Jonathan Best is the CEO of Better Collision Centers, a Carolina-based regional MSO established in 2021 that now has seven stores and is growing quickly. He joined The Collision Vision podcast, hosted by Cole Strandberg and driven by Autobody News, to talk about how he is scaling his business, why culture is key, and why consolidation is good for all shop owners.
From Lot Porter to CEO
Though his father worked in the collision repair industry, Best never pictured himself following in his footsteps. But when Best needed a flexible work schedule in college, the Charleston, SC, shop where his father was working was one of the only employers that could provide that and pay enough to make ends meet. Best started working part-time as a lot porter. Later he joined the parts department. Eventually he became an estimator, and then a service advisor.
After that, Best worked his way up through the office, becoming assistant manager and then an area manager. At 25, he became the shop’s CEO.
“I helped the company grow,” Best said. “I want to say we had four or five stores at the time. We grew from five stores to 10 stores.”
About five years later, when Best was 30, the owner wanted to sell the company. “I was not ready for that,” Best said. “So we moved on, and we created Better Collision Centers.”
Consider Your Capital
Best said the biggest hurdle single-shop owners face when trying to grow their business is capital.
“Interest rates are out the roof; banks are not wanting to lend,” Best said. “Where are you going to get your capital to grow?”
Best said he expected Better Collision Centers to have twice as many stores now as it does, but it “ran into this post-COVID world of capital.”
“We've had to think a little bit more strategically on growth, and not just go off to the races like you see with some of these private equity-backed groups that are just acquiring everything around you,” Best said.
“That doesn't mean that we're not going to get caught up,” he said. “We’re at seven stores now, and next year we're going to try to open twice as many.”
Better Collision Centers has spoken to private equity firms, Best said, but the company prefers traditional debt -- bank loans and small investors -- as it grows mostly through green- and brownfield locations, rather than acquiring other shops.
“We’ve had some amazing offers, but anytime you bring [private equity] in, it's going to cost you something. They're going to take a fairly large piece of your company,” he said.
New Vehicle Technology, New Opportunity
Better Collision Centers was subletting out ADAS recalibration work until Best attended the 2023 SEMA Show, where he learned just how much ADAS was forecasted to grow in the coming years. “It's going to get more dynamic and more complex,” he said.
He started looking at ADAS as an opportunity to diversify his business. Better Collision now has four mobile calibration vehicles that service all of its own stores, as well as a growing list of other area shops.
“It’s another segment for us when we enter new markets,” he said. “We're finding a lot of other shops are having trouble with their sublets, making a decent margin on it. Because we're from the collision space, we understand their needs a lot better. We'll put the paperwork and the invoicing together in a way that helps them get the money they need with their insurance carrier.”
Better Collision is also exploring how robotics can help streamline its shop operations.
“Some of these robots can be programmed to pick up parts and carry them around your parking lot,” Best said.
When that technology becomes available, Best said his company wants to be ready to implement it -- and customers will know.
“We love marketing, so you're going to know right away if we bring a robot on property, I promise that,” he said.
Creating a unique brand and effectively marketing it is vital for a regional MSO’s success, Best said.
“If you truly want to get your voice out there, you do amazing things and share it,” he said. “Get that stuff. Get it on video, get it in pictures and text and get it out there so the world could see.”
Better Collision is also looking into programming its central call center to run through an AI control dashboard that will answer the phone, book appointments and text customers.
Culture First
Better Collision’s “culture-first” strategy is the real driver of growth, Best said, as it has helped attract top talent among technicians and management. But it has to be authentic.
“Practice the culture you preach,” he said. “It's easy to talk about it, but I find it the more we grow, the harder it is to practice it, because you get so caught up in the mundane items. But we put a huge emphasis on it.”
The company’s culture focuses on integrity, transparency and doing better.
“That's why we came up with Better Collision -- we want to do everything better,” Best said, from the quality of repairs to customers’ and insurers’ experience working with the company.
“Our culture is pretty much the only thing, as a regional MSO, that will allow you to stand out,” Best said. “That's your edge. That's always your edge. You can create relationships with teams and individuals that they can't replicate.”
Don’t Fear the Consolidators
Consolidation will never stop, Best said, but it is not something to fear.
“I was terrified of consolidation. I was reading the news articles. These guys just got $500 million and shops were getting gobbled up left and right all around us. And then we realized what was happening,” Best said. “At the time, our opportunity was just a two-lane road. But the more consolidation that took place, the opportunity opened up into an endless highway, a 12-, 18-lane highway of opportunity.
“I think consolidation is great for business,” Best said. “I think it starts allowing your regional MSOs to truly be the place to be the home for talent to go to.”
Large consolidators also help all repair shops negotiate better pay rates from insurance companies, Best said.
“A bunch of independent MSOs have a lot of trouble standing arm in arm and getting things done,” Best said. “The big boys step in. It's a huge help for us all.
“Don’t let the consolidators scare you. We talked to a lot of different independents, and they're always so terrified of where the next Caliber over the next year is going,” Best said. “Do you really have enough time to worry about that? Really?
“I think that we all need to focus on our businesses, and don't let that consolidation around you scare you. Focus on your people, your culture, the quality of repairs, your relationships,” he added.
In Better Collision’s region in the Southeast U.S., there aren’t a lot of acquisitions left, so large consolidators are turning more to the same green- and brownfield growth strategy. “I'd like to get moving a little quicker, before they take up some of our places we're moving to,” Best said.
Better Collision uses a combination of buying brownfield locations and renovating them itself, or asking one of its property investors to buy the location and renovate it before selling it to Better Collision. It also sometimes leases buildings.
“For us, it's not one path. It was before. But we've learned quickly…it has a lot of weight on what choice we do, on which property, which market we're going to,” Best said.
Key Takeaways
Consider your capital source. Don’t take on a private equity investor unless you have someone in your organization with strong financial experience.
Stay focused on your mission. Don’t let industry swings and consolidators scare you or disrupt you. Focus on your people.
Don't forget about your culture. Culture is top of the food chain.
Abby Andrews