himself as a "people person." "Some
shop owners wake up in the morning and the most important thing
to them is how many dollars they can make today," he says.
"I like to think of how many people we can make happy today."
Cossette considers the employees and customers
of his company the most important assets he has. "If we can
do a good job of taking care of our customers and have our employees
be very positive and very strong working with the customers,"
Cossette says, "then we’re going to have a successful business."
For Cossette, part of building a successful
business is making sure employees are satisfied with what they’re
doing. "Unless you have good people who you can work with
and groom and have understand how you feel about business and
customers, you can’t do anything," he says. "Employees
are everything. Without a customer, Lehman’s has nothing to do.
And without good employees to service the customers, we’re dead."
A successful manager, Cossette says, needs
to identify and get good people, get them involved, coach them
in company philosophies and give them the opportunity to use those
philosophies. If employees drop the ball, Cossette doesn’t get
discouraged with them; instead, he continues to coach them along.
Letting them go and letting them grow is key. Watching an employee
who wants to learn and develop gain strength – that’s fun, he
Coaching employees can’t take place without
communication, which is one thing Lehman’s works on constantly.
Cossette believes employees are much more comfortable – and better
employees – if they feel they can talk to management about what’s
going on in the shop. This is why Cossette makes an effort to
let employees know that management is available to talk to. And
when visiting the shops, Cossette tries to talk with all employees.
Why? Because interaction with employees can
also help to increase profits. By interacting with them, he says,
you can make sure they’re all high achievers and high producers,
which gets volume up and makes profits stronger.
Cossette also believes communication, in all
areas of business, makes for a smoother operation and creates
a stronger entity. "The management and employees need to
communicate internally and externally with customers all the time,"
he says. "So often, if we identify a problem we have with
a customer or employee, someplace, communication broke down.
"Communication in our company is very
open. Any employee should be able to talk to anybody in any level
of management anytime about anything."
Being a Team
Being able to communicate with management
also makes for a much stronger team – and working as a team is
another cornerstone of Lehman’s.
Though Lehman’s consists of four shops, Cossette
deals with them as a whole company – a company with 66,000 total
square feet for collision repair (80 percent of the business)
and full mechanical repair. He describes each "department"
as a profit center and considers Lehman’s a high-volume collision-repair
shop – not a body shop.
Cossette tries hard not to breed competition
among the shop locations. He wants them to work together toward
the ultimate goal, which is the big picture – the sales numbers.
To breed teamwork, Cossette uses several tactics: a management
team incentive program, in which all are working toward a collective
company goal; weekly and monthly profit-center and technician
goals; sales and production numbers projecting; monthly shop and
management-team meetings; and individual shop meetings, as necessary.
When helping technicians set their goals,
production is monitored daily. If they can achieve the goals set,
they make more money than they did the previous year. This, along
with the other processes, helps to increase profits and to keep
the team cohesive.
New technologies, such as computer estimating
and management systems, have helped Lehman’s to monitor its systems
and shop processes, to focus on possible problem areas, and to
analyze and work closely with employees and production people.
In addition to having systems in place to
help manage volume, workflow, profits and employee relations,
Lehman’s also employs three vice presidents. One is in charge
of finance, another is in charge of insurance and customer relations,
and the third oversees fixed operations. There’s also a general
service coordinator, who deals with the workflow across the four
locations in order to keep it even and under control. Adding to
each team and the its efficiency are a production manager, two
customer-service representatives and a parts person.
Cossette and his management staff work hard
at developing and communicating the team concept. "No one
person in the shop can fix a car by himself," he says. "If
the phone’s not answered properly, we might not have a customer.
If the estimator doesn’t greet the customer properly, we may not
have a customer."
Most of Lehman’s customers are walk-ins or
referrals, while 30 percent of the business comes from insurance-company
relationships; Lehman’s is involved in direct-repair programs
with 17 insurance companies.
Though much more effort is now put into advertising
in general, Cossette’s advertising budget is geared more toward
insurance companies than ever before.
Lehman’s name can still be found by way of
traditional advertising methods – in the Yellow Pages, local newspapers,
chambers of commerce and church bulletins, and at community events
– but because Cossette feels it’s important that insurance agents
know what and where Lehman’s is, he also decided to do a little
cable-TV advertising for name recognition.
Though Lehman’s advertising is more insurance-company
driven, Cossette wants to make sure he doesn’t force his
business on agencies. "I think you can get too pushy,"
he says. "You can call an agent and put demands on him that
you’d like to have so much business with him. We like the softer
Simplicity at Its Best
Success is often thought of as being difficult
to obtain, but if you find people who are truly happy – such as
Cossette – chances are they’re also successful. It was once written
that if you do what you love to do, you’ll make a lot of money
Now that’s simple.
Eileen Benedict is associate editor of BodyShop