From Finance to Fender Benders
The old adage goes that a fresh pair of eyes can identify problems better than a worn out pair. This is the exact mentality that Kelly Huard, a former underwriter who is now co-owner of Painters Collision, brought to the collision repair industry.
Before stepping into the auto collision industry, Huard primarily worked as an underwriter before launching a career in real estate.
“I credit my time as an underwriter for my ability to work well with banks during my real estate career,” Huard says. “Really any job that I have worked, I was on the financial side.”
Huard’s experience set her up for great success in every area of her professional career. But her love for financials started pushing her toward collision repair while she was working for a real estate development company.
“It was in that industry that I discovered a love for identifying underperforming assets and turning them around,” Huard says. “There is a real beauty in flipping assets.”
While Huard isn’t the one doing the actual flipping, she plays an integral role in the project’s success.
“I am a support system for the business and the people getting the work done,” explains Huard. “The people doing the work cannot perform it without strong financials and cashflow.”
Finally, Huard found herself working as a controller. “I was getting pretty bored in the role,” says Huard. It was at this moment that Huard decided to start her own company.
“I credit some of my initial foray in the collision world to my husband, Jim,” Huard says. “When I started looking to start my own company, he suggested that smaller collision shops need the kind of financial support that I can offer.”
Huard started by offering a corporate package to shops that included doing their books, setting up entities, running payroll, filing for LLCs and tax numbers, really everything that you would expect a financial expert, like Huard, to offer. Essentially, Huard started a collision-based consulting firm.
One of the main snags that Huard ran into were one shop operations that didn’t see the value in hiring a consultant.
“Many of the owner’s mentalities were ‘I am getting along just fine,’” Huard says. “When one shop operations are doing fine, they don’t necessarily want bigger or better.”
Fortunately for Huard, the clients that she worked with really wanted to grow their businesses, giving Huard invaluable experience in her future field.
“I did pretty well,” Huard says. “I had a healthy company with a few great clients.”
While Huard did get enough business, “it wasn’t enough to make a living on, so that’s when I decided that I wanted to go all in and start my own shop.”
Making the Leap
Huard says that it wasn’t easy to convince Jim at first. After all, he was a collision executive and had a minority ownership share in a line of shops. He was making a good living, and was comfortable and happy. Huard’s plan could potentially jeopardize his career.
“He really had to weigh the risk-to-reward for a while,” Huard says. Did they want to gamble and take a leap? Jim was unsure and had a lot of doubts.
“I am a logical person,” Huard says. “So, eventually, I wrote him a letter going through each of his fears and doubts line by line, demonstrating why we would have nothing to be afraid of.”
Jim credits this letter for alleviating his doubts and for inciting him to take the leap. The main driving point is that they needed to build something for themselves.
So, they purchased their first shop.
The Huard Master Plan
Before the Huards purchased their first shop, they sat down to create their master plan.
“Our ultimate goal is to build a MSO,” Huard says, “but not your typical corporate MSO–one that integrates family values and appreciation for the team.”
They decided to frame their company on two values above all else: to maintain a culture that mirrored a mom-and-pop shop, and to offer corporate support to their shops that are typically difficult for single shop operations to provide.
The first half of their plan was born out of listening to technicians who had been treated like just another number in other MSOs. Huard quickly decided that she wanted her shops’ culture to be different
The second half of their plan was created because mom-and-pop shops have a hard time offering the benefits that larger MSOs can.
“We really wanted our team members to have great benefits and a stable payroll,” Huard says. “Oftentimes, mom-and-pop shops aren’t able to offer these things.”
At its core, Huard’s dream was to create shops that could offer large MSO benefits while still maintaining that single shop and family feel.
The final element of Huard’s plan is to identify underperforming shops and flip them.
“Jim is known as the turnaround guy,” Huard says. He, like Huard, “has a knack for taking underperforming shops and building them into what they could be.”
This was the core of their plan: to combine Huard’s corporate knowledge and Jim’s shop knowledge into the perfect team to flip shops.
“From the beginning, we identified shops whose owners were in over their head or who didn’t know how to get their shop off the ground,” Huard says. “Then, with Jim’s and my complementary sets of expertise, we could bring these shops to new heights.”
Implementing the Plan
The plan begins to unfold the second Huard enters her shop.
Immediately, she gets to work identifying issues in the front office and starts working on solutions.
“I start with the financial side,” Huard says. “I file any entities that they need, establish a payroll structure, get their IT online, and I focus on getting their management systems established so they can track their cars and repairs.”
Really, Huard ensures that the entire front office infrastructure is intact and running.
“While I am working in the front office, Jim heads out to the shop floor,” says Huard. “Above all, he focuses on addressing equipment and knowledge shortages.”
Huard explains that in today’s day and age, you absolutely need the proper equipment to repair cars to OEM standards, especially with ever-increasing technological aspects of car production and repairs.
“To gauge the knowledge of the employees, Jim conducts personal interviews with each person,” Huard says. Jim then creates a training plan to fill any gaps.
“Our first goal is to train everyone who is there, no outside hires,” says Huard. This is just another way that Huard demonstrates her commitment to her employees.
The next major focus is on the quality of the repairs.
“Jim is very OEM-driven,” Huard says, “so he focuses heavily on quality and implementing the proper before and after scans for collision repair.”
Another initial emphasis is placed on making the shop comfortable for customers and insurance companies.
“We never want to take their business for granted,” says Huard. “We very much want to make sure that customers and insurers know that we appreciate their business.”
This is accomplished by cleaning and updating the waiting room and front office. Ultimately, they want the space to be calming and welcoming.
A Staggering Change
When it comes to the outcomes of Huard’s master plan, there are almost too many positive elements to share.
“Jim calls himself the cycle time guru,” Huard says. A name that is well-earned, considering that after they purchased their first shop, the cycle time dropped to six days in house at five hours per day.
Even with a cycle time like that, the shop guarantees that the car will be returned to the owner in either pre-accident condition or better than pre-accident condition. The quality of the repair is not sacrificed for expedience.
Huard is happy to report that their shop has become very successful.
In addition to increased quality and decreased cycle time, their master plan has also returned on its initial investment.
“When we took over our first location, the shop averaged around $100k per month,” says Huard. “Now, the same shop does around $400k per month.”
Finally, the culture has really taken off at their location.
“While the culture wasn’t bad before we took over, the drive and push to succeed weren’t present before Jim and I took over,” Huard says. “We had a good foundation, but we were able to take it to the next level.”
Shop: Painters Collision
Owner: Kelly and Jim Huard
Location: Queen Creek, AZ
Staff Size: 35
Number of Shops: 2
Shop Size: 20,000 sqft
Average Monthly Car Count: 200+
Annual Revenue: $7.8 million
Correction: The original version of this article misstated some of the shop statistics for Painters Collision.