How They Did It

Jan. 24, 2018
Does your company resemble what you set out to accomplish from the beginning? Are you the leader you wanted to become? Are your employees part of a realized vision? Here are lessons from three top shop operators who had an idea, a plan and the diligence to realize their visions.

As the leader of your business, you decide you want to grow sales by 15 percent in 2017. Or you want to significantly improve employee retention. Or you want to reduce cycle time by one day.

And to do it, you identify your weaknesses. You set your goals. You form a plan. And then you execute.

If you’re challenging your business to constantly improve, this scenario should be nothing new to you. But moving beyond the processes in your shop, the everyday problems that come with running any business … what about your shop’s identity? At the end of the day, does your company resemble what you set out to accomplish from the beginning? Are you the leader you wanted to become? Are your employees part of a realized vision?

The three shop operators featured in this story can safely answer “yes” to each of those questions. And despite their wildly different approaches, there’s one truth that unites each of these people: From the beginning, they had visions for their businesses.

These three leaders are not an anomaly. They started exactly where every business owner starts: with that idea. What separated these operators from countless others who remain stagnant or fail, however, is the methodical, thoughtful execution of that idea.

The real demarcation is how these three shop owners breathed life into their visions, their processes, their teams. From the idea to the execution to the results, here’s how they did it.

The Idea: Attract the Best Employees in Town

Dave Mitchell has led a few teams in his day.

Actually scratch that. Considering that, years ago, his lone Tampa, Fla., shop grew into a three-shop network, which led to an executive position at an eight-location MSO, which led to an acquisition role at Gerber Collision & Glass—well, you get the picture. In those positions, Mitchell oversaw 40 different locations and hundreds of employees.

That’s why, when he sought to expand his new solo project, Car Guys Collision Repair, years ago in central Florida, he understood the difficulty his competition presented in obtaining quality employees. So, to compete with area MSOs, he knew he needed to sell his business in a way that attracted top talent in his region.

The Execution

1. Form a Mission Statement

The phrase “do the right thing” doesn’t exactly turn heads. Yet, when Mitchell opened Car Guys Collision four years ago, that phrase laid the seeds for his current 140-employee team.

“When you’re the new kid on the block, it’s tough,” he says. “You need people that trust you and your vision and feel as good with you as you do with them.”

So, “do the right thing” isn’t just a slogan for Mitchell—it’s a mission statement. He made it the foundation potential employees stepp upon when they first interview for a Car Guys position.

“‘When you’re finished with a repair, would you put your daughter in that car?’” he would ask prospective employees. “It makes them stop and think what kind of company we are.”

Because of that, Mitchell says his reputation spread amongst area professionals, cementing Car Guys as a go-to collision repair employer in central Florida.

2. Empower Employees

Mitchell has managed enough facilities to convincingly argue that hiring for culture is even more important than hiring for skill.

“Animosity will kill you. That spreads like a cancer in the shop,” he says. “So, getting the right personalities together and making sure the co-workers gel is crucial to how we operate.”

To ensure his employees meshed, staff members would participate in the second round of job interviews. This instantly integrated prospective workers into the shop culture. It also infused leadership qualities in Mitchell’s employees, which helped him identify management candidates.

“Certain things are hard to teach,” Mitchell says. “You can teach efficiency, but it’s hard to teach a good attitude. So we look for people with leadership qualities.”

3. Encourage Feedback

Improving efficiency; offering better benefits; increasing gross profit on paint and materials—all topics Mitchell openly discussed directly with employees.

Even if it involves a disagreement.

“If you’re building a larger company, a little diversity on your team is good,” he says. “I don’t want people that agree with me on everything. I want your honest opinion. I want your feedback. At the end of the day, that helps me make the final decision.”

To assure his employees were contributing to the company’s overall growth, Mitchell invited suggestions and feedback at regularly monthly meetings. He and his vice president also provided their phone numbers to each employee, which helped them feel more connected to management.

 

Conducting Group Interviews

Including employees in interviews has not only given staff members more pride in their roles, but simplified the process for Dave Mitchell. Here’s how his second round of interviews work:

Prepare Employees

During the first round of interviews, Mitchell says he’s looking for the most qualified candidates. The second round, however, means putting the job candidate in the same room as potential co-workers.

“Right before the interview, we say, ‘We’re thinking about hiring so-and-so. These are their qualifications, and this is what we’re looking for,’” Mitchell says.

Then, they all discuss what questions the employees should ask.

 

Establish an Informal Process

Unlike the first interview, the second interview is a very informal process, Mitchell says. He schedules the group interview for a day with a lighter workload, gathers everyone in a room, introduces each person, and simply lets a conversation unfold.

