Things change, as they do, and as the bodyshop got busier, we dropped the styling side. First mistake.
I started chasing insurance approvals, because that led to volume, and pretty soon we had to move to bigger premises, so we could chase even more insurance work. Second mistake.
Although we were growing every year, it took me a while to realise that while there was more money going through the business, we didn’t actually make any more money. I thought that the answer was to get even bigger, so we did. Third mistake.
Why were they all mistakes? Because we had gone from a business where we were dealing directly with the customer and able to meet their needs, to one where the customer was actually someone we never met.
What happens when the person sending the work and paying the bill (insurance company) isn’t the person receiving your service (car owner)? There is a saying, he who pays the piper calls the tune, and the insurance companies wanted just one song, lower prices.
That meant that we had a choice; cut corners and quality to squeeze a margin out of those low rates or keep repairing cars properly but lose money on every job. Neither option suited me, so I chose another way; deal directly with the car owner and give them the service and quality they deserve.
It took a while and some planning. For a long time I didn’t think it would work, simply because we had such high overheads due to our size and all the heavy duty equipment we needed, that our prices would be too high.
Then it dawned on me. I was trying to stay the same business but change who my customer was. That was never going to work because the cars we were repairing were too heavily damaged for most people to afford to pay for themselves. According to the ABI, the average motor insurance claim in 2013 was around £2509 and frankly, if a vehicle is that badly damaged then that’s what your insurance is actually for, after all.
Let me give you another figure; the total cost to you of making a claim on your insurance policy after taking into account your excess and the impact on your premium for the next 3 years, is £1200.
The question now was; could I create a business where the cost to our customers was less than the cost of going through insurance?
I had to change not just who we worked for, but the type of damage we repaired. What if we didn’t deal with major impact damage? What would be different if we didn’t have to handle suspension damage, bent chassis or undriveable cars? Would that make things better for the car owner?
I redesigned my whole business around that key concept and realised that by not taking on major damage and instead concentrating on everything else, I could do away with most of the heavy panel equipment other repairers need. I wouldn’t need such a large workshop, recovery trucks, a big fleet of courtesy cars. All those hidden costs, that are supposedly ‘free’ but still need to be paid for, would disappear, making it possible to give you the choice, service and quality you deserve at a price you can afford.