Chris Ray, owner of One Twenty-Two Collision, a growing regional MSO in the Atlanta, GA, area, stopped by The Collision Vision podcast, driven by Autobody News and hosted by Cole Strandberg, to talk about his growth strategies, OEM certifications and how he chose his company’s unique name.
Beginnings
Before founding One Twenty-Two Collision, Ray worked for 20 years for a large MSO, first as a technician, then rising through the ranks to a regional vice president and officer as it expanded in the Southeast. The experience taught him a lot about how to grow a collision repair business.
Ray said he had a goal to open his own brand by his 40th birthday. He missed it by a few years, but in July 2022, he launched One Twenty-Two Collision. Two years later, the brand has three locations.
“We entered into the collision sector via two acquisitions,” Ray said. “I did a lot of homework prior to even launching the brand, on whether or not my path would be that of an acquisition, a brownfield or a greenfield-type project, and I knew I certainly wanted a mixture of them.”
One Twenty-Two Collision acquired two shops to get started, to generate an immediate cash flow. Ray said he is now focused on brownfield opportunities, as those are “the best return on invested capital right now.” He looks for buildings that are already zoned for the correct use and don’t need special use permits. He is also looking for empty lots with proper zoning for greenfield locations.
“Like anybody else, I'm looking for markets that are high growth or heavily consolidated,” Ray said. “All the infrastructure is in place. You can kind of see what's coming. It makes sense to put a collision center here.”
Ray said One Twenty-Two Collision has four more locations in the works to open by the end of 2024 or early 2025, all green- or brownfields. He then wants to look at acquiring more existing shops.
Strandberg asked about the company name’s origins. Ray said he had a different name ready to go, but his wife suggested using something that sounded more modern, that included numbers. Ray jokingly said he could name it 1-22 after his last date of employment with the larger MSO, and his wife liked it.
“This might have been my last day at my last employer, but it's the new chapter,” he said. “It represented to me the ability to get out there and do this on my own.”
Challenges
Ray said he is always conscious of the lost costs associated with startups that other people might not think about. “I know it's ugly to look at, but you got to project that growth and that ramp up, and make sure that you're meeting your own objectives.”
Ray said he might have been “a little too aggressive out of the gate” in acquiring buildings and land for new future locations, but a good deal is a good deal, “and you want to strike while the iron is hot. You don't want it to get away.”
Private Equity
Ray said he has met with various private equity groups and is not against the idea of aligning with one. He also reached out to CEOs of businesses in several different industries who had partnered with private equity firms.
“I didn't hear anything that would necessarily derail me,” Ray said. “But at the end of the day, for me personally, it felt like something that I wanted to wait on because I knew what my abilities are.”
It might take a little longer to reach his growth goals without that capital, Ray said, but for now at least, he would rather have more control over One Twenty-Two’s culture.
“I would rather take four years to get to that number than two years or a year, and have a very solid foundation to continue to build on,” Ray said.
OEM Certifications
One Twenty-Two Collision has earned several OEM certifications and is working on more, including four premium brands that require some dealership sponsorship. The locations with those certifications will get work referred by the dealerships. That will help stay competitive in a market with a lot of consolidation.
“The way I pick my certifications, it's based on the demographics of where the shop is,” Ray said. “We focus based on what brands we're primarily working on. And then we use that to also build comfort with dealerships in the market that do not have collision centers.”
Ray said some third-party companies have eliminated barriers for independent owners to become certified. “It seemed to be a little more reliant back in the day on having a dealership-sponsored approach to even start that certification journey,” he said.
He recommended researching tooling and equipment requirements before pursuing any certification, as some can get expensive if they require special welders or frame machines.
Finally, owners should be realistic about their existing equipment. “If you have something that's a bit dated, that's not going to pass the inspection, start making some of those commitments to upgrading it,” Ray said.
Attracting Employees
When interviewing technicians and estimators for One Twenty-Two’s first locations, Ray said he tried to get a feel for what makes a great work environment.
The shop’s general manager is a crucial hire, Ray said. “People are going to show up to that box for the general manager. They're at that shop every day, working alongside them, helping them problem solve. It’s critical to put in a good management team.”
A great estimate writer is also critical. “At least out of the 100 guys I interviewed, it came down to estimating,” Ray said. “They would work in a bat cave as long as they got a good ticket to repair the car.”
The interviews shifted Ray’s approach. “I really thought I was going to hear tools, equipment. The No. 1 request from any given technician was making sure that the estimates reflected what they were doing to the car.”
Being in a market like Atlanta, which puts his shops near those of large national consolidators, can be an advantage, Ray said. They have bigger budgets for advertising that bring more potential customers to the area, and they have teams to research where to build. “If they’re there, they’re there for a reason.”
“It makes it super easy to staff your location, too. So that's interesting,” Ray added.
Skills
Ray said anyone thinking about operating multiple shops has to get really good at hiring, which means looking at a potential employee’s personality traits as much as their skill set. “I'm always looking for individuals that can problem solve,” Ray said.
Owners need to be able to delegate.
“I have three GMs that have very unique abilities,” he said. “Assigning them tasks for the company holistically, especially where we're on a growth path, it’s critical that I align the right guy or gal with the right task.”
Owners should also be organized and focus on the numbers that matter.
“I don't like to get lost in the weeds and manage to a KPI that doesn't really yield me a good return,” Ray said.
Key Takeaways
Make sure you are aligned with the right partners who will help your company reach its goals, from paint manufacturers to suppliers.
Look at third-party companies that can help your shop get OEM certifications.
Ensure your foundation is solid if you're looking to scale. Outline your mission, your vision and your values to guide your growth. And don't let perfection get in the way of progress.
Abby Andrews