Four Reasons Acquisitions Make Good Business Sense

Consolidation is significantly changing the landscape of the collision industry. But it is not just the collision industry that is consolidating rapidly. Throughout the entire automotive aftermarket there are examples of consolidating industries. Paint distribution, first consolidated in the late ‘80s and early ‘90s is undergoing a second round of consolidation. LKQ and aftermarket parts distribution, consolidated once already by LKQ is in the very early stages of a second round of significant consolidation. Aftermarket mechanical parts distribution already dominated by behemoths such as NAPA (Genuine Parts Co.), O’Reilly and AutoZone, and are seeing continued consolidation activity. Even automotive retail and new car dealership industry, once a paragon of the family-held small business, is undergoing consolidation at the hands of AutoNation, Sonic, and Warrant Buffett’s Berkshire Hathaway Automotive Group. It begs the question, why is consolidation such a popular business strategy? […]

The CFO as a Strategist – Four Alternatives to a Full Time CFO

Previously we spoke about how the CFO drives growth, and three main areas the CFO adds value: historical financial and vendor analysis, current working capital and cash management, and future budgeting and investment analysis, including acquisitions. One area in particular that we did not discuss, however, was the benefit the CFO brings to the table as an outside strategist and leader responsible for setting and implementing strategy in conjunction with other senior managers within the company. As the primary individual responsible analyzing past and current financial data, as well as budgeting for future growth, the CFO has a unique perspective on the operations of the company. […]

The Role of the CFO in Driving Growth

Recently I was at NACE in Detroit. NACE brings together leaders in collision repair, automotive service, and the multitude of stakeholders in insurance, parts, paint, and technology industries. It was a fantastic event full of great networking and educational seminars.

I had the opportunity to sit down with a lot of business owners in the industry who were incredibly optimistic about their future. They clearly recognize the challenges facing their business but are actively engaging in strategies to mitigate their risk while growing and thriving.

Consistent throughout many of my discussions, however, was the concern of managing the financial risks that often accompany growth. The lessons of M2 and other failed bids at rapid growth are still fresh in the minds of many in the industry. While these business owners are excited about the growth opportunities available to them they recognize that growth will bring additional financial pressures and challenges. In light of these concerns, our conversations naturally shifted to the role of the Chief Financial Officer (CFO) and how a company manages the financial risks growth entails. […]