As an industry trainer, consultant and "20 group" facilitator, Mike Anderson helps single-location shop owners understand
and improve financial numbers. But Anderson – himself a shop owner in Alexandria, Va., – thinks many single-location businesses
will not survive long-term as they go up against the increasing number of multi-shop operations (MSOs).
ILLUSTRATION COURTESY OF JOHN LAMB/DIGITAL IMAGES/GETTY IMAGES
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"There will still be a place for single-location shops, but except in smaller markets, they will need the volume of work to
afford even just the increasing amount of training they're going to need," says Anderson, whose Wagonworks Collision does
$3 million in annual sales. "My training budget alone last year was $100,000. And other costs are going up."
Other industry players point to the collapse of large chains such as CARA Collision & Glass, M2 and Fox Collision, and say
that customers, insurers and shop owners may be placing too much faith in the benefits MSOs offer.
"The problem has been execution," consultant and former consolidator CEO Matt Ohrnstein of Symphony Advisors says of the mixed
success of MSOs. "It's very difficult ... I can tell you that firsthand." Ohrnstein, Anderson and other industry participants were asked about the prospects of single-shop operators facing competition
from MSOs. Here are their suggestions for surviving and thriving.
Largest independent repair chains
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WATCH YOUR CASH/DEBT ISSUES. Jordan Hendler is executive director of the Washington Metropolitan Auto Body Association, a group that includes successful
MSOs. But she foresees the economy taking a toll on businesses with debt or over-reliance on credit – something prevalent
among MSOs, she says.
"In some cases, that credit is gone, so they're much more vulnerable," she says. "My advice for any size collision repair
business is to get debt-free. Don't try to start another location if you're under-funded or don't have 100-percent process-orientation
in your current shop."
Ron Reichen, owner of the single-location Precision Body & Paint in Beaverton, Ore., agrees. MSOs have financial advantages
sharing costs across multiple shops. But, they have the overhead of multiple buildings, property tax bills and utility bills.
Efficiency is key for competing single-location shops.
"Are you maximizing use of your facility? I'd rather have one or two locations running more hours per day than six or seven
just running eight," Reichen says, who looks for ways to be lean and not waste materials. "Pick up that partial roll of tape
on the floor and don't mix more than you need."
MATT OHRNSTEIN of consulting firm Symphony Advisers believes insurers still very much need single-location shops even more
than a decade after "consolidation" in the industry began.
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Understand and capitalize on your advantages, all of them. Single-location shops have strengths that can be tough for MSOs
to match, Hendler and others say. These include location and longevity.
"If you've always been in the right spot, MSOs might not necessarily affect you," she says. "It's always harder to get into
a (new) market (to do business) than it is for those who have been there."
Some vehicle owners prefer to work with the single-location facility where they get something they won't at MSOs: An on-site
owner making sure quality and customer service remain high.
