Grooming Employee Tips from a Growing MSO
When it comes to the body shop business, Dave Mitchell has just about done it all. As the son of the owners of Mitchell Enterprises, a small used-car dealership in Tampa Bay, Fla., that also handled mechanical and collision repairs, Mitchell spent his childhood summers cleaning cars and spiffing up the shop. He was painting cars and doing collision work by the time he was in high school. After graduating, he joined the family business full-time as a combo man, doing paint and body work, and devoted himself to growing the company’s collision repair business.
“I really leaned toward the body shop side,” he says. “I was just impressed with what these guys could do, how they could take a vehicle that was wrecked and torn up and put it back to where it looked great.”
Even in the shop Mitchell was something of a jack-of-all-trades, serving as the manager, estimator and painter before building business to the point where he could hire additional employees.
But his next role—owner—came about unexpectedly. In December 1989, Mitchell’s parents announced that they planned to retire and close the business at the end of the month. Mitchell, just 25 at the time, scrambled to raise funds to lease the property and buy the equipment from them, and in January reopened the business as Dave Mitchell’s Collision Centers. “I opened without a penny in my pocket,” he says. “I didn’t know how I was going to make payroll.” But by the end of the year he had grown the business from $20,000 a month to $200,000 a month and had opened a second location.
Today, that business is known as Master Collision Repair (Mitchell briefly sold his business to MCR, then bought it back and kept the name for branding purposes), an eight-location chain with revenues of more than $17 million. Fueling that growth is a belief—not surprising, given Mitchell’s personal experience—in employee mentoring, internal promotions, and a two-pronged business model that encourages lean processes.
Employees as Teachers
Having worked his way up in his parents’ company, Mitchell gives his 104 employees the same chance. “I believe in rewarding hard work and giving people opportunity,” he says. “When we need someone we always look from within first.” That attitude helps boost employee morale, inspires loyalty, helps keep the company’s turnover rates low (Mitchell puts MCR’s average employee tenure at about eight years) and makes training easier.
Mitchell proudly notes that not one of his eight shop managers was hired in that role; all were promoted from within the company. One started as part of the cleanup crew. Two others started as office personnel.
Sandra Martin is one of those managers. She joined MCR as a temporary receptionist in 1998 and was asked to stay. After a four-year stint in the military from 2000 to 2004, Martin returned to MCR as a receptionist and then began writing estimates. When the shop manager left, he suggested Martin as his replacement.
“Dave and Steve [Laszlo, MCR’s director of operations] are very open to whatever goals you want to achieve,” she says. “I was always ready to take on more responsibility and step in where needed.”
Hiring talented employees from the get-go isn’t the only reason MCR’s promote-from-within plan has worked so well; a five-year-old employee mentoring system is also largely responsible. Laszlo speaks regularly with employees about their goals and what role they’d like to have in the company in the future, and then pairs them with more experienced employees to help groom them for their desired jobs.
—Dave Mitchell, President & CEO, Master Collision Repair
The system (which Mitchell and Laszlo admit is “semi-formal”) stems in part from the fact that there’s an overall lack of paint and body technicians in the industry. “It’s a very highly skilled trade today,” Laszlo, an I-CAR instructor, says. “I think the attraction is not as great as it used to be, and it’s not as easy to fix a car today as in years past.” So MCR reaches out to collision repair students from a local community college—so far they’ve hired six—and has also instituted a unique compensation plan for techs and trainees going through the mentoring process.
Tech trainees start learning new skills with a handful of more experienced workers before starting to apprentice with one technician. That tech receives a percentage of whatever work the apprentice does (apprentices are paid a lower, flat rate.) The system means “there’s incentive for the lead tech to keep teaching, and incentive for an apprentice to keep learning,” Mitchell says. “It’s a win-win for everybody.”
In the office, trainees are cross-trained to learn data-entry for the estimating system and then begin writing estimates. The office mentors, who are either paid hourly or are on salary, are not compensated any differently because the mentoring process actually benefits them by reducing their workload.
The mentoring happens gradually, throughout the workday, and is “a work in progress,” Laszlo says. “It doesn’t happen overnight.” In fact, the one-to-two-year training timeframe MCR employees generally require is one of the challenges of the mentoring program and its promote-from-within goal for the growing company. “As we expand the business we take our best-qualified and trained people and move them to the locations that need them,” he says. That leaves a void—and a need to start the mentoring process all over to fill the vacant position. “If growth is too quick, then your people resources have been depleted and we may not have any candidates to immediately fill the position,” Laszlo adds.
The process can also be challenging for the newly promoted employees. “The last thing we want to do is set employees up to fail,” Laszlo says, but he admits that there have been a handful of occasions when employees were promoted into roles for which they were not suited. In such cases, they are reassigned to different positions within the company.
The benefits outweigh the occasional misstep, however. “It’s always easier when an employee has worked for you and understands the environment,” Laszlo says. “When you hire from [outside] employees come with their own view of the world and training that may be different.”
Business Models Based on Size
MCR also relies on dual business models to help ensure the success of its shops. While all MCR locations have down draft spray booths, drive-on frame racks, floor systems for pulling structure, and an assortment of mig welding equipment, plasma cutters and resistance welders, they don’t all have the same amount of space, the same revenues, or the same amount of staff.
In fact, MCR shops range from 6,000 square feet to 20,000 square feet. Because of that discrepancy, MCR employs two different business models for its shops, based on size and expected volume. Stores that generate less than $180,000 per month in gross revenue fit into the small-store business model; those that generate more than that fall into the large-store model. MCR’s eight shops are equally divided between the two, although Mitchell says the current emphasis is on opening smaller stores, with its four most recent acquisitions fitting into that model. Smaller stores, he claims, are “easier to manage, get to capacity and make a nice profit.”
When looking at new locations, everything from the demographics of the area to the population to the actual size of the facility help determine whether it’s going to fit in the small store model or large store model.
The different business models help MCR operate lean by increasing efficiency and eliminating over-staffing. In the smaller locations, employees tend to be cross-trained, “which allows us to be more productive and have less staff in the stores,” Laszlo says.
All locations have an overall shop manager, a writer and a front-office manager, but larger locations have separate parts and production staffers, while smaller locations combine those roles. Smaller shops also have a combination of body and paint technicians, “so those smaller repairs can go to one guy,” Laszlo says.
Mitchell and Laszlo initiated the dual business models three years ago. “The conversation really generated from looking at the bottom line and the fixed expenses in the stores,” Laszlo says. “You have to have people to support the [location’s] revenues, but in our opinion …there’s a lot of cross-training that can be done, and you can have three people doing the same [work] as four.”
Mitchell agrees: “I see a lot of smaller stores that have more people than I believe they need. With fewer people there’s less passing the buck and more accountability.”
Of course, MCR’s larger stores, while requiring more staff, aim for efficiency too. One example: An express process wherein cars can skip the tech bay and go directly into a paint line to be repaired. “It eliminates a step and allows us to be more efficient,” Laszlo says, estimating that the process cuts a full day off the cycle time.
After adding two stores to its roster last year, Mitchell took a break from expansion and focused on remodeling and upgrading his existing facilities. “We’ll continue to look for good opportunities,” he says, “but you have to be smart about how you’re growing.”
Going forward, he expects to grow the chain by a store a year.
MENTORING THE MCR WAY