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Government Bid?

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I newer to managing an auto shop i opened the one we are in on Jan 18 of this year. About two weeks ago i was contacted by the local Air Force Base to make a bid to take over their car care center. It is a two bay shop that currently only does tires, batteries and the occansional oil change. I've met with the technician they curently employ he can only manage three sets of tires installed in a day. monthly sales average $21,000 and he is three weeks behind. They are projecting sales at $55,000 a month and was wondering how realistic that is out of 2 bay shop. My other problem is the bid consists of a promised percentage of total sales. my question is can anyone assist me on how to figure out what that percentage should be. their will be no building cost, it has 2 lifts, 2 tire machines, 2 balancers, 2 coolant flush machines and some smaller pieces, they cover all utilities except for communication lines(phone, internet, fax). They cover all of the marketing and there is no competetion on base short of the hobby shop.

 

My background is ASE master tech and factory certified in Audi/Volkswagen Land Rover, Hyundai, GM, Ferrari, and Saturn.

Other than running my current location for the last 11 months i have no business training and very little knowledge of this side of things. To do this contract i would to need to go from 2 Employees to a total of 7 or 8. (the AFB wants us to be open 6 days A week 60 hours total)

 

I found this website about a month and a half ago and have put a lot of knowledge found into play. Last month after doing so was first month to show any profit and have actually caught up completely from rest of the years losses.

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First of all, Welcome to AutoShopOwner.com.

 

I really don't have an easy answer for you. Working for the Air Force Base will mean you will be getting paid by the Government and having to place a bid always makes me a little uneasy. I think there is an opportunity; I just don't know what type of work and who you will work for. As far as $55,000 for a 2-bay shop, that can be attained, but it take some doing with high productivity. How many techs will you need? You said they are only doing tires, batteries and oil changes. Is there a chance to do more work? Work that is more profitable?

 

This will not be your business, but will get paid a percentage of the sales? Maybe you should figure out an hourly rate for yourself and calculate what that would be in percentage. In other words, if you want to make $25.00 per hour per each tech, that would be the money you would need. I am new to this too and just trying to brainstorm an idea.

 

Who sets the prices and who will be your customers. Maybe we need more information to get a better understand. One more thing, you would give up your business to do this?

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First of all, Welcome to AutoShopOwner.com.

 

I really don't have an easy answer for you. Working for the Air Force Base will mean you will be getting paid by the Government and having to place a bid always makes me a little uneasy. I think there is an opportunity; I just don't know what type of work and who you will work for. As far as $55,000 for a 2-bay shop, that can be attained, but it take some doing with high productivity. How many techs will you need? You said they are only doing tires, batteries and oil changes. Is there a chance to do more work? Work that is more profitable?

 

This will not be your business, but will get paid a percentage of the sales? Maybe you should figure out an hourly rate for yourself and calculate what that would be in percentage. In other words, if you want to make $25.00 per hour per each tech, that would be the money you would need. I am new to this too and just trying to brainstorm an idea.

 

Who sets the prices and who will be your customers. Maybe we need more information to get a better understand. One more thing, you would give up your business to do this?

Thank you for answering let me try to answer question as they were asked

 

This would basically be a second location for me my business. But they get set percentage for providing building and some equipment. Example i

contemplating giving them 5% gross sales.

 

I will be in charge of what services we provide and at what prices, except i have to be between 5% and 10% below area average . Example if firestone has ac service for 79.95 i have to be 10% below that.

Lof services have to be 5% below area average.

 

Now tires are an area of concern for me they control what i can charge for those and how much to mount and balance.

 

I;m thinking between 4 and 6 employees for this location based on hourly pay and them mandating being open 60 hours a week 2 service writers and between 2 and 4 techs for rotation and not to over work them.

 

I do have a industry standard of 14.43 per hour minimum wage to pay techs and must provide paid vacations and 3.59 hour toward health and welfare which i'm assuming is health benifits

 

I hope this clears some up, because its just a little overwhelming for me by myself

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As a second location, it looks a little more promising. I am concerned about the pricing, but if it is managed well, you can use this has an additional income stream. Because it's another location, any profit is a plus. You will need someone to manage it or you will need to bounce back and forth between locations, which can be an issue.

 

How far are the locations from each other?

 

Is it possible to speak to anyone who has done this in the past?

 

You mentioned that the facility has 2 bay and 2 lifts, and you would want that many employees? Is it because of the amount of hours and days required?

