On a recent episode of The Collision Vision, host Cole Strandberg sat down with Jacob Tilzer, founder and managing partner of Accrual Equity Partners and founder of Kaizen Collision, which Tilzer built from a single location into one of the industry's fastest-growing multi-shop operators.
Tilzer said Kaizen was doing about $150 million a year at its peak. On the episode, he walked through what he learned scaling and exiting that business, how he sizes up founders as an investor, and where he sees growth opportunities for collision repairers.
Strandberg noted on the episode that he works for Tilzer, having joined NBB, an Accrual Equity Partners portfolio company, in April.
Kaizen started as an "anything auto" business
Tilzer said Kaizen's original model covered far more than collision repair. "When we first got going we were mechanics. We were auto glass guys. We were collision guys. We were just scratch and dent repaint guys ... we were anything auto."
He said the goal was simple: "If you had a vehicle and you had a need ... I wanted our team to figure it out." The company's original logo listed collision, glass, and mechanical under the Kaizen Auto Care name.
Key takeaway: The multi-service model Tilzer now recommends to collision owners is the one Kaizen started with before shifting heavily toward collision.
Growing sales is not the same as having cash
Tilzer said each stage of growth demanded different systems. "What worked for us at a million didn't work at five, didn't work at 10."
One of his first lessons came in Kaizen's second year, when the shop was busy but short on money. "There was cars everywhere ... sales were going up and I was broke." A dealership-owner mentor told him sales is one thing, but learning cash flow is a whole other thing.
Recounting how that mentor walked him through the problem, Tilzer pointed to insurance and fleet receivables. "You've got all this accounts receivable. You're dealing with all these fleet companies ... you got to have a process to stay on top of these people."
He added that rapid growth often lands hardest on the office. "Front end can shovel the sales in and honestly the guys can fix it super fast. It's always the accountants that ... are expected to overnight like make sense of it all."
Key takeaway: Tilzer described tightening accounting procedures and staying on top of receivables as one of Kaizen's first growing pains, noting that sales growth can outrun the back office.
Expanding into a tougher regulatory market made the business stronger
When Kaizen went multi-site, it expanded across state lines, which Tilzer described as moving "from wild wild west Arizona to highly regulated California." He pointed to California's employee laws and EPA regulations, saying, "I do think that was one of the things that made us stronger."
He listed later turning points as handing responsibility to regional operators at around 10 locations, learning investment and finance, and integrating technology to build systems for scale.
Key takeaway: Tilzer described Kaizen's growth as a series of inflection points, from going multi-site to regional management to finance and technology, each requiring new systems.
Scale is a choice, and single-store success is a real option
Tilzer cautioned that growth carries personal costs. "With scale, there's a lot of sacrifice that comes with that. It's a lot of hours on the road, a lot of time away from family, a lot of sleepless nights."
Citing a friend in home services, he said "revenue is for vanity. And I think the industry has been really vanity driven."
He pointed to high-performing single shops as an alternative path, describing stores "that do 10 million, 8 million, 7 million, and they're throwing 3 million down at the bottom line." He added, "So, just depends on what you want."
Key takeaway: Tilzer framed multi-site growth as one option among several, and said a profitable single location can fund a retirement, depending on the owner's goals.
People work for appreciation and team first, pay third
Tilzer said Kaizen's first five shops were staffed by people who believed in the vision, and that he didn't make any money for seven years.
He shared advice he said may have come from Jim Guthrie: "Pay is like the third thing to your employee base that'll motivate them and make them connected. The first one's just to be appreciated in the environment. Two is to be connected to a team and then third was obviously compensation."
Key takeaway: Tilzer cited a ranking that puts appreciation and team connection ahead of compensation in keeping employees engaged.
Hire for the seat, not for chemistry
Tilzer said communication is the issue that repeats most in service businesses, and that hiring often goes wrong because managers favor people they get along with. "A lot of managers will end up hiring people that they get along with versus hiring for what that seat and role needs."
He said that produces teams that get along but can't move results forward, and that he encourages his teams to push back. "We've encouraged people to challenge and to speak up. We smoke out a lot of tough issues."