“That loosens them up and they can talk a little bit,” Mitchell says. “Then we just watch the interaction and how they get along.”

 

Follow Up With Employees

After the interview, Mitchell and his employees discuss the job candidate. This is ultimately how he and his managers gauge which candidate will fit in best.

“It really helps,” Mitchell says. “Being part of the decision-making progress, the staff buys in on it, and the odds are much greater that we’ve chosen the right person.”

The Result

With 11 facilities and 140 employees on staff today, Mitchell has quickly made a mark in just four years. He attributes his network’s $23 million annual revenue to his employees’ collective sense of purpose—which is now aiding his ability to acquire competing businesses.

“We like to come out and meet with employees before we sign,” he says. “We go over our culture and what we want to do as a company.

“We tell them, ‘We’re not going to cut benefits and pay. We won’t replace you.’ And because of that, most of the time they walk away feeling good, telling their owner how excited they are to be on a new team.”

SHOP STATS: Car Guys Collision Repair  LOCATION: 11 FACILITIES IN FLORIDA  Staff Size: 22  Average monthly Car Count: 200  Annual Revenue: $23 million* 

*Four locations were recently purchased

The Idea: Build a Foundation with OEM Certifications 

When Tony Lake opened the Exclusive Auto Collision doors in Ramsey, N.J., 15 years ago, he wasn’t just entering a new profession—he was seeking to upend the traditional industry model.

At the time, he says very few collision repair shops had the time or funds for OEM certifications. An insurance appraiser for years, Lake recognized the potential appeal certifications could hold to insurers and the public, and decided to build a brand that stood out from the pack.

“I could see there weren’t a lot of guys driving toward the education side of fixing these sophisticated cars,” Lake says. “Nobody in New Jersey was taking advantage of those programs. So I saw it as a great opportunity for a business model.”

The Execution

1. Build a Foundation

Back when OEM certifications were a new concept, there was no formal model around which Lake could build his business. Thus, he surveyed his limited options and made initial investments.

At the time, Lake says Mercedes and Audi were the only prominent OEMs pushing for certifications. He immediately invested in both.

With knowledge of OEM equipment and training costs, he could better navigate newly established certification programs from Volkswagen, Porsche and Cadillac. That understanding has continued through today with his certifications for Honda, Volvo, Acura and Hyundai.

2. Recognize the Value

To this day, there remains a resistance to OEM certifications from shop owners, Lake says.

Why? Well, as Lake’s initial $150,000 investment in a Mercedes certification signals, it requires some serious investment—which, 15 years ago, made ensuring profitability all the more crucial.

Knowing normal labor rates wouldn’t justify the hefty training fee, Lake implemented specialty rates that grew with damage severity. He rose rates even higher for luxury brands.

3. Sell the Value

And with such high rates, Mitchell concentrated his negotiations, advertising and leadership on selling his unique, high-end business model. 

“I thought they would see this guy who fixes these high-end cars,” Lake says. “‘He has the equipment and training. That’s where we’ll have to send these types of cars to get them fixed properly.’”

Ensuring Buy-in From Everyone

Because labor rates were high and certifications necessitated more training, OEM certifications required buy-in from both insurance companies and his employees. Here’s how he did it:

Buy-In: Insurers

Lake pitched his unique business model in the form of seminars, which he hosted for insurance representatives. Lake partnered with an I-CAR employee to run the classes. Automaker representatives would even participate and discuss the technology, equipment and training necessary to properly fix their companies’ vehicles.

Lake also ran television and radio commercials that pitched Exclusive Auto Collision’s one-of-a-kind qualifications.

 

Buy-In: Employees

As Lake continually invested in new OEM certifications, he would remind his team what separated them from every shop within hundreds of miles.

Because of his pitch and the steep investment (“I can spend over $60,000 training my men,” Lake says), training wasn’t a burden, but instead, an opportunity—it became a way of life at the shop. When employees came back from training, they would present new tactics to their co-workers, working together to craft a more efficient process.

The Result

Today, Lake’s $5 million business lives and breathes off its original idea. On luxury models, such as Maserati, Ferrari and Lamborghini, Lake’s labor rate is a minimum of $75 for basic repairs and $225 for heavy structural damage, which accounts for the shop’s $4,166 average repair order.

“When I started, I was trying to get this industry to wake up and see that the old way of doing business is not the way to do it anymore,” he says. “And I keep planning on doing that.”