Can you clarify the amount of bays, the size of the facility and the amount of lifts? Does is have alignment equipment?

 

I have two facilities, a 4-bay and a 6-bay. Both are opened 6 days, 56 hours

 

In my 4 bay shop we have 3 techs (rotational) and 2 advisors. One advisor also doubles as the manager. Our car counts for this shop is 110 to 125 per week, and we do brakes, preventive maintenance, axles, tires, steering, suspension, LOF's, alignments. This shop does not do any large repair work.

 

This is why I want to make sure of the number of lifts and bays, this will determine the potential and then we can figure the manpower needed.

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As a second location, it looks a little more promising. I am concerned about the pricing, but if it is managed well, you can use this has an additional income stream. Because it's another location, any profit is a plus. You will need someone to manage it or you will need to bounce back and forth between locations, which can be an issue.

 

How far are the locations from each other?

 

Is it possible to speak to anyone who has done this in the past?

 

You mentioned that the facility has 2 bay and 2 lifts, and you would want that many employees? Is it because of the amount of hours and days required?

Can you clarify the amount of bays, the size of the facility and the amount of lifts? Does is have alignment equipment?

 

I have two facilities, a 4-bay and a 6-bay. Both are opened 6 days, 56 hours

 

In my 4 bay shop we have 3 techs (rotational) and 2 advisors. One advisor also doubles as the manager. Our car counts for this shop is 110 to 125 per week, and we do brakes, preventive maintenance, axles, tires, steering, suspension, LOF's, alignments. This shop does not do any large repair work.

 

This is why I want to make sure of the number of lifts and bays, this will determine the potential and then we can figure the manpower needed.

It is two Bays two lifts maybe 35' X 35' total shop area no rack and truthfully i'm nervous because of how small it is. But there is a store room that is probably 15X 20 for storage of inventory tires, parts, etc...

 

So basically it would be like your 4 bay but without alignments. the base is located about 5 miles from my current location.

 

Currently my business now is about 50% wholesale I do Warranty work and getting cars ready for 5 car lots. which is what i only had in mind when i started my current location. But i quickly found out it is WAY more profitable doing retail. my current location doesn't even have an office. just a desk in the corner of the shop and no lifts. We average between 35 and 50 cars a month. Average monthly income is between 13,000 and 20,000 So going fully retail would be a newer experiance for me so i greatly appreciate all of the help.

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It is two Bays two lifts maybe 35' X 35' total shop area no rack and truthfully i'm nervous because of how small it is. But there is a store room that is probably 15X 20 for storage of inventory tires, parts, etc...

 

So basically it would be like your 4 bay but without alignments. the base is located about 5 miles from my current location.

 

Currently my business now is about 50% wholesale I do Warranty work and getting cars ready for 5 car lots. which is what i only had in mind when i started my current location. But i quickly found out it is WAY more profitable doing retail. my current location doesn't even have an office. just a desk in the corner of the shop and no lifts. We average between 35 and 50 cars a month. Average monthly income is between 13,000 and 20,000 So going fully retail would be a newer experiance for me so i greatly appreciate all of the help.

 

That shop is small and I don't know how you can produce enough work unless you have extended hours and assign techs to work different shifts. The problem is staffing and management. Without an alignment rack, where would get your alignments done?

 

50% wholesale is another issue. You need to think about increasing a retail trade and increasing car counts.

 

Who would primarliy be your customers at the Air Force Base location?

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the afb would be 100% retail.

i'm currently working on marketing to increase retail customers at my current location. at the moment i've been subleting my alignments to another shop that only does alignments.

also joe if you have time would you send me some additional info on ELITE

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the afb would be 100% retail.

i'm currently working on marketing to increase retail customers at my current location. at the moment i've been subleting my alignments to another shop that only does alignments.

also joe if you have time would you send me some additional info on ELITE

 

Increasing your retail business in either location is key to your success. I would suggest that you build a business model of both locations on what you want to achieve based on the amount of hours of operation and the amount of techs. In this way you can forecast your potential gross sales and determine your net profit. This will give you an indication of the potential income. I am not opposed to growth, but growth must always make financial sense.

 

You asked for more info on Elite, here’s the web site: http://www.eliteworldwidestore.com/

If you need any specific questions answered about Elite, please ask. In addition to owning a repair shop in New York, I also work as a business consultant/Coach for Elite. It’s a great company and the owner Bob Cooper is the best of the best.

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