Shop Strategies: Indiana MSO Discusses How to Create Process for Duplicable Business

Owner's of Tom & Ed's Autobody
From left: Eric Newell, Andy Tylka and his father, Tom

Tom & Ed’s Autobody dates back to 1983 when Tom Tylka and his partner, Ed, moved their garage operation into a 2,000-square-foot facility in Schererville, Indiana, after quitting their jobs at an engineering company.

Tom spent time marketing the business during the day and repairing vehicles at night. The business arrangement soon became very stressful for the partners, and a few years later, Ed left the company.

“My dad decided to keep the name Tom & Ed’s because he had recently purchased signage and stationary,” said Tom’s son, Andy, who joined the company in 2009. “He felt the business was more about the products and services offered, rather than the name, so he put his finances into running the shop and keeping the lights on.”

Tom eventually purchased the building he was leasing, and over the next decade grew his business to include three locations. Tom & Ed’s opened three additional facilities, including a boat and RV division, during the last 18 months, bringing the total number of locations to six---all within a 15-mile radius of one another.

Andy has worked as CEO of the company since 2009. Along with Tom, the majority owner and chairman, the business’s leadership team includes Eric Newell, who joined the company five years ago.

Eric had taken a break from the collision repair industry and had become a full-time firefighter when he re-connected with Andy. The two had attended high school together and soon found out that they both had a background in the collision repair industry. Andy asked Eric to help out part-time at Tom and Ed’s working as a compliance manager. Recently, Eric was promoted to COO.

“We’re opposite but similar, so we are constantly looking at different sides of the business,” said Andy.

Autobody News talked to Andy and Eric about some of the strategies the company has put into place during the MSO’s recent growth.

Q: Can you tell us about the processes the company has implemented to help create a duplicable business?

Andy: Our goal has always been to take as much human error out of the company as possible. We do this by clearly defining our business process and sticking to it. We try very hard not to veer away from what we’re good at—collision repair and paint. When companies concentrate on restoration or special jobs, I feel like there are too many variables in the business. That can often lead to errors. When we know that there is just one outcome that needs to happen---the car needs to be repaired perfectly---we’ve found that it’s a lot easier to manage the business.

Eric: When I initially joined the company, it was the first time there was a compliance person who visited all of the locations. We noticed that each store was running a little differently than the others. This included how estimates were written, where parts were ordered, and who they sublet work to. As a result, we put our efforts into making sure everyone was on the same page. Each store now writes the estimate the same way and the process is consistent from check-in to delivery. Parts are ordered from the same vendors, which allows us to negotiate better deals. We are also able to move staff from location to location because they all understand the process and know what is expected. Not only has this change made it a lot easier to manage from a corporate standpoint, but it ultimately enables Tom and Andy to expand to new shops.

Q: What advice can you offer business owners who want to open multiple locations?

Andy: When we decided that we wanted to grow our business, we knew we had to build a corporate structure around that growth. That’s where Eric coming on board full-time has really helped. About a year ago, we had our paint company come in and spent two full days mapping out each of the corporate employees’ responsibilities. That has been extremely helpful. One of the reasons I believe we have been so successful is that we’ve aligned ourselves with good partners.

Eric: It’s very important to have a corporate business plan as well as a clear idea about what your business is going to be. Whether you are building a new structure from the ground up or acquiring another business, you want to ensure the decision is in line with your strategy. As we have added locations, we always make sure it is a good fit with Tom & Ed’s business plan.

Andy: I think a huge factor with multiple locations is being transparent with employees. I believe what sets us apart from other collision repair businesses is the education and ownership our staff welcomes into the business. I am very lucky to have employees who want to continue to learn self-improvement. Every quarter, we focus on four KPI goals for each facility to work on. Then we teach employees how they can influence those KPIs. As they grow in these fields, we tend to move on to other KPI goals for the next quarter. By being transparent with the staff and teaching them how to understand what their numbers are and how they are doing, it creates constant education and improvement.

Q: In what ways are KPI goals determined?

