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Thoughts on opening a second location?


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Hey guys, my shop is becoming pretty successful and it runs pretty well without me being there (most of the time), should run flawlessly if I hire another advisor for when I'm not there.

 

Owner of a building of a 5 bay garage 1995 sq/ft contacted me to see if I want to rent it out for $2400/mo. Currently leasing a 3000 sq/ft 6 bay garage about 20 miles away for $4100/mo. I have a reliable employee that recently quit bc of the distance he was driving and the new location is only 15min away so I have people to work lined up and this one is 10min from my house oppesed to 45 min for my current shop. My current shop has a 5 yr lease so not planning on giving anything up.

 

I have a good brand image and a strong reputation. Google alone 82 reviews 4.9 rating.

 

Profitability wise I just got to the point of being able to pay myself salary. Is it too risky? Headache worth it? Thoughts?

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Jay, I am in a similar boat as you. The questions I had to ask myself are...

 

1. Do I have a handle on my numbers? Do I understand all of my KPIs?

 

2. Do I have the right systems in place?

 

3. Do I have the right staff in place?

 

4. Do I have enough capital or do I have access to capital?

 

5. Do I have a business plan? What is my current business plan?

 

6. Am I profitable enough at my first location?

 

7. What is my launch marketing campaign? What is my marketing budget?

 

8. Where will my staff come from? Have I been recruiting?

 

9. Can my shops operate with me not being there?

 

10. What is the demographic of the new location?

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I'm by no means a wildly successful shop owner (Small, three man shop). However, knowing that you just go to where you can afford to pay yourself a salary... I'd say wait and build up a nice financial nest egg so you don't stretch yourself too thin.

 

And to repeat what mspec said, "Can my shops operate with me not being there?" - If not, I would think the clear answer is no, do not open a second location

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They say when you go from owning one shop to multiple the plan needs to be getting to three pretty quickly. I can tell you that the dynamics and/or skillset of running one location to multiple is completely different. I dont know you but my some of the questions, comments and the part about just beginning to take paychecks I would think your one location is way to risky at this point. I would perfect the one operation before ever considering a second. You should be hitting a solid and consistent 20% net (after paying yourself if you work there) before ever thinking you are ready for more.

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I'm almost embarrassed to reply to this. When my shop became moderately successful with lots of help from family and ATI, I had an opportunity to take over a failed shop - just the facility - no staff or equipment. They had even removed the air fittings when they left. It was a lease on a back street with no through traffic, but a nice five bay with office space. It took three years, a bunch of debt and hard work, but now that shop is neck and neck with shop one. I really had no plan going in, but that's how I roll and I don't recommend it. I am lucky to have a family who supports, no, puts up with my reckless approach and makes the most of it. Wait until the numbers at your first shop scream at you that it is time to expand.

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I'm almost embarrassed to reply to this. When my shop became moderately successful with lots of help from family and ATI, I had an opportunity to take over a failed shop - just the facility - no staff or equipment. They had even removed the air fittings when they left. It was a lease on a back street with no through traffic, but a nice five bay with office space. It took three years, a bunch of debt and hard work, but now that shop is neck and neck with shop one. I really had no plan going in, but that's how I roll and I don't recommend it. I am lucky to have a family who supports, no, puts up with my reckless approach and makes the most of it. Wait until the numbers at your first shop scream at you that it is time to expand.

 

 

would you have not made the same choice even knowing what you know now?

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Absolutely. Even though I caused myself and others some stress with my business ad-ventures, I don't regret any of it. Did the same thing with my used car lot, really putting a strain on my nerves and my wallet, but now I'm on pretty firm footing. That's the last one, though. No. Really, I mean it.

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You know, for some reason it has been much easier to run 1 or 3 or more locations than 2. I have no idea why yet, but i am thinking about it. I will share the answer once I figure it out.

 

 

I was recently at a meeting where one of the shop owners mentioned it was much easier to run run 6+ shops than 3. I think the idea is that at 6 you have an infrastructure and a corporate team at that level. When you get to 3 you start to formulate your corp team. At 2 things get tough if you have a store that is struggling or if you have staffing issues.