Key takeaway: Tilzer recommended matching personality profiles to role requirements and building a culture where employees can challenge leadership.
General auto repair sits where collision was more than a decade ago
Asked where the opportunity lies across automotive, Tilzer said general automotive aftermarket repair is the hottest asset class, citing an average vehicle age climbing to 13 years and affordability pressures on new vehicles.
"General automotive repair today sits where collision sat 12, 13, 14 years ago. And those were the heyday years."
Tilzer's own platform, Gemba Automotive, is acquiring and integrating general repair shops in Arizona, where he said the company has come up with "a dozen great locations."
Key takeaway: Tilzer expects general automotive repair to be the next sector to consolidate, following the path collision has already taken.
Collision's consolidation calls for a defensive strategy
Tilzer said collision is no longer the market it was. Referring to the share of revenue controlled by the top groups, he said "this is not a fragmented industry anymore. This is why ... wages are so high and door rates are so low."
"I hate to say it, but the race to the bottom has arrived and that the resilient operators need to take a good hard look at that customer life cycle."
He said the shift starts with how shops view each customer. "People need to get defensive in collision right now and they need to view that customer not as a collision customer that's going to come once every 10 years."
Key takeaway: Tilzer urged collision owners to stop treating customers as one-time claims and plan around the full relationship instead.
The lifetime value of a collision customer goes far past the repair
Tilzer put numbers to the argument. "Net present value of collision, maybe it's five grand, but lifetime value of that collision customer. If you're servicing their glass, their tire needs, and their mechanical needs, you know, that could be well in excess of $100,000."
He said many shops already have the room to capture that. "There's a lot of underutilized square footage. People should be looking at adding glass. They should be looking at adding mechanical and diversifying and understanding where the money's going."
Tilzer said his team went back into collision with a center that serves "those exact needs under one roof," calling it "one of our single most profitable rooftops. And nobody's saying that about collision right now."
He added that about 10 of the locations he acquired over the years had a mechanical component, and some were among his most profitable shops. "While they're two different knowledge bases of business, it's the same customer."
Key takeaway: Tilzer argued that adding glass and mechanical services to existing square footage diversifies gross profit and captures more of a collision customer's glass, tire, and mechanical spending over time.
Body shop techs already have mechanical-level skills
Tilzer pushed back on the idea that collision shops should stick to one service. "Auto body shops have some of the best mechanics. We got to pull dashboards. We've got to trace, you know, small pinched wires that, you know, have an airbag light on."
He contrasted two paths for operators: "We can struggle at 10% bottom line margin and carry most of it in receivables or we could diversify the gross profit." He added, "Ancillary businesses drive value."
"Most collision owners I don't think they realize they've got a huge pot of gold sitting right there in their talent base and their equipment base that could add you know 100 to 150,000 in gross profit and from an administrative expense not add a lot."
Key takeaway: Tilzer said the diagnostic and electrical work collision technicians already perform, plus existing equipment, positions shops to add mechanical revenue without heavy new overhead.
Investors look for owners who are honest about where they're stuck
On what gets his attention as an investor, Tilzer said he favors founders "that are transparent about the struggles you know because as an investor you have to be able to provide value. I think capital is a commodity."
He said the best partnerships start with an owner admitting a ceiling. "When somebody's transparent like, 'Hey, I've hit a wall, got this great business, checks all these boxes, I got all these customers, I'm stuck right here,' ... that's where a great partnership can really prosper."
Key takeaway: Tilzer said owners who openly identify their operational limits, whether in systems, technology, or financial visibility, are the ones investors can help most.
Tilzer's growth playbook starts with the customer already in the shop
Tilzer's advice to collision owners came back to the same point throughout the episode: grow by doing more for the customers they already serve. That means managing cash and receivables as closely as sales, hiring for what each role requires, and putting existing space, talent, and equipment toward glass and mechanical work.
Looking five years out, he said he hopes "that we've employed thousands and we've given back tens of millions of dollars to churches and charities that really need it." Asked why he keeps building after Kaizen, he said, "Building makes me feel alive, you know. It's who I am."