Andy: We look at historical data and then spreadsheet all of our KPIs every month. This gives employees the opportunity to look at the spreadsheet and see what other locations are doing. If a facility starts to fall off on a certain KPI, such as gross profit, we’ll bring that to their attention, so that they can focus on it. The thing we do very well is notice our deficiencies immediately. Then we can fine-tune them and ensure our locations are as consistent as possible.

Q: How did your staff respond to the changes?

Andy: It was definitely a culture change for the staff. It’s not that the locations were doing anything wrong; they were just doing it differently. Breaking someone from a habit that they had been doing for 10 years was very difficult. It was nice that Eric was constantly there as a reminder to educate them and ensure the changes were implemented, rather than following up a month and a half later and realizing they are still doing things the same way.

Q: How has training been helpful to employees?

Eric: First, we take a look at the changes we are going to make moving forward and then I generally go to each location and determine their strengths and weaknesses. Next, we develop specific training material to give employees a roadmap so they all get to the same destination.

Q: Can you explain how regular meetings have been beneficial to your growth?

Eric: We have quarterly meetings that primarily focus on the various job roles, for example managers or estimators. Twice a year, we hold a meeting with all of our 50 employees.

Andy: What I like about the meetings is they become mini-roundtable groups. The staff is very close across all the locations and often text and talk to each other to problem-solve an issue. They are constantly communicating with one another because we do load level quite a bit from location to location. We’ve noticed that everyone wants each other to succeed. That’s how our meetings are as well. We’ll bring up an issue that one location is having, and another location manager or CSR will help come up with a solution. I look at it as peers managing peers. It works out well because there is a lot of ownership that comes into play when we have those meetings.

Q: How have you fostered a supportive working environment among staff?

Eric: At Tom & Ed’s, we stress the importance of quality of life. We want our people to be happy. If they have a stressful situation they might need help with, we have an open-door policy. We’re always willing to listen and talk and we make sure to take time to focus on the individual as a person rather than just an employee.

Andy: All the locations take care of one another. I’m ridiculously lucky with that. I’ll find out after the fact that locations have been communicating for the past two days to solve a small issue and they don’t even involve me. Although I want to feel needed, the awesome thing is they are taking care of themselves. That is the culture my father has always instilled at Tom and Ed’s Autobody throughout the 35 years of ownership.

Q: Are all of your locations part of a DRP?

Andy: Different locations have different DRPs. Some locations work well with a DRP business model and some don’t. We don’t put every location on every DRP possible because we want our locations to succeed in their DRPs.

Q: What advice can you offer shops in terms of working with adjusters?

Eric: The number one thing you have to remember is that your customer is the customer, and not the insurance company. We don’t work for the insurance company. We work with the insurance company to provide great service and a proper repair for the customer. Tom has always run the business with the motto: The customer always comes first. Number two, it’s important to understand that you are going to have to work with adjusters. They have a job to do.

One thing we have been good at is educating ourselves. I work with my managers and estimators, so they are able to present the facts and supporting data to build value in their position as a repair professional. That’s really important. We need to beable to communicate fact-based knowledge in a confident and educated manner. The way to do that is follow the OE repair manufacturers’ guidelines. At Tom & Ed’s, we research these guidelines and become very educated so when we are talking to adjusters, our information is based on the most up-to-date information available.

Andy: What Eric does really well is teach the staff how to take the emotion out of working with adjusters and deal with the facts and how to be extremely consistent. We are dealing with the same adjusters every single day---the same personalities. If you are consistent in the business model you have and what you believe in and the facts you deliver, the pendulum shifts over to what our culture is, and we start managing our business rather than let someone else manage and direct us.

Eric: The other thing that we do at Tom & Ed’s that a lot of other shops don’t and probably should, is include customers in the conversations that we have with the adjusters. It’s very simple to include them if you agree with a specific provider, but if for some reason you don’t, you need to remember that we are the repair professionals, not the insurers. What we do is let customers know we’re not going to repair the car any other way than the way it’s supposed to be repaired. Many times, when customers get involved, a lot of things can get done in a very efficient fashion.

Stacey Phillips Ronak

Stacey Phillips Ronak is an award-winning writer for the automotive industry and a regular columnist for Autobody News based in Southern California.

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