Strategy+Planning Leadership Multi Shop Operations (MSOs) Shop Life

Man with a Plan

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Man with a Plan

On the rare moments in which John Terrizzi Jr. finds his passion for the auto industry waning, he looks at that old photo featuring a restored Model T.

The photo documents Terrizzi Jr.’s father and uncle in their primes, circa 1955, after they had brought a Ford from the 1920s back to life. And that classic picture essentially serves as the foundation for the Terrizzi family business, which has always revolved around the automotive world.

“It’s just a really inspiring picture,” Terrizzi Jr. says. “They were two kids of immigrants. They started with nothing. … First year in business, they had to sell that car in order to stay in business. So that car basically was the start of our family business.” 

That photo represents the hard work—the 13-hour days and the Philadelphia grit—that has long been a Terrizzi family tradition.

Terrizzi Jr. has been immersed in car culture, in earnest, since he was 14 years old. So, when the car wash industry he had long worked in started to suffer, he began to look for other business ventures that he could hand off to his son, John Terrizzi III, in the future. He wanted to continue the family tradition of working side by side with fathers, sisters, sons, and nephews in a garage setting. Nothing would deter Terrizzi Jr. on his path, not even a lack of capital that nearly devastated his new venture. In 2013, Terrizzi set out to create a three-store collision repair business—only to nearly hit rock bottom before it even got off the ground.

But Terrizzi Jr. is a firm believer that there’s nothing that can’t be overcome by an indefatigable spirit, even in an evolving auto industry. And he wanted to ensure that his next venture in the automotive world would have serious staying power.

“It had to be able to produce enough to take care of [John Terrizzi III] as a career, for a lifetime,” Terrizzi Jr. explains. “We don’t get into things to get out of them. We get in them to stay.”

 

The Backstory

The Terrizzi family has been involved in the auto industry, in various forms, since back in the Edsel era. In the late 1950s, the family operated a mechanical/body shop. Not long after that, their auto businesses evolved into full-service car wash facilities. In 1973, Terrizzi Jr. began working at a Pit Stop car wash and detailing center, which also offers paint refinishing and windshield repair. The family still operates that facility, but it eventually sold two similar businesses.

The economics of owning multiple car washes simply grew less and less favorable over time, due to factors such as the rise in real estate costs in greater Philadelphia, Terrizzi Jr. says.

Thus, roughly five years ago, when Terrizzi Jr. was pondering potential business ventures that his son could thrive in, the father’s thoughts drifted back to his own teenage years, when he would sell used cars after having them painted at a nearby Maaco facility. Considering his family’s long association with automotive repair and the desire to work fewer evening hours, Maaco seemed like an ideal fit for Terrizzi Jr.

He also felt the franchisor offered a sense of security.

“Maaco seemed to be a good fit for everything we wanted,” Terrizzi Jr. says. “The franchise model worked because it offered my son support if something were to happen to me.”

Terrizzi Jr. eventually secured a loan, and began construction in Bridgeport, Pa., near Valley Forge National Historical Park. The shop opened in 2013.

 

The Problem

Terrizzi Jr.’s first Maaco location was unveiled in the month of February. And those first few months of business coincided with frequent snowstorms.

“The first few months were rough,” Terrizzi Jr. says. “It was stressful.”

With the benefit of hindsight, the owner is certain of what truly held Maaco of Bridgeport back early on: Terrizzi Jr. says he didn’t adequately anticipate his shop’s financial need. The shop operator got started with Maaco with just $25,000 in working capital.

He could’ve used $60,000 more than he originally borrowed, as it turned out.

Fleet accounts with local dealers and rental companies like Enterprise and Avis rolled into the Bridgeport location fast enough that it left Terrizzi Jr. in a cash pinch due to the demand for parts. Then, unexpected plumbing and electricity issues ate up nearly $20,000.

Terrizzi Jr. grew desperate to fuel his fledgling business.

“We set out immediately to find some wholesale accounts, to keep the fires burning,” Terrizzi Jr. recalls. “And then we went out on the street every day, pretty much asking for people’s business.”

The owner describes the first eight weeks or so in Bridgeport as being “devastating.” Yet, he rallied his employees by pushing them strictly when it felt appropriate.

“We had no intentions of stopping,” Terrizzi Jr. says. “So we pulled in our belts and we did what we had to do.”

 

The Solution

Yes, the Terrizzi family relied on its determination to survive early on in Bridgeport. But even more valuable than lengthy workdays, or seeking out community endeavors, like sponsoring youth sports teams, was the fact that Terrizzi Jr. began reviewing every shop process far more thoroughly.

Looking back, this is what he learned about key business elements:

 

HITTING BENCHMARKS

Terrizzi Jr. is largely unrelenting when it comes to established procedures. If a customer isn’t handled properly, for example, he makes sure to have a review session on the matter.