SHOP STATS: Exclusive Auto Collision  LOCATION: RAMSEY, N.J.  Size: 10,000 square  Staff Size: 13  Average monthly Car Count: 100  Annual Revenue: $5 million 

The Idea: Form an Executive Team

After years spent turning his tiny collision repair facility into a multi-shop operation, all of Clay Fallis’ hard work felt as though it was dissipating: ProCare Collision’s third facility had pushed his dream business to the point of bankruptcy.

That was before, of course, he sold controlling interest in the company to Vince Brock.

“He[Brock] brought me out of my comfort zone,” Fallis says. “I was really focused on day-to-day operations. [Brock] came in and said, ‘Let’s get you out of the shop and focus on fine tuning what we have.’”

And that vulnerability—that moment Fallis realized he truly needed help to realize his vision to build his own franchise—offered him a new perspective on truly establishing his budding network: stop micromanaging, and take an executive-level view of the business. With a goal of acquiring eight shops in five years back in 2008, Fallis quickly realized he needed to spend less time intricately involved with operations and more time building an executive team that worked on (and not in) the business.

The Execution

1. Establish Executive Roles

In order to spread throughout Texas, Fallis and Brock determined it was necessary to gain enough market shared to negotiate better prices with vendors and insurance companies.

Thus, once Fallis committed to removing himself from day-to-day operations, he assigned himself a new title: director of acquisitions. His sole focus was spreading his network’s footprint, which allowed shop managers to run individual locations.

The ProCare Hierarchy

Before Clay Fallis could truly grow his organization, it meant stripping away some of his own powers and assigning them to others—including his CEO duties. Here’s how his corporate location is currently staffed, and the roles assigned to each executive position:

Vince Brock, Chief Executive Officer

Vince Brock originally stepped in as CEO to relieve Fallis of his overwhelming duties. In his role, Brock oversees all executive positions and ensures the ProCare corporate office is properly overseeing individual shop performance.

 

Clay Fallis, Director of Acquisitions

In this new, succinctly defined role, Fallis began to survey potential markets in Texas and interview shops looking to sell. This quickly led to a deal with Ellis and Salazar that grew the ProCare franchise to eight locations.

When Fallis isn’t concentrating on acquisitions, he has enough free time to work with managers on improving individual shop performance by tracking and discussing KPIs weekly.

 

Joe Lewright, Chief Operating Officer

After the deal, Ellis and Salazar owner Joe Lewright transferred his Ellis duties to the ProCare office and became the chief operating officer. As the COO, Joe Lewright oversees administrative and operational processes, stressing the company’s strategy to the individual shops.

 

Kristin Rajala, Chief Financial Officer

As the company has grown exponentially in recent years, Fallis says it became essential to more effectively manage growing sales. Thus, Kristin Rajala stepped in as CFO, overseeing all financial planning and record-keeping.

2. Manage by the Numbers

Before the switch, Fallis was constantly consumed with employee management, billing issues, insurance negotiations and customer updates. As director of acquisitions, he learned to delegate those duties to managers and focus on daily numbers.

Fallis dedicated part of each morning to the company’s “daily scoreboard,” which he sent to managers via push reports. The scoreboard tracked closing ratio, cycle time, efficiency, repair vs. replace, and other KPIs deemed important to growing each individual location.

"Now, each day when I look at those push reports, I can see what’s not working, call the shop and say, ‘We have to turn this around,’” Fallis says. “And together we figure something out.”

3. Outsource Leadership

Contrary to Fallis’ former micromanaging attitudes, he found there were myriad people both inside and outside the organization better suited to train and teach. So, to establish a learning culture back when the company had just 65 employees, Fallis made it a point for managers, vendors and manufacturers to host regular in-house training.

Soon, Fallis invested in off-site trips, spending $5,000 for each employee to attend Discovery Leadership training, where they’re taught “how to lead.”

“It’s about personal responsibility and learning to lead yourself down the right path for you,” he says. “It’s about being a better person, husband, wife, brother, sister—a better co-worker.”

The Result

Fallis and Brock shattered their goal of opening eight stores, and purchased 12 shops within the first five years of their partnership. Carrying that momentum and utilizing their proven growth tactics, the ProCare team plans to expand its current 17 location franchise (that pulls in around $60 million annually) to 30 facilities by the end of 2017.

Fallis has become so effective at managing from afar that he’s freed up enough time to take on new projects, from opening a ProCare customer call center to revamping the network’s customer engagement processes. Right now, he’s heading a five-month internship program for collision repair students.

“We started running it more like a business than mom-and-pop shop,” Fallis says of the transformation. “It’s helped us negotiate better prices and improve employee retention.”

SHOP STATS: ProCare Collision  LOCATION: 17 FACILITIES IN TEXAS  Staff: 300  Annual Revenue: $60 million 

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