Making it Through the First Year in a Small Town
Shane DeRusha was tired of the uncertainty of working for others, having been laid off from a car dealership and a forestry company during the past decade. So at a very youthful 26, he decided to take matters into his own hands. He started a collision repair business in Ontario, Canada, last summer with the help of a government grant program for young entrepreneurs.
Perseverance saw DeRusha through more than a year of ups and downs on the way to opening Precision Auto Body in Sioux Lookout, Ontario. The rural area in northwestern Ontario has only about 5,500 residents—and loads of tourists, who adore the area’s plentiful lakes and rivers. But DeRusha fiercely believed Precision Auto Body would succeed, and here’s why:
The small, remote area has an excess supply of potential customers. Vehicles there often get damaged on the bumpy dirt roads in the nearby First Nations’ reserves and in collisions with abundant wildlife. And in an area relatively unharmed by the recession, people are willing and able to fix their cars. Sioux Lookout had only one collision repair shop, and it had more work than it could handle. Residents’ only alternative was to drive almost 90 minutes away to patronize the body shops in Dryden, Ontario.
“I thought we could take the work that was going out of town,” says DeRusha, now 28. “The other shop owner in town couldn’t keep up because he was so busy. And that’s why I knew this shop would work.”
When Precision Auto Body opened in July 2009, DeRusha had willing customers, and business has not let up ever since. The shop completes three to five repairs each week, bringing in $15,000 to $20,000 in sales each month. “As soon as we had the heat on, we had work,” he says. “It was tough to work it all out and make everything work to get started. But I was optimistic. Now that the first year is under my belt, I feel pretty good.”
And what a first year it was.
DeRusha has been working in the collision repair business his entire life, so it wasn’t surprising that he wanted to start his own shop. His route to apply for the Northern Ontario Young Entrepreneur Program began when he was a 15-year-old apprentice at the General Motors dealership in Sioux Lookout. Eventually he earned a certificate in auto body collision damage repair from Niagara College and got a full-time job at the dealership, where he worked for seven years. DeRusha lost his job in 2006 when the owner decided to turn the shop into a quick-lube service instead.
Next DeRusha worked in the logging industry running heavy equipment. But he never let go of his love for repairing cars. When he was down-sized out of the company in late 2008, he thought it might be the right time to be his own boss.
“I didn’t want to go and work for the jobs that were out there, and I always liked to do body work,” he says. “I was good at it and I had people approaching me all the time to fix their cars, so I figured I’d just make a business out of it.”
Starting a company—or launching any big growth initiative—requires a healthy dose of audacity. And it’s almost a certainty that unexpected obstacles will pop up when least expected. DeRusha hit some major roadblocks during his first year. Here’s how he turned them into building blocks for his success.
Roadblock #1 Believing he would sail through the zoning process, DeRusha confronted red tape in Sioux Lookout that dragged on for months.
The Building Block: It prompted DeRusha to find a site about three miles outside of town. (DeRusha’s future father-in-law owned a piece of land that he offered to the budding entrepreneur for a reasonable price.) Situating beyond the town border drastically reduced the taxes Precision Auto Body pays on the building and eliminated the zoning issues.
Roadblock #2 DeRusha needed additional financing. Typical of many young up-starts, he met reluctance from banks to provide a business loan.
The Building Block: DeRusha and his fiancée, Jenny Sawyer, both used lines of credit to borrow about $100,000 for start-up costs. They also had credit cards on hand—though they never had to use them.
Roadblock #3 DeRusha needed a building for his business.
The Building Block: Ever creative and resourceful, he found a kit online for a $41,000 prefabricated steel garage (by Pennsylvania-based Olympia Steel Buildings) and went this route to save money on construction costs.
With help from friends and family, DeRusha spent about a month erecting the building’s steel frame and completing the insulation and paneling to get the 2,400-square-foot shop ready for business.
Not only did the construction kit save Precision Auto Body upwards of $20,000 in contractors’ fees, “this building should last forever—at least 100 years,” DeRusha says. “It’s also super efficient. We don’t spend a lot on fuel, even though we get four feet of snow in the winter and the temperature can get down to 35 below Celsius (about minus 31 Fahrenheit) in Northern Ontario.”
DeRusha opened for business in July 2009 and hasn’t had a slow day since. Customers are patronizing Precision Auto Body instead of driving to Dryden or waiting for the other shop, just like he predicted. DeRusha stays on top of business by making the company a family affair: His father, Dean, is a mechanic who works with him on repairs, while Sawyer handles the books and helps out with estimating and ordering parts.
“It’s definitely a challenge but it’s so rewarding,” says Sawyer. “Shane works his butt off seven days a week sometimes. I’m sure it will pay off in the end.” In addition to that hard work, DeRusha thinks his shop has taken off because his training and experience translate into high-quality repairs.
Marketing is also undoubtedly contributing to the payoff. The grant DeRusha received required spending at least $3,000 to market the business. DeRusha took full advantage of that since the other shop in town did not advertise. Precision Auto Body marketed its services through flyers, radio spots, and advertising in the area’s two newspapers, Sawyer says.
The ads tout the shop’s ability to handle collision repair as well as welding fixes, mechanical work including brakes and ball joints, restorations, refinishing, and detailing. Precision Auto Body also differentiates itself by offering to come to customers to do free estimates. That helps solve potential customers’ resistance to the shop’s outside-of-town location, DeRusha points out.
It also doesn’t hurt that DeRusha is eager and willing to take on almost any project. Prior to opening his shop DeRusha restored a couple of airplanes, including a Cessna 185, and he’s game to do similar work on other crafts. One of Precision Auto Body’s first projects was a beat-up fiberglass Baja boat, a 200-pound vessel that DeRusha restored to a sharp looking jet-black beauty with gunmetal stripes.
These projects take much of the same skill as auto body repair, except with different chemicals for the restoration. “It gets you through the summers when things are slower,” DeRusha says, “but they don’t pay as well as auto collision because they take twice as long.”
Through the hard work and adversity, DeRusha feels confident about the future. He’s grateful for his Young Entrepreneurs grant and the assistance of family and friends, and he’s proud that he now runs a self-sufficient business that helps the local economy.
Based on his experience in starting his own collision repair center, he offers this advice to other shop owners: “Don’t give up, no matter what anybody tells you. There are a lot of negative people out there. Even with the economy, there are always going to be accidents and collision work. So keep trying.”