Episode #176- Navigating the Future of Collision Repair- w/ Cole Strandberg

Show Notes: 

Is the collision repair industry on the brink of a revolution? 

What could be the best options for you to capitalize on right now?

Are you looking to stay ahead of the curve in this tidal wave of transformation in our industry?

 Join us this week, with Cole Strandberg, principal at Focus Investment Bankers and host of the Collision Vision podcast, as he shares his expertise on the industry's future, the importance of adaptability, and learning about strategic growth while working his family’s distributor business. This episode is a treasure trove of lessons for shop owners and industry professionals aiming to stay ahead of the curve.
 
Discover how private equity is making waves in the automotive aftermarket sector, busting myths about its profitability. Cole's experiences and perspectives offer valuable insights into why now the perfect time for collision repair shop owners to become more professional and financially savvy. 
 
We also shared our perspectives on the evolving role of distributors, how they have transitioned from nuisances to essential partners. For shop owners nearing retirement, we discuss strategic options such as selling their business, scaling operations, or specializing in niche markets. Cole's insights into the best paths for maximizing business value and long-term success are invaluable. Whether you're an entrepreneur looking to expand or a shop owner wanting to adapt, this episode provides a comprehensive guide to navigating the future of the collision repair industry.

Guest Info: Cole Strandberg – Principle -Focus Investment Bankers

Email: cole.strandberg@focusbankers.com     
Website: http://www.focusbankers.com

LinkedIn: https://www.linkedin.com/in/colestrandberg/

Podcast (YouTube): https://www.youtube.com/@Autobody_News/podcasts

Collision Vision Podcast on Apple: https://tinyurl.com/y822bnuw

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Transcript

Industry Insights With Cole Strandberg

Cole 0:00

My perspective is it will continue moving strong for the next three to five years and I view the industry , and any industry , in three to five year increments and that's kind of trained into me from a private equity mindset . Right , that's that stereotypical standard hold period Three to five years . Consolidation is going to continue , increasing at a rapid pace . The era of the single shop , generalist body shop , is closing , it's going away and that sounds like a horrible statement , but it's not a doom and gloom statement because body shops in that position who are seeing that have three really good options ahead of them to take advantage of .

Rick 0:44

Welcome to the MindWrench podcast with your host , rick Sellover , where minor adjustments produce major improvements in mindset , personal growth and success . This is the place to be every Monday , where we make small improvements and take positive actions in our business and personal lives that will make a major impact in our success , next-level growth and quality of life .

Rick 1:13

Hey , what's up everybody . Welcome to the MindWrench Podcast . I'm your host , rick Silover . Thanks so much for stopping in . If you're a returning listener and haven't done so already , please take a minute and click the follow or subscribe button and then rate and review the show . When you rate and review the show , the algorithms for Apple , spotify , google Podcasts , iheartradio , amazon Music and all the other platforms will see that it's valuable and show it to more people that have never seen it before , and hopefully it can help them too . I would really , really really appreciate your help , sharing this word with your friends and family as well , and if you're a brand new listener , welcome . I hope you find something of value here that helps you in your personal or professional life as well . Please make sure to click the subscribe or follow button so you never miss another episode .

Rick 1:58

Recently , I had the opportunity to sit down with a very sharp young man whose incredible knowledge and passion for this industry certainly does not go unnoticed . Cole Strandberg is a principal at Focus Investment Bankers and also the host of the very popular Collision Vision podcast from Auto Body News . This week , my special guest and fellow podcaster has been working in the collision industry since childhood , growing up in his family's equipment distributor company , which now serves the whole southeast , but with a keen eye on the financial end of the business . We first met back in 2023 at a PPG conference and became fast friends , sharing a mutual passion for the art of sharing industry knowledge through the platform of podcasting . Since then , he's interviewed top shelf guests , icons of this industry , as well as many experts on the financial side of our industry . So please join me in welcoming an industry influencer and good friend of mine , cole Strandberg , principal at Focus Investment Bankers , to the MindWrench podcast . Cole , welcome to the show .

Cole 3:01

Thank you , Rick . Appreciate you having me and looking forward to a really fun conversation today .

Cole 3:06

Yeah , like I said , it was great meeting you back . Just I can't believe it was just a little over a year ago or so . You were fairly fresh in the podcasting side and it was , you know , came fast friends , like I said , and it's been a great relationship ever since then . So I do appreciate that and I appreciate you jumping on the show today . So for those of you that have not seen my interview with Cole before , I was a guest on his podcast a little while back , so I wanted to return the favor and have him on my show . He's got a lot of knowledge to share and we're going to dig into that today . But first off , I really wanted to jump into just some of your background . We talked a little bit on another call . You started off very young in this collision industry with a family business . Tell us a little bit about that .

