Mossy's Momentum

June 1, 2008
What happens when a shop starts big, and has even larger plans for the future, just as the economy slows? One major San Diego Toyota shop finds out.

Some collision repair shops build gradually, growing through the years from a few employees to a few dozen, and expanding square footage with a new move each time the lease runs out. But at Mossy Toyota, in San Diego, Calif., the decision was made to start big and to keep building momentum, a strategy that’s going full-speed even in a dragging economy.

A 36,000 square-foot, cutting-edge facility that’s only three years old, the shop already pulls in about $500,000 per month in revenue, relying on relationships with insurance companies and its seven dealerships to keep technicians working at full steam. Although that might be enough of an accomplishment for some shops, Mossy is looking to take it to the next level, says Body Shop Manager David Carter. “We ramped up quickly, and saw tremendous growth,” he says. “But this is a shop that’s easily capable of doing up to $700,000 per month in sales, and that’s where we’d like to take it.”

The shop saw two years of booming growth, followed by more stable numbers last year, he says. Going forward, the shop intends to build more revenue through a number of efforts, including emphasizing its Toyota certification for its technicians, increasing its direct repair programs (DRPs), staying focused on its customer service index (CSI) increases and creating production teams.

Referrals may bring in some business, but that type of approach tends to build over of time. DRPs can increase the numbers quickly.

In the Beginning

The shop opened in May 2005 as San Diego’s biggest certified collision center, as part of a company owned by Phil Mossy, who has a proven track record in the region. A previous owner hadn’t done well with the dealerships, but Mossy had better tactics and grander plans, Carter explains. Mossy set out to have the dealerships be full-service, and given the large geographical location, he felt that having a formidable presence made sense.

Helming the major effort is Carter, who has nearly 30 years of industry experience. Most of those years were spent on the auto dealer side. His father worked at a dealership in Mission Valley, and when Carter was just out of high school, he took a job in the parts department and gradually moved up the ranks, increasing his knowledge along the way. He most enjoyed collision repair and moved into that specialty as a profession.

As manager at Mossy, he’s been able to call on his past managerial experiences, especially his proficiency at growing a business. But he also knows the value of starting right and creating a proper foundation. From the beginning, Carter plugged into DRPs by creating relationships with insurance companies, inviting representatives to the grand opening. Once they saw how well-appointed the shop was, they began sending business to Mossy.

Carter takes pride in the state-of-the-art setup that Mossy provides for technicians, which includes two stalls for each tech and the latest equipment for welding, disassembly, structural work, painting and other tasks. There are spray booths, Jollifts and numerous other components that were impressive to companies like State Farm, Farmers Insurance and Geico.

“Timing was on our side,” Carter says. “There was a need in this area for something like this, and we’re close to the downtown area, so it was a good fit.”

Poised for Growth

Production teams are a major component for the next stage of growth because of the time they can slash from repairs. Right now, Carter notes, one technician does the job of five or six people, doing everything from welding to painting. “A technician can only work on one car at a time, as opposed to a team, where you can be more efficient,” he says.

Currently, Mossy has 10 technicians, but Carter would like to hire more, and—conventional wisdom aside—he doesn’t see recruiting as much of a challenge. He’d anticipated that staffing the shop initially would be difficult, but found that once technicians saw the Jollifts and other equipment, they signed on quickly. “Each has his own unibody repair device, so they don’t have to depend on waiting for another technician to clear off,” he says. “That was a big selling point.”

Similarly, when it comes time to stock the teams, Carter doesn’t believe there will be much trouble, given Mossy’s reputation. But what could prove tricky is timing: Currently, there isn’t enough work to justify creating teams and doing a large hiring push. But if other efforts to increase the workload are successful, Mossy will have to meet that need.

“With teams, you need a solid backlog of work, and we have such a big facility that we haven’t maxed it out yet,” Carter says. “The danger is going to teams before the work is there, and then the teams don’t work, because you have people just standing around.”

