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Planning on opening a shop.

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Hey everyone.


I've been talking about opening a shop on and off with my former boss/friend.


My background:

I use to manage my friend's shop (then, former boss) + other businesses. He specialized in European repairs. I used to run diagnostics for the Mercedes via laptop. We closed his shop down. Reason being, he's more of a shop foreman, than a business-minded guy. I'm an IT and business guy. I build out networks and computers for clients.


He works at a big name dealership and he got me a job with him. He's a journeyman and I was a service advisor. This was over a year ago. I quit the job, due to terrible pay (practically slave labor) and terrible hours (65+ hours/week).


I now do mobile programming. What got me into it was, my last 2 weeks at the dealer, we had a car that came in. Brand new 2016 with 1000 miles. Had a check engine light. Dispatched it and the tech came back to me telling me it needed a software update. P Code was regarding low fuel pressure (generally a fuel pump). It got me thinking and I did a lot of research and 2 months later, I started to program cars.


I program cars on the side and I work another job so I'm always staying busy.


My friend and I got in talks again. He still has all his tools + more from his old shop. I have the IT stuff (laptops, computer hardware and more) + a ton of scan tools and subscriptions. I can program GM, BMW, Mercedes, Nissan, Kia, Toyota and much more.


I handle the business side + do programming/computer diagnostics and he handles the shop side + whatever techs we hire.


Stuff we will need:

Smoke machine (not sure if he still has his old one or not)

Air Compressor

TPMS tool (Been reading a lot about Autel's TPMS tool)

Mitchell POS system (I used to use and loved it)

Brake Lathe


Stuff we have:

Scan tools / Programming subscriptions

All Data / Identifix subscription


Waiting room furniture (from the old shop. Still like new)

MPI Sheet (Multi-Point Inspection)

IT hardware


Stuff we'd like to do:

Carry common parts (air filters/cabin filters, etc)

Structure a streamlined hiring process.

Do book time and use Mitchell to keep track of book time. If not, create an excel formula to keep track.


Stuff I'd like to know more about:
What do you offer for benefits / What company do you go through for benefits?

Employee handbooks / how to come up with them?

What insurance do you have for the shop?

Alignment rack (Very expensive, but curious to what brand/model people have)

Possible hourly rate for shops that work on European + Asian/Domestic.

Do you start off a diagnostic charge at 1 hour and if a customer accepts the job, do you still charge them the diag fee + job fee or is diag fee discounted?

Do you use an outside payroll company/accountant or do you use Quickbooks or something similar?


I do a lot of research and ask a lot of questions to further learn and prep myself.


Thank you for taking the time in reading this.

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You guys will do well. It looks like you already have pretty much everything covered. I started my shop with no capital and we turned out fine. If you are into programming cars, you should get a dyno! :) Way down the line though. We don't have a lot of shops that program/tune here so you'll do well if you can.


Look for lifts on craigslist. I got a 2 post for $1000 and set it up myself. Very helpful when I first started and was short on cash.


Smoke machine..... I'd put it on the bottom of the list. Good to have but it was like 3 months before I even used mine. We use it like once every month and we stay busy


Air compressor- our shop was formerly rented out by Cottman Transmission so we have a really nice compressor but I went a while without one. I had a small $150 compressor from Harbor Freight and that's all I needed. All my impacts are electric. The Milwaukee 2763 has 1100 ft lb nut busting torque and I'll put my electric impact against any air impact any day. Go electric. Only air tools I use is the air hammer (Harbor freight comrpessor will be fine) and of course putting air in tires...


TPMS tool- yea Autel 601 is good but I wouldn't prioritize it


Mitchell is good but check out Shopboss. It is cloud based, it's amazing. $99/mo- does more than Mitchell. Also make sure you get Identifix- really helpful in diagnosing problems


Brake lathe- I bet we do more brakes than any shop of our size. People advertise cheap oil changes, we advertise cheap brakes. We never use our lathe. We sell them new rotors or just install the pads. Factory service manual even says only machine if surface is scoured. With cheap material these days, they warp once it gets too thin. With our prices, our customers are happy to replace them.


Stocking filters would be hard in my opinion. I'd just order. Stock wipers and batteries.


Shopboss keeps track of technician booked hours. Use Identifix and Chilton labor time- it beats Mitchell. Alldata and Mitchell sometimes screw you over. We actually have Mitchell Prodemand as well and always compare labor times. We use the highest one. Sometimes there's more than 1.5hr difference!! Motor time is the worst. Always.


I don't provide benefits so can't help you there but the Aflac lady visits once a month.


Employee handbook is good to have- you'd probably write a better one than me since you worked at a dealer


I use Nationwide for my insurance. No trouble so far and cheaper than you'd think. They do garage liability along with general. I only pay like $115/mo...


Get an alignment machine!!!! That is a money maker. Dont worry about all the other stuff like the brake lathe or tpms. Sell alignments. Do suspension work, sell alignment. Tie rods, alignment. Do alignment, camber off, sell struts. Gregsmithequipment sells the Atlas alignments. They are cheap, like $8000 cheap. They sell alignment stands where you can align cars with a 2 post instead of 4 post lift. I have a 4 post though but I bought the stands as well. Used the Atlas alignment machine for over a year and no problems. Hunter machines are like $78k....


You don't want advice from me for hourly rate-

Diag charge we start at .5 hr- harder stuff (compression test, smoke test, head gasket test) 1hr. We don't discount diag. We make sure we let our customers know correctly diagnosing a problem is the hardest part.


I do my own accounting with Excel spreadsheets and I do payroll with Intuit Payroll (online software). Paying taxes and sales tax will be your biggest headache. I do that all myself too.... No one showed me how, just did it. Look online and you'll see what forms to fill out and most stuff you can submit online. My first time, I even called the IRS agency lol, surprisingly helpful.


Don't be afraid and just do it. When negotiating rent, the biggest thing is make sure you ask for the first 3 months FREE. That will give you time to set up and maximize your chances for survival. Start with Craigslist ads but once you get enough money saved up, advertise on Google and drop craigslist. Customers are worlds different.

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When I started out I leased a shop with lifts and compressor already there. 1st month was free, the 1st year was cheap, then I bought the place at the end of the 2nd year. I can tell you it took a few months to get all the permits and stuff in order, and maybe one customer every other day. Save your money you will need it the first year!

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