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Shop expansion: Think SOPs, tech-centric culture & duplicative processes

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Business Practices
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Jim Huard, a 40-year industry entrepreneur, and his wife, Kelly, recently shared some tips with Repairer Driven News on how to quickly grow successful shops and branch out to additional locations.

The Huards’ most recent venture was Painters Collision Centers in Arizona. In three years, the Huards grew the business from one to three locations earning $15.5 million. They sold to Classic Collision in January.

“It comes down to what kind of money they have, what they’re looking to acquire, what type of cultures they currently have, and if that culture is duplicative,” Jim Huard said. “We knew that our culture was duplicated in our processes so we were very confident in that. We had back office [operations], accounting, and everything already preset up.

“When we would look for a shop, we tried to find something that was in business, however, failing at a pretty high level where they were on the verge of bankruptcy.”

Huard began his collision repair career at 15 working in his father’s California shop. In 1978, the shop partnered with Allstate in the nation’s first direct repair program (DRP), according to Focus Advisors, which handled the Painters sale for Huard.

Eventually, Huard transitioned his family’s business to a computerized system, allowing them to maintain their high level of volume. Huard said the experience prepared him for a lifetime of guiding shops through complex changes and rapid growth.

He went on to expand two independent shops in Oregon. At the second, he became partner after growing revenue from $270,000 a month to more than $800,000, then stayed on through its sale as operations manager to continue assisting with the location’s business growth.

Ten years later, Huard began using his leadership and operational experience to help expand MSOs in Southern California, later becoming Caliber Collision’s first general manager then regional manager and turnaround specialist. He helped expand Caliber from 75 to 500 stores.

Huard went on to become an owner-partner at another MSO, Fix Auto ACAB Automotive Group. That’s where he met Kelly, who had real estate underwriting, controller, and CFO experience. After assisting in the sale of the group, the Huards went on to open their first Painters Collision Centers location in Queen Creek, Arizona in 2021.

“When acquiring another business, we would sit down with them and we say, ‘OK, where are you at and what do you need and how can we make a deal? …we would make deals with them based on what their needs were, and what their debt loads were,” Jim Huard said. “What do they need to get out of the hole?

“You’ve got to find something that is affordable to you. When you buy something that’s not doing well it typically has a small staff to it. One of the larger challenges the industry currently has is [a lack of] technicians, management, and writers. It’s kind of hard to staff at a store from scratch.”

The second store opened in Chandler in March 2022. In January 2023, they opened a dedicated advanced driver assistance system (ADAS) facility. Three months later, they bought their third shop in Apache Junction.

With Kelly handling the back office and Jim directing shop operations, the Huards grew Painters to three locations with over 100 employees within two years and made each acquisition cash flow positive within 30 days. Doing so has to do with throughput, Jim Huard said.

“How much sales can you get out and how quickly then what’s your current debt structure and your current financial structure per location? We were able to maximize sales in the first 30 days,” he said.

That was possible, he added, by ensuring the business workflow was preset so as soon as the shop opens, the work starts to flow immediately.

Independent shops that aren’t part of DRPs likely would have to go about the process a bit differently, according to the Huards.

“They’re going to have to make sure they have all their ducks in a row and are good at what they do,” Jim Huard said.

That includes knowing how to effectively recruit and retain employees and problem-solve.

“The owner-operators and the people that are around that person, they have to have a lot of wherewithal and they have to be able to deal with problems to quickly resolve them,” he said. “They have to be extremely good with people and they have to have a technician-centric culture where the technician is heard.

“The technician wants to be in an independent MSO. That’s important. They have to offer the benefits that a consolidator would offer. They have to offer competitive pay. They have to have upgraded shops with brand-new equipment. The young tech of today and even the seasoned techs want new equipment.”

It’s also important before purchasing a property to ask the insurance companies your shop works with if they operate in the areas you’re considering, Huard added. He said DRP shops should ask their carriers if the locations they’re thinking of fit their demographic.

The Huards said it’s a must as well to have someone within the shop’s leadership who has accounting, finance, and real estate contract knowledge and experience.

Regardless of whether you’re DRP or independent, Kelly Huard said shops that want to expand need to have strong processes, written standards of practice (SOPs), and strong administrative leaders.

“As you duplicate the shops, that’s the key to making sure that you can grow and not lose control of your growth,” she said.


Featured image: Stock teamwork illustration (Credit: Sakorn Sukkasemsakorn/iStock)

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