How a Mexican immigrant turned his Austin auto shop into a thriving small business

At 17 years old, Jose Carrazco left his native Mexico and headed north in hopes of establishing a better life in the U.S. Now a few decades later, he’s accomplished that and more.

The U.S. Small Business Administration (SBA) named Carrazco’s Austin-based West Oakland Auto Repair shop the Minority-Owned Small Business of the Year in Minnesota. The honor came mid-March in recognition of National Small Business Week. Abdirahman Kahin — CEO and owner of Afro Deli & Grill — and Kenneth Dodge of Falls Optical Inc., also earned the Minnesota Small Business Person of the Year and Veteran-Owned Small Business of the Year titles, respectively.

“We are really proud of the team,” Carrazco said, adding he’s thankful just for steady work throughout the years. “Sometimes it gets so busy in here, I think, ‘Oh my God, I don’t know what I am going to do.’ But we focus on what we can do today. One of the good things that customers see is the turnaround is super fast, as far as getting the car back. That’s important.”

Carrazco started his business about 10 years ago, renting a tiny garage with three car bays and running it mostly with help from his father and nephew before eventually hiring two workers. It was a major development since leaving his home state of Michoacán, where he made just $5 a day working on farms after school to try to help support his family.

When he first came to the U.S., he worked construction jobs in Iowa for two years before settling in Austin to work at Hormel’s pork plant. But he always fixed cars on the side, a gig he liked so much he eventually found work in a collision repair shop full time. At Car Nu Auto Body, he learned about things from collision repairs to frame measuring and gained the skills and confidence to consider his own shop.

He found a place to rent, but he needed equipment. Banks wouldn’t lend him a dime, something many diverse small business owners encounter.

Luckily for Carrazco, he wasn’t entirely out on his own.

Southern Minnesota Initiative Foundation (SMIF), which prides itself on bride loans and economic development, issued a loan that allowed him to buy all he needed: a car lifter; a balancer and tire changer; barrels of oil, coolant and antifreeze; and cases of batteries, wiper blades, brake pads and rotors.

He paid off that loan by 2015, more than a year early.

And by 2016, West Oakland Auto needed more space, so Carrazco found a derelict auto station for sale just 3 miles from his current place. It had a giant hole in the roof and massive water damage. But the building was on a downtown street with slower speed limits. Thus it had the potential to give the garage greater visibility than the rented location.

“We contacted the [regional] president of Home Federal Bank, Tom Klapperich, and he was willing to come to inspect the building and see if it was something we could handle,” Carrazco said.

This time, the small business had proved it could handle a business loan for buying and renovating the property. Home Federal Bank used a government SBA 7(a) loan guarantee, a tool that helps banks make loans to emerging businesses without shouldering all of the risk.

Yet even with that, Carrazco said he “came up a little short” on renovation funds. So the Development Center of Austin (DCA) stepped up with $20,000 for construction supplies. SMIF then provided a six-year loan for a professional paint booth.

With financing settled, Jose, two brothers and two employees went to work. They first gutted the building. Then they installed a roof, walls, floors and a first-class bathroom and waiting room, something Carrazco insisted would impress women customers.

The new shop opened in 2017.

“They have grown from working in their yard to a rental space to owning their own building,” SMIF lending director Marcia Haley said. “They are working the way we hope other businesses will grow.”

John Garry, DCA president and CEO, said it was unique how Carrazco and his crew did so much of the renovation work themselves. That elbow grease produced a vast improvement within a small retail district.

It also helped the shop develop its family feel. Cecilia Cifuentes, Carrazco’s wife, greets customers at the front, alongside the family’s dog and sometimes even the couple’s children, who are curled in a corner doing homework while shop workers hustle in the attached garage.

Today the auto collision and mechanic firm boasts hundreds of customers and 11 employees making $16 to $21 an hour and eight car bays.

“Business owners like Jose Carrazco bring a wealth of diverse ideas, innovation and experiences to the marketplace,” said Brian McDonald, SBA’s Minnesota district director. “We are celebrating West Oakland Auto Repair, for creating good jobs and providing quality services for the community of Austin.”

Jose and his wife had also enrolled in SMIF’s technical assistance classes. Through those, they learned about marketing, profit and loss statements, QuickBooks, sales tax and payroll tax reporting. Even how to write an employee handbook.

They created Facebook posts, joined the board of the local YMCA and each year talk to students about the grit it takes to run a business. That involvement spurred the community to support the business.

“They connect with people so well. They come across as sincere and ambitious and down to earth,” Garry said.

Sometimes people stop by this shop thinking the building is an auto parts store. That’s because the shop is painted blue and yellow, thanks to $5,000 of donated paint last year from the National Automotive Parts Association. Carrazco initially worried about the expense of joining such an organization but did so to have quick access to parts as well as a 24-month guarantee on them.

Carrazco’s business grew so much that NAPA financed a new car lift and wheel alignment station for the shop through five years. And any mistake for a NAPA Auto Parts branch usually turns into a conversation and a new customer.

“All the improvements have allowed us to grow continuously year after year,” Carrazco said. “We’re excited to see how far we can go.”

Carrazco will pay off SMIF’s second loan in May. He’s already paid off the paint booth loan.

“They saw an opportunity, had a vision, and they went for it. And they accomplished what they aspired to do,” Garry said. “One of their strengths is knowing what they are really good at and knowing where they need some help.”