Taking the Smart Route Into New Locations
Growing a shop into a chain can bring big challenges and big rewards, potentially turning a thriving local shop into a regional powerhouse.
Deciding how and when to acquire or build can be daunting. It’s a mix of timing, opportunity and risk. But there are certain strategies to keep in mind. Operators who have gone through expansions say that the top consideration is what you might expect in any industry: location, location, location.
When Tyson Daniels was looking to expand the footprint of Grease Monkey Idaho, he knew where to look. He had existing locations in the Idaho cities of Rexburg and Pocatello, and Idaho Falls sits between them.
“It was just a hole in our area,” Daniels says. “We had a large demographic of people who lived in Idaho Falls.”
The company acquired a shop in Idaho Falls and made the expansion, bringing a total of five quick-lube shops under Daniels’ care.
One of the biggest don’ts is jumping too quickly into expansion, whether it’s within your service area or among your staff.
Proper research ensures that a new shop can keep its car count high enough to match and exceed the investment needed to open up. It also means taking time to make sure your business is a positive impact on a community.
“As far as expansion and trying to move into a new part of it, you really need to take your time to invest in that town,” says Cody Posey, division manager for Toot ‘N Totum Car Care Centers based in Amarillo, Texas.
As an established convenience store brand, Toot ‘N Totum acquired its first car wash and lube shops in 1997. Since then, they’ve grown to eight car care locations with two more in the works.
Early on, Posey says they kept their expansion within the greater Amarillo area, looking for opportunities in underserved areas or existing businesses looking to sell.
They’ve since opened up shops in towns as far as 85 miles from headquarters, and Posey says that it’s important to treat that move with care.
Transitioning a workplace culture requires care, as well. Daniels says he lost a shop manager after acquiring one quick-lube business. Introducing computer systems and company best practices to staff can be tough.
They worked to manage the rate of change so it’s effective but manageable for staff.
“We were able to slowly staff the store as we grew,” Daniels says. “We didn't come in and just hire a bunch of people. We just grew as the business grew.”
Use what you’ve got
Another big tip shared by both Daniels and Posey is using your available assets and building on them.
It’s a strategy that can be put to action in lots of ways. For Posey, that meant building on the solid brand recognition that Toot ‘N Totum created over decades in the convenience store business. Customers know them from seeing their storefronts in the area.
“We don’t do any marketing campaigns,” he says, “just because we do have our stores on basically every corner. We just incorporated with that, Toot ‘N Totum Car Care. They know what business we are, who we are, operationally what we do.”
That also meant that they didn’t tie their business directly to another brand through exclusive supply contracts.
“I think that the best thing we did is we went unbranded,” he says. “We don’t sign contracts. So we go with our distributor, and if we’re not happy with what we’re getting, we’ll spit it out.”
For Daniels, it meant turning one of their biggest challenges into more business.
When Grease Monkey Idaho took over its fifth location, the building came with seven bays. The other locations had two bays for lube services, and they just used two of the new bays at first.
“That’s been a hurdle for us,” he says, “to find out ways to generate income with additional space that we had.”
It meant hiring and training for additional services like inspections, mechanical repair, alignment and others. They’ve gradually grown into those spaces, but the payoff has been immense.
“It’s grown exponentially,” Daniels says. “It’s probably doing four times the business now. And we just expanded. It had a few bays that weren’t being utilized.”