Debating Opening 2 Bay Shop, Solo Operation

[JBach151]

)Here's the situation, and if there is anything else you'd like to know I'd be glad to offer up any information I have. I'm a 10+ year tech, both automotive and heavy truck/equipment repair. I have a good friend who owns a two bay shop with a large waiting area and office. He has been letting me work out of his building as it is up for lease. He found someone that wants to lease the building to open a second location for his successful used car dealership, but he has no use for the shop portion as he outsources his work. I've been offered to lease the shop portion, 10 of 32 parking spots, and share the waiting room/lounge for $500 per month. One bay has a 9,000lb lift, the other bay an oil change pit. There is already an industrial compressor there, a back room for a desk and storage, a coolant flush machine, differential fill machine, and a trans flush machine. I have as many hand tools as I need to get going, and a Snap On diagnostic scanner. I have yet to get quoted insurance prices, but have researched NYS Registered Repair Shop requirements.

I really think I can make something work with the low overhead, and I am in a position in my life (36, single, no children, no house) that I can scrape by financially while I build things up for a few years. I have good credit. I have a brother and several friends (technicians) who are able to help for minimal cost on an as needed basis, as well as an accountant in the family to take care of that side of things. Ideally the plan would be to get things rolling and as soon as possible fill the oil change pit/pour concrete in preparation for a second lift, as that's where the bottleneck would be I figure. The other benefit is that the used car dealer agreed to allow me to do his work, and he plans on having roughly 20 cars on the lot at any given time. I also have another used car dealer who brings me his work, roughly 3 cars per week. I live in an area where there is not a ton of money, as in a high percentage of people drive 10yr old or so cars.

Any advice? I really want to make a go of this but I am doing as much research as I can to be as educated as I can before pulling the trigger. I appreciate anything you might be able to add, and I am reading through many posts as it is just to garner whatever knowledge I can from those with experience. I should also add I have absolutely no issue working insane amounts of hours (70,80), as I do that already. I have always wanted to work for myself and someday make some money for me instead of making it for others. 

Edited August 20, 2017 by JBach151
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[JustTheBest]

Quote

I really think I can make something work with the low overhead

Hi JBach151! Yes, you've got a great opportunity.

Here's the best 3 things I can tell you from what you've said:

1) I understand  you're a good tech - no question. But that alone will NOT get you more business (car count). Your biggest job - no matter how busy (or not) - is to get business. Get people into your shop. You'll quickly realize that no matter what any account tells you about assets and all that - your shop will become nothing more than a collection of customers. That's it. Because without customers, all the assets aren't worth a damn. Sorry, but that's the truth

2) Start out with every customer - every time - getting full contact information. That means first and last name, mailing address (complete), phone, mobile, email - EVERYTHING. Look at it this way - you can't go to a big box auto repair to get a flat tire fixed without all that information - you can't either. Trust me- this will be of extreme value when you want to grow. 

3) Make plans to stay in touch with customers. The reason is that 68% of customers leave a business because the feel the owner is "indifferent". That means - "they think you don't care!" Your customers are NEVER yours. You don't own them. They're busy - you know, work, social life, kids, football practice and piano lessons - and IT'S NOT THEIR JOB TO REMEMBER YOU! They (as consumers - we all do) see over 3,000 messages a day. Knowing that - tell me - how can you cut through the clutter? How can you get their attention? 

Above those things - I caution you about those used car guys that want you to do their work. Sure - great source - but at what cost?? Now, there's nothing wrong with a 'deal' for the volume - but you've got to get to that BEFORE you count on it for income. 

Follow those three step and I can guaranteed you this. You'll be able to turn simple postage stamps into dollars. With a good, solid customer list - you'll be "winking at the girls in the dark". You'll know what you're doing, but they won't!

Hope this helps!

Matthew Lee
"The Car Count Fixer"

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[Andre R]

The first thing I would do is check out the reputation of the dealer. If he is shady or unethical, like it or not your reputation will be tied to his.

Next, lose that mind set that there isn't much money in the area because everybody drives a 10 year old car. It takes a lot of money to drive a 10 year old car, especially in NY.

 

 

 

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[JBach151]

3 hours ago, Andre R said:

The first thing I would do is check out the reputation of the dealer. If he is shady or unethical, like it or not your reputation will be tied to his.

Next, lose that mind set that there isn't much money in the area because everybody drives a 10 year old car. It takes a lot of money to drive a 10 year old car, especially in NY.

 

 

 

I more meant that there are more people than normal in need of repairs as they're not driving brand new cars. Good point about the dealer's reputation, I hadn't considered that. I'll do some digging.

 

[Jeffrey]

10 years ago this month I started Fetch & Fix auto repair. I started in my own garage with 1 lift. I payed cash for everything I needed and made due with what I brought in. 5 years ago I moved to a commercial location in a body shop. Business has been good. I was doing a lot of mechanical work for the body shop but that has stopped. Not because of any issues between the businesses but an outside issue. (its a long story but one I never would have imagined when I started). Anyway I explain the work required to my customers, I make the estimate and get the approval, I do the work. It is possible to run the show by yourself but it is hard. I have made a lot of great friends (customers) and enjoy helping them with their car repairs. I pay about $1000 for 1 bay with utilities and I make a living wage. I would love to have a second bay now. I think if you are a good mechanic and just as important a person who likes people you can make a good business. Matthew Lee can help with some marketing ideas and I highly recommend attending an ATI one day shop owner training. It has made a huge difference in my bottom line. Wish I had done that years ago. Ask ATI how you can attend the class for free. You won't regret it. Good Luck.  Jeff

[Wheelingauto]

I'd be curious about what your expectations are. What is it you want out of starting your own business? You stated making money for yourself rather than someone else. Have you written a business plan? Have you defined sales expectations? Net profit expectations?

Most everyone here has not done this so it's easy for me to stand here and question you. If I had it to do over again I would define my expectations. You said your willing to work 70-80 hours a week.,,,,,,,for what? Think about it. Owning your own business is not about how hard you want to work but about working smarter. Matthew likes to talk about how important car count it....well...car count is great to have but if your not making money on those cars they are useless. How do you plan on charging? Do you know how to properly price out auto repair or do you charge what the guy down the street charges?

Have you thought about the time it will take for administrative duties? Do you enjoy administrative duties?

[alfredauto]

Sounds like a great opportunity. Once you have a big enough customer base you can easily migrate to your own shop. 

I would make it very clear up front that while you are paying rent it is your shop. If you want to be his service dept. get it all worked out before you commit. Used cars come back fairly regularly with time consuming jobs. The dealer will want that beauty he just sold in the shop and on the lift like right now with someone fixing it when there's a family fuming at him. Some dealers wait until a car sells to do inspections. That means he's got a fat carrot dangling in his face to get it serviced immediately when someone buys it. 

Or, he might expect full use of the lifts. Just be sure to be perfectly clear what you want in exchange for your rent money. 

[Andrew Cutler]

On 11/7/2017 at 5:11 AM, alfredauto said:

Sounds like a great opportunity. Once you have a big enough customer base you can easily migrate to your own shop. 

I would make it very clear up front that while you are paying rent it is your shop. If you want to be his service dept. get it all worked out before you commit. Used cars come back fairly regularly with time consuming jobs. The dealer will want that beauty he just sold in the shop and on the lift like right now with someone fixing it when there's a family fuming at him. Some dealers wait until a car sells to do inspections. That means he's got a fat carrot dangling in his face to get it serviced immediately when someone buys it. 

Or, he might expect full use of the lifts. Just be sure to be perfectly clear what you want in exchange for your rent money. 

Ditto.  We've been in that situation, and this can make it difficult to service your clients.  If you're doing work for the lot it should be fill work, not scheduled, and shouldn't stop you from taking appointments from YOUR customers.

[Hands On]

On 11/7/2017 at 3:11 AM, alfredauto said:

Sounds like a great opportunity. Once you have a big enough customer base you can easily migrate to your own shop. 

I would make it very clear up front that while you are paying rent it is your shop. If you want to be his service dept. get it all worked out before you commit. Used cars come back fairly regularly with time consuming jobs. The dealer will want that beauty he just sold in the shop and on the lift like right now with someone fixing it when there's a family fuming at him. Some dealers wait until a car sells to do inspections. That means he's got a fat carrot dangling in his face to get it serviced immediately when someone buys it. 

Or, he might expect full use of the lifts. Just be sure to be perfectly clear what you want in exchange for your rent money. 

This was what I was going to say too. When you get that lease, make sure there is nothing in it about giving him shop time or servicing percent of his cars. I tried this route renting a garage form a gas station owner. The longer I was there the more he tried to get his hooks into my shop. I eventually had to walk and now have my own place. Best thing I ever did.  What happens when you work on one of his cars and something goes wrong, you know it is not your fault but he does not see it that way, are you suddenly locked out of a business you spent years building? What about when he realized he could hire someone else to run the shop for him?  Murphey's law dictates these things will happen, just save enough cash to be ready to open your own place when that day comes.