I was in Miami last week working with one of my mastermind “20-Groups”. The particular group I was working with is a group of paint distributors, representing over $100 million in annual revenue in North America. As it was the first meeting of the year, the focus of the meeting was on budgeting and goal Read more about Mastermind Groups, Budgeting and Goal Setting[…]
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! […]
Working Capital is something that is scrutinized by almost every company but rarely talked about in the collision industry.
But I guarantee every large MSO in your marketplace is actively managing Working Capital.
It is also something that major vendors will consider if you are negotiating for a pre-bate or other consideration for purchasing their product.
Banks look at it too. If you want to borrow money to grow, they will scrutinize Working Capital to ensure that you can afford the loan.
If you ever sell your business, it will be a hotly negotiated topic as well.
Most business owners do not look at working capital until one of the above situations forces a working capital negotiation. But that is the wrong time to start managing working capital. It is like going on a diet the week before your annual doctor checkup. […]
I wanted to take a break from talking about finance and the collision industry and spend a bit of time discussing the importance of employee alignment and engagement.
Normally we talk about growth and how to finance and account for that growth. But what gets lost in that narrative is that growth is impossible without a group of people working towards a common goal.
In corporate management speak, that is called “employee alignment”.
What is employee alignment? In its shortest form, alignment is about getting employees to think like owners. […]