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Bodyshop: Diversifying replaces lost work at Minimec.

Recent moves by major insurers to sack their body repair networks and replace them with a handful of group contracts nationwide have put many bodyshops at risk.

They could do worse than follow the example of Bracknell, Berkshire-based Minimec, which has made a career out of diversifying.

Minimec is facing its second major challenge in five months due to insurer network changes.

It has already replaced lost work worth 10% of turnover following Axa’s shake-up late last year by becoming an Elite repairer.

The company wrote to its 1,000 Axa customers telling them it was no longer approved and explaining their legal rights to select the repairer of their choice.

It’s had a positive response.

Losing its Zurich approval pre-sents a far greater test – it accounted for a quarter of Minimec’s business.

The company has prepared letters to send out to its Zurich customers.

Managing director Neil Berryman admits he is apprehensive.

“The work will probably be phased out but it is a concern,” he says. “It won’t be easy in the next 12 months.”

However, he adds: “I feel that work will still spill out of the new network because customers will not want to have to wait weeks to have their car repaired.

If we continue to get 30% of the Zurich business at retail rates we will make some money from it.

If we get 40% or more we will be in profit. “Most private individuals still think they have to go where the insurance company tells them – but this will change.

People want their car repaired locally but as more insurers move to group deals that won’t be possible.

I think then we will see more people exercise their right to have their car repaired at their place of choice.”

Minimec will be insulated against lost body repair work through its other business interests – servicing, mechanical repair and MoTs.

This also presents cross-sell opportunities where the company can promote and sell its body repair services.

“I’d like to see the business get to 50-50 on retail and insurance body repair work,” Berryman says.

“That will enable us to make reasonable profits and the money to invest in training and equipment to put the business where we want it to be.”

Minimec was founded in 1976 by Berryman and two partners.

Even back then it spread its services across mechanical and body repairer.

The team lasted four years before the three men parted ways and Berryman set out on his own.

Always on the lookout for new ways to raise revenue, he introduced a van hire business in 1984 which brought in extra revenue and cash flow at a time when payments from insurers for body repair work were notoriously slow.

He replaced van hire three years ago with MoTs.

Minimec is set up for Class 4 and Class 7 MoTS and now employs a full-time tester.

It has also helped the service side of the business and Berryman has just ordered his fifth service ramp.

He employs four mechanical service managers and a service adviser.

The impact from the mechanical repair and MoT business is clear.

Last year, accident repair accounted for 75% of Minimec’s turnover, service and MoT for the rest.

MoT alone brings in £9,000-11,000 a month from 10-12 cars a day.

This year, Berryman is forecasting a 60-40 split in turnover.

Service and MoT are much more profitable than body repair – their contribution to the bottom line is almost the reverse of the contribution to turnover.

And they improve cash flow as customers – 70% of whom are retail, the rest fleet – pay for the job when they collect the car.

On servicing, fleet business is typically one to three-year-old cars; retail tends to be three to seven.

Just over two years ago, Minimec became an authorised service and maintenance dealer for LTI taxis.

Berryman believes more will follow Minimec’s example in mixing body and mechanical repairs, prompted by the growing consolidation in the insurance sector.

“Bodyshops will have to look at other revenues and recognise that the step from bodyshop to repair centre isn’t that great,” he says.

The Company

Name: Minimec
Turnover: £2.3 million
Number of sites: One, 22,000sq ft
Number of staff: 31
Body repair throughput: 40-50 per week
Service/MoT throughput: 50 per week

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