This is what I discovered about OEM Certification when I attended the Assured Performance’s Certified Collision Care Provider Conference – OEM Certification 2.0

Recently I was asked to fly out to Phoenix to present at the Assured Performance Annual meeting. Each year Assured Performance hosts meeting for its members to discuss industry trends and OEM certification. It was a great meeting that brought together OEMs, property and casualty insurers, dealership groups, and certified collision repairers. Note: Will you[…]

I Was Invited to the CARSTAR North American Conference. Here Is What I Learned.

Last week I was invited the CARSTAR North American Conference. ​While CARSTAR has been active in both the US and Canada for decades, this is the first time that CARSTAR organized a unified North America conference. I was invited to the conference to work with some of CARSTAR’s top MSOs to review growth opportunities in[…]

I’ve never been more optimistic about business growth in the industry than now.

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.[…]

2 Ways to Know When to Sell and When to Grow

The past four years have seen an unprecedented level of buy/sell activity in the industry. Mergers and acquisitions have dominated the industry. Private equity groups have invested heavily in the largest companies in the industry, further increasing consolidation. Consolidation will continue, but it will be different than it has been in the past. As a[…]

Grow Like a Consolidator

For the past few weeks we have been speaking about the options that are available to a collision repair operator: stand pat, grow, or sell.

I spoke at some length about the risks involved in each strategy. Standing pat is a risky strategy due to the concentration of risk into a single business in a single city / region.

Growing is risky because it involves developing a new set of core competencies built around high level financial management as well as acquisition and integration competencies. Most collision repair businesses have not developed these competencies; and those that have developed those competencies now compete for deals against other large MSO’s with extensive experience sourcing, closing and integrating acquisitions. (Editor’s Note: Keep an eye out for an upcoming article about how the franchise model plays a role in growth.)

Selling is similarly risky as there is almost a certainty that a buyer will have vastly more experience in a business transaction, leaving you and your business vulnerable. Buyers will pay a premium for a well-documented, well-run business but most collision repair businesses have little experience presenting financial information in a usable format to a multi-million dollar institution.

Those are the risks. But I promised an article about opportunities!   […]

Buy, Sell, or Hold: The Risks

Last week we spoke about the conundrum that collision repair operators currently face. Because of the influx of Wall Street money and rapid consolidation, owners have essentially three choices when looking towards the future. They can:

  • Stay small and continue to compete on a standalone basis, or with the help of a franchise (more on the franchise approach in future articles);
  • Build scale, acquire competitors, open brownfields and compete with large MSO’s by becoming a small MSO;
  • Sell to a regional or Big 4 consolidator.

Each of these three strategies carries inherent risk, as well as potential rewards. This article will break down each of these three key strategies to help better explain the specific risks and rewards implicit in each. […]

6 Ways to Maximize the Value of Your Business

Previously we talked about valuation methods. Valuation is great, but like any tool, only as good as the person using it.

Anyone can tell you that your business is worth $10 million. But if you can’t find a buyer at that price, is it really worth that much? An investment banker once told me that a business is only worth what a buyer is willing to pay for it…PERIOD.

In order to maximize what a potential investor or buyer is willing to pay for your business you must be able to demonstrate the value of your business to them.

Understanding valuation methods is important (common valuation models are discussed in this article).

You also need to pay attention to recent comps. Know what other businesses in your industry sell for. If possible, know the profitability and size of those businesses so you can compare them to your own business.

But in addition to the above, here are six more ways to maximize the value of your business: […]

How Private Equity Makes Millions in the Collision Industry

We’ve talked a bit about the state of the industry and the Big 4, or the Big Boys as I sometimes call them (Boyd/Gerber, Caliber, Service King, ABRA). While they may be in the same business of fixing cars, the way they do things is systematically different.

(Editor’s Note: Keep an eye out for our upcoming article on the role of franchise based MSO’s and their impact on the industry.)

Perhaps the least understood difference is at the core of their business – how they actually make money for their shareholders.

Some people believe they give heavy discounts and make it up in volume. Others believe they don’t actually make money, and are barely holding on.

The reality is that these businesses are making millions upon millions of dollars. But not the way you may realize. […]

Profits Don’t Matter – Why it’s really all about cash flow.

It’s all about profits, right? You can’t survive in this industry unless you mercilessly watch your profit margins. Parts margin, paint margin, labor margin, gross profit margin, overhead expenses, the list goes on and on.

But what if I told you that the big boys don’t care about their margins? […]