I’m on a plane back from Atlanta to Orange County, California as I write this. I spent the past few days in Atlanta with AkzoNobel talking to distributors, jobbers, shop owners, and senior execs across North America about business growth, strategy and finance. We talked about ways to grow your business in a consolidating industry. We talked about the role of finance in the automotive aftermarket. We talked about where the automotive aftermarket has been, and where it is going. It was a fantastic event and it was great to see so many business owners and managers gathered in one location focused on growing and improving their business.
I was encouraged by the fact that there were a number of business owners who are continuing to experience great success and business growth in this changing industry. Even in markets where a number of the largest repairers are present, these business owners continue to grow both revenues and profits.
I was also encouraged by the fact that there were a number of young owners in the room. Perhaps it is that I am getting older and now have noticed a few grey hairs on myself. Or that many of the older owners have already exited their business. Regardless many of the younger owners had very innovative ideas on business growth, and saw much opportunity in the industry. I found it interesting that some of these business owners came from outside the industry, entering the industry by chance but quickly recognizing and seizing opportunity.
Consistent among this group of owners was a focus on people and processes. The business owners who have found consistent success are the ones that have focused on developing their team and developing repeatable processes their team can execute on.
I’m often asked what smaller organizations can do to compete with larger multi-billion dollar chains that continue to grow with no apparent end in sight. One of the most effective approaches I have seen is when owners create strong cultures driven by repeatable processes and then leverage that culture across multiple locations. This holds true whether you are in the paint distribution business, the parts business, collision repair, or any other business for that matter. When I talk to private equity investors, they are looking for management teams that are doing this.
My message to the Akzo group was that now is a great time to grow. While the industry has changed substantially, and challenges exist, business growth is still possible. Business growth comes in many forms. It includes growing your top line sales at your existing locations. It includes growing your profits through efficiency and margin improvements. But it also includes growing through expansion – new location developments, brownfields, greenfields, and acquisitions. And while business growth can be difficult and can feel very uncomfortable, when done with the right team and advisors, scaling your business is very achievable in todays environment.
Of course, such business growth requires a substantial investment of time and capital. If you have a timeline of 7 years or more, now is a great time to re-invest in your business and in the industry. There are many private equity groups actively seeking out businesses with strong management teams to invest into. Paint companies want to see their customers grow. Insurers have generally accepted the rise of MSO networks as a positive development due to the consistency and efficiency such organizations bring to the claims process. In general, there is a lot of institutional support for growing business in the automotive aftermarket.
If you want to explore some growth initiatives, give me a call, use my contact page, or hit REPLY to shoot me an email. I enjoy talking with owners that are passionate about an industry that I am also passionate about. My role in the process is to help you decide if growth is right for you, and if it is, help you execute on that plan.
Until next week!