Cole 4:00

Yeah , no , I grew up around what I call the outside of the collision repair industry . It wasn't sweeping shop floors or anything at 10 years of age , but I was . As you mentioned , my family's business was an equipment distributor , is an equipment distributor for the collision repair industry across the Southeast selling paint booth equipment , frame equipment , welding , measuring , the whole deal , and so I grew up around that . We were kind of reminiscing together on our pre-show call about going to NACE and NADA at 10 years old all the way through college and so really got a lot of exposure and made a lot of lifelong friends in this industry before even entering my kind of professional career . Phase of life ended up as much as I knew and loved the family business it was a decision that I made my family also made and said hey , go do something else first . I think it was their nice way of saying bring something different to the table .

Rick 4:58

Go get an education son .

Cole 5:00

Yeah , yeah , absolutely , absolutely . So went , got a finance degree and went into the world of investment banking within kind of the publicly traded companies , the big deals . I was a tiny cog but it was a great experience as a 22 , 23 , 24 year old , going on road shows and getting exposure to some brilliant financial minds , some incredible executives of publicly traded companies , taught a level of proficiency in the boardroom that I think was really cool to have at that age . But a couple of years into that the family's business came calling and typically when the family calls you pick up the phone and answer . And so I did .

Cole 5:40

And at the time we were getting some acquisition interest from some strategic players within the collision repair ecosystem and selfishly wanted to be a part of that .

Cole 5:52

I had been a part of transactions like that as an intermediary but wanted to get involved at the family business level and the personal level and go through that as a seller with that hat on and , more importantly , hopefully felt I could bring some value there .

Cole 6:07

Ended up not going with the suitor at the time , kind of taking a step back and focusing on improving our business and purposefully going about growing and finding the right partner for the future of the business . So stayed on with the family business for about three years , went from boardrooms and suits to jeans and dry fit polos and paint booth pits and just along for the ride and really a fun experience , growing organically About three years into my tenure there we partnered with a private equity firm as a platform for them , stayed on with that group for another three years and in that time we made seven acquisitions and quadrupled headcount , quadrupled revenue really your typical like roll up private equity story . So very cool to be a part of and we'll dive a little bit more into that . As you mentioned , currently a principal with Focus Investment Banking , where I focus exclusively within the automotive aftermarket and really within that collision repair world doing sell side advisory , capital raising and buy side advisory for collision repairs .

Cole 7:11

Obviously , going from distributor business into the world of financial side investments and mergers and acquisitions definitely had to be very interesting and very intriguing for a young man at that point to go . Wow , this is the world of high finances , this is pretty cool and I see how it plays a role in our industry .

Cole 7:36

What were some of your favorite parts of going through that process , of coming out of the blue jeans and into the suits and into those meetings that you've only heard , maybe your dad talk about a couple of times , right , how was that for you it was really a cool experience and my first stint in banking was really that white collar thing , and then you go straight into the blue collar trade world and , with focus and what we do , it's really a unique combination of that .

Cole 8:05

It's there's a comfortability of , of , of communicating in a boardroom environment , in management meetings , coaching our , our clients , and how to how to best perform in those , and so it's a very fun combination of the two previous experiences I had . Something I didn't mention was while with the family business I went to go to grad school and while working full time there , and that focus was in the master's of science and entrepreneurship and so just kind of furthered my passion for entrepreneurship , the respect for entrepreneurs , and throughout that whole time I knew just how great the people in the collision repair industry were . So it's been a fantastic combination and a really fun experience .

Cole 8:52

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Cole 9:01

It is a fact that an incredible number of the most successful business owners , nearly half of the Fortune 500 companies , top-earning professional athletes , entertainers and industry leaders like Microsoft's Bill Gates , former President Bill Clinton , oprah Winfrey , richard Branson , amazon's Jeff Bezos and Salesforce's Mark Benioff all have one thing in common they all have at least one coach and some have several that they work with on a consistent basis , someone that helps guide , mentor and support them , challenge them , help them set and achieve goals that move them forward and then hold them accountable to follow through , driving personal and professional growth . Working with a coach has many substantial benefits . Just for an example , 80% of coaching clients report improved self-esteem or self-confidence thanks to coaching . 99% of individuals and companies that hire a coach report being very satisfied and 96% would do it again .

Exploring Industry Innovations and Podcasting

Cole 9:55

If , deep down , you know it's time to make those improvements in your business or your personal life that you've kicked down the road year after year .

Cole 10:02

If you're tired of knowing there's a better version of you waiting to shine , but unsure of how to bring that version to light . If you're tired of wanting to enjoy a more successful business but not sure how to start . And if you don't want to go another 12 months without better results , but you don't want to go it alone , then take the first step . It's super simple . Sometimes talking to the right person can make all the difference . Go to wwwrixelovercom . Slash contact and I'll set you up with a free consultation . Call with me to see if one-on-one coaching is right for you . Well , that's awesome . That's awesome . What a great look at the whole industry from all levels , you know , starting off . So you alluded to the fact that you did get introduced to the mergers and acquisitions part of the business with the collision side fairly early on . So is that a strong part of the portfolio that Focus works with , or is that like an equal size sector to some of the other stuff they do ?

