Documents

Battling the Bigs

Description
Cover story – BodyShop Business July 2014.
Categories
Published
of 3
All materials on our website are shared by users. If you have any questions about copyright issues, please report us to resolve them. We are always happy to assist you.
Related Documents
Share
Transcript
  C OVER S TORY Four locally ownedsmall MSOs sharetheir thoughts on howthey plan to retaintheir market shareshould one of the “BigFour” consolidatorsmove to their block. By Gina Kuzmick 1  July 2014 | BodyShop Business  I n a world where Walmart and McDonald’s reignsupreme, it’s sometimes difficult to even see themom and pop shops of yore beyond the boldred letters and golden arches that seem to adornevery other block in America. But we as consumersknow they’re out there, and they still retain theirown loyal followings tostay in business andstave off competition.As members of thecollision repair industry,we often divide the industry into two cate-gories: the big guys vs. thelittle guys. But what about thein-betweeners? What are theydoing to keep their businessesthriving and out of the hands of mega-consolidators?Ask Pat Beavers, managing partner of CollisionMax in Philadelphia, and he’ll tellyou that his business’s experience andknowledge of their market gives them theupper hand. Since its inception in 1977, the business has grown to 11 locations betweenPennsylvania and South Jersey. With ServiceKing’s recent purchase of Sterling Collision Centers,the large-scale consolidator will be moving into CollisionMax’s area, which means it could potentiallydisrupt their relationship with insurance carriers.“As we view it, the ‘Big Four’ all have national re-lationships with insurance companies and we are apro-direct repair organization,” said Beavers. “Sowe are concerned that [Service King] could have animpact on our claims and customer base. The high-level relationships they have could impact our rela-tionships that we’ve worked to develop for years, but that’s the unknown for us.”Despite this concern, Beavers is reassured thatCollisionMax will uphold its longstanding presencein the Philadelphia market.“We’re local, family owned and operated, andwe’re not a franchise,” said Beavers. “Almost a thirdof our people have been with us for 10 years, sothere’s a strength over a new corporation that’s notfrom the market and doesn’t understand some of the market nuances. We can touch our 11 locationsin any given day, so we’re accessible to all our stores because of proximity.”To maintain that feeling of proximity, Beavers reg-ularly meets with his management staff to discussperformance and how to maximize the business inits market as much as possible, which includes ex-panding the company’s brand identity. “We’re working on our name in our market andhaving some top-of-mind presence with the retailconsumer so they identify us in the markets weserve as the shop of choice,” he said. Forming Alliances» Beavers also points toanother unlikely reason for CollisionMax’s success:his current, local competition. By keeping an eyeon one another, CollisionMax and similar well-established shops in the area have been able tostay on their toes and create their own exclusiveand competitive marketplace. “If we didn’t have some of the good operators inour market already, we probably wouldn’t be as ad-vanced as we are,” he said. “I think because of ourcompetition locally, we and our competitors havemade a market that may not be that easy to comeinto and take over because we have all watchedeach other and didn’t ignore each other – and ourcompanies got better as a result.”Similarly, Richard Fish, owner of Coast CollisionCenters in Oceanside, Calif., actually admires collisiongiant and local competitor Caliber.“They’ve always had great prowess in terms of marketing, and they’ve been able to strike big dealswith insurance carriers,” Fish says. “That gives themgreat precedence over other MSO organizations, andthat’s always a challenge.”Fish has been in charge of Coast since 1996 andnow owns four locations in the San Diego area. Heattributes his success to implementing lean practicesand Six Sigma in his business, but also allying withFix Auto.“Being aligned with Fix Auto allows me to havemy cake and eat it, too. I’m the owner and operator of four body shops. If I were branded on my own, Iwould have felt the market demand to be up to six to10 body shops, so [my alliance with Fix Auto] willallow me to grow at a pace I feel good about.”Fish says that aligning with the Fix Auto namewill give his shop boosted marketing power as well.In addition, he’s linked to a number of “peer shops,”which grants him opportunities to scope out thefriendly competition and gain ideas as to how toimprove his business model.