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Letter to the Editor

Farewell Small Shop?

Although they face growing competition, operators of smaller shops say they are not going away.

Hank Nunn, a popular instructor of management and marketing courses aimed at collision repairers who draws upon his own years of experience as a shop owner, often speaks about the benefits of being among the industry's tens of thousands of smaller shops.

"You enjoy rapid adaptability," Nunn tells such shop owners, pointing out sole proprietors have the flexibility to not have to hold a meeting or notify partners or investors before making a change. "You can change to meet the market on a whim."

Even more importantly, Nunn says, such shop owners can tell customers and those who may refer customers to you that you offer something no one else can: you.

"Tell that potential customer who comes into your shop, 'One thing you get here that you don't get anywhere else is my service and my attention,'" Nunn says. "'You can go to the big shop down the street, where you're just one of 150 cars in progress, or you can come here where you're one of 5 or 10 or 15 and where I personally take care of you and your vehicle.'"

Focusing on attentiveness, speed of service and how much more important every single customer is gives the smaller shop a marketing advantage over their larger competitors, according to Nunn.

At a time in the industry when consolidation, insurer-owned shops and an increasing reliance on cost-savings driven by volume are among key trends, what's the outlook for smaller collision repair operators? Are they likely to face the same fate as many corner pharmacies, neighborhood grocers and smaller hardware stores?

Here to stay

No way, says Mike West, whose seven-employee, 6,500-square-foot shop has been on the same corner in the Seattle suburb of Tukwila, Wash., for more than 30 years. The business and building have expanded over that time, he says, but he believes shops of his size have a "tremendous advantage in today's market."

"You look at these mega-shops or consolidators...We have distinct advantages over them," West says of smaller shops. "Some people actually want to know the people who are repairing their car. Some people like that personal attention. When I go somewhere that I've been doing business for 30 years, it's nice that they know my name when I walk in. We have customers like that. We trade on that fact. We created a niche market in our area."

West's wife Donna says it's very unusual for one of them not to be at the shop every day when it's open. They enjoy operating the business, she said, so they're not interested in being absentee owners. That has become a selling point for them.

"Our customers come in and ask, 'Where's Donna?" or 'Where's Mike?'" she says. "People come to us because they know we're going to be there every day."

Mike West agrees with those who say success as a smaller operation may require developing a niche.

"I never really used to understand what that meant," West says. "I thought it meant focusing in one type of car or a certain part of the market. But for smaller shops, it can mean you're creating a niche market of people who like that personal attention."

John and Mary Dickerson are another husband-wife team who see a bright future for smaller shops in the industry. The second-generation owners of Dickerson's Collision Repair in Garland, Texas, say marketing, customer service and convenience are the three things that can help almost any size shop compete with "the big boys."

"One of the main factors that will influence where a customer will take their business is convenience," Mary Dickerson observes. "No one wants to drive a long way out of the way. I know for me, I want something that's close to where I live or work."

In many areas, it can be tougher for a larger shop to locate closest to where a large population of people live and work, she says.

Like Mike and Donna West, the Dickersons also see "an attitude of indifference by employees" in many larger businesses in many industries. Again, that can give an advantage to the small business operator willing and able to provide courteous, personal attention.

Marketing is only going to become even more critical to the survival of smaller shops, the Dickersons believe. But without the marketing budgets of larger shops, smaller shops have to be smarter about how they market themselves.

"I think it's important when planning your marketing strategy that you know as much about your competition as possible," Mary Dickerson, who holds a degree in business, says. "Learn all you can: Are they open on Saturday? A lot of people are so busy during the week that they don't have time to handle car repairs during the week. I know just being in my office on Saturday mornings has brought in many jobs that our competition - larger and smaller - missed out on simply because they are not open on Saturday mornings."

Like many larger shops, the Dickersons knew it was worthwhile to call regularly on insurance agents, mechanical shops and others who could refer them work. They tried hiring a full-time salesperson, but found that was not cost-effective. But with only the two of them in the shop's office, it can be tough to have one of them away.

"So now on the mornings when I go out and make sales calls, I'll have a temporary come in and work for me while I'm out," Mary Dickerson notes.

Networks and new profit centers can help

One way some smaller shop operations are trying to bring more revenue to their door and more profit to the bottom line is by offering more services. Towing and mechanical services are two obvious close fits with collision repair work.

Another added sales opportunity that has worked well for Ken Stanley is spray-on truck bed liners. Stanley, owner of Competition Auto Supercenter, a collision repair shop in Flagstaff, Ariz., has been selling spray-on bed linings for about 10 years, and says his company installs them on 10 to 40 trucks a month. Stanley hired a full-time employee to spray the bed linings, although that person assists the shop's collision technicians when not busy. The service also requires a designated ventilated area.

Tim Tait, owner of Brite Way Collision & Glass in Bend, Ore., said windshield repair not only offers an added service he can provide his collision repair customers, but more importantly it attracts customers he might not otherwise get.

"It actually brings us different customers, a new client base, and gives us a chance to inform them about the other services we do and let them know about our quality standards," Tait comments. "It definitely produces some profit for us, but winning a new collision customer because you're willing and able to help them with this service is really important, especially in a town our size."

Similarly, being able to offer small damage repair can help generate revenue and bring in larger repair jobs. Paintless dent repair is a service virtually any shop can offer without adding staff or overhead. And Doug White of Capitol Body Shop in Jackson, Miss., says his company has added revenue using the small-damage repair system offered by the shop's paint vendor, BASF. Using the system, according to White, allows his shop to offer vehicle owners repair of small scratches and damage - up to 1-1/2 inches in diameter on a vertical surface - at a far more reasonable cost than traditional repair and paint procedures. The process, which requires mini-spray guns and "spot blender" allows the shop painter to make "an undetectable repair in a smaller area than usual," White says.

Most owners of smaller shops say banding together with other shops is one way they are able to compete with larger players in the industry. They join "20 groups" to share ideas and compare their shop's performance with similar sized shops in other markets. They join the local and national trade associations to get industry information and discounts on products and services. Some have found it helpful to join one or more of the dozen or so shop networks created in the last several years. These networks vary widely in terms of fees and services, but most promise some combination of marketing benefits, discounts on products and services, and training.

Successful operators of smaller shops caution that no one added service or network is a cure-all or a guarantee for success, but if chosen carefully, they may give shops an edge on larger competitors. Rare - but not endangered

With the continued growth of mega-shops, local and regional consolidators and multi-location collision repair businesses, smaller shops are likely to face even tougher competition in the future. But there will always be a place, Mike West and others believe, for smart operators of all size shops who focus on quality work, personalized service and continuous improvement and marketing of their business.

"When people come in to get their car fixed, they like to be recognized, they like the attention, they like the fact that they think you're the one who is working on the car and fixing it yourself and checking it out," West states. "You should capitalize on that for all you can, because it's getting to be rarer and rarer."   o

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