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Friday, 07 May 2021 15:50

Two Responses to COVID for Collision Repairers---Resilience and Realization

Written by David Roberts, Focus Advisors
Two Responses to COVID for Collision Repairers---Resilience and Realization Oliver Roos/Unsplash

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In dozens of discussions with shop owners over the past four months, there is a marked divergence among MSOs about their plans for the future. 

Many who are experiencing a strong rebound in revenues have strong balance sheets and managed their expenses throughout the pandemic, and now have embarked on more aggressive expansion. Others are reconsidering their alternatives post-COVID, as their recovery proceeds more unevenly and more slowly than anticipated.

 

The former are carefully identifying expansion opportunities. One client is in the process of buying a dealer body shop. Another client has committed to building a large greenfield location in a rapidly expanding portion of his market. 

 

Among those who are reconsidering their future are some who have been planning their exit opportunities for a long time but have been reluctant to pull the trigger.  Others are exhausted: “I just don't have it in me to roll this rock up the mountain one more time. COVID really took it out of me.” Slow recovery seems to be a common thread: “I’m finally ramping up, but at this rate it will take me over a year to get back to where I was.”

 

COVID may be the straw that broke the camel’s back for some. Between pressures from insurance companies (including being dropped by State Farm or USAA), additional investments for certifications and new equipment, and the retirement of senior technicians, several operators have decided that it's time to let somebody else take over the business.

 

For some of our clients, the hard decision to sell has already been made. Now they're spending their time preparing their companies for a positive exit with a more defined future for their technicians and managers.

 

One operator who is still sitting on the fence is concerned an acquirer may not treat his employees as well as he does. Another is worried because his children have no interest in the business, the family name on the door will be lost forever. Another is uncertain about...


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