How They Did It
Voit Rich will be the first to tell you that his business is not like yours. Autowerkes Maine has a specific focus. Its market is unique; its facility, too.
The fact is, no two shops are the same, but that doesn’t mean his story can’t mirror your own.
“We’re all going to do things differently to try to get to similar places or goals,” says Rich, who has built a $1.7 million repair powerhouse just outside Portland, Maine. “All my career, I’ve learned from other owners—taken one thing here, one thing there—and tried to make it work in my own shop.”
That’s what made Rich and three other industry entrepreneurs want to share their stories with Ratchet+Wrench. Whether you’re working on in-house improvements in a single shop or looking to scale a 12-location company to reach a broader customer base, it doesn’t matter; all four have messages that can translate to any repair business.
“No one does things exactly the same,” Rich adds, “but you can learn a lot from how they did it.”
Jon Thompson Became an Expansion Expert
A 20-year veteran of the steel industry, Thompson has used a precise acquisition strategy to build an $8.5 million business in less than 10 years.
Let’s start with some numbers: When Jon Thompson purchased Butitta Brothers Automotive in 2005, the company had six locations churning out $2.8 million in repair work per year. In 2014, he did $8.5 million out of 10 locations.
Each location is and has been profitable since 2005, and the company, based in Rockford, Ill., is still growing—quickly; he’s opening two new facilities in 2015.
Today, Thompson runs the business with the intuition of an industry lifer. Except that he isn’t; he’d never stepped foot on a shop floor until he entered the buying process of his current business. He spent 20 years in the steel industry, first running the production floor before moving up the ladder into senior management.
If it seems like an odd transition to where he is today at Butitta Brothers, Thompson insists it isn’t.
“They’re both mature industries, and they are both industries built on service,” he says. “There are a lot of options for customers with similar products that most people don’t see the differences in. So, at the end of the day, it’s all about taking care of your customer.”
Systems, processes and procedures are the true keys to doing just that, he says. You eliminate wasted time and wasted energy, and you won’t ever waste an opportunity to land a customer.
Thompson’s systematic approach has carried over into every aspect of the business, and his careful, analytical process for expansion has allowed the company to grow rapidly while remaining profitable.
“You need to have an approach where you’re looking for opportunities and have a process in place to be able to take advantage of them when they come up—no matter if that’s expansion, a new partnership, anything,” he says.
Thompson’s Six Keys to a Successful Acquisition
Butitta Brothers has expanded with “new builds” in the past, Thompson says. Its additional facilities in 2015 will both be new builds. Overall, though, Thompson feels acquiring another shop has a much higher chance of success—if you follow these six rules:
1.) Get Your Mindset Right. Thompson views Butitta Brothers as a company that owns 12 shops, not a 12-shop company. Yes, there’s a difference: “Each shop needs to be an independent profit center,” he says. “You can’t have one lagging behind and draining the others. You’re not McDonald’s, and you can’t handle that.”
2.) Find Mutually Beneficial Opportunities. Start each new location with a clear conscience and no baggage with the staff, Thompson says. Find opportunities that benefit you and the seller. Bad blood is not a foundation for a successful future, he says.
3.) Focus on Profitability. When looking at the current state of the shop before purchasing, focus on one thing above all others: profitability. There’s no reason to have to dig a shop out of its own hole, Thompson says. It may limit your options, but, he says, that’s a good thing; you should never rush into an acquisition.
4.) Size Doesn’t Matter—but Location Does. Thompson’s ideal shop is three or four bays due to the low overhead, but his facilities today range from 2,500 square feet to 8,000. “You can adapt your systems to fit a building. You can’t adapt a neighborhood,” he says.
5.) Avoid “Joe’s Auto.” Don’t take on any business in which its reputation and customer relationships are tied to one owner. “If [the owner] leaves, that business leaves with him,” he says.
6.) Iron Out a Thorough Agreement. Each situation may be different, but cover all your bases and highlight the things that are most important to you. When Thompson first bought Butitta Brothers, two of his sticking points were that the former owner, Jim Butitta Jr., had to stay on for a year and that 75 percent of the staff had to be retained.