With regard to production, the owner increased his demands incrementally in Bridgeport, starting with “two or three cars in a day” and has built his shop’s average monthly car count to 120 currently.

In that respect, Maaco’s operations team was especially helpful in Bridgeport, as were similar representatives from Sherwin-Williams, who helped make Terrizzi Jr.’s shop processes more efficient.

“They kept it sane,” Terrizzi Jr. notes, “when it started to get out of control. They kept us centered and focused.”

 

ALLOCATING RESOURCES

Chief in helping Maaco of Bridgeport survive its early lack of capital were Terrizzi Sr.’s time-tested financial principles. The Terrizzi family patriarch, who still does payroll for his son, has long been a believer in treating your business and its staff as something larger than you.

“It’s like a child, and you give it what it needs,” Terrizzi Jr. explains of his octogenarian father’s key business beliefs, which largely entail saving for rainy days.

Now, more than ever, the Terrizzi family pays off any business-related credit card bill as fast as possible, for example, to keep its credit in good standing.

“We try to own what we have, as much as possible—which takes a lot of financial pressure off,” Terrizzi Jr. says.

 

MONITORING GROWTH

By 2017, Maaco of Bridgeport has refined procedures for keeping tabs on business elements like financial figures, as well as customer satisfaction.

“Now we pore over the numbers every day,” Terrizzi Jr. notes. “We look at phone calls every day. We survey our customers—we make sure they’re happy.”

 

The Aftermath

Less than four years after opening Maaco of Bridgeport, Terrizzi Jr. unveiled Maaco of Aston (Pa.) in late 2016. It was preceded, in 2014, by a location in Philadelphia’s Manayunk neighborhood.

“We went in with a plan, and said we wanted to get three shops up and running,” Terrizzi Jr. says. “We were able to achieve that.&rdquo

The Bridgeport location’s average monthly car count has nearly quadrupled from its early figure of approximately 32. And, that location has seen its annual revenue increase from the equivalent of around $750,000 in that first, truncated year of 2013 to $1.2 million in 2016.

Terrizzi Jr. says his first Maaco location currently boasts an ideal mix of retail, wholesale, and fleet business. And, he’s confident that 24-year-old John Terrizzi III, and his other son, 20-year-old Timothy, will have a business to take to even greater heights in the years ahead.

 

The Takeaway

Terrizzi Jr. didn’t achieve his goal of owning three Maaco locations by accident. It took thorough planning, and a thorough review of any shop processes that endured failure shortly after launch.

If Terrizzi Jr. could do the process all over again, he would rely on resources like Maaco’s operations team even earlier in the process of getting his shop up and running.

“It’s kind of silly not to follow their [strategies], because that’s their path to success,” the shop owner notes. “You can try to standardize the procedures as much as possible, but every car’s different, and every bit of damage is different. … And that large group of people helps you answer questions.”

Terrizzi Jr.’s overall lesson from his Bridgeport experience, though, is to plan for the worst-case financial scenario when launching a new facility. Looking back, Terrizzi Jr. would’ve sought a larger business loan five years ago.

“I underestimated a bit, because I wanted to be a little bit conservative,” he says. “But we got through it, and learned our lesson.”

Terrizzi Jr. says his advice to prospective shop owners would be “make sure you really put enough aside for working capital, so you’re not sweating that.” After all, business owners encounter unforeseen circumstances all the time, and need the resources to weather such storms.

These days, Terrizzi Jr.’s stress has dissipated. He’s confident in his Maaco shops, and he’s eager to see what his family does with the business in the future.

But he still plans on sticking around a while. After all, hard work is a Terrizzi family tradition that he doesn’t plan on abandoning.

“It’s something that we’re committed to, and it’s not something I’m going to walk away from anytime soon,” Terrizzi Jr. says.

 

EXPERT ADVICE 

Bob Juniper, who has owned Three-C Body Shop Inc.—currently a three-location MSO in the Columbus, Ohio, area—since 1984, has had to do ample strategic planning in his career. He describes the most important elements of written-out business plans. 

A business plan, in my mind, is a sales pitch. So it has to be enthusiastic. Typically you’re doing a business plan to get some financing; describe how you’re going to use that money effectively. If you’re going for $100,000, make sure every penny’s accounted for. 

Put in pro formas: Here’s what my sales are going to be in 2017; here’s what my sales are going to be in 2018. Include your current financials. Know your competition, how large they are, where they’re located. Know your market, the demographics. 

If I was hiring a new manager, or a GM, or hiring an accountant, or an attorney, I would show all those folks my business plan, because you want to get your entire team up to speed with what you’re doing. And having a business plan for yourself isn’t a bad idea—the exercise of writing that business plan sometimes imprints it on your mind. 

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