Cole 11:05

Yeah , so it's a very cool firm . Focus is a is a big firm . We have 50 or so senior bankers , including myself , and we have 12 industry verticals that we focus on , and automotive aftermarket is where I spend my time , along with four other senior bankers , some analysts and support staff . So that is , in my opinion , one of the strong teams within the firm , but we have many and it's been a lot of really good things happening in this industry and I'm sure we're going to dive into that a little bit further . But the tailwinds here , the consolidation , the new up and coming players that are going to be around for a long time a lot of fun stuff to talk about .

Cole 11:44

Excellent , excellent . Yeah , as you can see , a lot of people don't realize how much private equity and investment money is pouring in to the collision industry . I would have never expected this a few years ago , but man oh man . Obviously there's reasons for that right . So there's probably some science and some data behind investing in collision centers and mechanical glass centers . So yeah , we'll dive into that definitely a little bit more .

Cole 12:14

Absolutely A lot of smart money involved and smart money waiting to get involved , waiting for that right opportunity yeah , to get involved , waiting for that right opportunity .

Cole 12:23

Yeah , you know , and it's funny just on a side note through my career as a distributor for shit 30 some years , um heard a lot of shops , a lot of shop owners , a lot of you know upper management saying , well , there's no money in this business anymore . And you know it's just . There was so much negative talk on it's like wait a minute , I'm pretty sure there's still money to be made in collision . There's must be something that you're missing . But I never would have expected the amount of millions of dollars that are being dumped in right now . So , uh , very , very interesting uh on this . So , um , but I want to shift gears a little bit , uh , cole , and I want to talk to you about something that's uh passionate for me and a big part of my life and I know it's a big part of yours now and that's podcasting . It seems to have taken massive jumps and leaps in all aspects of every industry . Right now , everybody seems to have a podcast for whatever the hell they do , right .

Cole 13:21

So , but when I jumped in back in 2020 , this is right at right , as COVID was hitting is when I started really crafting . Okay , what do I want to do ? What do I want to say how am I going to do this ? Didn't know anything when I got into it , but figured it out a long way . But I always had that thought . You know , this could pan out in four or five episodes . I think that the stats back then were usually podcasts last about seven episodes and people give up on it , right , yep ? So here I'm . I'm up in uh , approaching 200 . You're in the , I think in the seventies , low seventies or something like that .

Sharing Success Stories Through Podcasting

Cole 13:59

Um , how did that transition start for you ? Because I'm really happy that it jumped in when I did and I really enjoyed doing this . It's been a great piece of my life . But so how did you evolve into that from where you were at ?

Cole 14:16

Yeah , well , it was as a consumer , I think . Looking back and going into college , even that whole journalism thing was kind of in my mind and ended up not doing it . But it's always been something cool Like good media . I I appreciate , I respect , I consume it like crazy . My favorite books , business books . I tried forever to read the typical preachy educational business books and couldn't do it . But where I fell in love were the memoirs and the stories of successful entrepreneurs and how they got where they were going . So rather than kind of preaching , they were just telling their story and you could glean a ton from that . Books like Ride of a Lifetime by Bob Iger , shoe Dog by Phil Knight .

Cole 14:58

From there I got into business podcasts and there are some really good ones in the M&A world , in the entrepreneurship world , and wanted something like that as I was diving into the M&A side within collision repair , something like that for collision . And I should point out , some great podcasts existed at the time and continue to exist , including this one right now Really a big fan . But I wanted something especially for me . I joke about it , but it's true , you do not want me working on a car or talking about how to work on a car . I have negative knowledge in that world , but I know and knew at the time , there are so many great entrepreneurial success stories who those stories can educate and help the next generation of entrepreneurial success stories . And so that's where the idea of the collision vision was born , and at the time was working with auto body news and writing regular columns for them on the business and M&A side of collision repair and we approached this idea together and from there the collision vision was born .

Cole 16:04

You sold them on it , didn't you ? Oh man , I sold them on me . I think they had the idea Uh , they , they loved it . It was uh , can this , this random dude , uh do it . And you know it's been a lot of fun .

Cole 16:17

Yeah , it is a lot of fun . I'm glad you jumped into them too . So , uh , like I said , when I first met you , I I'd listened to a couple and I said , hey , this guy's got some legs . I think he's going to be okay in this , you know . And then you've you've had some really uh phenomenal guests uh on your podcast .

Cole 16:35

Um , some really really great uh minds , some great speakers uh , some some different parts of the business too that I'm not seeing everywhere else . So you have definitely a little different slant on it , which is helpful , because as businesses become a little bit more professional in our industry , start taking things a little bit more from financial and goal setting and goal achieving platform , you need to kind of know about some of the business pieces that maybe they weren't familiar with before , and some of the great minds that are entrepreneurial , that can spell out how to make a better path to where you want to end up right . And I got guys like my friend , matt De Francesco , that does a podcast , but he does it on generational wealth , and I know you know Matt .