Danny Sanchez Scaled his Business—without Losing Its Culture
Sanchez built AutoShop Solutions into one of the industry’s premier marketing companies by focusing on three things.
Everything in running a successful business, says Danny Sanchez, boils down to asking yourself one simple question: How is this going to scale?
“That’s the biggest thing I’ve learned in my career,” he says. “Creating a business that can be successful for the long-term is all based on building one that has the ability to grow.”
To do that, a business needs to be able to (1) adapt and innovate, it needs to have (2) systems and processes that allow it to be repeatable, and it needs to have a (3) core company culture that unites the staff as a team pushing toward a common goal.
Each of those factors is critical to success.
Each is a lot easier said than done.
But Sanchez has done it, both in building Autoshop Solutions’ well respected national brand and, before that, helping turn his family’s Northern California shop into a $1.3 million business (with just three techs and a Monday-through-Friday schedule).
He moved cross country to North Carolina to found Autoshop Solutions as a one-man Internet marketing company in 2003, a good several years before anyone else in the industry took notice of the power the Internet could play in shop success.
Today, Autoshop Solutions has more than 750 clients nationwide. The company handles all online marketing for shops, from website design to SEO rankings to social media. He has more than 30 employees and Autoshop Solutions was named to the Inc. 5000 list of the country’s fastest-growing companies.
What’s the secret to his success? A focus on scale—and the three factors that allow a business to do that.
1.) Adapt and Innovate. “What you are doing today might not work next year, or in three years, or three years after that,” Sanchez says. “You always have to keep an eye toward what’s next and where you can improve.” In his business today, Sanchez encourages employees to try new tactics, and he doesn’t dwell on mistakes. “You have to allow them to make their own decisions and learn from them,” he says. “They become more invested and it helps everyone grow, including the company.”
2) Systems and Processes. Talk of SOPs and systems can sound very rigid. Sanchez insists it’s not. Proper systems and processes actually liberate employees. A shop example: In his family’s repair business, Sanchez created a parts-delivery system where each parts order was assigned the same number code as its repair order, as well as an additional letter, A-D. The letters corresponded to the bays in the shop where that job was assigned. So, when the parts were delivered—just by glancing at the order number—they could be dropped in the correct bay for the correct job. No one wasted time looking for parts, and everyone in the shop had more time to focus on their more important tasks.
3) Core Company Culture. Creating and maintaining a company culture is a business owner’s No. 1 job, Sanchez says. And if the other two previous items are done well, this is the final aspect that allows a business to flourish. For Sanchez, he cooks his staff breakfast every Friday morning, they celebrate each team member’s birthday with a cake and party, he throws elaborate Christmas celebrations, and has built a modern, trendy new office for the team’s home base. “Your business needs to be a place that people are proud to work at,” he says. “We’re all a part of something, and we all feel we have a stake in helping this thing grow.”
Todd Westerlund Found a Career in Winning Over Customers
From repair technician to CEO of Kukui, Westerlund has built lasting relationships through his ability to earn your trust.
Todd Westerlund isn’t an artist. The drawing was just a stick figure on the middle of a blank piece of paper. Then, he started filling in the space around it with “ideas” of where that stick figure’s life would lead him.
The stick figure was meant to be Westerlund, and sitting in a Northern California coffee shop the day after he abruptly gave his two-weeks notice to the service center at which he’d spent all 15 prior years of his career, he was trying to map out his life.
“I knew there was something out there for me,” he says now. “I just couldn’t figure out what it was.”
So, he drew that picture, and began writing those words, and, eventually, he filled in enough blanks to formulate a description of his unique talent: connecting with people on a personal level.
That realization sparked a quick, if not sporadic, career climb. After leaving that shop he went on to work for a Chevy dealer—then Diamond Certified, RepairPal, Demandforce and R.O. Writer, before landing at Kukui a little more than two years ago. At the time, Kukui was a small company with just five employees, but Westerlund helped it grow exponentially. Today, the full-service industry marketing company has five offices, more than 100 employees and is approaching 1,000 clients.
A lot of that success can be attributed to Westerlund’s innate ability to sell. It’s one of the reasons he was named company CEO last year.
