PABCO Auto Body: Veteran Business Owner Survived to Thrive in Modesto, CA
Marcial & Gloria Chavous purchased PABCO Auto Body in 2008 several months before the 2009 financial collapse. Marcial, who is US military veteran, continued working fulltime for the CA Highway Patrol in their local vehicle maintenance shop. A year later, with the US recession in total free-fall, the business was struggling to stay afloat. At this time, the owners reached out to the SBDC based on a referral from their local business banker.
The owners began working with SBDC Lead consultant and operations specialist, Dennis Murphy and attended several SBDC management trainings. After years of struggling but hanging on, the owners decided in late ’14 to sell the business. SBDC lead consultant Dennis Murphy was asked to help the clients value the business and find a possible buyer. Lexus, BMW and several large independent body shops in the Modesto area were contacted with no positive response.
One day in early 2015, after a long and difficult discussion with Dennis, Marcial and Gloria decided to persistent by taking a fresh look at managing costs, improving operations and looking for new insurance referrals. They also attempted to renegotiate the terms of the original loan carried by the seller which was coming due, but without success. By summer 2016, business revenue began to improve but remained inconsistent. In late 2016, revenues became more consistent and a happy surprise occurred. The former owner (now living out of state) responded positively to rewriting the terms of the “carry-back” loan. With advice from Dennis, Marcial & Gloria were successful in negotiating a reduction the Seller’s note loan balance from $170,000 down to $70,000. In addition to the improved cash flow, this was an enormous relief of stress on this wonderful couple.
At the end of 2017, revenues are 20% above 2016 levels and PABCO is now signing up over 50% of the jobs they quote. A better relationship with their new Progressive Insurance adjuster has resulted in a significant increase in referrals. Marcial recently commented; “the assistance we received from the SBDC kept us from giving up. We absolutely would not be in business today without that support” “Thank you Dennis and the Modesto SBDC”