Cole 17:23

Oh , yeah , another great one .

Cole 17:25

It's another piece of it that most shops just don't think about , but once somebody brings it to your attention it's like , oh yeah , I guess I probably should pay attention to that , and it's awesome that we have people within this industry now sharing that kind of knowledge for for everybody that's involved .

Cole 17:40

I think it's beautiful . Oh , absolutely , man , and to that point too , I think it's such a cool group of podcasts within Collision Repair that really come at it from a different perspective , and I think something that you highlighted that's so important is there is no shortage of really good guests to come and bring their own . You and I have talked about it offline . The knowledge that we've gained from podcasting just from the incredible guests that we're able to have on and have this really intimate 30-minute to hour-long conversation it's so cool . I feel like I learn something literally every week , recording that I didn't know going in , and so so many great minds out there that it's an honor to be able to help spread their message .

Cole 18:26

Absolutely . I couldn't agree more . In fact , as many years I've had this trade , you'd think , well , I'm probably have absorbed about all I can absorb . Right , but I'm learning something Every time I talk to someone . I see a different perspective , I see something else that they see , that maybe I didn't see . That's beneficial to not just me I don't own a shop but it's beneficial to all those that have shops that are working their guts out trying to make it happen , and that's really some of the passion I have for wanting to share . The message that I do is , if it helps one shop owner , two shop owners , improve their business just a little bit , then it was time well spent by me or whoever the podcast guest is .

Cole 19:06

So , sure , and , and Rick , it does right , I've been with you in Miami , in Vegas , when folks come up to you and us and talk about how much it's helped and it's really cool what you do and it's , it's incredible .

Cole 19:20

Well , I appreciate that . It is very self-satisfied to to hear somebody say I've had guys call me , I've had guys send me a text and emails go hey , your message this week , man , just help me . And I was going through this thing and you know it's like that's awesome . That will keep me fired up and keep doing this for another 200 or 500 . I got one of my favorite podcasts that I've been listening to for a long time . He's I think he's had almost 5,000 episodes . That was his goal . He's one of the first guys that started doing it . Anyways , I was going to ask you the concept of this , what you were going to do with the collision vision , the concept in your mind of how that was . How did that vary to the reality once you started doing it ? Did you have this ?

Cole 20:04

vision of okay , this is how it's going to go right and reality sets it . It's different .

Cole 20:10

Yeah , I think it's really checked all the boxes I wanted to check going into it . I think it's evolved based on some really good feedback we get from listeners , based on the needs of the industry , based on the technology within the industry . We see ourselves talking about things that we wouldn't have even thought would be on the radar a year and a half ago . So I think , more in the content it's evolved . I think the whole design of the podcast has really been effective .

Cole 20:39

I think , again , kind of moving on into the future and see what it looks like , we tried to keep it really diverse in the content . We'd go from one topic and one type of guest to an entirely different , to a different , and then back to the original and try to keep it fresh . Of guests to an entirely different , to a different , and then back to the original and try to keep it fresh . I think now we're buying into the series based approach where at the time of this recording we're in the middle of a two month long series on on MSO leadership . Previous month was technology , so it's just absolutely doubling down on some of the most important things at the time rather than trying to keep the content diverse diverse , absolutely , and that leads me into my question .

Cole 21:20

I was going to ask that you know to tell us a little bit about the mso chronicles . I listened to a past couple of those . Those are great and getting those high level people from those msos uh , even like now michael , that guy will . He's so cool , he's so generous with his time and his thoughts . I I've ran into him he barely knows me , but I ran into him in a couple different places and he'll talk for 45 minutes and give you any information you want . He's very open with that stuff and and are you finding it that the mso world they're're responsive to wanting to talk on your podcast about their success and maybe their path and their history and stuff ?

Cole 22:02

Yeah , generally they really are . When you get big finance involved and even , in some cases , publicly traded companies involved , there are some moving parts that you have to deal with , but overall I think it speaks to a broader mindset shift within the industry and I know we'll dive a little bit deeper into how the industry is different today than it was in the past . But there's this real willingness and openness to share what in the past might've been guarded but is now something that's really valuable to help others within the industry . I think that mindset has shifted from hey , you're our competition , we're not going to share anything that can help you , to we're all kind of in this boat together as one industry moving forward . So that's definitely been the case with the technology series , with the MSO series , and would expect that to continue along as we get into other topics .

