I spent last week at NACE in Anaheim California. For those of you unfamiliar with NACE, it is the only US industry trade show dedicated to the collision repair industry. In the past I have done video updates from the floor during the week, but this year I was so busy that I just couldn’t find the time. Between presenting on growth strategies in a consolidating industry to hosting the super successful inaugural MSO Craft Beer Tour (already planning next year’s in Atlanta) to client meetings and the MSO Symposium I was running around like a man on a mission. Hey – even my own father showed up to say “Hi” at NACE this year! By Friday I had already begun to lose my voice. But I would have it no other way .
The highlight of the week for me, was by far, the MSO symposium. I have attended nearly every MSO symposium since 2012 and find them incredibly valuable. The level of talent in the room is unmistakable. The attendees are business owners and executives who run some of the best businesses in the industry. They are business owners who are focused on the future and looking to grow. I really enjoy being part of that environment. If you were at NACE hit reply and tell me what you enjoyed most about the week.
MSO Panel – The Value of Experience
One of the most popular sessions at the symposium was a panel discussion simply titled “MSO Panel”. On stage were a number of owners of successful MSOs. Of particular note was Rick Wood of Cook’s Collision. Cook’s is the largest privately held pure play collision repair organization in the country and Rick and his brother Don co-own Cook’s Collision. Their father founded the business in a single location decades ago, and the two brothers grew up in the business, growing it to what it is today.
Throughout the panel all the participants had amazing insights, but Rick’s insights stood out to me in particular. When asked about his success, he continually emphasized the importance of the people surrounding him. Never once did he take take sole credit for the rapid growth of his organization. For the leader of the 5th largest collision repair operator in the country, I found that quite impressive.
Specifically, there were two comments that really stuck out in my mind. When asked about his growth, Rick said a key factor in the growth of this business was hiring an attorney who understood how to get business deals done. Unfortunately, we so often think of attorneys as obstacles instead of enhancers. But one of the key areas we advise our clients early on, whether buying or selling a business, is to find a transaction attorney licensed in your state that understands business deals and can help get them done quickly rather than slow them down. For a buyer, the sooner you get a deal done the sooner you can start generating a return on your investment. For a seller, that means the sooner you get the deal closed the sooner you get paid (the longer a deal drags out the greater the risk it never closes).
The other comment that caught my attention was the importance Rick placed on hiring a CFO that understood his business. Rick said that Cook’s was currently on its fourth CFO and that the current CFO was the best CFO he has had to date…and also “by far the most expensive”. While that comment drew a number of understanding chuckles from the crowd Rick was very clear that experience delivered value well in excess of the cost.
Investors Investors Investors
In addition to the fantastic insights from the MSO symposium, I noticed another trend – increased investor and analyst interest in the industry. I spent time with equity research folks a NACE that were very intrigued by how consolidation is impacting the entire collision repair segment. Some of these analysts were looking at collision repairers like Boyd, Caliber, Service King and ABRA. Others were looking further downstream at the big 5 paint companies such as PPG, Axalta, AkzoNobel, BASF, and Sherwin/Valspar (yes, there is consolidation in paint manufacturing as well). Still others were simply new to the industry and looking to get up to speed and understand general consolidation trends industry wide to take that knowledge back to their respective firms. Regardless, all were very interested in how the industry is changing.
For some time I have discussed the ongoing investor interest in the collision repair segment. I think this is generally a good thing, as it implies capital will continue to flow into the industry. That means the large players will continue to grow. But it also means there is great opportunity for business owners that are looking to grow as well. I had a conversation with a business owner who was shocked to see his company listed as one of the top 10 largest collision repairers in the country. He had no idea.
But getting into the top 20 in the industry is an attainable goal for owners with a growth oriented mindset and the appropriate timeline. If your goal is to join this group let’s talk about how we can help you get there using the same tools and methodology as the large consolidators.
Until next week!