Running a Shop Operations Sales+Marketing Estimating

Grounds for Taking a Risk

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TS. Eliot said, “Only those who will risk going too far can possibly find out how far one can go.”

From time to time, most of us tire of the “same old, same old.” We yearn for something new, something different and hopefully something more profitable. What stops most of us is an equal and opposite feeling: fear!

Deep down, we sense that breaking new ground will be risky. We fear the loss of our investment in time and money—and worse, embarrassment if we fail.

But we also mourn the loss of the initial enthusiasm we had when we started the business. We had real “fire in the belly” then. Gradually, that fire may have dwindled to little more than stale smoke.

“It’s been painful to watch multiple growth initiatives consume a million dollars or more, only to plunge a company into bankruptcy and ruin.”

Now, we long for an opportunity to get fired up again—to feel that enthusiasm for a new venture. What can give us this thrill of adventure when we’ve been working for years?

PRESSURE TO GROW

A shop can only grow so far in one limited location. I’ve seen a remarkable $250,000-a-month coming out of a shop with fewer than 7,000 square feet. But even this business genius eventually maxed out what he could accomplish in that limited space.
The reality is this: To keep growing, most shops eventually have to consider moving to larger quarters, expanding or opening a new location.

There’s an old proverb that says: “Everything alive is either growing or dying. Whatever is not growing, is dying. Nothing stays the same.” I’ve seen many shop owners take this old truth seriously and begin the process of trying to break new ground. Obviously, there are many multishop success stories. But for every success, I have seen a dozen failures.

Operating a profitable second (or third, or fourth...) shop is risky business. Many of the successes I’ve seen involved family members running the additional shops. Finding a manager who can be trusted—and who will make a commitment to success that is comparable to an owner’s dedication—can be more than difficult.
But it isn’t impossible.

GROWING BIT BY BIT

Most failures I’ve seen came from a first effort that didn’t work out—and wasn’t followed by a second, smarter effort. Like the old saying goes, a cat that gets burned touching a hot stove won’t touch a hot one again—or a cold one either.

Some of the most successful expansion efforts I’ve seen have been made by shop owners who have limited capital. Their success ultimately came from adding a second estimating location. Estimates were written, jobs were booked, and vehicles were transferred to the main shop for repairs.

Once the new location attracted a critical mass of additional business, production facilities were added to transform that estimating location into a full-service repair facility.
On the other hand, many failures I’ve seen have come about because significant capital was plowed into creating a new, complete, full-service shop—only to discover that the amount of business at that location couldn’t justify the expense of it.
That major loss of capital often made it impossible for the business owner to try again.

LITTLE STUMBLES, GIANT STEPS

It’s been painful to watch multiple growth initiatives consume a million dollars or more, only to plunge a company into bankruptcy and ruin. The best marketing gurus emphasize one key element: test, test, test. You never know exactly what is going to succeed in today’s rapidly changing market until you test.

Usually, the key to that success is the same as for many other real estate–based ventures: location, location, location.
The shops that I’ve seen win with small estimating locations have been those where the main shop is hidden in an industrial park or on a remote side street.

One California shop had a small estimating location in Beverly Hills. Another put an estimating kiosk at a major freeway exit. Sometimes even locations like these don’t work out, but the cost of that failed test is virtually nothing compared to the emotional and financial investment in a failed full-blown new shop.

But let’s not forget what led us down this expansion path: the tension between the thrill of adventure and the fear of failure. Perhaps the best reason to try creating some kind of new location—whether a small estimating site or a big, beautiful full-service space—is to fire up that old enthusiasm for a new game. Because with a winning game comes a new opportunity for substantial financial growth and lasting success.


Tom Franklin, author of Strategies for Greater Body Shop Growth, has been a sales and marketing consultant for more than 40 years.

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