Cole 22:50

Absolutely . Yeah . I do feel that we are now as an engine , as a a collective industry . We are more of a uh , let's all get on the same boat and let's all grab a door , um , kind of mentality it's . Everybody listen , I grew up in a in an era of . You know , I'm shutting my door because I don't want the guy down the street , even seeing that I have cars in here , let alone what kind of equipment I have or don't have , right . So everybody was very protective and territorial about their little bitty shop on main street . And the next guy was , you know , a couple of blocks down and they wouldn't talk to each other . They'd see each other at at meetings or the restaurant or church or something , and they would just kind of like sit and look the other way . I mean , it was horrible , it was horrible . And now it's like done a one , 80 , and people are meeting at conferences , they're getting together and talking to B2B groups and it's just , it's great for me to see that transition finally happen . That I thought I'd never see .

Cole 23:47

So it's awesome , even the , the , the local associations . I car like there's so much going on . That's for the betterment of the industry and everyone really seems to be buying into that , which is a great thing absolutely all right .

Cole 24:01

So we'll jump off uh podcasting because I could quite honestly go for a couple more hours on just on podcast . So I I want to talk just a little bit for uh distributorship , because we did talk a little bit on a pre-call about uh you growing up in a distributor family-owned distributor business and me spending my whole life on the distributor side , other than the first 15 years I spent inside of a spray booth . Now working with a spray booth company , I feel like the impact that a good distributor can make is probably overlooked by probably a lot of shops . Just what I've seen from my end and I want your take on this too . So it seems that your biggest asset as a collision or even a mechanical shop , it seems like your biggest asset could possibly be the guy that comes by there and sells you your tools and equipment , sells you your frame rack , your spray booth or your paint materials .

Evolving Role of Distributors

Cole 25:01

And I think you know , through my career I've met plenty that have viewed you as a me . The distributor viewed you as a nuisance , somebody that I have to deal with , someone I got to take 15 , 20 minutes to talk to . You know , can you just get out of my shop ? I got work to do . I'm seeing that kind of evolve a little bit too . There's some , there's some companies that go . This is a valued part . I get more information out of him than I do anybody else in my , in my uh , in my little world here . So what are your thoughts on ?

Cole 25:33

yeah , I think the mindsets evolved , but I also think the level of of service and sophistication has evolved to where distribution today is probably more of a value add than distribution in the past .

Cole 25:45

It's typically no longer a couple guys in a truck , there are some really big and growing organizations , really sophisticated , and as I look back , I think that's the biggest change in that industry is as putting that distribution hat on it as a distributor . Our customer base has gotten bigger and more sophisticated Consolidation , private equity , corporate level employees wanting that one call to make and requiring a level of professionalism that had not been required previously . So I think distribution has stepped up to meet the new needs of the new customer . But that's the goal right and there's opportunity there , if it's not happening in your market , to find somebody who will do that level of service , because it's out there . I've seen some body shops and body shop groups who that is an absolute partner in their mind is their paint job or their equipment supplier . There's training included . You know you're going to get your phone call answered any time of day or night or weekend . That's huge and I think it's a reality now .

Cole 26:54

That's huge and I think it's a reality now . Yeah , no , I would agree . I think years ago they weren't viewed the same as they are now , and there is a different level of expectation from a good distributor . And I don't care what side or what part of that business you're talking , but having somebody that's knowledgeable , that is constantly learning , constantly educating themselves , has connected with other parts of the business and can bring that stuff to you . They're more than just a partner distributor . They could be a mentor or a coach in your business . They can impact your shop success , I think , more than any other entity that's not in your employment , if that makes sense .

Cole 27:34

Yeah , I mean as a distributor . You want to put yourself in a position where you have a good sense of where that relationship is . You are a partner . You have built that trust because finding those relationships is not easy . So building them and once you build them , to keep them is more fun .

Cole 27:52

Yeah , absolutely . I think there's shops that are stuck with the same old distributor because they don't know that there's better options out there . They feel the loyalty . You know I understand the loyalty and all that . But , just as an example , I've been in a lot of shops previous years where the jobber rep that comes in there had no value at all I mean couldn't even take a complete order really but the ownership had a friend that was common with them or something , and they would hold on for those reasons . And I understand loyalty , I understand friendship , but man , when you're not bringing value , you should be really cautious about what you're not bringing to the table , because there are guys out there that are killing it , that are smart , that are learning , they bring a world of value with them and those the ones that'll be around by .

Cole 28:40

So that's it the importance to always get better . You don't want to be . We always used to say you don't want to be the best bad option . You really want to be good at what you do . Right . You can't sell for just being the best of a bad group .

Cole 28:55

Yeah , great great way to put that . So , anyways , I want to , I want to move on from that . So , once again , that's another one of those subjects that I can talk for a long time on .

Cole 29:05

No question and we have yeah , I'm going to be mindful of everybody's time , including yours , but I wanted to circle back to . You know we're talking about the mergers and acquisitions piece of your business that you do for a daily living . Give us a little context on where you think that's going right now . It seems to be a lot of it . Over the past , I don't know since the very large MSO started buying up shops , it was always a conversation . It was always something people talked about or gossiped about or whatever in the collision room .

