10 tips on how to set about trimming your bodyshop expenditure

Like all businesses in a recession, bodyshops need to focus on managing costs. Here are Expense Reduction Analysts’  10 top tips to trim bodyshop expenditure:

Lead by example. Business leaders should demonstrate that they care about saving money by resisting expensive travel and hotels. Be prepared to open your organisation to scrutiny and examine every cost. Example: Challenge cosy relationships with insurance brokers and suppliers by questioning costs.

Keep the green light flashing. If it does not remain high on the boardroom agenda, employees will see the directors’ crusades as ‘the flavour of the month’ and the drive to cut costs will fall to the bottom of everyone’s in tray. Example: Remind staff of the impact of cost savings by using powerful monetary examples.

Establish your costs. Your perceived ‘well kept ship’ may not be as leak proof as you think. Examine and benchmark your costs line-by-line. Compare costss against competitors and other suppliers. Example: Clearly define what you need then model and compare each supplier’s offer in detail. 

Be market wise. Be aware of constantly changing supplier markets and developments you may be able to capitalise on. Example: One bodyshop makes savings by not only reducing their waste service provider costs, but gains £18,000 per year by selling recyclable material. 

Don’t purchase things you don’t need. Buy what you need, not what your suppliers would like to sell you. Suppliers will often use bait-and-switch tactics to move you onto higher margin items. Example: You may be paying too much for laundry services because employees either wash overalls or they don’t have them cleaned as regularly as the service contract allows.

Let suppliers know about your cost review programme. Let suppliers know that you are undertaking a review of overhead costs. Refuse to accept price increases during tough. Example: Workshop consumables prices have remained stable at one bodyshop, thanks to ERA’s involvement.

Establish supplier key performance indicators. In addition to reviewing prices look at establishing key performance indicators. Example: Sourcing a mini call centre system for one bodyshop resulted in a higher specification solution with much greater value.

Create a cost conscious culture in the workplace. Develop a culture where everybody is responsible for challenging costs. Example: Cost savings would be achieved by sourcing consumables centrally from a single supplier.    

Jettisoning suppliers should be the last consideration. Reducing costs is not about reducing quality or just switching to a cheaper supplier. By following these tips and working in partnership with your suppliers to identify cost-cutting strategies, you can generate savings without disrupting standards of service.  

Create a long-term cost-management programme. Potential savings are great, but they don’t mean anything unless they are realised. After creating a culture of cost consciousness, appoint cost management champions to drive the programme forward.

Club Members save £½m

Members of the ABP Club found new ways to reduce costs and boost the bottom line when they appointed cost consultants, Expense Reduction Analysts.

Consultant Adam Wheatley and his team have made savings of over £560,000 among 19 ABP members who continue to see profits improve. Neil Kirk, managing director of Howard Basford bodyshop group and ABP Club Platinum member, said: “When we first engaged Adam and the team, we challenged them to achieve savings.  Their ability to do this quickly established their credibility and has ensured a long and fruitful relationship.”

 ‘Develop a culture where everybody challenges costs’