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We just opened our second location the Monday after Thanksgiving. It is in a small town 35 miles away from our original location. The opportunity literally "fell into our lap".

 

The shop had equipment and was essentially turn key. We did have a couple of bumps in the road, but we see that it will be worth it. Our reputation and great customer service from our first shop catapulted us in bringing in business.

 

MSpec has some great questions. When I posted the same question as you, I believe someone on that thread asked about running the two shops without relying on each others profits. That was probably the major point that ran through our minds as we were getting everything set up.

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Jay, I am in a similar boat as you. The questions I had to ask myself are...

 

1. Do I have a handle on my numbers? Do I understand all of my KPIs?

 

2. Do I have the right systems in place?

 

3. Do I have the right staff in place?

 

4. Do I have enough capital or do I have access to capital?

 

5. Do I have a business plan? What is my current business plan?

 

6. Am I profitable enough at my first location?

 

7. What is my launch marketing campaign? What is my marketing budget?

 

8. Where will my staff come from? Have I been recruiting?

 

9. Can my shops operate with me not being there?

 

10. What is the demographic of the new location?

 

 

Thanks for all the replies. Been thinking a lot about this, this is off topic but who made your website?

Also, was your shop featured on a shop magazine few months ago?

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Thanks for all the replies. Been thinking a lot about this, this is off topic but who made your website?

Also, was your shop featured on a shop magazine few months ago?

 

 

We use Kukui for our website, CRM and analytics. If you need anymore more info PM me.

 

 

We were not featured in a mag a few months ago but we may be in R+W soon.

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We use Kukui for our website, CRM and analytics. If you need anymore more info PM me.

 

 

We were not featured in a mag a few months ago but we may be in R+W soon.

Thanks,

Ok yea I thought I saw you guys on R+W or Shop Owner. That's awesome though, look forward to seeing it!

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Ok well just want to give everyone an update.

 

So I submitted an offer to the owner of the building. Sometimes I think I am crazy. I don't think I'm ready but I am never satisfied and get bored easy.

 

The thought of opening a new location excites me from getting new equipment and office supplies, getting signs made and announcing yet another step forward for my business.

 

I've been sprinting non-stop it seems like from when I quit my job suddenly one day and started working out of my home garage 2 years ago. Every step of the way I've had second thoughts but went ahead with it anyway. I hope it'll work out this time too, that is if they accept my offer.... if they don't then it's an easy decision for me.

 

One thing I've learned along the way is that you can't be afraid to fail. Failure is a part of life, but at least I won't have regrets.

 

O yea, that 5 bay building was pretty crappy when I saw it but they also own a larger 6 bay building which is much nicer (but more expensive). Made an offer on the 6 bay

Edited by Jay Huh
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  • Have you checked out Joe's Latest Blog?

         0 comments
      It always amazes me when I hear about a technician who quits one repair shop to go work at another shop for less money. I know you have heard of this too, and you’ve probably asked yourself, “Can this be true? And Why?” The answer rests within the culture of the company. More specifically, the boss, manager, or a toxic work environment literally pushed the technician out the door.
      While money and benefits tend to attract people to a company, it won’t keep them there. When a technician begins to look over the fence for greener grass, that is usually a sign that something is wrong within the workplace. It also means that his or her heart is probably already gone. If the issue is not resolved, no amount of money will keep that technician for the long term. The heart is always the first to leave. The last thing that leaves is the technician’s toolbox.
      Shop owners: Focus more on employee retention than acquisition. This is not to say that you should not be constantly recruiting. You should. What it does means is that once you hire someone, your job isn’t over, that’s when it begins. Get to know your technicians. Build strong relationships. Have frequent one-on-ones. Engage in meaningful conversation. Find what truly motivates your technicians. You may be surprised that while money is a motivator, it’s usually not the prime motivator.
      One last thing; the cost of technician turnover can be financially devastating. It also affects shop morale. Do all you can to create a workplace where technicians feel they are respected, recognized, and know that their work contributes to the overall success of the company. This will lead to improved morale and team spirit. Remember, when you see a technician’s toolbox rolling out of the bay on its way to another shop, the heart was most likely gone long before that.
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