Cole 29:37

But now I'm seeing more and more private equity money into the emergence and acquisition side . I'm seeing a lot of single shops that have done well that are now going . Hey , I want to partner , I want to finance buying . The two guys down the street from me I know they're not going to make it . They haven't even updated their framework or anything else , so they're probably not going to be here . They probably can't work on the same cars that we need to be working on . How do you see that activity going forward for the next three to five years ? Is it tapped out or is it still moving strong ?

Cole 30:10

Oh man , it is still moving strong and my perspective is it will continue moving strong for the next three to five years and I view the industry , and any industry , in three to five year increments and that's kind of trained into me from a private equity mindset right , that's that stereotypical standard hold period . But three to five years consolidation is going to continue increasing at a rapid pace to the point where I have my most incendiary comment . I like to say the era of the single shop , generalist body shop is is closing , it's going away , and that sounds like a horrible statement and in truth there's some reasons to it that are not great and in truth there's some reasons to it that are not great . It's getting more expensive to repair cars from an equipment standpoint , from a the first one's kind of easy it's , if that ROI is not there to invest in that equipment , to invest

Strategies for Collision Repair Shop Owners

Cole 31:21

in that training . If you're nearing or even thinking about nearing retirement , sell . The M&A market's really strong right now . There are real markets for good businesses , whether that's consolidators , private equity , individual investor buyers and family offices . There's a lot of really well-funded folks floating around in the buyer universe .

Cole 31:43

So sell option number one . If you don't want to do that . You have two other options grow and scale . Go ahead and add shops . Grow organically , grow inorganically via M&A organically , grow inorganically via M&A . Scale is kind of a magical thing and you see all the smart money flowing into the collision repair industry is using that capital .

Cole 32:04

To scale . It's add stores . It allows you to absorb those more expensive repair costs and more expensive talent . It allows you to invest in building a culture . You have more capital . The bigger you get more layers of management . You can really expand an investment aggressively via scale . The last one I love as well , and it's specialize , focus on your niche and double down on it . We're not going to be all things to all people anymore . As cars get more and more specialized , I guess , and specific in repairing , there's going to be avenues to increase shop level profitability by focusing actively on whatever that niche looks like . So with all of that , even though the kind of where I started is a little bit scary , a little bit uncertain , with those three options , it brings me back to my favorite statement , which is and I believe it wholeheartedly there has never been a better time to be in the collision repair industry than right now .

Cole 33:00

I would actually concur with that statement and I've heard that statement a few different times . I think we both spent time with Frank Turlop and some other folks like Frank who've seen the cutting edge of technology and they've seen the direction . They've got fairly good crystal balls that they're looking into , based on some data and some facts and some things that maybe the common shop owner doesn't really investigate and know the direction things are going . I would absolutely say it's the best time in collision repair to be a shop owner and have the options . So to go back to your options , so option one , selling , I would agree there is about 36,000 , 38,000 shops in the country , right , and those are the ones that are on the books . Those are the ones that have registered a name or the . You know what I mean . There's probably another 10,000 guys that are pole barns , mom's garage in the corner of a building with a buddy kind of under the tax radar fixing cars probably nothing near correctly , but making money and calling themselves a little body shop , right . So there's a lot of shops out there .

Cole 34:17

Now we all know the complexity of cars has changed a lot . They're not all naked . A lot of them shouldn't even be repairing cars that were built in the 80s , from my perspective , just because of their methods and their lack of equipment or anything else . So selling a shop seems like it makes sense . There's a ton of older guys that are 60s to 70 that have just you know , I've seen how this industry has gone from back in the mid-70s to now . Okay , so they've seen the very worst of it . They've seen the best of it . How this industry has gone from back in the mid-70s to now , okay , so they've seen the very worst of it , they've seen the best of it , but they may have not made the best of it with their choices in what they've done , right ? So they're still sitting with the kind of mindset and business platform that they've had since maybe the 90s , right ? So selling looks like a good option , and I'll add to the selling .

Cole 35:08

I'll add to the selling pillar as well .

Entrepreneurship and Industry Growth

Cole 35:11

In addition to the retirement age folks , there's also a layer of serial entrepreneurs entering the collision repair industry where , back in the day , a business that you started , that's probably the one thing you're going to hold onto for your career . Now you have these younger entrepreneurs who are viewing entrepreneurship as stepping stones . It is my first business and I think that's interesting because the market for body shop sales right now really does well to that , and there's examples of folks selling and then going into different geographies or different parts of the collision or automotive aftermarket . There's examples of people selling body shops and then going into entirely different professions . So it's not exclusive to the retirement age . There are people who are taking advantage of the valuations and building their own career .

