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BACK CHAT: MIKE MONAGHAN
Consultants. Discuss. Mike Monaghan of MJM & Associates does just that.
I cannot think of another industry where the customer tells you how much they’re going to pay you for your service, but that is the body repair industry.
In the case of the bodyshop, they combat this by using some of the traditional tools that are available to them; obtain as many hours as possible for the job within the scope of your estimating powers, get the productives to complete the work in less time than on the sheet, and buy parts and paint for less than anybody else. After all of this, you may have a small margin left to run the business.
For my part (having been in the automotive world for 35 years, from spanners to Chief Executive of the MVRA) the truth is, very little has changed in the world of crash repair. Now there’s a statement some would like to challenge.
Of course I have seen the tremendous efforts from all sides, watching our industry develop and improve in so many areas. I’m also still amazed at the guile and resilience of many bodyshop owners to survive and endure that evolution.
But within those times, many have failed and many who have survived have failed to change enough to survive the changes that are coming next.
Longevity
Today, I operate as a consultant (the word everyone seems to have great difficulty with). Like bodyshops, there are good ones and bad ones.
Over time, we sometimes lack the courage or capacity to see the changes that have or have not happened in our business. This is where a good consultancy review can help that business get back on track, or to assist in a change of approach or methods of operation. All of which could improve the businesses performance or longevity.
In my experience, most shops fail to plan at all, or fail to plan far enough ahead. Even for those who do the first part, they then fail to stick to it.
It is only natural for most business owners to be protective of something they have work years to develop and be resistant to change. The irony is that within any changing market lies opportunity. That opportunity could take the form of surviving where others fail, or recognising why some fail and reacting to capture the business that they’ve clearly lost.
I have been very fortunate in my time to have the helicopter view of our industry, a position many shop owners rarely have. Some of the changes were predictable, such as the development of larger shops that became groups, and with that came structure and strength. The process of evolution continues, with regional groups becoming national. Some of those will fail, possibly through the wrong mix of people, process or strategy. But they are trying something to affect the balance of the market changes.
Capability
So where does the future lie for the small stand alone independent? I’ve been asked this many times and there is never a single or simple answer. However, in my opinion, there will always be room for the good independent. But capability at all levels will be essential. Geography and strategy should become a major part of their thinking, not just doing a good job on the next car.
It is a tough world out there in body repair and the insurance industry will never loosen its grip on control. Nor are they ever truly going to be able or willing to allow for a meaningful balance of supply. A bit like the climate debate: how bad will it have to get before we realise things need to start changing now for both sides?
So, what can bodyshops do to help secure their future? Yeah, you guessed, get a good consultant in to help you and, you know what? They can help.
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