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6 Things to Consider Before Opening Another Location

  • Decades in the making
  • 6 deal-breakers to think about when considering expansion
  • Embracing the community pays dividends
  • How to use technology to run multiple shops from one locationSubscribe to Our Blog

The only thing Mike Button has more of than repair shops is heart. He recently purchased his third location, and while he is working hard to get it up and running, he is also using his time to mentor and support other auto shop owners.

 

A humble start

Mike, owner of Affordable Automotive and Affordable Automotive West, has been fixing cars in Chico, California, for more than two decades. His original auto repair shop, Affordable Automotive, has been open for nearly 25 years and in 2018, he opened his second location, Affordable Automotive West.


New ProjectAffordable Automotive West, and the original location in Chico, Calif.


Both Digital Shops were at capacity, so when an opportunity came up earlier this year for a third location, he jumped on it.

“My plan was to expand again, and kind of where we’re at right now, we’re busting the seams of both locations,” he told Tom Dorsey in a recent episode of The Digital Shop Talk Radio. “This third shop, for right now, is going to be a production facility.”

Using it as a production facility, where both car shops can feed work to it, will help lessen the load at his other locations.

“We have a fair amount of customers who bring in their classics,” he said. “They usually come in with pretty big budgets, and our town is really lacking that niche.”

Currently, those longer-term, big projects run through his two locations, but he is planning to move those cars to the new site. Hopefully, that will eliminate some of the bottlenecks that come from these projects which require fabrication or having to wait for parts.

 
“This is the idea: I come in with very low costs and still be able to make it up by getting some of this work done that we already have, but we just don’t have the facility to do it,” Mike said. “So, this is my concept; this is what’s working in my head. Everyone I’ve talked to so far has agreed with it and thought it was a good idea so I’m going to keep rolling with it and if something changes and it looks like I do need to make it a retail place, then I think it’s just a matter of hanging up some signs and doing some things with the Bureau of Automotive Repairs as far as another license.”

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From one auto shop to three: Things to consider

Deciding to open another location is not something Mike took lightly. But, now that he has done it a couple of times, there is a template he follows and some essential things to consider.

Your team

Mike is a multi-shop owner for one primary reason, his staff.

 

“The expansion was almost forced on me, and it was the fact that I had this great staff, this great group of employees, and I didn’t want to get rid of any of them,” Mike said of opening his second auto shop back in 2018. “They were highly productive. The care factor was through the roof. You know, they had ownership in what I was doing, and so it was almost like I had to build a shop for them.”

He knows that across the automotive industry, employee retention or employee acquisition can be a big issue. Still, Mike firmly believes you have to have a strong group of workers before you can successfully expand. 

Before opening his second location, Mike spent a lot of time maneuvering different crew members around to see how people worked together. When you find the guys that are tighter than others and work well together, you have to build on it, he said.

“I would highly suggest that to anyone out there that’s looking at expanding, just make sure you have the loyal type personnel that you can really lean on before you strike out to do, you know, another shop,” Mike said.

If you don’t have that staff in place yet, Mike suggested at least finding and recruiting a manager you get along with so they can roll right out of the gate.

“That’s key,” Mike told Tom. “Otherwise, the owner is going to get stuck on that account, or the owner is going to be there all the time, and that’s not what you want. You don’t want to go out and buy yourself another job. You want to buy a potential business that’s going to make a profit.”

Budget

Perhaps the most important factor in opening an additional location comes down to budget.

Mike has been able to keep his overhead low on his third location by doing a couple of things. He bought the property since he found his mortgage is less than rent would be if he had to rent a comparably sized shop. He was also able to purchase almost all the equipment from a family who was closing their auto repair shop, which helped to keep things less expensive.

His plan to move existing work from his two locations that are at capacity also allows for him to anticipate making money immediately.

“Coming out of the gate, you know, I’d like to see us at $30,000 - $40,000 a month,” he said.

It has worked for him before, and he is hoping this shop will be no different.

“Don’t stick your neck out too far, have a budget, stick to a budget, and it can be done,” said Mike about opening additional locations.

 

Technology and data

Mike took his auto shop paperless more than four years ago, and after seeing the data come in, he started to anticipate a second digital shop.

 

[AutoVitals] was kind of the writing on the wall for me,” said Mike. “It makes expansion that much easier because, yes, I’ve been measuring this whole time, I gather statistics, and I do a weekly plan every week. With AutoVitals, it’s another measuring tool, and it opens up more things to look at, but they’re things that when you can focus in on them, can really make some big changes.”

One example Mike used was the value of the “Today’s Vehicle Page” in his comprehension of how workflow would change with two locations.