Cole 36:07

I would imagine there's some fix and flips going on as well , right , oh yeah , which , yeah , that wasn't around for collision shops that long ago . So , yeah , that is definitely another aspect to it . So selling will make sense for a lot of folks that are at that spot where it's hey , listen , I've had a good enough career , I'm done . I just want to grow this . So , but before you do that , look deeply into your business and go , okay , is there some things I can do that will better my business enough to where it's more attractive ? Maybe I get a little better sale down right . So I think there's some basic little things that shops can do before they just go that's it done , I've had it Somebody do . Before they just go that's it done , I've had it . Somebody come buy this thing , right . So that's selling . You get into scaling right .

Cole 36:51

So if you've got a good shop that's running well right now , you've got most of the decent equipment that you should have to repair today's vehicles . You're trying to follow that path of maybe doing the OEM style repairs or just you know path of maybe doing the OEM style repairs or just you know , doing a good collision repair job that's safe , right for customers and you've got good presence , you've got people coming in , you've got partners , whatever it is . Yeah , buy some other stuff . Buy some of those fix and flips . Turn those into good shops . Grow your brand , grow your footprint , because it would make sense to have a nicer footprint . So at some point you do want to exit and go into another business . Now you've got something to sell to a larger MSO that's looking for a missing piece of their footprint , maybe in your market , right ? So great option , sure .

Cole 37:41

Absolutely a great option , and I touched on some of the benefits of scale . I think one other benefit of scale that when you talk about that three to five-year private equity hold period , there's a real example of multiple arbitrage where , in meaning one shop might be worth some number or percentage of revenue X but 10 of those shops together is now worth that multiple of call it , two times whatever that number or percentage was . So scale naturally , bigger companies traditionally get bigger multiples . So as you grow , not only do you increase the profitability , the revenue , what have you ? Theoretically , the desire is to exit at a bigger multiple than where you entered .

Cole 38:26

Good business sense is to exit at a bigger multiple than where you entered Right Good business sense and not everybody may look at that that way . But yeah , I didn't know that that's how that works . So you have a larger footprint . Yeah , you'll actually get a larger percent or larger multiple of EBITDA , right ?

Cole 38:43

Yep , awesome Great advice Traditionally . Traditionally no hard and fast rules .

Cole 38:48

No , not in this world , no . And the third concept of specializing I probably like that one most and that's the one . If someone asks me , a collision shop owner that I run into at a conference or something like that , and they go here , here's my situation . What do you think I should do ? Well , you're fixing a lot of Teslas , right ? You got a great mix of Teslas and some higher-end jobs or just some late-model Cadillacs or you know nicer brand stuff . That's a perfect example of you know what double down on doing the Teslas or the Lucids or the Rivians or whatever the brand is that you got .

Cole 39:28

Make yourself an EV shop and specialize in that . Be the best in your market at it and then expand . Get a couple more shops , do the same thing , right ? I think that's a recipe to last a long time . Or , if you're , you know , I've got a couple of shops in my market . They do just simply high-end stuff . They're doingmws , mercedes , maybe rivian , but that's all they'll focus on . They're not even going to go look at , look at a you know a chevy volt that rolls up , or some other non-high-end vehicle and they're really good at , and they can duplicate their shops , which some of them have .

Cole 40:05

So I think those are great directions to go , because , if we look into the crystal ball about what's coming down the road , specializing seems like it probably makes the most sense . Look at the Amazon delivery trucks , right ? How many of those did anybody expect to see four or five years ago ? Well , maybe a handful , right , they're everywhere . You can't go down one street without running past three or four of them . Well , they're all you know . They're on time crunch . We've got to hurry up and hit all these stops . They crunch them , they run into shit , they scrape things up . They've got to get them fixed . Amazon wants to keep them look good , right ? So there is also now a whole big slew of people wanting those high top prep decks and high top booths , and it's because that's a niche market that is hot right now that people are starting to look at .

Cole 40:51

So Could not agree more . I think your logic is sound . I would not , from my perspective , assign any of those options as the best option only because it's so dependent on the person . It's dependent on their skillset and their business desires and their goals for their careers . It's also dependent on the market and it's dependent on their relationships . But I think if a lot of the shop owners who have an appetite to do one of those three and aren't sure what those are , take a step back and take an inventory of yourself what you in a perfect world , what that business looks like five , 10 years down the road and what the lifestyle looks like and what you personally are going to be best at executing . Are you that MSO CEO figure ? Well , maybe , maybe you should turn that direction . Are you really good at at uh , you know good relationships or something within the OE world ? Well , hey , look at specializing . So many good options and it's so perfectly tailored for different types of people to pursue different avenues .

Cole 42:02

That's a great summary , cole . It really is , because I feel the whole idea of sharing a message like this and I appreciate you being here and sharing your insight on it , so it's not just some old nut like me spouting off . I think the message is you know , if you're a shop owner out there , you're just not sure what you're going to do . But you feel a lot of people feel this way , just because they you know , I've worked on mindset stuff for years and a lot of times people just don't understand that they are in control of their destiny . They can make the changes that they want to make . They do have options and you're not stuck with anything , not stuck with any position that you're in .

