Quantcast
Jump to content

When to expand


Recommended Posts

We've got an opportunity to expand, in a big way. The expansion would require a somewhat significant investment in equipment, and monthly rent. That being said we're maxed out at our current location, with 2 week wait in some cases. This would allow us to have 10+ vehicles inside at any given time.

Any advice? The opportunity was dropped in my lap out of no where. The building owner is a family friend, which scares me a bit.

The building is on a major highway, lots of traffic, and no other shop for 5 miles in any direction. Another plus is the location is very close to our current location. I'd be concerned he'd market it to another shop which could possibly impact our walk in sales. Our profit numbers are the best they've ever been, and we're finding production (revenue) to be limited by shop size. When big jobs come in it literally can bring our shop to a halt.

I'd rather not make a rash decision or a decision I won't be able to pay for, so I'll be taking a hard look at the numbers prior to making a decision as well.

Just curious if you guys had a guideline for expansion.

 

Sent from my SCH-I605 using Tapatalk

 

 

Link to comment
Share on other sites

Car count could exceed 150-200 with of a aro of 500+. We're right in a college town and popular vacation area with skiers bouncing us up through the winter months. I own my current shop, so no fear of it going elsewhere. We only have 2 bays (one upstairs and one down stairs) and one lift. Both bays are fairly small and the setup limit production. We can easily turn 40+ hours a week with good weather but we're severely limited during the winter months. If you ever intend to visit let me know. We've got cabins we rent!

 

Sent from my SCH-I605 using Tapatalk

 

 

Link to comment
Share on other sites

The last two comments bring up two concerns of mine. 1:not in a position where the business can run without me and my wife - if something were to happen that would be mess and could possibly damage a long term family relationship. I really like being where I am, if something happened little harm would come from it. (Were working on the policy's and procedures to make the business self sufficient but I don't think the building would be available when we're done at the pace we're moving)

2: the work to pay for the building rent is literally in the parking lot. I couldn't pay for the building with current workflow (as in the weather and work mix currently at the shop for the next month), but the increase in volume should address that. That's why I was so astonished by your revenue with one bay - then some things came to light 1 our work mix falls on the heavy side and many shops here won't take on the work we do 2. I've got a little girl and she comes first. I leave work at 5pm. No exceptions.

 

Sent from my SCH-I605 using Tapatalk

 

Edited by ncautoshop
Link to comment
Share on other sites

Will you have to add employees and hiw hard would it be to find the right help? Would there be a problem cash flowing the business during the snow months?

Cash flow should be fine with additional space/lifts, but it's still a concern for me. I'll do some planning and mock budgets and see what it looks like when I know more specifics on electric/heating bills, equipment financing etc...

Employees are going to be hard to find, and even harder quality employees. With our current work mix we could continue to move bigger jobs, maybe even more productively and be OK on the employee front. If we were to take on alignments and possibly more tire work I'd have to do some hiring. Valid concern here - I can think of 4 local independent shops with 2 openings or more for techs/tire guys

 

Sent from my SCH-I605 using Tapatalk

 

 

Link to comment
Share on other sites

I had a shop owner a couple years ago that had a similar situation. I noticed that a disproportionate amount of time was spent moving vehicles around to accommodate new arrivals or to park vehicles that were ready for pick up. The shop production was impacted by this constant "parking rodeo". My advice to him was get a shop with more parking, and a larger shop. I advised him that bottom line is you get to a point and your shop is like a root bound plant. After careful analysis, the shop moved and now grows at a healthy pace.

 

You mentioned looking hard at the numbers. Consider what will happen if you don't move as well. Do your ROI and make an informed decision that works for you.

  • Like 1
Link to comment
Share on other sites

The decision to expand, move, or open up another location is never easy. I found myself in the same position about 8 years ago. At the time I had a six bay shop with very little parking. There were times when you could not even enter my driveway. I had to make a move. Luckily, years back, I bought property adjacent to my shop and in 2008 constructed another 4 bay facility and a much larger parking lot. We finished the project in 2009.

 

The advise I can give is to run the numbers, know exactly what you will need to remain profitable, understand that you will need good people around, and build the systems and procedures that will allow the business to run without you having to hold everyone's hand each and every day.

 

If you read my early blogs, I outline the steps I took for the project.

 

http://www.autoshopowner.com/blog/2-joes-blog/

Thanks Joe,

We're the opposite. Tons of parking but only 1 lift that's somewhat unsafe and another low ceiling bay. About 60% of our work is outside and we've found ourselves spending more time moving cars than working on them. Another issue currently is the bays are not on the same level, making it more of a struggle at times. I'm meeting with the building owner today to determine some of the facts. I'll update when I know more. If I could invest the monthly rent on improvements here I'd rather do that.

 

ncautoshop, do you have an active living business plan? I made a move about 2.3 years ago and its something I would highly suggest to be done thoroughly before a move is made. I didn't and I have to figure things out as I go along. 

mspec, I must have clicked the post without knowing sorry for not replying sooner. Business plan - you mean the one in my head right? sure I know what my plan is!

Just kidding, we're working on one, never needed one when it was just me with no overhead but I need one now lol. It can be hard to find the time but it's slowly but surly coming together.

 

Sent from my SCH-I605 using Tapatalk

 

 

Link to comment
Share on other sites

We're going to pass on this opportunity and consider staying where we are. With all expenses, new equipment and building modifications we easily would be looking at $8,500-9000 a month. I'd rather spend that on something that's ours! I did have an option to purchase at 1.5m but to be completely honest, financially I'm not prepared for that.

 

Sent from my SCH-I605 using Tapatalk

 

 

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • Have you checked out Joe's Latest Blog?

         5 comments
      I recently spoke with a friend of mine who owns a large general repair shop in the Midwest. His father founded the business in 1975. He was telling me that although he’s busy, he’s also very frustrated. When I probed him more about his frustrations, he said that it’s hard to find qualified technicians. My friend employs four technicians and is looking to hire two more. I then asked him, “How long does a technician last working for you.” He looked puzzled and replied, “I never really thought about that, but I can tell that except for one tech, most technicians don’t last working for me longer than a few years.”
      Judging from personal experience as a shop owner and from what I know about the auto repair industry, I can tell you that other than a few exceptions, the turnover rate for technicians in our industry is too high. This makes me think, do we have a technician shortage or a retention problem? Have we done the best we can over the decades to provide great pay plans, benefits packages, great work environments, and the right culture to ensure that the techs we have stay with us?
      Finding and hiring qualified automotive technicians is not a new phenomenon. This problem has been around for as long as I can remember. While we do need to attract people to our industry and provide the necessary training and mentorship, we also need to focus on retention. Having a revolving door and needing to hire techs every few years or so costs your company money. Big money! And that revolving door may be a sign of an even bigger issue: poor leadership, and poor employee management skills.
      Here’s one more thing to consider, for the most part, technicians don’t leave one job to start a new career, they leave one shop as a technician to become a technician at another shop. The reasons why they leave can be debated, but there is one fact that we cannot deny, people don’t quit the company they work for, they usually leave because of the boss or manager they work for.
      Put yourselves in the shoes of your employees. Do you have a workplace that communicates, “We appreciate you and want you to stay!”
  • Similar Topics

    • By Joe Marconi

      Premium Member Content 

      This content is hidden to guests, one of the benefits of a paid membership. Please login or register to view this content.

    • By Joe Marconi

      Premium Member Content 

      This content is hidden to guests, one of the benefits of a paid membership. Please login or register to view this content.

    • By carmcapriotto
      Recorded Live at MACS (Mobile Air Climate Systems) 2024 Training Event & Trade Show, Adam Kimmel discusses the refrigerant and thermal management industry. He highlights the significance of air conditioning technology in vehicles, the essential use of fluorine in refrigerants, and the evolution of refrigerants for environmental safety. Adam Kimmel, Koura, [email protected] Show Notes
      The importance of air conditioning (00:00:01) Discussing the significance of air conditioning in vehicles and homes and the commitment of industry professionals. Understanding fluorine in refrigerants (00:01:53) Evolution of refrigerants (00:05:16) Future challenges and developments (00:10:19) Regulations and alternatives (00:14:18) Safety and handling precautions (00:16:10) Engineer training and transparency (00:17:11) Understanding refrigerant nomenclature (00:19:47) Efficiency and GWP (00:25:38) Thanks to our Partners, AAPEX and NAPA TRACS Set your sights on Las Vegas in 2024. Mark your calendar now … November 5th-7th, 2024. AAPEX - Now more than ever. And don’t miss the next free AAPEX webinar. Register now at http://AAPEXSHOW.COM/WEBINAR NAPA TRACS will move your shop into the SMS fast lane with onsite training and six days a week of support and local representation. Find NAPA TRACS on the Web at http://napatracs.com/ Connect with the Podcast: -Follow on Facebook: https://www.facebook.com/RemarkableResultsRadioPodcast/ -Join Our Private Facebook Community: https://www.facebook.com/groups/1734687266778976 -Subscribe on YouTube: https://www.youtube.com/carmcapriotto -Follow on LinkedIn: https://www.linkedin.com/in/carmcapriotto/ -Follow on Instagram: https://www.instagram.com/remarkableresultsradiopodcast/ -Follow on Twitter: https://twitter.com/RResultsBiz -Visit the Website: https://remarkableresults.biz/ -Join our Insider List: https://remarkableresults.biz/insider -All books mentioned on our podcasts: https://remarkableresults.biz/books -Our Classroom page for personal or team learning: https://remarkableresults.biz/classroom -Buy Me a Coffee: https://www.buymeacoffee.com/carm -The Aftermarket Radio Network: https://aftermarketradionetwork.com -Special episode collections: https://remarkableresults.biz/collections            
      Click to go to the Podcast on Remarkable Results Radio
    • By carmcapriotto
      In this episode, Kim reviews the book “Unreasonable Hospitality” and talks about ways you can become so good at customer service and making your customers feel special, that the world would consider it unreasonable. This has quickly become one of Kim’s favorite books. Listen in to learn why and to get some ideas on how you can provide unreasonable hospitality to your clients in your auto repair shop.
      Thank you to RepairPal for sponsoring The Auto Repair Marketing Podcast. Learn more about RepairPal at https://repairpal.com/shops
      How To Get In Touch
      Group - Auto Repair Marketing Mastermind
      Website - shopmarketingpros.com 
      Facebook - facebook.com/shopmarketingpros 
      Get the Book - shopmarketingpros.com/book
      Instagram - @shopmarketingpros 
      Questions/Ideas - [email protected]
      Click to go to the Podcast on Remarkable Results Radio
    • By Joe Marconi

      Premium Member Content 

      This content is hidden to guests, one of the benefits of a paid membership. Please login or register to view this content.



  • Our Sponsors

×
×
  • Create New...