Joe Carubba, the president and CEO of upstate New York MSO Carubba Collision, has expansion down to a science.
Carubba has spent years developing his formula for adding new stores. And, by controlling variables as much as possible, he added four new locations in 2016, and has plans to open at least two more this summer.
“We’ve got a pretty ambitious growth strategy,” Carubba says.
FenderBender featured Carubba in 2015 (fenderbender.com/rapidexpansion) and learned about his main philosophies as an MSO operator. Since then, he has put his theories to good use, and the four Carubba Collisions that opened in 2016—in Auburn, Horseheads, Oneonta and on the north side of Buffalo—are on pace to meet or surpass the president and CEO’s goal of $3 million in annual sales each.
Expanding a business isn’t always easy for shop operators, but Carubba Collision seems to continuously evolve, with recent measures like the addition of a career website.
Breaking down data associated with potential new business locales―like population figures―has been on the top of Carubba’s mind of late. And, along those lines, Carubba shared the following advice to shop operators who are scouting potential new locations to expand their business into.
Do Your Research.
Carubba has a business development employee who helps him thoroughly study prospective site locations, usually over the course of roughly six months. They pay attention to such details as the volume of collision repair sales within a 10-mile radius of a particular location.
“Paint companies can supply you with that information pretty easily,” Carubba says. “We have somebody that we work with at a paint company that, [if] you give him a zip code, one day later you’re going to have the information you need.”
Carubba also suggests using the services of a realtor with a proven track record.
Keep Partners Happy.
Carubba’s business development employee strives to keep an open line of dialogue with prospective sellers who reach out to the MSO virtually weekly.
From there, feedback from fleet partners and insurance agents largely impacts Carubba’s final decision to expand into a new market. Carubba knows that keeping fleet and insurance entities content can keep a steady supply of customers flowing his way.
Respect Red Flags.
When Carubba is considering taking over an existing business building, he’s especially cautious with regard to elements like the size of the facility, amount of parking, and nearby competitors who may have a loyal customer base.
One frequently ignored factor when considering a new body shop location: zoning.
“Each town has a criteria for our type of business,” Carubba says, “so you’ve got to look into that. Typically, you don’t want to be by a school, you don’t want to be by restaurants, you don’t want to be by residential, and you don’t want to be by playgrounds, because you’re probably not going to be successful in your quest to get zoning approval.”
Gauge the Demand.
Ultimately, before adding a location, a shop operator must crunch the numbers and be certain that their business is positioned to keep building the customer base.
“If it’s a takeover, I’m going to look at my [projected] return on investment based on their current profit,” Carubba notes. “If it’s a startup, you’ve got to have a pretty good feel for what the projections are going to be … in 18 months, and then base the profit off of something around what your average net profit is. We like to get our money back within four years.”
