A group of shop owners in the United States recently discussed where they are intending to focusing more of their attention and resources this year – and why. Here’s a look at what they had to say.
David Robinson of USA Collision, a shop in the state of Arizona says he’s looking to add a couple more fleet accounts.
“I don’t know about other parts of the United States, but in Arizona, we’re down across the board, with direct repairers and large multi-shop operations (MSOs) taking jobs from one another,” Robinson says. “We’re probably down about 30 percent in Arizona. So what we’re trying to do is just pick up a few more fleet jobs just to fill in until other work picks up again.”
He’s also continuing to focus on online customer reviews and digital consumer marketing, working to increase customer-pay work, which he estimates already accounts for half of the shop’s US$3 million annual sales.
“We’re redoing our website right now, and I just hired another company, to help with our marketing. We probably spend about $60,000 (US) a year on [marketing].”
Larry “Skeeter” Smith of Skeeter’s Body Shop in Garden City, Kansas, has 25 employees working in four buildings. Like Robinson, he’s working on diversifying the company’s mix of work.
“There are three slaughterhouses within a 60-mile radius, and we have a lot of semi trucks and a lot of oversized box trucks [in our area], so we kind of switched to add that into the mix,” Smith says. “I never dreamed I would be in the truck repair business. But they come in, we write the estimate and they say, ‘When can you fix it,’ and they send us a check.”
The hourly rate paid is significantly higher, he says, so the only downside is the additional space needed.
“I’m out of room in my facility, so I’m just not sure if we’re going to slow down the automotive side and pick up more on the semi and box vans side. But that work has really increased, and really moved the needle for us very quickly.”
Adding OEM certifications and more shops
A number of the collision repair business owners say they are focused on adding automaker certifications – or more shops.
Tim Paap, owner of Paap Auto Body in Illinois, is going after OEM certifications for higher-end vehicles, including BMW, Mercedes and Volvo. He says he has seen less return on investment from certifications with less rigorous qualification requirements and no restrictions on parts sales.
He also was in talks to acquire another shop.
“Our shop is actually in the middle of two towns of 20,000 or 25,000 people, and I also have a satellite facility in one of the towns,” Paap says. “Our shop can probably do roughly US$5 million to $6 million a year at full capacity, and right now we’re at US$3 million, so we are looking to grow the next couple of years.”
Paul Vincent, who opened Guardian Collision in Jacksonville, Florida last year (after selling his three shops to a larger MSO at the start of 2023), says he is also focused on gaining OEM shop certifications.
“To me, that’s where the money is,” Vincent says. “I wouldn’t say I’m anti-insurance companies. I try to be friendly. But at the end of the day, the customer is my partner, not an insurance company. The OEM certifications, to me, are becoming their own referral program without saying you have to use this part or buy this part from out of state. We’re certified by Volkswagen and Subaru. We now want to get more into the luxury and the exotic lines. I think that’s where the future is at for the industry.”
Vincent says he didn’t go after the high-end vehicle certifications in the past because of the expense.
“But if you really think about it, depending on what your profit margin is per job, on average, it doesn’t take a lot of cars to pay for these,” he says. “And the customer feels more comfortable and more safe knowing that the people that made the vehicle trust you to work on the vehicle.”
Second-generation owner Andy Grundman of Pat’s Body Shop in Wausau, Wisconsin, says he is focused this year on getting financing to build a new shop.
“With a lot of the new technologies that are coming into play, we want to have an ADAS calibration centre built into the new shop,” he says. “We want a shop where you can do team-style work to address the technician shortage. The younger generation likes working in teams, not the old one-guy-one-car mentality. It will be a new location across town with a different name. It will be called Blueprint Collision to kind of play off some of the words we use in the industry right now. Eventually we’ll convert the current shop I have now into a training facility.”
Evan Opeka of Opeka Auto Repair also has his sights set on adding a shop, which would be the fourth location for his business in Western Pennsylvania.
“We want to expand our footprint, so we’re focusing heavily on recruitment and technician development, and then making sure that the shops we have currently are running as efficiently as possible,” Opeka says. “That way when we open the doors on the fourth one, we can hit the ground running.”
Opeka says he was still determining if he’ll be acquiring an existing shop or starting one from scratch.
“We’ve done both,” he says. “From our experience, it’s been easier to start from scratch rather than convert over all the clientele and try to retrain all the technicians. It took a lot longer for us to get that store in the black than when we just opened up a brand new location that used to be a different business entirely.”
Finding a better way
Working to improve the shop-insurer-consumer dynamic is what Kena Dacus says is on her agenda for the coming 12 months at Dacus Auto Body in the state of Kansas.
“I don’t know if others will agree with me, but the insurance companies are just getting more difficult to deal with,” Dacus says. “I feel like I say this every year, and then every year somehow it gets a little bit harder. I’ve been thinking about this because, to be quite honest, the deterioration of our relationship with the insurance companies is really harming our customer relations at the same time.”
She says in the past years they’ve taken a more combative approach, using the right to appraisal, hiring attorneys and even suing their own insurer on a claim related to one of their personal vehicles.
“We’re winning a lot of battles, but I’m not sure if we’re really winning the war when it comes to customer service in that regard,” Dacus says.
The customer has always come out ahead when they’ve invoked the appraisal clause, she says.
“But at the end of the day, I just think it’s a really crummy experience for our customer,” Dacus says. “The customer ultimately is the one who suffers when we can’t get along with the insurance companies. So we’re really working on our negotiation skills. I think we do a good job of documenting with photos what we need and why we need it. But what we’ve not done great at is building those relationships, having those conversations from a less argumentative standpoint. So we’re working on that.”