As increasing vehicle complexity and evolving repair procedures threaten to end the era of the single store generalist body shop, owners have three paths forward to remain competitive: specializing, scaling and selling.
The Collision Vision podcast, driven by Autobody News and hosted by Cole Strandberg, wrapped up its series of exploring all three options with a deep dive into scaling, featuring Thomas Goforth, an owner who made it work for him. Goforth bought two-store Absolute Collision in North Carolina in May 2020 and built it into a seven-store MSO in less than four years. He sold it to Classic Collision in 2024.
At that point, between Absolute Collision and an offshoot, Innovative Diagnostic Solutions, which performed ADAS calibrations for the collision centers, the company had 135 employees.
Goforth said he had key partnerships that helped him scale Absolute Collision so quickly, including a consulting service, Elevate, and a “phenomenal jobber,” Blue Ridge Color Company. They helped Goforth set up centralized processes for parts procurement and reviewing estimates. He also added several corporate-level executives.
“It was just having those corporate pieces that didn't make sense financially [at first], but as we grew, we were more of a proactive approach versus reactive,” Goforth said. “Obviously, there's the growing pains of cash flow in those positions. But in the end, it turned out to be a good thing.”
Goforth said Absolute Collision’s footprint was widespread across North Carolina, from Shelby in the west, to Charlotte in the middle and Wilmington in the east.
He said an important part of building a cohesive culture was, as management, following through on promises and showing employees they mattered.
“It was just caring,” Goforth said. “It could be simple things. We always had, if it was somebody's birthday, a cake and a gift card. Every year we had a banquet where we brought all the stores together and their spouses -- one year in Wilmington, then it was in Charlotte. So we just bounced back and forth, because some of these people have never even met each other.”
Unique Approach to M&A
To find acquisitions, Goforth said he did a lot of cold calling of shop owners, along with networking at trade shows. He said his relatability as a fellow owner who understood the day-to-day stresses of running a shop was what “got me in the door.”
“We had commonalities and things that we could talk about,” Goforth said. “I was one of them. I was just blessed enough, or crazy enough -- it depends how you look at it -- to have seven of them.”
Goforth said he had a target list of 60 stores that had business models similar to Absolute Collision’s.
“You have your DRP, you have your certification. There might be a fleet side,” Goforth said. “So just identifying those shops that were similar to what we were doing and had the equipment in place, had the people in place.”
Goforth said he wasn’t interested in turning around struggling shops – “We did capital improvements, rebranded, etc., but it wasn't looking to do that” – but he also wasn’t looking for a shop that was at its peak.
“There's only so much you can [do to] make something better,” he said. “There's going to be a plateau. There's going to be a ceiling at some point.
“I was looking for the ones that had a little bit that we could put our critical mass together, you know, scalability, and take advantage of that,” he said.
Goforth said the “bread and butter” was shops producing between $2 million and $4 million in gross annual revenue.
Advice for Other Owners Looking to Scale
“You can't dip your toe in it. It's either you're diving in the pool in the deep end, or you're going to just stay outside the pool,” Goforth said.
If an owner doesn’t have a background in M&A, they should hire an accountant, broker or attorney who can help identify funding resources. “Make sure that you've got some experts, if it's not yourself, that can walk you through that, to make sure that you're going to have the cash flow to support that business and that growth,” he said.
Goforth also recommended finding a mentor.
“It's good to talk through the challenges and have that person that's been there, so instead of hitting potholes, you'll minimize that and hit some speed bumps,” he said. “Instead of trying to recreate the wheel, talk to somebody that's already got the wheel and can help you through it, because there's plenty of people out there that will.”
Scaling requires overcoming challenges, like staffing and permitting, to establish new locations.
“I would say the biggest thing is honestly getting the getting the buildings up and going,” Goforth said.
Staffing is easier when a company offers good benefits and competitive pay. Goforth said Absolute Collision “had a different pay plan.”
“We weren't on flat rates, with all the safety and the complexity of even writing an estimate, getting the OEM procedures, the ADAS, the calibrations, just everything that goes into fixing a car,” he said. “We were either hourly or salary and did team bonuses, like everything was a team instead of an ‘I.’
“Everybody likes to be a part of the team, and I think that was key,” Goforth added.
A strong “back office” is crucial. “At our peak, I had a CFO, I had a controller, and I had three bookkeepers,” as well as a recruiter and human resources generalist.
“There could be 20 different vendors for fixing a car that you're getting parts from,” Goforth said. “Having that back office support with accounting and HR is instrumental to when you grow to a certain size.”
When integrating a new acquisition, the “biggest thing is to instill that culture,” Goforth said. He said when he bought three stores in Wilmington, his corporate team rented a house for three months so they could be in the shops every day.
“Implementation is a constant thing,” he said. “It's not, ‘We've bought it. Let's move on.’ No, you’re going to have to pay attention to it, because they were used to a different owner that was doing XYZ their way. With scalability, you can't have seven different stores doing seven different processes.”
Once a closing date is established, he recommended the new owners visit the shop two to three weeks in advance “to rip the Band-Aid off.”
‘We would go in, introduce ourselves and just have a ‘campfire’ setting of talking through it,” Goforth said. “People don't like change. And we just sit there for an hour, two hours, three hours, whatever it took, and just let people ask questions, and then we give them our number.
Of the six shops Goforth bought, he said he can probably “count on one hand” the existing employees who chose to leave.
“How I always viewed it: somebody's going to leave,” Goforth added. “I'd rather them leave and know what we have to replace going into closing, versus getting there and saying, ‘Oh, we need a painter and an estimator.’”
Selling to Classic Collision
Absolute Collision had reached a point where it had to decide if it was smarter to expand into neighboring states to continue growing, or sell to a national consolidator.
“Where we had went, and what we have done was great, but where we'd have to go in the future, I don't know if that's exactly where I wanted to go,” Goforth said. “There's a CEO for turnarounds, there's a CEO for growth, there's a CEO for stability and long holds. And just my skill set, I thought it was best to step aside.”
Goforth praised the team that helped Absolute Collision in the deal, including FOCUS Investment Banking. While Goforth and his internal team had been comfortable handling M&A deals themselves when buying other stores, selling seven was a different matter.
“That's something I think you need an expert,” he said. “If I would have done it myself, it would still be for sale.”
Goforth said he is finally nearing the end of closing out all of his accounts after selling the business in September. He is currently exploring opportunities for his next move.
“I love the industry,” Goforth said. “I can't say a whole lot, but it's going to be a specialty, niche portion of the industry. I'll leave it at that.”
Abby Andrews