“When you see someone doing something notably C OVER S TORY » Battling the Bigs www.bodyshopbusiness.com 2   better than you time in and timeout, there’s a paternal feeling therethat allows you to reach out to thoseshops and ask how they’re doing itso much better than you,” he said.“You might end up even going tovisit them to share their best practices,and that collaborative atmosphereis something that’s very powerful.” Eye on the Competition» Fish believes in acknowledging the com-petition rather than ignoring it. “I think ignoring the competi-tion is shortsighted and wouldprevent you from learning aboutsome innovation that a competitormight be bringing to the table,”he said. “Having said that, Iwouldn’t spend too much timefocusing on it. We’re focusing onour own level of excellence, know-ing full well that if we achieve thatthere are very few competitors whocan keep up.”However, like many businesses,some worries still creep up in the back of his mind. “I plan on being in the businessfor many years to come, so theprospect of selling my company isn’ton the table. I’m a buyer, so thething I worry about now is the fervorthat’s happening in the marketplacein terms of valuations. With ServiceKing coming through the market re-cently through the acquisition of Sterling, and Caliber continuing toexpand in Southern California, youwould think they have enough mar-ket positioning in the area, but ap-parently they don’t think so. I hopeI don’t get priced out of the valuationmarketplace.”Still, some shops say that largeconsolidators haven’t had any impactwhatsoever on their respective busi-nesses. For Jacob Nossaman, ownerof Collision Works in Del City, Okla.,the key to keeping neighboring giantsCaliber and Service King away is toimplement a strong company cultureand employee environment.“I feel that if you focus on yourorganization with 110 percent eachday, then the competition is not anissue,” he said. Established by Nossaman in 2001,Collision Works has grown fromtwo to four locations in its market-place. One of the factors that allowedhis business to grow was using amanagement software platform that’sspecifically designed for large single-shops and small MSOs.“The management software is alsoyour accounting software, soyou do everything out of it,”he said. “It improves accuracy andallows you to look at multiple loca-tions off of your PDA. You can beanywhere and you’re still at youroffice.”While Service King and Caliberhave more buying power as corpo-rations, Nossaman is confident thatCollision Works’ stable, small busi-ness model will give him the ad-vantage. “I’m the owner and I’m in-volved,” Nossaman says. “We runa family-oriented, locally owned business. There’s no corporate redtape; we make decisions and con-nect fast.” No Threat in Sight» While con-solidators continue to sweep acrossthe nation, there are still some partsof the U.S. that haven’t yet felt theimpact. Conner Brothers in Rich-mond, Va., is a small, family-owned business with four locations and nomega-consolidator in sight. But thatdoesn’t mean it’s not on owner KevinConner’s mind.“We’d have to step up our gameif they did come to town,” he said.“They could really take a lot of work from us.”Although the shop is out of thehands of consolidators for now, Con-ner says he still wants his staff awareof the potential threat they pose. Hemeets with his manager every fewweeks to discuss strategies that canhelp to improve their business model– and keep the big guys at bay. Be-cause according to him, losing tothe competition stems from ignorance– something he doesn’t want to suc-cumb to. “Having not experienced [consol-idation in our market], I think my biggest fear is ignorance. We don’tknow what to fear.”While some might turn a blindeye and deny the fact that consoli-dation is indeed a threat to manyshops, Conner says he actually looksforward to learning more about thetopic. “If you don’t know your competi-tor inside and out, all you’re doingis setting yourself up for defeat.They’re going to eat you alive.”These four businesses eachshared one commonality that’s al-lowed them to keep mega consol-idators at bay: the involvement of an active and proximate owner-operator. And as long as their own-ers stay active, the customers willkeep on coming.“I plan on being in the businessfor many years to come, so theprospect of selling my company isn’ton the table,” said Fish. BSB C OVER S TORY » Battling the Bigs 3  July 2014 | BodyShop Business Keys to MaintainingMarket Share in aConsolidationEnvironment 1. Aligning with an establishedname or improving yourbrand identity 2. Understanding marketnuances 3. Establishing a strongcompany culture 4. Being an active andproximate owner 5. Knowing your competitor in and out
We Need Your Support
Thank you for visiting our website and your interest in our free products and services. We are nonprofit website to share and download documents. To the running of this website, we need your help to support us.

Thanks to everyone for your continued support.

No, Thanks