Cole 42:40

But if shops can understand that they have options , if they still like this business , they still like fixing cars or they like being a collision center , you , if they still like the Spidians , they still like fixing cars or they like being a collision center , you do have options . There's different directions to go . The world's kind of wide open . So if people don't get anything else from this message but that that would be the most important thing you will always have options and I've said this before , I don't give a shit if cars are flying . That's the direction you know that we're they're still going to run into each other . They're still going to need to get fixed right . Totals will probably be a little bit more expensive , but still there's always going to be .

Cole 43:22

Oh , that's the opportunity . It's why the opportunity in this industry is so exciting and I don't want to take us in a direction you're not looking to go here , but I think the overarching theme that I try to put out there I know you do the same , I know a lot of our colleagues do as well is the positivity surrounding this industry , and we talked about it a decade ago . It was kind of . You mentioned that doom and gloom term . It was man .

Cole 43:44

This self-driving technology is coming out , cars are getting harder . There's not a whole lot of runway left here , and I think we saw that in companies at least pulling back on R&D . We've shared some stories about folks who were just really negative like oh man , there's no money in here , there's no money in this industry . This place is the worst . The shift over the last decade , even five years , has been astounding to witness . Everyone now almost most everybody , most everyone that we surround ourselves with at least , are so positive and there's so many good tailwinds in this industry that I want to make sure we harp on that a little bit .

Cole 44:25

Absolutely . You know me , I'm an extremely positive person and I I try to surround myself with positive people . To me there's I don't see any other way of looking at things . Right , yeah , why not ?

Cole 44:37

I'll tell you what the luckiest people in the world are also , coincidentally , the most positive people in my experience . Yeah , no .

Cole 44:45

Yeah , yeah , I know , yeah , I don't . I think it was Tony Robbins that said that life happens for us and not to us .

Cole 44:53

And I think that's a great way to look at things . So well , as we get ready to wrap up here , I'm not going to steal your shtick and give you some takeaways to give me , so I do like that . I like that you do because takeaways are good reminders , but I think we covered some really good stuff today . But one of the things that I do like to ask my guests is what's the best lesson that you've ever learned ?

Cole 45:23

Oh , I think we were just harping on it . It's really about mindset , I think , like where , in reality , challenges create the biggest opportunities . And I think that is almost personified in the collision repair industry and the evolution it's had over the last five , 10 years and will have over the next five , 10 years . So I think that mindset shift is so important to look at these challenges that we're facing that could be construed as headwinds , to flip it and realize , hey , these are actually the tailwinds we keep talking about .

Cole 46:15

Excellent man . You ended on mindset . I couldn't think of a better subject . But that is a great takeaway , that's a great lesson , and I appreciate you sharing that today , Cole . So , dude , it's been a pleasure having you on talking with you . I look forward to seeing you again . I believe I'll probably see you at CIC here in a few weeks , right , So- .

Cole 46:38

Got to do my best . Yes , we're going to get together here soon , absolutely . I know we're on the circuit and , no , really appreciate you having me on and appreciate our friendship and just can't appreciate enough what all you do for the industry . Keep up the great work .

Cole 46:53

Thank you , cole . Appreciate that you too , and for everybody out there . See this we're not competitors . We're in the same field , we do the same thing , we talk to the same audience , but we're friends . We share , and I think that's the whole thing , that's what makes life great , right ? We share , and I think that's the whole thing , that's what makes life great , right ? So , cole , what's the best place for everybody to reach out ? And if they need some questions answered , whether it's on mindset or financial mergers and acquisitions , what's the best way to get a hold of Cole Strandberg ?

Cole 47:22

Yeah , really active on LinkedIn , Cole Strandberg , and I'll share a link with you . Additionally , anybody can email me with any questions at all . I'd love connecting with people . In fact , one of my internal KPIs is just connecting like-minded folks who can benefit from knowing each other . So anything at all , you can reach me at colestrandberg , at focusbankerscom .

Cole 47:47

Awesome . I'll make sure I put all the context up show notes so everybody will see that . Once again , thank you so much for sharing today . I appreciate it and I look forward to seeing you in the future . Thank you , rick , likewise . Well , I hope you enjoyed my conversation with Kohlstrandberg , the topics we covered and gained a little helpful insight into some positive future options for collision shop owners that may be looking down the road at what's next , what's available and three distinct paths you could take to reach your own next levels in business . Feel free to reach out to Cole for any questions or additional information you may need . I'll leave his contact info in the show notes . Hey , and don't forget to check out his podcast , where he interviews great industry leaders as well as business and financial experts on the Collision Vision podcast brought to you by Auto Body News . Thanks again for tuning in . I really appreciate your support and I hope you have a great week . I can always be reached at wwwrickselovercom where you can find all my social media links podcast episodes , blog posts and much more .