To boost growth, Carter is focused on finding another large-volume DRP to fill capacity. Word-of-mouth and referrals may bring in some business, but that type of approach tends to build over a long stretch of time. DRPs, however, can increase the numbers quickly, he says.
The shop will also emphasize its Toyota certification, which each technician is required to have and keep updated. Only 167 Toyota dealers in the U.S. are certified, Carter notes, and although certification may not mean much to the average car owner, it tends to mean a great deal to insurance companies. To become certified, a shop has to maintain a certain CSI, use certain types of equipment, and offer training to both technicians and estimators.

Ongoing training with the auto company is especially important, and technicians travel to a facility in Torrance, Calif., to keep their skills fresh. They also do a healthy amount of online training. The ongoing education means that Mossy is creating strong team leaders, gearing up for the future by building the type of management abilities and technical expertise that’s needed for production teams and large-scale growth.

Another Toyota requirement that will come into play for Mossy’s next level is the CSI. Currently, Toyota requires a 91 percent rating for excellent service, but Carter expects that number to inch up by a few notches in the near future.

“They push for constant improvement. There are a lot of benchmarking and performance groups,” he says. Even the overall appearance of a facility factors into the certification decision.

Toyota has been instrumental in establishing the shop, and corporate is assisting with long-term goals, Carter says, by setting Mossy up with a consultant who can be called at any time.

“The type of stringent requirements for certification set us apart, and that’s what will help us reach the next level,” Carter says. “I believe that’s where the industry is headed—toward having these types of requirements that show technicians and estimators are trained, that facilities are up to a certain standard and that there’s a plan for continual success.”

Carter attends meetings with other Toyota collision repair managers in the state, which also helps in brainstorming new strategies that can bring Mossy the growth needed for production teams. Managers lately have been talking a great deal about marketing, and being able to keep levels up in the current economy.

Being able to tap into a group of like-minded individuals is helpful in any field, and has been proven to spark creativity. Carter is hopeful that the expertise of the Toyota consultants, combined with insight from other managers and perhaps a dash of DRP success, will provide the necessary oomph to boost Mossy to that $700,000 mark.

Team Approach

As the production team strategy begins to unfold, it’s likely that Mossy will face a few challenges—not just with hiring new technicians, but in ensuring that the work and rewards are doled out in equal measure.

Jack Calafato, a technician at Mossy, has been with the shop since the start when Carter recruited him from a nearby Mercedes-Benz dealership. Calafato values his relationship with the body shop manager, and especially likes working on Toyotas as opposed to the BMWs, Mercedes-Benz models and Lexus autos that he’d fixed previously.

Still, he’s cautiously optimistic about the production team plan, rather than wholehearted in his enthusiasm. “It sounds great from a dealership and shop angle. I can see why Mossy would want to do it, but as a commission-based technician, I can see some ways that it might be difficult,” he says.

The success of teams will depend not just on pooling hours and creating a way to get more cars through the shop, but also on the level of work and skill that each team member puts in. If someone is rated at a high skill level, such as a “5” on a scale of one to five, and that person is working with two technicians rated at 3, it could create conflict if they’re all compensated equally, Calafato believes.

“The idea is to create a pool of labor, but what if a skilled technician is teamed up with a couple of deadbeats?” he asks. “If you’re the 5 it’s unfair, and if you’re the 3 it’s a gravy train. It will all depend on how the pie is split. If the 5 gets more of a percentage, based on skill level, then I think it will work great.”

Calafato is also aware that if any relationships with insurance companies sour, it could create havoc for the entire shop because Mossy depends so heavily on DRP work instead of word-of-mouth business. “If you get a bad reputation with a customer, he tells a few other guys about it. But if you have an insurance company stop coming to you, that means a few thousand guys,” he says. “If something like that happened, it could create a situation where we’re overmanned.”

Since the teams haven’t been put in place yet and are still being developed, Carter didn’t note precisely how commissions would be split, but he does see the teams working even if techs of different skill levels are put together. In fact, he says, there could be a huge benefit to having teams of techs at multiple skill levels. That way, more mentoring can take place.

“We’re identifying team leaders, and looking forward to having seasoned technicians who are willing to mentor people,” he says. “You want to develop the right skill levels, and continue hiring people at the same time. It’s a tough market right now, but we think having such a strong start and the right people in place will help us take it to the next level.”

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