A down economy can be a good time to expand your business

"We like to expand during the recessions, and we've seen three of them," Gustafson said. "It shows strength and more people notice than you realize. We can do that because we save money when times are good."

Gustafson isn't alone in viewing what many see as tough times as a potentially good time to expand your company's footprint. In Gustafson's case, that meant a literal expansion of the facility. For others, it's meant reaching into new markets through additional shops, services or marketing efforts.

Here's a look at ways shops are expanding their territory and why many see now as a good time to do so.

Offer new services

After five years in business in Dallas, Ore., White's Collision Service in 2005 had both added a second location in a town 13 miles away, and moved into a former dealership shop, a building almost three times the size of the one in which it had been operating.

Then last year during the heart of the recession, the Whites took advantage of that added space to install a 50-foot downdraft paint booth, enabling the company to expand into the truck and RV repair market.

"We just got into that in the last year, marketing it at RV shows and to fleet managers," White said. "We almost always have one or two RVs in, and we do quite a few bus repairs," she said, pointing out more than a half-dozen retirement home shuttle buses in the shop and on its 1.5-acre fenced lot. "Our next big purchase will probably be a full-size truck and RV frame rack. Right now we have the use of a large frame machine, but buying one will be our next equipment purchase."

While the Whites already bring in business through dealership referrals, community sponsorships, and radio and TV advertising, they also produced full-color brochures that focus on their new truck and RV services.

Marketing outreach

Steve Walsh isn't really doing something different from what he ordinarily does to expand his collision repair shop's territory; he's just benefited from continuing to do it when others have pulled back because of the economy.

Walsh, for example, advertises in the newspapers and phone directories distributed in the surrounding communities, and offers mechanical shops in the area quick turn-around for repair of minor damage, and gift baskets or pizza lunches to thank them for customer referrals to his shop.

"The people in these areas moved out here to be out of town," he said. "Most of them probably work in town, but bringing their car here is one less time they have to drive into town. And people are really loyal to the businesses in the area. That's part of our marketing, too."

Adding new locations

"You hate to benefit from other people's distress, but for those looking to add another location, this can be a good time," the multi-location shop owner, who asked not to be identified, said. "They sometimes have too much debt or not enough scale to make that location work, but for us, it helps us pull in work from another market. There are shop buildings and property and equipment available at bargain prices right now for those with the resources and ability to make them work."

But expanding your territory by adding locations in other markets doesn't always require another full-service collision repair shop. Bill Rupp of Akins Collision Center in Santa Clara, Calif., is among the shop owners who have reached other markets by opening smaller satellite estimating and vehicle drop-off centers. The locations have helped his shop attract work within those other communities to keep the company's 24,000-square-foot shop running closer to capacity.

Branching out

New territory for your business doesn't have to be limited to collision repair work. Although mechanical work or tire and accessory sales are among the most common complimentary businesses collision repair shops add, other shop owners have branched into other areas while their collision business continues.

During the 1990s, for example, brothers Tim and Todd Deshler were trying to solve the bottlenecks that they often saw in the paint department at their collision repair shop in Orange, Calif. That analysis led them to develop a line of rolling parts-holding racks that they have manufactured and sold under the Time Shaver Tools name for the past dozen years.

"The biggest problem in the paint shop was loose parts," Todd Deshler said. "Every piece has to be painted and moved around. So we devised a parts holding system that rolls them right along with the car right on through the process. Everything is at the right working height, and it makes it easy to move and turn and flip the parts for painting."

Their shop has proven a great "laboratory" to develop tools to solve problems faced by other shops as well, the Deshler brothers say, and the tool business has proven a successful new territory.

Some successful shop owners also have expanded their business by taking what they've learned and sharing it with others through training or consulting service. Dave Dunn, Mike Anderson and Hank Nunn are among some of the better-known names among industry trainers and consultants, all of whom started offering those services while still operating their shops.

Beating the language barrier

Expanding your territory doesn't always require significant investment in real estate or facilities. Dannie and Diona Manuel of A New Dimension Collision Repair in Portland, Ore., for example, did it by simply having their website built in English and Spanish. That move, they said, helps the shop reach the estimated 11 percent of the local population that is Hispanic or Latino.

Similarly, some shops have ensured they have a bilingual estimator or customer service representative to work with these customers.

Expand by specializing

It might at first seem counter-intuitive, but some shops expand their territory by actually limiting the types of vehicles they work on. Develop a reputation as the place to have your high-end vehicle repaired, for example, and you may soon find yourself working on vehicles for customers from up to hundreds of miles away, drawn by your shop's reputation for quality and expertise on those vehicles.

You can experience a similar magnetic pull, attracting work from outside your core geographic area, by focusing your marketing on certain segments of the population as well. Choose a professional group – doctors, lawyers or CPAs, for example – and advertise in that group's publications and help sponsor its events.

Always looking for growth

Without a doubt, the last two years have been a tough time for most businesses. While some collision repair owners have pulled back – cutting staff, slashing expenses, and battening-down to weather the downturn – others have looked for ways to reach new territories and keep their businesses steady or even growing.

California shop owner Gustafson, for example, hasn't just stopped looking for growth opportunities beyond the 5,000-square-foot expansion of his shop. If the property next door becomes available at the right price, he said he'd like to add even more additional services to his business, such as a commercial car wash and detail center.