Understanding the Power of DRP Partnerships

Direct Repair Programs (DRPs) have long been one of the most powerful levers in the collision industry. From an insurer’s perspective, DRPs drive efficiency, consistency, and customer satisfaction. But Calk reminds operators that DRPs aren’t just about cost control—they’re about relationship control.

“Insurance companies invest billions in their brands,” he explained. “They’re great at underwriting and marketing—but not at fixing cars. That’s why they rely on trusted partners who deliver both quality and customer experience.”

For repair shops, the key is alignment: understanding each insurer’s local needs, communicating transparently, and ensuring performance metrics reflect reliability.

The Post-COVID Power Shift

The pandemic flipped industry dynamics. For a brief period, shops were flooded with work and could afford to be selective about insurer relationships. But as volumes normalized, leverage shifted back to the insurers.

According to Calk, that shift means insurers are becoming pickier partners. “They’re looking at maps of where their policyholders live and matching that to their best-performing shops,” he said. “It’s not about how many DRPs you’re on—it’s about how strong your partnerships are.”

For shops, this means excellence now outweighs access. The most consistent, data-driven, and communicative operators will earn—and keep—their place on top-tier programs.

Building the Modern Collision Business

What differentiates the best shops isn’t size or equipment—it’s mindset. The top operators treat every partnership like a performance-based relationship.

“The best owners were engaged,” Calk noted. “They knew their insurers’ goals, mirrored their KPIs, and ran their operations like extensions of the insurance network.”

He also emphasized clarity of positioning. Whether your focus is on OEM certifications, DRP expansion, or organic growth, your business strategy must align with who you want to be—and with what the market values.

That clarity extends to your financial and operational discipline. Shops that document their processes, monitor data daily, and can demonstrate consistency are better positioned for both insurer confidence and investor interest.

From Insurance Operations to Investment Strategy

After more than a decade in insurance leadership, Calk moved into mergers and acquisitions. Today, as an active investor through Arcova Advisors, he focuses on the broader collision repair ecosystem—the suppliers, service providers, and technology companies that support body shops.

“We love the collision industry because it has strong fundamentals,” he explained. “Good or bad economy, people still wreck cars. But many business owners haven’t maximized their value. Our goal is to step in two to three years before a sale and help them do that.”

Through Arcova Capital, the firm applies enterprise-grade valuation and readiness strategies to help owners build sellable businesses—whether or not they plan to sell soon.

What Investors Look For

Calk shared clear insights into how investors view collision businesses today:

• Strong local brand presence and community trust.
  
• Healthy financials with diversified revenue streams (not over-reliant on one DRP).
  
• Operational maturity, including documented systems and clean reporting.
  
• Scalable positioning, such as certifications or unique service capabilities.
  
• Collaborative ownership, willing to engage through diligence and transition.

He’s quick to point out that “sound business fundamentals outweigh size.” In other words, you don’t need to be the biggest shop—you need to be the most disciplined and investable one.

The Human Side of Exit Planning

Beyond financials, Calk emphasizes the psychology of selling. For many owners, their business is a lifelong identity. “You have to think about what happens next,” he said. “If you sell without a plan for what’s next, it creates risk—for you and the buyer.”

Arcova helps founders visualize life after exit—whether that means staying involved as an advisor, moving into a related business, or pursuing personal passions. That clarity not only eases the emotional transition but strengthens deal outcomes.

The Compounding Effect of Enterprise Value

One of the most overlooked financial truths in business ownership is that enterprise value compounds faster than profit.

For example, increasing annual profit by $250,000 might seem modest—but if your valuation multiple rises from 4x to 5x because your business becomes more systematized and less owner-dependent, that same improvement adds over $1.25 million in exit value.

That’s the hidden ROI of building a company that’s always ready to sell.

What Makes a Collision Shop Attractive to Investors?

Investors look for collision shops with strong financials, diversified revenue sources, documented systems, and consistent performance. Businesses that balance DRP relationships, OEM certifications, and operational discipline command higher valuations and attract more interest.

The Industry Outlook

Consolidation among both insurers and MSOs is accelerating. As vehicles grow more complex and repair costs rise, large players will continue to integrate more deeply with preferred partners. For independents, that creates both challenge and opportunity.

The takeaway? Position your business now to thrive later. That means investing in systems, leadership, certifications, and data visibility—factors that increase both daily efficiency and long-term valuation.

“Ride the wave,” Calk advised. “The shops that adapt fastest will be the ones investors and insurers can’t ignore.”

Key Takeaways

• DRP relationships are about partnership, not price.
  
• Insurers increasingly reward performance, transparency, and alignment.
  
• Investors seek scalability, clean financials, and owner engagement.
  

Whether you’re building your next location or thinking about your eventual exit, the choices you make today shape your enterprise value tomorrow.

Arcova Advisors helps collision repair operators align with market dynamics, strengthen DRP relationships, and prepare their business for future growth or acquisition.

Schedule a discovery call today to learn how Arcova Capital can help your business ride the next wave of change with confidence.