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In a world where Walmart and McDonalds reignsupreme, its
sometimes difficult to even see themom and pop shops of yore beyond
the boldred letters and golden arches that seem to adorn
every other block in America. But we as consumersknow theyre out
there, and they still retain their
own 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 they
doing to keep their businessesthriving and out of the hands
of
mega-consolidators?Ask Pat Beavers, managing partner of
CollisionMax in Philadelphia, and hell tellyou that his
businesss 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 Service
Kings recent purchase of Sterling Collision Centers,the
large-scale consolidator will be moving intoCollisionMaxs 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 weve worked to develop for years,but thats the
unknown for us.
Despite this concern, Beavers is reassured thatCollisionMax will
uphold its longstanding presencein the Philadelphia market.
Were local, family owned and operated, andwere not a franchise,
said Beavers. Almost a thirdof our people have been with us for 10
years, sotheres a strength over a new corporation thats notfrom the
market and doesnt understand some ofthe market nuances. We can
touch our 11 locationsin any given day, so were accessible to all
our storesbecause 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 companys brand identity.
Were 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 CollisionMaxs success:his current, local competition. By
keeping an eye
on 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 didnt have some of the good operators inour market
already, we probably wouldnt 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 didnt 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.
Theyve always had great prowess in terms ofmarketing, and theyve
been able to strike big dealswith insurance carriers, Fish says.
That gives themgreat precedence over other MSO organizations,
andthats 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 with
Fix Auto.Being aligned with Fix Auto allows me to have
my cake and eat it, too. Im the owner and operator offour 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, hes 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
COVER STORY Battling the Bigs
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8/11/2019 Battling the Bigs
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better than you time in and timeout, theres a paternal feeling
therethat allows you to reach out to thoseshops and ask how theyre
doing it
so much better than you, he said.You might end up even going
tovisit them to share their best practices,and that collaborative
atmosphereis something thats very powerful.
Eye on the Competition Fishbelieves in acknowledging the
com-petition rather than ignoring it.
I think ignoring the competi-tion is shortsighted and
wouldprevent you from learning about
some innovation that a competitormight be bringing to the
table,he said. Having said that, Iwouldnt spend too much
timefocusing on it. Were 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
theback of his mind.
I plan on being in the businessfor many years to come, so
theprospect of selling my company isnton the table. Im a buyer, so
thething I worry about now is the fervorthats happening in the
marketplacein terms of valuations. With ServiceKing coming through
the market re-cently through the acquisition ofSterling, and
Caliber continuing toexpand in Southern California, youwould think
they have enough mar-
ket positioning in the area, but ap-parently they dont think so.
I hopeI dont get priced out of the valuationmarketplace.
Still, some shops say that largeconsolidators havent 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 thatsspecifically designed for largesingle-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 youre still at
youroffice.
While Service King and Caliber
have more buying power as corpo-rations, Nossaman is confident
thatCollision Works stable, small busi-ness model will give him the
ad-vantage.
Im the owner and Im in-volved, Nossaman says. We runa
family-oriented, locally ownedbusiness. Theres 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 havent yet felt theimpact. Conner
Brothers in Rich-
mond, Va., is a small, family-ownedbusiness with four locations
and nomega-consolidator in sight. But thatdoesnt mean its not on
owner KevinConners mind.
Wed have to step up our gameif they did come to town, he
said.They could really take a lot of workfrom us.
Although the shop is out of thehands of consolidators for now,
Con-ner says he still wants his staff aware
of 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
doesnt want to suc-cumb to.
Having not experienced [consol-idation in our market], I think
mybiggest fear is ignorance. We dont
know what to fear.While some might turn a blind
eye 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 dont know your competi-tor inside and out, all youre
doingis setting yourself up for defeat.Theyre going to eat you
alive.
These four businesses each
shared one commonality thats al-lowed them to keep mega
consol-idators at bay: the involvement ofan 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 isnton the table, said Fish.
BSB
COVER STORY Battling the Bigs
3 July 2014 | BodyShop Business
Keys to MaintainingMarket Share in aConsolidationEnvironment1.
Aligning with an established
name or improving your
brand identity
2. Understanding market
nuances
3. Establishing a strong
company culture
4. Being an active and
proximate owner
5. Knowing your competitor in
and out