And Westerlund’s secret to successful selling? “Listen to what your customers are looking for, and then provide it for them,” he says. “It’s that simple.”
Get customer feedback, he adds, and truly get to the root of customers’ issues. Don’t force what you feel is the best option on them; allow their feedback to determine your offering.
“I start a lot of meetings with clients, or even speeches at events, by asking them, ‘What do you want us to build next?’” he says. “You have to be the business that they need.
“You work together with them, you get their involvement, and they buy in, and it’s like they join your family. Now, you’re not selling anymore, you’re working together on something. There’s no art to it. Keep it straight forward.”
Voit Rich Built his Dream Business—Twice
After building Autowerkes Maine into a profitable, reputable Euro-focused shop, Rich elected to uproot and start over 30 miles south.
For Voit Rich, Autowerkes Maine is home—literally. The 12,000-square-foot palace of a repair facility just outside of Portland, Maine, isn’t just the shop he spent years planning, designing and, eventually, building. He lives in the 2,000-square-foot apartment on the second floor.
“Every time I’ve ever been in another shop or another business, I’ve taken note of the things I’d want or the things I didn’t want in a facility,” he says. “That’s what this place is—it’s everything from my years in the industry put together.”
And it’s a business that Rich took a very calculated risk to create.
He founded Autowerkes Maine in 1984, but it was never his sole business until 2002. (Until that year, he also owned a number of mobile home parks.) He simply allowed the business to grow organically. By 2005, the business was humming around $650,000 in sales out of 3,500 square feet.
Autowerkes Maine had built a strong reputation and a loyal following; nearly 70 percent of his customers drove more than 30 miles to get work done at his shop.
With a deep passion for European vehicles and a natural entrepreneurial spirit, Rich had felt like he’d built the business he always dreamed about owning.
So, naturally, he decided to blow it up and start over.
His commuting customers—again, 70 percent of his base—nearly all drove up from Portland.
“Moving south, I thought I could retain my customer base and add to it,” he says. “It was a huge opportunity.”
Rich made the move in 2005.
And jumping ahead nearly 10 years, his facility isn’t just a physical embodiment of that plan, but it also serves as a symbol to Rich’s core principles of running a business.
Fiscal Responsibility: The Facility. “The fact this facility exists comes from how we approach our finances,” he says. “We never overreached, we always saved, and it paid off.” Rich’s dream facility didn’t pop up overnight, though. Leading up to when he broke ground in 2009, the business had never had an unprofitable year and never had to rely on a dime of financing. He rented space for four years after moving south until he found his ideal plot of land. Rich’s Lesson: Stash a certain percentage of revenue each month into savings; keep it consistent and treat it as overhead.
A Focus on Quality: The Team. Walk up the stairs from the shop’s lobby and you’ll find what has the appearance of a corporate boardroom—plush chairs, wooden tables and a large monitor. This is his shop’s in-house training room, where Rich brings in instructors from WORLDPAC and other organizations for his team. Part of the reason for the facility’s many amenities, Rich says, is recruiting. And he says he focuses on just one thing in candidates: motivation. Rich’s Lesson: Picture your perfect team member, then envision what it is they want out of an employer; that’s what you need to design your facility and business around.
Efficiency is King: The Systems. Autowerkes Maine has a pristine shop floor with all the latest tools and equipment. It’s also set up uniformly with eight two-post lifts and all equipment along one wall. Everything, Rich says, was designed with workflow and processes in mind. Rich’s Lessons: When creating systems, focus on the best route for a technician to complete the task the way you want it completed; start with the end result and work your way back.
Protecting a Reputation: The Marketing. The signs are impossible to miss. The facility is located on U.S. Route 1 and is visible from Interstate 295 (with two exits less than two miles apart, north and south). Rich takes advantage of that location with a 30-foot long LED sign facing the highway. When he first moved to the area, he saturated the market with every kind of advertising to build brand awareness. All of it has kept the shop overflowing with business (it’s approaching $2 million in sales this year), which gives Rich’s team the opportunity to win over customers. Rich’s Lesson: Treat customers like family, and they’ll do the same in return. Rich wants everyone who comes in the door to feel like they’re at home at Autowerkes Maine. Just like he is.