Last week I was in Chicago for NACE Automechanika. NACE is one of the largest trade shows dedicated to the collision, mechanical and automotive service industries in North America. It is a great show to connect with leaders in the industry, and as is normally the case, my day was filled to the brim with early mornings, late nights, and meetings and events throughout the day. By the time I got home Friday night I was exhausted and glad to be home but already missing the energy from Chicago.
The primary reason I go to NACE every year is to attend the MSO Symposium. I attend on behalf of clients, but I also attend to because there is no better place to get “boots on the ground” perspective from other successful business owners and executives in the space.
The topic on everyone’s mind at NACE was pre and post repair scanning of vehicles. In the mechanical and services space, scanning has generally been a standard business practice for a number of years, and is a key component of diagnosing a vehicle. On the collision side, however, scanning has been a largely ignored procedure until recently.
At the MSO Symposium there were two panels on scanning; one made up of OEMs, and the other comprised of insurers. It was fascinating to watch the dichotomy between the two groups. The role of scanning will continue to impact the industry, and there are a number of companies providing innovative solutions to meet this need. Equipment manufacturers like Bosch and Car-O-Liner are looking at the connected workshop and working feverishly to create a real-time network leveraging the internet of things. Companies like AsTech and AirPro are focused on providing remote solutions to the industry, leveraging both centralized and decentralized work forces to drive down costs and increase access to OEM level scanning technology at the shop level.
But these companies face challenges as OEMs move further into the space. A representative from On-Star gave an interesting presentation on the company’s go to market strategy. On-Star’s vision is report codes at the time of an accident, going as far to imply they will develop technology that will provide predictive analytics to insurers and repairers alike, speeding the claims cycle and reducing claim cost. Information providers have also entered the fray, with companies like Mitchell, CCC and All Data all discussing ways to provide OEM level information to the end user and creating new technologies that will write estimates based on photographs alone with no need for human intervention. Fascinating times indeed for companies with innovative business models. From my perspective – there is a lot of work still left to do an no one company has yet to develop a truly disruptive approach to solving this challenge. The “killer app” is still yet to come.
My favorite part of the MSO Symposium, however, was hearing from business owners directly. In a highly informative panel, three former collision repair owners discussed their growth and their exit from the business. It was fascinating to hear from individuals that built world class organizations discuss how they grew, and also their experiences in selling a business. The importance the using debt as a tool to grow, but also the importance of managing the capital structure of the business were discussed. “Shed debt. Grow Cash.” “Grow at the right pace and place.” “Remember your taxes.” These were all some of the pearls of wisdom from the panelists.
I also enjoyed hearing from these panelists how they had previously managed their business, and the importance of financial and operational KPIs in their business. Each panelist was intensely focused on their business, and utilized a number of financial and operational KPIs to manage their business on a daily basis. There are a lot of different financial metrics used to evaluate a business, and I found it interesting to hear how different owners used different ratios to manage theirs. (subscribers hit REPLY and we can talk about some of the ratios that were discussed).
All in all, the entire week at NACE Automechanika was a great use of my time. Ultimately, these events are about networking, and I spent most my day doing as much. I find I can accomplish more in 4 days of face to face meetings than I able to accomplish in 3 months.
The next big industry event that I’ll be attending is SEMA in Las Vegas and I hope to see you there.
Until next week!