Monday, 07 December 2015 15:14

Nebraska MSO Owner Says the Only Constant in Industry is Change

EBS front

Eustis Body Shop is one of five locations in Nebraska owned by Doug Keller

Doug Keller turned his childhood passion for cars into a thriving MSO in central Nebraska. He opened the Eustis Body Shop in Eustis in 1979 and has expanded to five other locations including: Lexington, Grand Island, Kearney and Cozad. The latest addition to the corporation is a Mechanic Shop in Eustis as well, which works hand-in-hand with the body shops.

Q: With your experience running five shops with more than 50 employees, what is your advice to others who are thinking about opening more than one shop?
A: I think before you can consider taking on another location, you must have the people in place who can run your current location, and the people in training to manage your new location. Your attention needs to be focused on making all of the pieces fit and work together.

Another thing that most people do not consider, beyond the cost of the land, equipment and building, is working capital. That is the money needed to pay for all the inventory and labor to produce a finished product before you get paid for that job. This can amount to a considerable amount of money in the beginning until you are able to earn cash flow. The amount depends on your anticipated sales and your cycle time. The faster you can turn your inventory, the less you will need in working capital. You also need a very good bookkeeping system, and an accountant who can guide you through the process.

Q: What are some of the benefits of running an MSO?
A: The benefits of multi-locations are the economics of scale. With more volume, you will be able to negotiate better discounts from paint and parts vendors. Also, most DRPs like to deal with MSOs because they have consistency in quality, cycle time and price. They also like dealing with one person that represents all of the locations.

Q: As vehicles have become more complex, how have you addressed this in your shops in terms of training and equipment?
A: We have the equipment required to repair damage to most late model vehicles including 3D measuring, welders, specialized aluminum tools, and down draft-bake paint booths. The key to making all of this equipment work is our technicians. We are constantly training our employees and always working on our I-CAR gold status.

Q. Can you tell us about your employees?
A. We are so blessed to live and work in an area that has such a great work ethic. Many of our technicians have some farm background or have had other jobs that allowed them to become very good at figuring out how to repair things. Most of our technicians have gone to tech school but some we have hired and trained right out of high school. We are also fortunate in the fact we have very little turnover. Most of our employees have been with us for many years.

Q: You’ve said in the past that you strive to have the most progressive auto body repair center in Nebraska. How are your shops progressive and what does that investment do for a body shop?
A: We offer free loaner vehicles and each shop has from five to eight loaner vans. Every shop has towing equipment and are on 24-hour call. We are now “dealer certified” for GM, Chrysler, Nissan, Hyundai and are “aluminum certified” for the new Ford F-150. We are involved with DRPs for State Farm, Farm Bureau, Shelter, and Progressive. We also have a strong working relations with all the non-DRPs in our area.

Q: What are some of the benefits of being part of a DRP and what would you say to shops that are not part of one now?
A: The benefit of being involved with a DRP is consistency. It is more of a partnership. Normally, there is an operating agreement that works for both parties. Terms are laid out for rates, mark-ups and, most importantly, payments are reliable. There have been a couple of DRPs that we backed away from because of the great working relationship we had established with the local adjusters, and the DRP requirements for that particular company were too restrictive.

Q: Is there additional information you would like to share with body shops?
A: I have been in business for 36 years and have found that the one thing that is a constant is change. This is what keeps this business exciting as a challenge and sometimes frustrating. My involvement in Axalta’s group 20s has had a very positive impact on our overall strategic plan for growth. Since becoming involved six years ago we have increased our cycle time, our CSI and after a lack luster sale growth of only four percent have achieve seven percent growth over the last five years. Also, I have found that all my employees, who make our company so successful, want to win, and my job is to help them understand the rules and how to play the game to win!