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Taking the plunge & scared to death!

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Here goes! My husband and I are working out a business plan to start a shop. I'm trying to fill the role of "brain" to his "braun" so Iooking to get lots of practical business advice before we make the investment. We found a great location in our home town (right off the highway). A two bay shop with lifts for 1600/mo. Our family name is associated with a great reputation in the area, so the plan is to use that to our advantage in marketing along with a referral program. We have a $17,000 line of credit already established. Is this a realistic amount to cover start-up in your opinion? We don't plan to have employees in the beginning. Thank you!

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The reason you may feel scared is what I call the many "unknonws", since you lack the experience and have not had the opportunity of dealing with the many issues of running a business, you feel that anxiety that comes when going into a new adventure. Don't be scared, think logically and many things will come to you.


There are certain fundamentals that should be obvious, yet they are not if you have not given them any thought, for example:


1. ) There are only 24 hours in the day, of those hours, how many hours will your shop be open? That means someone that is qualified will have to staff the shop for the hours it will be open.


2.) If your billable rate is $100.00 per hour and your mechanic bills 7 hours per shift that will bring in $700.00 in revenue into the shop.


3. If you pay your mechanic $15 per hour and the state taxes and benefits cost you another 30%, mark up your labor cost by 30% for example: $15 mechanic pay x 1.3 = $19.50 effective cost per hour. That means that mechanic is costing you $156 per 8 hour shift in hard dollars.


4. Break down your rent, insurance, and utilities down to a daily cost, that way you will know your daily break even sales target.


5. Learn to use excel and make a dashboard that will help you keep track of your daily numbers. This way you will know day to day how your business is doing.


6. Learn to know the difference between mark up and margin, as a rule of thumb, mark up things higher than your expected margin, for example, your cost is $10, mark it up by 50% for an expected margin of 33%.



Edited by HarrytheCarGeek
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Don't worry about making mistakes and don't feel intimidated by the whole thing, it is a lot of fun running your own business, but it also has its challenges.


Keep an open mind, don't be afraid to ask questions. The most successful people I know do not mind sharing their secrets to success.

Edited by HarrytheCarGeek
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  • 3 weeks later...

I have a bunch of notes I have jotted down for you, but have not had the time to log in and post them in a coherent script that would be of much help to you.


One thing I can tell you from this process though, a lot of the things I have been writing down to post have caused me to go back and re-examine my own business experience, and what I could do to innovate and improve my present business.


Myself, I have a very difficult choice to make, sell the business, stay at the present size or grow to more locations. More locations doesn't necessarily mean bigger profits as a percentage of sales, and I am not sure if my wife is willing to spend more time with me growing the business.


One thing I can tell you though, I am an odd bird in regards to this business. I really like the smell of the shop when I come in early in the morning to open up, and look forward to help my customers get their car problems solved. With this in mind, no doubt anyone with a passion for something can find success in anything they do, the kicker is, I find it a bonus for getting paid for what I do.


So, don't be scared, take some business classes, learn to listen to your customers and solve their car problems and you can find success in this industry.


More to share soon, Divine Providence willing,



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I started my shop with no capital... no money...and no idea how to run a business. I basically started with one test light, one tool box, and one can of WD-40 (no kidding)

If ASO would have been around back then I certainly would have read every scrap of information I could have. I'm like a lot of guys in the biz, a really good tech, but don't have a clue how to run a business. This site is a great help to learn what to do or what not to do.


You're on the right track... Go For It... you won't regret it. Gonzo

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  • 3 weeks later...

It's a lot of work. I love my shop and it is the best thing I ever did for my financial well being. It has been 2 years since I opened and I just surpassed 1mil in sales in that time. There are been many tweaks and changes, but as I grew I learned how to deal with them. Fired my first employee, hired another, worked my butt off and I have a lot to show for it.

If you have your head on your shoulders and a good tech in the back, you can make it. I set myself apart from the rest by focusing on just BMW's and Mini Coopers (I'm a BMW master tech), and slowly expanded into other German makes. We operate at a 60% profit margin and are on target for $750k this year. I say go for it! Best of luck...

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  • 1 month later...

A $17,000 line of credit is all relative, I opened with 100 grand in the bank and all equipment paid for on my opening day, and there were times I felt I was under capitalized, but if you keep track of all the numbers, incoming and outgoing and work smart, you will win. Working for yourself is so rewarding and when you win, makes you feel like you accomplished something. Good luck

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  • 3 weeks later...

In addition to your business plan, take some time to review your FAMILY'S budget. When you are starting a family business and relying on that business to put food on your table, your business finances and your personal finances will get very interwoven. I do not mean formally interwoven ... you're going to have separate checking accounts. But in reality, what impacts your family financially will impact your business financially.


Practically, this means shedding every unnecessary expense you have before you start this business. Your family finances should be lean-and-mean going in. Did you just buy a new boat with $600/mo payments? Sell it. Are you living in an expensive condo downtown? Move out to somewhere a bit too small. Are you spending $500/mo on restaurants? Time to start eating beans and rice.


If you can get your family's finances in order, your business finances will follow suit. I can speak from experience on this. Three years prior to starting our shop, my wife and I did a Dave Ramsey course with our church. We then lived off 12% of our combined incomes for the next three years. When we walked into the banks with our business plan and finances in order, all six banks we visited were begging to give us very sizable loans.

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  • 2 months later...

Welcome to ASO and good luck in your business!!


We have been open for about a year. (Nov 22 would be our 1st year in business) We started with nothing. We had enough savings to lease the facility and that's about it. The thing that helps us was that my husband is a great tech and he had all his tools already.


Don't give up and learn, learn learn.


I have been on ASO for about a couple of weeks and I'm learning so much thanks to all of you that have some great advice. I'm still learning and I know that I have way more to learn about the business.


My husband is the tech. I work inside the office and take care, of almost everything except working on cars. (not yet)

We have had our disagreements because I want to do it one way and he wants to do it another way. It has impacted our relationship quite a bit. I hope that you guys have a lot of communication involved and you both agree on things concerning the business. We are getting better at communicating but we still need a lot of work.


Good Luck and keep in touch.



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  • Have you checked out Joe's Latest Blog?

      Got your attention? Good. The truth is, there is no such thing as the perfect technician pay plan. There are countless ways to create any pay plan. I’ve heard all the claims and opinions, and to be honest, it’s getting a little frustrating. Claims that an hourly paid pay plan cannot motivate. That flat rate is the only way to truly get the most production from your technicians. And then there’s the hybrid performance-based pay plan that many claim is the best.
      At a recent industry event, a shop owner from the Midwest boasted about his flat-rate techs and insisted that this pay plan should be adopted by all shops across the country. When I informed him that in states like New York, you cannot pay flat-rate, he was shocked. “Then how do you motivate your techs” he asked me.
      I remember the day in 1986 when I hired the best technician who ever worked for me in my 41 years as an automotive shop owner. We’ll call him Hal. When Hal reviewed my pay plan for him, and the incentive bonus document, he stared at it for a minute, looked up, and said, “Joe, this looks good, but here’s what I want.” He then wrote on top of the document the weekly salary he wanted. It was a BIG number. He went on to say, “Joe, I need to take home a certain amount of money. I have a home, a wife, two kids, and my Harly Davidson. I will work hard and produce for you. I don’t need an incentive bonus to do my work.” And he did, for the next 30 years, until the day he retired.
      Everyone is entitled to their opinion. So, here’s mine. Money is a motivator, but not the only motivator, and not the best motivator either. We have all heard this scenario, “She quit ABC Auto Center, to get a job at XYZ Auto Repair, and she’s making less money now at XYZ!” We all know that people don’t leave companies, they leave the people they work for or work with.
      With all this said, I do believe that an incentive-based pay plan can work. However, I also believe that a technician must be paid a very good base wage that is commensurate with their ability, experience, and certifications. I also believe that in addition to money, there needs to be a great benefits package. But the icing on the cake in any pay plan is the culture, mission, and vision of the company, which takes strong leadership. And let’s not forget that motivation also comes from praise, recognition, respect, and when technicians know that their work matters.
      Rather than looking for that elusive perfect pay plan, sit down with your technician. Find out what motivates them. What their goals are. Why do they get out of bed in the morning? When you tie their goals with your goals, you will have one powerful pay plan.
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