So you want to expand your business. Maybe you’ve been saying for the last five years that expansion is in your five-to-ten-year plan. But have you made any moves to solidify this future for yourself?
As a business owner, Greg Bunch, owner of Aspen Auto Clinic, knows how difficult it is to grow. He grew his business from one location to the fruitful five locations throughout Colorado Springs, Colorado, he has today. So, how did he do it?
Bunch explained his journey and offered a roadmap to going multi-location for other automotive repair shop owners during his session “Introduction to Going Multi-Location” that aired Thursday during the AAPEX Virtual Experience. As founder of Transformers Institute, a coaching and consulting group for automotive repair shops, he has helped other shop owners chart their path and create a living they dreamed of while making a difference in their communities.
Bunch began his presentation by reviewing the automotive aftermarket landscape. The average age of a vehicle is 11.8 years old, the Asian and European VIO (vehicles in operation) has dramatically increased over the last 20 years, electric vehicles are on the horizon and private equity is growing at a fast rate in the industry, he said. Plus, the automotive aftermarket is solid and predicted to expand and grow over the next decade. These indicators, Bunch said, present opportunities to go multi-location.
Not only can a shop extend its reach by differentiating, having the ability to service both domestic and import nameplates via multiple locations, but it will also be more attractive for private equity if owners choose to exit the business and sell.
“Private equity would much rather pick up 5, 6, 7 shops all at once, and, for you, the payoff when you go to sell your business is better.”
Bunch explained that one of the first steps to going multi-location for shop owners is to stop working in the business and start working on their business. You also must understand which role you’ve been taking in the shop—the manager, technician or entrepreneur. Once you identify where you stand, educate yourself in your areas of weakness.
For example, Bunch explained that he was a technician who rose through the ranks to store manager. As a technician, he loved problem solving and fixing things. But a defining moment came when he attended an industry event and was asked to write down one thing he needed to do to take his business to the next level.
His answer? “Stop being an automotive person in business and start being a businessperson in automotive.”
From there, he put down the technical articles and papers and started cracking open business books. He learned to better read financial statements, enhanced his knowledge of investing in commercial real estate and learned more about his business’ worth as a one-location versus five-location dealership. He also delved into learning about teamwork, leadership and culture and how they would affect the growth of his business.
Before deciding to expand, Bunch advised that shop owners understand what kind of business model they have and if they can duplicate it. He encouraged owners to prepare to go multi-store by scoping out their market value, defining their strengths and weaknesses, and creating an action plan from “as is” to “to be,” as a roadmap for where they’d like to see their business.
He recommended owners do a SWOT test of their current business to find its strengths, weaknesses, opportunities and threats. Do this with each aspect of the business, he said, including its mission, sales, marketing, operations, IT, accounting and human resources.
In finding your shop’s market value, Bunch recommends owners think about their “why” for being in the business, if their business can be duplicated without their daily presence, the type of employees they’ll need and to define their customers and competitors.
In executing their vision, Bunch advised shop owners to think about what current business functions keep them up at night, what functions of the business need to be bolstered to increase revenue and which leaders are best suited to grow with your multi-store vision.
“With people you have in leadership roles, you’ll need to put people of higher skillsets above them in your company if you scale. There may be people in your organization who want the job, but they won’t be qualified because they won’t put in the work to get the certain skill set you need to take your business to the next level.”
Bunch said as you’re scaling your business, a helpful way to build structure and guide your team is through personality testing. That way you can self-evaluate as well as learn more about your employees’ strengths and weaknesses to determine in which position they’d best fit in your organization and how you can help them grow.
Lastly, Bunch advised that once shop owners plan how they’ll reach that “to be” state of their business, that they write out their goals, breaking them down and evaluating them frequently.
“When you’re building a road map, it’s one thing to write it out, but what you need to know is what needs to happen the next hour, the next day, the next quarter and even the next year in order to see progression and achieve those goals.”
Finally, Bunch asked shop owners to consider their competitive advantage—not only in their market but with employees as well.
“Dig deeper than we’re honest, we fix cars right the first time and do good work. Now, people service ADAS, look at all different types of makes and models of cars, have extended hours and geographic exclusivity,” he said, adding that, “You must be able to maintain your competitive edge.”