WF; All SA; Expanded (1)A glimpse of the TVP

“When you have that tool to help you, it becomes a lot easier,” he said. “Having that AutoVitals tool to go along with, it just made me feel more confident that this can happen without changing up a bunch of stuff, without having all these headaches. So, again, technology working with us, you know, to get to a better place. That’s really the way I look at it.”

The use of technology has also made it easier for Mike to share and compare data with his mentors.

“We’re comparing apples to apples, and I feel like that’s a huge advantage going into this.”

Mike is also grateful for a few other features AutoVitals affords him. First, since it is cloud-based, he can check in on his business even when he is on vacation. Second, having a technology that allows his locations to talk to each other means the workflow is better, and their customers are being taken care of. Finally, if they have a customer drop-in, but they are booked, they can direct the motorist to another location. pickup notification

“The service history is shared, branding is shared, if an inspection is done at one location, it is going to look the same at the other location,” Mike said.

These qualities make Mike’s job much more manageable.

 

Support

Support has come in a variety of ways for Mike. His family, mentors, and staff have all played significant roles in the development and success of his multi-location business.

Two of his 20 group members have turned into friends and mentors, and he has watched what they are doing and how it has worked for them.

“Having that network to feed off of was critical,” he said. “I tell the guys to this day that my second location I don’t think would have been possible without not only their encouragement but their guidance.”

Mike’s team, during their weekly Monday lunch meetings, also offered their input and encouragement.

“I shared with them what my thoughts were, and, you know, I wanted their dreams,” he said. “I wanted to find out if they’ve got my back on this because it will keep me out of the shop for a while, and I will have to spend time on another spot.”

He also takes advantage of all the knowledge his team has to make sure his new shops are set up and run efficiently. Everything from the layout of the lifts and where to put doors, windows, and even signs, are things he asks for input on from his crew. Grow With AutoVitals
“Those are all things that I feel like, I need the feedback and their professional opinions because they are professionals,” he said. “They are probably in it more than I am as far as efficiency inside of a shop, how to move, and where to get the cars in and out and those types of things. So yeah, they’ve been a lot of help, and I really appreciate all the hard work that they’ve given me.”

His wife and kids have also been critical in his journey to multi-shop ownership.

 
“[My family] were the first ones I asked, and they were all behind me 100%,” he said. “They support me. They see the joy it brings me. I like to take things that aren’t so pretty nice and make them pretty nice and work again. That’s the fixer in me. So, taking a shop that was, you know, on its way out and making it vibrant again, and making it fresh and new and bringing something to the community that they, a place where they can go and trust the work is going to get done right, that brings a lot of joy in my heart. That’s what feeds it, you know.”

Location

Location matters, for obvious reasons, and for some not-so-obvious reasons. After Mike had opened his second location, just three miles away from his original shop, he was surprised by how much time he spent commuting.

“I wasn’t factoring that in, but that should be something people factor in,” he said. “The downtime you’re going to have.”

Extras

There are also a few intangible things Mike stressed should be considered when adding a location.

“Timing is huge,” he said. “You’ve just got to have that right. It’s got to feel right, too.”

There have been occasions when Mike has passed on a location or encouraged others to pass on a potential site. Not every opportunity is a good one.

 

A future full of promise and community

Prior to opening his third shop, Mike had already noticed a change in the way his locations were working. His overall car count was down slightly, but his revenue was up.


big 3 metricsThe Business Control Panel (BCP) by AutoVitals lets shops dive deep into the stats

“We’re able to manage the customers and really take care of them and not just flush them through the shop as a number,” he said. “So, I feel like the quality of service has increased by quite a bit, you know, just because of this move. The fact that we can service more customers in our area, the right way.”

He’s hoping his third property will continue that trend and with a bonus.

The property he recently bought has two buildings. The larger building will be home to the production facility. However, he still hasn’t determined what he is going to do with the other 2,400 square foot building. He’s hoping it will eventually be another revenue stream, but he doesn’t want to get ahead of himself.

Instead, he is using some of his time to help other auto shop owners become successful.

“This business can be cut-throat,” he said. “It can be really tough on people, and if there’s something I can do to help, I’d love to help.”

Mike has mentored a young shop owner for the last year and is enjoying watching his success.

“I really do like to help people, and I see a lot of people struggling out there,” Mike said. “I feel like either there’s no one there to really lean on, that they can trust, or that there are people out there just trying to take advantage. That’s not right.”

Mike doesn’t just offer his support to local owners; he even provides his time on the phone with shops further away.

A friend of his called him earlier this year asking Mike’s opinion on a property he saw. He was looking for a third location, but after a long conversation with Mike, he decided it wasn’t the right fit.

“Just even being an ear for somebody to run things by,” he said, “I think I can be helpful in that area as well.”

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Listen to the full Digital Shop Talk Radio episode here


How to contact Mike, Affordable Automotive, and Affordable Automotive West: