Printer Friendly

Collision kingpin: Terry Smith collides with success.

Terry Smith's hands are clean -- very clean. So is his crisp, white 100 per cent cotton shirt with the silk tie neatly knotted and perfectly centred under his Adam's apple.

He has the open, all-Canadian good looks of a YMCA camp counsellor and the honest blue eyes that could raise a million dollars. In fact, he has raised $3 million in the past three years from more than 200 investors -- seed money for his company Boyd Autobody.

As the president of Boyd, a chain of six collision centres in Manitoba, Smith's work clothes are in stark contrast to 90 per cent of the operators who are his competition.

The shops of the old guard are not neat and tidy showrooms, and the acumen of their owners isn't white collar fund-raising or marketing. For most, their strength is the dirty end of the business, in the back shop where crinkled fenders and bent frames are doctored back to high-gloss health.

Gary Benzelock is one of those people. A co-owner of Bunzy's Autobody Limited, in the auto repair business for 19 years, Benzelock says 90 per cent of the repair shops in Winnipeg are run by skilled tradesman. "They've all come from the apprentice system and then went on to open their own shops," says Benzelock.

Terry Smith's skills are a lot different. He has no hands-on experience in the shop. His talent lies in marketing.

Since all car owners make discretionary decisions on which body shop to go to, Smith uses mass media marketing to reach them. Boyd's outlets have a high profile on television, billboards, radio and in newspapers. As a result, Smith did something no other collision repair shop in Manitoba has done; he quickly secured a large market share, a feat that has taken established shops years to achieve.

Boyd Autobody is doing well. According to calculations based on Autopac statistics, Smith claims three of his shops are among the top 10 earners in Manitoba with gross earnings of more than $1 million each. And two others are close to that in their first year of operation. The gross income from all the shops was nearly $6 million, compared with $2.25 million in 1991 -- the end of the first full year of business. What's stunning is that it all happened in just three years.

Smith and his shareholders own five shops in Winnipeg, one in Brandon, and one in Vancouver -- two more Vancouver locations are under construction and a third is under negotiation. They are all on major traffic routes and most are close to ICBC outlets to make it convenient for customers. Smith waited for nearly a year to get his King Edward Street location which is directly across from an Autopac outlet and doubles as his head office.

No other collision repair shop in Winnipeg has as many outlets as Boyd's. Smith used smart business acumen to plunge ahead with expansion, backed by the many investors who agreed with his prospectus.

Smith says, "My competitor's don't understand. We're running this business like a retail operation, not a blacksmith shop, which is the original roots of the autobody repair business. We want clean surroundings in high traffic areas. That's our marketing strategy."

Smith is a risk taker and investor, and has a track record of inspiring people to work with him. He had experience running several businesses, including a restaurant chain called Clancy's, and also invested money in Docksteader Collision Centre in downtown Vancouver. He considered it a good investment in 1988 and the reason is solid; his father started the business at 62 years of age.

Smith says, "My dad sold his house in Vancouver because he felt he wanted to go into business for himself, and I put money into it too." Today, 5 years later, his father and Docksteader Collision Centre are doing very well with gross billings of more than $2.9 million, and Smith senior now has shares in Boyd Autobody.

Smith's entrepreneurial idea for collision repair was born in 1990. He sold his share in Clancy's in early 1991. He bought Boyd Autobody on November 1, 1990 -- a small but established collision repair shop started in the early 1950s. He paid $100,000 for the shop after six months of negotiations.

Smith says, "I learned a lot from the original owners, Israel Friedman and Maurice Lipkowitz. They were both over 65 and they knew the time had come to sell, but they loved the business because they had grown up in it."

It took Smith six months of Saturday morning visits to the coffee shop of The Airliner hotel, owned by the two men, to finish the deal.

Smith is a shrewd, well-schooled, hard-nosed, soft-sell entrepreneur who raised $530,000 for Boyd in the first month of the limited partnership offering. According to Manitoba Security Commission rules, he had only 180 days to sell, but by the end of the period he had raised $1.5 million. With 150 units, at $10,000 each, that's a lot of selling. Then, in the second round of 180 days of selling, Smith and his directors raised an additional $1.5 million -- by word of mouth. Under the rules of the Manitoba Securities Commission, buyers had to be friends, relatives, business associates or sophisticated investors. The first round of shareholders receive dividends as they are the preferred risk takers who established the business. The second round investors are paid on a different scale based on a formula that gives the first round investors a quicker return on their capital to reward them for their early investment. Professional equity capital sales people said it couldn't be done.

With more than 1,200 shops in the province, Smith was the subject of rumors. Some were that he was being sued by investors, others that his workmanship was not good, while others said, based on his overhead costs, he wouldn't be around for the long haul.

Boyd's workmanship, according to an Autopac source, is as good as industry standards. And 47 per cent of Boyd's new business comes from personal referrals. The satisfaction rate for work done is at 95 per cent. Says Smith, "Obviously we're working on that."

The financial picture is cheery. Boyd's long-term debt is low, cash flow is high, the equipment is paid for and his buildings are leased.

With about 720,000 vehicles on the road with more than 188,000 accidents, costing the public insurance plan an average pay out of $1,766, there is a lot up money for grabs.

That's $331 million in high-gloss repair work out on the street. All that money is undirected money in the hands of the consumers. The repair work is fully insured by the mandatory, no-fault Manitoba public insurance system.

An intelligent, well-funded, persistent marketing plan goes a long way in drawing in sizable amounts of business. Boyd has the cash to carry it off, but few smaller collision repairs shops can compete on that scale.

Smith's proven ability to run a business has attracted several financial heavyweights. Megill Stephenson, which owns the Birchwood Group of car dealerships, is a joint-venture partner with Boyd's in collision repair on south Pembina Highway. Winnipeg Jeep Eagle also owns a share.

Smith says there are no side deals, and there are suppliers that have shares in Boyd from which there are no buys.

"We buy from those suppliers who are the most competitively priced and who offer the best service," says Boyd.

The majority of Boyd's shareholders, more than 230, are single-unit buyers, a testimonial to Smith as a leader and to the organization's ten shareholder directors. It also proves that when a good idea comes along, there are more risk takers in Manitoba than once thought.

Smith says, "In my early days in the restaurant chain I was not interested in selling to my friends. I told them if I lost money I'd lose a friend. And if I made money, I didn't need their money in the first place.

"When I came up with the Boyd expansion idea, I spoke to some friends. I told them if they believed in the idea strongly enough for them to involve friends and associates, we would have something to be partners in."

But he still didn't talk to his closest friends about shares.

"I didn't want to have close friends over for dinner and be mad at me if the business didn't go well. But they said they didn't want to come to dinner and be mad at me if I made a lot of money and I left them out. In the end they sought me out."

Smith's friends must be happy. After three years, the company is rapidly taking its share of the market. With 60 free courtesy cars, something that Autopac doesn't pay for, and a heavy media marketing campaign, business has come pouring in. (Boyd's cars aren't marked. Smith feels that professionals don't want to advertise that they've cracked up their car).

Boyd's incursion into market has hurt the competition. Some of the existing shops have been around for 40 years and they wonder how Smith and Boyd Autobody shot into the million dollar ranks so quickly. They also wonder how good a $10,000 investment in Boyd can be. Many are wondering how long Boyd will last.

Gary Benzelock from Bunzy's, whose clientele includes corporate clients, says Boyd's clientele are the average driver and he's reaching them.

"There are a lot of people in this business who whine about it being slow," says Benzelock. "It's so competitive that some of them are taking licence numbers from Autopac outlets. But the business is there if you want to go and hustle it."

And that's exactly what Terry Smith is doing.
COPYRIGHT 1993 Manitoba Business Ltd.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:president of Boyd Autobody in Winnipeg, Manitoba
Author:Gage, Ritchie
Publication:Manitoba Business
Article Type:Cover Story
Date:May 1, 1993
Words:1628
Previous Article:Where the action is.
Next Article:Country capitalism.
Topics:

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters