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Hi!  I'm looking to open a new automotive repair shop and I could use some help assessing a specific opportunity from the experts here.  To put this in perspective, I would be a new owner without prior repair shop experience, however, I understand repair work and have done almost all of my own work on my personal vehicles for nearly 30 years.  The scope of work I have personally performed included transmissions swaps, suspension, brakes, ignition systems, fuel systems, computer diagnostics and so on.  My formal training is in science and management and I've been in corporate positions for 20+ years.  I also have experience running my own real estate rental business.  I've always been interested in auto repair and I believe this business would be a very good fit for my aptitude, skills and experience.  I would plan to operate as the business owner and bring in skilled staff to handle repairs and customer engagement under my leadership.

Here is the scenario I could use help with.  I found a 10,000 sq. ft. building which is split up between 6 existing bays (3 front and 3 rear), office space and retail area.  The section with the bays has about 5000 sq. ft. , about 1000 sq. ft. of office space and another 4,000 sq. ft. of retail area.  The property has not been used for auto repair in a long time but could be converted back very quickly along with opportunity to do something interesting in the retail area.    I have many potential ideas for the property.  I am running into two primary challenges in evaluating the opportunity.  The first is the competitive landscape and the second is how quickly I could ramp up the business along with how much business I would likely do from the location after ramp up.

The property is located on a main road with 20-40k total vehicles/day depending on the day of week.  About a mile up the road, in a cluster, there are 6 name brand auto dealerships.  On the same road, within just a few miles from the site, there are three tire shops, one local and two name brand, along with a Midas and another local 6 bay garage.  Think of this as 5 competitors, each with 6 bays plus the new car dealers.  There are a handful of smaller local shops with 1-2 bays locally as well.  Also, there is a State DMV location, with inspection services in the same zone.  The overall geographic area is in a town that contains a Wal-Mart, Lowes, BJ's and a Costco plus restaurants, etc..  These stores are all within 10 minutes from the potential new location.  The next closest big retail areas are 30 minutes north or 40 minutes south of the target area described.  The demographics of the area skew affluent and population density is moderate - this is not a big city - however people are drawn in from at least a 30 minute drive time radius due to the shopping and other resources. 

I have a few ideas to differentiate my business from the rest in the area although on Google, it appears that most of the competing businesses have decent reviews overall.  My shop would do all types of repairs including the heavier stuff and the bays are very tall so we could potentially accommodate trucks too.

So, my questions are:

  • Is this an opportunity worth considering given the competitive landscape?
  • If I were to open a shop, how quickly should I expect business to ramp up?

I am really looking for solid feedback from folks with deep experience in this industry to help me evaluate if this is a business proposition worthy of consideration at this location.

Thank you!

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  • 2 weeks later...


I'm new here and I have to say that I'm a bit surprised that my post has received nearly 65 views as of today and not one person has an opinion on this?  I was hoping to get some honest feedback based on experience from other shop owners. I have more questions, but this is the critical starting point.  I was hopeful that my original post was detailed enough to explain the opportunity so that responses would be meaningful.  Maybe I gave too much information and scared everyone away?

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Hi Forum Beginner! Well, today is your lucky day! Here's the first response to your question. 

I read your post a couple of times and let me start with this. 

What I think is a problem: You said....
"have done almost all of my own work on my personal vehicles for nearly 30 years. " ... and
"I've been in corporate positions for 20+ years. "

Doing the work isn't what the business is about. Also, corporate life is 180 degrees away from small business, auto repair shop life. As an example, in corporate, they build a horse by committee. Ultimately, someone asks "does he really need two ears?"

On the other hand, here's what I liked about what you said:
"About a mile up the road, in a cluster, there are 6 name brand auto dealerships." You also indicated...
" there are three tire shops, one local and two name brand, along with a Midas and another local 6 bay garage."

 Most fear competition. On the other hand, the competition PROVES there's business there. It's like opening a restaurant. Let MacDonald's do all the research - then open up beside them. 

So to answer your questions:

1) Is this an opportunity worth considering given the competitive landscape?
YES! The competition is PROOF that there's enough business. Now, I can't tell you that some of them aren't starving, but that's because they built a business "thinking" people will come.
You WILL need to work at getting customers. New customers are the most difficult. I explain it all in this video. In fact, understand this... it's critical.

2) If I were to open a shop, how quickly should I expect business to ramp up?
That really depends... and it depends on YOU. 
Let me ask you this. How distracted do you think people are?? How many messages do you thing people see in a day. 

I know - difficult questions. Just trying to put it in perspective. You can do it if you spend the time (notice I didn't necessarily say money) to get out in front of your customers. 
Then have a killer customer referral program (I show you everything in this FREE TRAINING COURSE) and make a solid effort to stay in touch. 

There's a ton of things I could get into - but I really don't know what you already know or how much time you're willing to put into it.
The biggest thing I can promise.... if you put your marketing into somebody else's hands... like outsource it... it will be  a costly, expensive grind. 

Hope this helps!

Matthew
"The Car Count Fixer"

Get Car Count Help at YouTube.com/CarCountHackers
Like & Follow Car Count Hackers on Facebook

 

 

 

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5 hours ago, JustTheBest said:

Hi Forum Beginner! Well, today is your lucky day! Here's the first response to your question. 

I read your post a couple of times and let me start with this. 

What I think is a problem: You said....
"have done almost all of my own work on my personal vehicles for nearly 30 years. " ... and
"I've been in corporate positions for 20+ years. "

Doing the work isn't what the business is about. Also, corporate life is 180 degrees away from small business, auto repair shop life. As an example, in corporate, they build a horse by committee. Ultimately, someone asks "does he really need two ears?"

On the other hand, here's what I liked about what you said:
"About a mile up the road, in a cluster, there are 6 name brand auto dealerships." You also indicated...
" there are three tire shops, one local and two name brand, along with a Midas and another local 6 bay garage."

 Most fear competition. On the other hand, the competition PROVES there's business there. It's like opening a restaurant. Let MacDonald's do all the research - then open up beside them. 

So to answer your questions:

1) Is this an opportunity worth considering given the competitive landscape?
YES! The competition is PROOF that there's enough business. Now, I can't tell you that some of them aren't starving, but that's because they built a business "thinking" people will come.
You WILL need to work at getting customers. New customers are the most difficult. I explain it all in this video. In fact, understand this... it's critical.

2) If I were to open a shop, how quickly should I expect business to ramp up?
That really depends... and it depends on YOU. 
Let me ask you this. How distracted do you think people are?? How many messages do you thing people see in a day. 

I know - difficult questions. Just trying to put it in perspective. You can do it if you spend the time (notice I didn't necessarily say money) to get out in front of your customers. 
Then have a killer customer referral program (I show you everything in this FREE TRAINING COURSE) and make a solid effort to stay in touch. 

There's a ton of things I could get into - but I really don't know what you already know or how much time you're willing to put into it.
The biggest thing I can promise.... if you put your marketing into somebody else's hands... like outsource it... it will be  a costly, expensive grind. 

Hope this helps!

Matthew
"The Car Count Fixer"

Get Car Count Help at YouTube.com/CarCountHackers
Like & Follow Car Count Hackers on Facebook

 

 

 

Matthew:

Thanks for being willing to reply to my request for assistance and for helping to validate that the area and property I'm considering should have sufficient demand. 

The reason I mentioned that I have extensive experience as a DIYer is to make the point that auto repair is not foreign to me.  I understand the way cars work, how to diagnose them, and fundamentally understand the work of repairing vehicles.   I think understanding cars is a help when starting this business, wouldn't you agree?  From a business operations standpoint, I know I will have a learning curve for the automotive industry, however I'm already running a real estate business successfully, this will be my second business.  I also have 20 years of experience in consumer goods where I have seen how larger businesses operate, I have also held management positions for many years and executive positions for the last 5 years or so.

Although it is absolutely true that running one's own business is dramatically different than working for a larger corporation, through my tenure in corporate roles, I have had the opportunity to develop my leadership capability.  I know how to recruit, build and lead teams.  I know how to motivate people.  I am deeply analytical and will not have any issues monitoring KPI's for the business.  I also have extensive experience with various types of marketing and sales tactics.  I will admit there are some shortcomings with my background, however, I also believe there are some significant benefits.  20 years of hands on experience in the consumer goods industry in the areas of sales and marketing should not be dismissed as a liability, rather, I would argue that it has given me a great foundation to springboard from. 

A new question for you and the rest of the forum - is there a consensus as to whether I would be better off working to identify a niche or specialty area or better off going broad based in terms of target consumer base?  I could easily do either.  As an example, my feeling is that I might have better success specializing in premium brands (e.g. BMW, Audi, Porsche, Mercedes, Lexus, Infinity, Jaguar, etc.) versus a more generalized repair business.  The location I have identified would easily support an upscale experience and my perception is that the clientele who own those vehicle brands may be willing to pay a bit more for an enhanced service experience.  I have also noticed that, aside from the new car dealerships, none of the local repair shops offer a premium, white glove, service experience.  As a side note, I am aware of a 3 bay Import repair shop nearby but not on the main road and another Import repair shop about 20 minutes south on the main road.  These two shops were not included in my original list.  Thoughts on this concept?

Thanks in advance.

ABS

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I think you have A LOT of research to do, especially if you want to open a shop catering to high end vehicles.  Being a DIYer and servicing BMW, Audi, Porsche, Mercedes, Lexus, Infinity, Jaguar, etc. for profit is a pretty stark contrast in daily life.

 

You're going to run into issues with:

Tools and equipment

Storage of supplies and vehicles

Finding and keeping qualified technicians - There is no time to train a tech.  Everyone who has an interest in mechanics is a master tech in the making.  Some take a year to get it, some take 10.

Finding and keeping qualified advisors - The average time to train a novice advisor is at least 24 months till they can stand on their own two feet without everyone wanting to kill them.

 

This is a really hard business to walk into from people who come from the industry already.  I would assume it to be exceptionally harder for anyone not in the industry everyday.

I would probably be doing some recon work on the businesses already in place, evaluating them, seeing where you can make your difference and how.  Because without it, you're about to invest at least $150,000+ into a gamble. I would invest in some statistics for your area on demographics to know what kinds of customers you may have and I might even hire a business coach to help you put a plan together.

 

If you're up for some seriously hard lessons and really long days for the next 3-5 years... then you're on the right path.  There's a reason even the MBA number crunchers don't buy shops to run them, this is seriously hard work that requires extreme dedication to yield profit from.

 

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7 hours ago, CAR_AutoReports said:

I think you have A LOT of research to do, especially if you want to open a shop catering to high end vehicles.  Being a DIYer and servicing BMW, Audi, Porsche, Mercedes, Lexus, Infinity, Jaguar, etc. for profit is a pretty stark contrast in daily life.

 

You're going to run into issues with:

Tools and equipment

Storage of supplies and vehicles

Finding and keeping qualified technicians - There is no time to train a tech.  Everyone who has an interest in mechanics is a master tech in the making.  Some take a year to get it, some take 10.

Finding and keeping qualified advisors - The average time to train a novice advisor is at least 24 months till they can stand on their own two feet without everyone wanting to kill them.

 

This is a really hard business to walk into from people who come from the industry already.  I would assume it to be exceptionally harder for anyone not in the industry everyday.

I would probably be doing some recon work on the businesses already in place, evaluating them, seeing where you can make your difference and how.  Because without it, you're about to invest at least $150,000+ into a gamble. I would invest in some statistics for your area on demographics to know what kinds of customers you may have and I might even hire a business coach to help you put a plan together.

 

If you're up for some seriously hard lessons and really long days for the next 3-5 years... then you're on the right path.  There's a reason even the MBA number crunchers don't buy shops to run them, this is seriously hard work that requires extreme dedication to yield profit from.

 

Thank you for the candid feedback.  Maybe I've underestimated the difference in the complexity of servicing higher end vehicles.  I own two Lexus vehicles and I have performed all my own work on them, I've found them to generally be easier to work on than my Ford vehicle.  My sense is that most of the systems are similar between low end vehicles and high end vehicles.  In my experience, the differences mostly pertain to fit/finish, features and electronics.  I fully expect to have to invest in some specialty tools.  I'm curious to know more about why you feel that servicing higher end vehicles would be that much more challenging than servicing mainstream brands?  At the end of the day, brakes are brakes, struts are struts, a fuel injector is a fuel injector and so on an so forth.  I fully expect to invest in tools, equipment, and I know that for some specific jobs/vehicles a particular unique tool may be required.  Isn't that just a cost of doing business?  I can see quite a few benefits in servicing higher end name plates.  I'd like to be sure I'm tracking with you fully, is your recommendation to go more main stream versus more niche or simply not to enter the industry at all?

I do not doubt that finding and keeping high quality staff including mechanics, service advisors and managers could be challenging, but that would be true for any repair shop.  In fact I would argue that is true for most service oriented business, wouldn't you agree?  HVAC has the same issue. So does, pool installation/maintenance, home PC repair or a high end A/V shop.  Maybe not as much for a pizza shop, a bagel shop, a McDonald's or a Dunkin Donuts, but then those are all in the food industry which is a different beast with it's own unique set of issues.

I do realize that most business fail within the first year or so, and I do not want to enter this industry, spend substantial sums of money, and then have the business fail.  The good news is that I do not expect to have any issues obtaining the financing I would need to get started based on conversations with my bank.  On the other hand, it appears to me that a well run business could do exceptionally well, once scaled the pro-forma net profit numbers look very good to me.

Comparing myself to a mechanic who has saved money for a few years and is about to open his/her own shop but who has little to no actual business experience and very limited financial resources, my feeling is that I am in a better position from the perspective of both business knowledge and financial strength, to be successful.  I've read posts on this site from folks who fit that profile and are just getting started.  I give them a lot of credit for chasing their dreams.  I just see that situation as substantially different than what I am proposing to do.

As an aside, I'm not dead set on the being an auto repair shop owner, but as I stated earlier, I do feel that I have the right aptitude and skills to be successful at this.  From what I've read, the industry overall has a CAGR approaching 6%, that is a pretty good number, if real.  Many businesses have been flat over the last few years.  I like that people are keeping cars longer than before and therefore those older vehicles need repairs as they accumulate higher miles.  In general, I like that new car price inflation is slowing purchases of new vehicles for certain consumer segments.  I like that auto repair is not really "optional" even though a vehicle owner can delay, they will eventually have to repair their car.  In turn, this means this business would be less effected by recessions than many other business (I could even see demand increasing during a recession in some markets).   I also like the fact that some auto repair shops have a poor reputation which creates an opportunity for better operators to provide a superior customer experience.  Given your feedback, I'd like to know what business you would recommend if not auto repair?

I do like your idea of a business coach and I would like to bring on a coach/mentor to help me with evaluating the opportunity and setting things up the right way.  Any recommendations as far as how best to go about finding a true industry expert who would be willing to work with me?

Lastly, over the weekend, I noticed that the current owner closed off two of the bays in the original shop area, so the building I am thinking about purchasing would actually support 8 bays total if I opened those two back up.  The bay doors are also about 14 feet high which I think is a bit taller than average?  My understanding is that this location was originally used for truck repair/service.  With 8 bays open, this would then be the largest independent shop (by bay count and maybe also by square footage as well) in the immediate area.  The total square footage for the shop area would then be about 7,000 sq. ft,. and I would have an additional 3,500 sq. ft. to use as needed for business offices, service writer area, waiting area, kids play area, on-site parts inventory, etc.  My goal would be to establish this as the highest quality, most preferred shop in the immediate vicinity.  I am thinking we would deploy one of the new systems that includes a mobile app, paperless billing/invoicing and photos of the vehicle to show the customer the issues, and document them.  I am not aware of any other local competitor offering these features and it would help to further differentiate us and enhance our image.  In particular, I also view the mobile app as a major opportunity for direct 1:1 marketing with customers . . .

I welcome all the feedback, good and bad, this is a very important decision for me and I want to set myself up for success.  

 

 

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I'm not really sure how much I'd be willing to divulge to someone I don't have a relationship with.  

 

I'd like to be sure I'm tracking with you fully, is your recommendation to go more main stream versus more niche or simply not to enter the industry at all?

All I'm stating is that starting this business, is very difficult for someone vested in the industry.  I would imagine it can be harder for someone with only DIY experience.  Having business experience helps, but in this business... it's cheaper to hire someone to teach you business than it is to hire someone to teach you proper vehicle service and repair procedures.  Each business has it's benefit and it's drawbacks.  Real estate is a lot about managing processes and meeting people's expectations, vehicle repair is both of those things while trying to fix a car.  

 

You are right about other industries suffering the same fate with hiring talent.  The main difference is that a mediocre HVAC technician won't have the ability to question the safety of a customer and his family while driving down the road at 75mph.  A vehicle technician does have that responsibility on his shoulders and that responsibility falls forward to the owner of the facility.  Hire a mediocre manager and a sloppy tech... and things can get hairy really quickly.

 

I've written an article about things you need to understand when opening up your own repair facility.  Feel free to add it to your reading to get an understanding of things you may not be accounting for at this time or maybe use it as a roadmap. 

A,B,C 's Of Opening An Auto Repair Facility

 

You are also right about the opportunities in the market.  Years of horrid business practices have collided with the internet and those that have been a disservice to their customer base are feeling the pain of those choices now.  However, what's not known easily is that a lot of them also went out because of failure to adapt to an ever changing environment.

 

Any recommendations as far as how best to go about finding a true industry expert who would be willing to work with me?

There are several people on this forum available for hire, I do not have experience with any coaches I can recommend.

 

Maybe if you're really serious about opening a shop, you should go work in one.  Learn what actually goes on at a small facility every day and the challenges they face and how you would do things differently from that perspective.  Because without having the ground level experience, a team that is experienced in repair, and only access to capital and statistics.... it's going to be a long road if you want it to be a successful one. 

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10 hours ago, CAR_AutoReports said:

I'm not really sure how much I'd be willing to divulge to someone I don't have a relationship with.  

 

I'd like to be sure I'm tracking with you fully, is your recommendation to go more main stream versus more niche or simply not to enter the industry at all?

All I'm stating is that starting this business, is very difficult for someone vested in the industry.  I would imagine it can be harder for someone with only DIY experience.  Having business experience helps, but in this business... it's cheaper to hire someone to teach you business than it is to hire someone to teach you proper vehicle service and repair procedures.  Each business has it's benefit and it's drawbacks.  Real estate is a lot about managing processes and meeting people's expectations, vehicle repair is both of those things while trying to fix a car.  

 

You are right about other industries suffering the same fate with hiring talent.  The main difference is that a mediocre HVAC technician won't have the ability to question the safety of a customer and his family while driving down the road at 75mph.  A vehicle technician does have that responsibility on his shoulders and that responsibility falls forward to the owner of the facility.  Hire a mediocre manager and a sloppy tech... and things can get hairy really quickly.

 

I've written an article about things you need to understand when opening up your own repair facility.  Feel free to add it to your reading to get an understanding of things you may not be accounting for at this time or maybe use it as a roadmap. 

A,B,C 's Of Opening An Auto Repair Facility

 

You are also right about the opportunities in the market.  Years of horrid business practices have collided with the internet and those that have been a disservice to their customer base are feeling the pain of those choices now.  However, what's not known easily is that a lot of them also went out because of failure to adapt to an ever changing environment.

 

Any recommendations as far as how best to go about finding a true industry expert who would be willing to work with me?

There are several people on this forum available for hire, I do not have experience with any coaches I can recommend.

 

Maybe if you're really serious about opening a shop, you should go work in one.  Learn what actually goes on at a small facility every day and the challenges they face and how you would do things differently from that perspective.  Because without having the ground level experience, a team that is experienced in repair, and only access to capital and statistics.... it's going to be a long road if you want it to be a successful one. 

 

Car_Autoreports:  Thanks for the reply. 

I remain interested in additional constructive feedback. 

Also, an alternative idea suggested by a friend is to specialize in diesel truck service, as a specialty, catering to commercial customers.  Thoughts or feedback on this idea?

 

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  • 3 weeks later...
On 9/4/2019 at 7:26 PM, abs said:

 

Car_Autoreports:  Thanks for the reply. 

I remain interested in additional constructive feedback. 

Also, an alternative idea suggested by a friend is to specialize in diesel truck service, as a specialty, catering to commercial customers.  Thoughts or feedback on this idea?

 

Specialization is good but typically it would be the "owner" who would be the specialist that starts a business around that specialty. Since you don't have that experience, I would find your specialist techs before moving this direction and just do general auto repair when starting out.

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I think your biggest hurdle will be finding good techs and knowing if they are good. All guys are “master techs” that know everything, whether they are a DIY, lube tech, or real auto tech. Without the experience you will not know what a good tech truly is. You will need to hire a good right hand man that is experienced in this business.


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ABS

My world is somewhat different then others in this industry and on this forum. What you are describing is a very common event in the franchise automotive service world. The typical new automotive service franchisee has spent most of their career in the corporate world, in some capacity. They, much like you seem, are highly intelligent and analytical and believe they are strong leaders in their perspective fields, and likely so, in what ever that world was. I get to work with these folks(new franchisee's) a few times a year. 

A few beliefs/lessons (my beliefs) come immediately to mind:

About a third of new franchisee's are out of business or sold at a substantial loss, in the first three-five years. This come from the SBA numbers combined with my experience. 

The next third wonder what the hell they got their selves into, but fight on, in sometimes very difficult circumstances. Personal fortitude and courage, along with how many "wins" they get (mostly stuff only minimally within their control, i.e. "Good Fortune") verses losses , will likely determine their ultimate fate. 

A third do quite well, mostly because the did their due diligence early on, made the right choices from a business/market perspective and had the right skill set to be successful.

Others here have made mention of the difficulty of finding qualified staff. I suggest you consider this from a different angle. I suggest you consider that you simply WILL NOT be able to find qualified staff in any timely fashion(especially as a new "untested" business). This is your Due Diligence #1 step. I realize that their may be time constraints on a purchase, so I would not delay this step. Post ads, use head hunters, job boards, ect and see what kind of response you receive for the area you are in. Blind ads are out their all the time, so you don't actually have to be in business to run ads. I suggest actually scheduling and performing interviews. Even with established business's, no shows for interviews and for "day 1" are increasing greatly.  In the franchise side of this industry(probably most of the industry), finding and retaining qualified staff is single greatest threat to growth and CAGR. I am personally aware of shops performing at 1/2 their "simple" potential, primarily because they can't find staff to do the work and the franchisee's are not qualified or desire to do the work of "auto repair". 

On average, specialty shops are much more profitable then generalists. Some specialty services, like diesel, come with monster companies as competitors, with very deep pockets and extensive resources to sweep the cream of the crop right off the top of the new candidate pool, before you ever get a chance to seek them out. 

Less than a third of all service shops are actually profitable, with less then 10-20% (10% or less?) actually having annual adjusted cash flow in the 20-30% range. 

Suggestions:

Actually try to find qualified help and seek out someone that can assist you in determining "qualified". Do not underestimate how much you will depend on others, for the success of your automotive service business. 

Review Carm Capriotto's Remarkable Results podcast episode list and start listening. You will find qualified help there.

 

I have also attached an excel sheet I use to evaluate the raw market potential of automotive service markets. There are a couple hundred markets evaluated in their. Many are shops that have been written up in industry journals for one reason or another. Others are their because they became of interest to me for any number of reasons. The store in the very last column is "New Shop NJ". It looked like a market similar to what you described, but of course it is not the parcel you are considering, but maybe similar. I populate the sheet from data pulled from a website called Easi Demographics, using their Easi Site Analysis feature. This is strictly a hobby, so please don't use it to make business decisions. The raw market score is based on primarily, housing density, household income and household education levels. The formulas are all their to assist in dissecting the score.  

You have also received many great thoughts from experienced industry professionals. I would advise giving some weight to those suggestions/advice. 

 

 

 

 

 

 

 

 

 

 

 

shopdemographicsmisc2.xlsx

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I was being sarcastic when I said all guys are master techs in my earlier post. I reread it and know it didn’t come out right. You will find when interviewing candidates that everyone will consider themselves to be top shelf techs. The only thing is this knowledge can not be faked when thrown into the real environment.


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My experience, no matter what type of shop - is that getting (and keeping) techs is a challenge. Not saying it can't be done, but yes, it can be a challenge. 

In addition, having following this topic from the start, I feel that there is a continued "which way should I go?" - General? Import? Specialize? 

These are all difficult questions to answer and most of it depends on your expectations and experience. 

I find the franchise details posted above to be fascinating. I firmly believe that most of it is because people are looking for the "easy button". No matter what franchise you get involved in - regardless of industry - there is a lot of work to be done! Yes, the so called "formula" will work - but applying it and doing it day in and day out is what matters. 

Walking in the door and thinking it's all going to just fall in place is the dream - and you know what happens with dreams!

I think the biggest questions, regardless of what type of shop, revolve around understanding the competition and what YOUR SHOP can do different that will attract customers from those established shops. 

I felt so strongly about this - I made a video. 

Hope this helps!

Matthew
"The Car Count Fixer"

P.S.: Join me on YouTube at Car Count Hackers! FREE Help to grow your Car Count, Income and Profit! 

P.P.S.: Like and Follow Car Count Hackers on Facebook

P.P.P.S.: Have you registered in my FREE Training? "How to Double Your Car Count in 89 Days"

 

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I would start with a smaller shop possibly in the middle of town. Highway drivers are normally passing through unlike local in town traffic. To get them to come to you would take some serious marketing dollars and your pockets are probably not as deep as the dealers and franchises around you. Also, I’ve never considered another shop competition, there’s enough cars for everyone. My competition is the grocery bill, phone bill, electric bill, etc. People only have so much income to spend.

You sound like a smart guy so I don’t doubt your talents. My concern, though, is your lack of shop ownership experience. You need to know about tech productivity and efficiency, parts margin matrix, labor matrix and so on. How to maintain a 50% gross profit in this type of business. How much you pay your techs to maintain at least a 65% labor profit and so on. Without this knowledge, it will be tough to make enough money to stay open. If you already have this knowledge, I would give it a shot but on a smaller scale to start. Again, this is my opinion so take it for what’s it’s worth 

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On 9/29/2019 at 10:42 PM, Transmission Repair said:

I'm sorry I'm late coming to the party.  Some people will withhold information and that speaks volumes about the sad state of our industry.  I don't rely opinions; you know what they say about those.  My recommendation is to call Kristin Carney at Cubit Planning in Austin, TX.   She has an El Cheapo radius report for only $49 bucks that will give you all the demographics in a 1-mile, 3-mile, & 5-mile radius of the shop address you give her.  If you're not happy with it, she offers a money-back guarantee.  I'm an expert at picking shop locations.  I can do it for you or if you want to DIY, I'll tell you how.  I come from the school that helping people is the best way to get business.  Here's a link to a radius report I gave a client with whom I'm helping select a great location.-->https://drive.google.com/file/d/12Dqqq1V6G9Fb_RHoBNzXARwFErQxKNDD/view?usp=sharing

Here's the add-on services that you can get in addition to the radius report:

1. Traffic counts & map. - $50

2. Competitor list & map. - $199

3. Three drive times instead of radius distances. - $50

4. City population projections. - $25

5. Custom area instead of radiuses - $50

6. More than 3 radius distances. - $50

7. Custom calculations. - $100

For less than $600 bucks, you can find out everything anybody would want to know about FACTS, no opinions.

There's more sources than just Kristen.  Her order form is at the bottom of this page.-->https://www.cubitplanning.com/data/radius-report and her phone number is 800-939-2130 and tell her Larry Bloodworth sent you.  If you have more questions, I'm at [email protected] or (214) 347-7788 [office] (214) 473-5563 [text]

Some great resources here.  Thanks for sharing.

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  • 2 weeks later...

Well said on all points

Traffic patterns are woefully underestimated in their importance, Imo. They become glaringly clear once you spend 50k (and more) on direct mail and then do a "sales by carrier route" evaluation. Once you overlay "carrier route spends" on a radius map, a lot of what is obvious is common sense. Are there geographical or road/highway barriers between your location and those "high value" neighborhoods? Is work, shopping, medical, ect.  primarily in a different direction from those neighborhoods, that puts your store outside their normal travel routes? If they don't have another reason to stop in your area, then you will likely be a second choice. Only time and consistently delivering a higher value service overcomes this to any degree, but normal traffic patterns is still more important, Imo.

I do not believe we can buy any report that demonstrates the likelihood of traffic passing your store actually being inclined to pull in. If there was, I would love to hear about it.

I believe our original poster for this thread has gotten a clearer picture of our industry. As I have seen time and time again, their old job starts to look a whole lot easier then what we do everyday

Thank You 

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First off let me say there is a lot of good information from the previous posts.

A little about myself stated working in this industry in early 80's as a apprentice for a German Car shop after completing the training I work for the shop for a few years.

I started my own shop in1987 specialzing in only German cars at the age of 27 I knew how to work on cars but no idea on running the shop, it was a 5 bay shop on a busy street in a small beach town, the entrance was small and speed on the road made it difficult to enter and exit safely. Also I had to come up with $65k to buy the business, big mistake, never buy a business and if so the customer base in the automotive repair business is of no value, depending on the equipement it's pennies on the dollar at best.

After a few years I had the opportunity to move to a different location about 4 blocks south, The shop was a bit smaller rent was less but the building did not face the street, plus I was sharing the building with other tenants so parking was a issue, Still struggling  due to low car count, buying diagnostic equipement and lack of education on running the business and marketing.

In 2000 I moved out of the area and closed the shop, I found a shop in my new town, which was a piece of crap with a crazy landlord but it was the only place available  that fit my wants I was there 6 years and build a good reputation and applied everything I had learned earlier from running the shop to marketing.

In 2006 I found the shop of my dreams 7500 building 1500 sq of office 6000 of shop space at first it was pretty good my landlord was sharing the shop space so rent was god and it gave me time to build the business, the building was awesome but it was a warehouse and not a auto repair shop so it had to be permitted here in California that set me back 30k  but I was grossing  500k with 2 guys and myself so it was ok.  Once the landlord left and I assumed the entire rent it became harder especially when a the would leave or I would have to let them go. Also due to the location of the shop it was hard to get customer to come in. I was not on a main road, there was a main road just down the street but still did not help me with drive by traffic. In 2009 the landlord sold the building to a group out of Korea and I was on the hunt again.

I found my current shop  a 5 bay shop  on a busy road with easy ingress and egress. I have 2 techs plus myself, one tech is still learning but getting better he came to me with little training but over the last 2 years he has come a long way, the second tech  had his own shop but got tired of all the B,S  so now he is working for me which is great. At the current shop my landlord is great that's a big deal for me, he painted  my building a barn red so you can't miss it coming up or down the street. which has increased my bottom line.

So some of the hurdles I have run into that you need to consider

Money, how much in reserves do you have, you will need it to buy what ever this shop does not have, parts and equipment lifts, filters, fluids, air compressor  diagnostic tools especially if you want to specialize. Plus all the licensces  requied,, shop insurance workman comp ect.

Techs, really hard to find good techs they all say they can work on cars, but as someone said if they make a mistake it could cost you your home, your business. You need to do extensive back ground checks. I've had tech steal from me lie to me walk out on me, I've had them disaapear come in wasted do not stand for any of that. 

Shop management tools there are a lot on the market you need to find something that is easy to operate and keeps in contact with your customer base. I use Mitchell shop manager with a few add ons this send out reminder text thank you text automatic but at a cost. You will also need either Alldata or Prodemand  in helping with repairs Mitchell has  labor and maintance programs build in to help with pricing.

Insurance and workmans comp. Very important if you get caught without this fines are $1500 per employee in California

Paying techs there is flat rate and hourly. In flat rate the tech gets paid on how much he can produce.  If a job books out at 2 hours and the tech does it in 1 hour everyone wins but if it takes him 3 hours he looses. Flat rate is tough, the tech is working against the clock, especially when it come to diagnostic stuff or if there is no work he does not get paid.

Hourly  is tough on the shop owner because if the guys are sitting around waiting on parts or no work then they are burning your money, but at the same time a good tech and busy shop will more then pay for himself on a hourly system. Here in Ca it is not legal for techs to be on a flat rate system, they must have a min. of $1600 take home every 2 weeks. for a 80 hr work week.

Shop is your shop currently zones for automotive repair best to check with the local city planning department. At my current shop that has been a auto repair building for 20 years I went to apply for a license at this shop and was told it was not approved for auto repair, I was shocked but after going through some old documents at the permitting department I found paper work stating that it was allowed.

Advertising there are plenty of things out there they all say they will increase business but the truth is 99% IS A WASTE OF MONEY. Things like cheap oil changes free tire rotations brake specials will bring in cheap customers  one time and will only return when you have the next special. I use a company called  WOW cards this advertises to my customer base which you want to do when you get there. Very affordable and great results. Mudlick mailiers  expensive but they send mailers to a specific area and or car type.  Of course a good website is important too

There are plenty of shop management training classes be very careful of these, they promise a lot and deliver a lot less then promised plus very costly. Most will offer a free seminar which are usually very informative also some of the suppliers like World Pac offer classes on car repair shop management ect   

Hire a good book keep and accountant, I have a bookkeep that comes in 2 to 3 time a week to input to quicken and filing then once a year  send everything to the accountant. Also do not fall behind on any state local or federal tax payments

 

Coming from a DYI background is hard but not impossible, you will have a pretty sharp learning curve, try and find good techs, buy good equipment, and good tools that will last you10 15 years, find good suppliers extremely important and keep the shop and office and waiting area as clean as possible goes a long way with customers especially if your a new shop .

 

Good luck

  

 

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