Quantcast
Jump to content

Partner or Employee?


Recommended Posts

I am an experienced businessman who has a lot of experience in starting, growing and operating a service based business. I am now wanting to start an auto repair shop but am trying to decide how to handle the fact that I dont have enough of the technical know how to do repairs myself. Should I partner with an experienced mechanic or simply hire quality professionals to work under me?

Link to comment
Share on other sites



Both have their pros and cons. What is your long term exit plan? Do you intend to sell within 5 years? An employee will do what is required to get paid. A partner needs to bring something equal to your capital to the table. Does the potential partner have a following of customers? If so that will help the start up. If you want employee then look for one that has obligations (familiy, mortgage etc) they tend to be more reliable than those without. Just my opinion.

Link to comment
Share on other sites

Good point, I plan to stay in this business until retirement at which time I plan to either hand it down to my kids or sell the business. The only reason I am considering a partner is mainly due to my lack of expertise in the actual technical side of the business.

Link to comment
Share on other sites

I am one year into a similar situation but instead of lack of experience it was lack of time (I decided to start up a shop while still working another full time job). I got lucky and was able to hire a very seasoned tech who was looking for something more. I currently pay him flat rate for billable hours only but his condition for coming on board was to eventually become a partner. I will soon be making him a minority partner as we are growing like crazy and he is very dedicated. It also helped the trust factor that I already knew him and his friends before bringing him on. Like I said, I got lucky - not sure this helps but thought I would share. -Pete

Link to comment
Share on other sites

If you have the startup money think about buying a shop that is already in business. I have over 35 years in the business and that is what I did, you have cash flow and employees to start then you can fine tune it to the way you want it done and run. Good luck and keep reading here from all the professionals who can help you sort out all the kinks you will encounter.

Link to comment
Share on other sites

Yes that is also very good advice I think I will set that as my first option and if that doesn't work I will just start by hiring an employee. Any advice for a good way to find a business that would be willing to sell or transition ownership?

Link to comment
Share on other sites

Right! Partnerships rarely end well. Not to be a downer but that's the story I see played out time and again. Hire some good people and pay them well. Even if you pay a guy half your money at least you don't have to stick with him forever like a partner.

Link to comment
Share on other sites

Pay hourly or salary with a profit sharing bonus. A new shop can't pay flat rate, no good tech would take that gamble.

 

My top tech gets treated like a partner, he is involved in decision making, gets a % of gross sales, makes a high hourly wage. He also has a key and uses the shop like its his own keeping the business's best interest in mind. Someday he will probably own the place. But he's not a partner, if I have to get rid of him because he turns into a criminal or whatever its easy see ya later here's your unemployment slip.

Edited by alfredauto
Link to comment
Share on other sites

If your guy is answering the phone, scheduling work, and taking out the trash in addition to fixing cars then the answer is never. You can always offer it, say you pay a guy $15 per hour straight time you can offer $20 per hour flat rate or whatever the norm is in your city. Some techs like flat rate, some don't care for the uncertainty. I would expect an hourly employee to produce at least 80% if the works there or they are beating you. One thing for sure is if are paying flat rate you need a good front end person to sell the work and get the parts fast!

 

Hourly employees don't care as much, but its easier to slip into low production #'s because they won't complain. Hourly guys are spending your money sitting around, Flat rate techs will push the front end to move faster.

Link to comment
Share on other sites

If you do have a partnership you need to define clear expectations and responsibilities. If your partner is going to have an everyday role in the business he needs to have a job title and description. This will avoid any confusion as to what their role is and what is expected of them. Of course this does not guarantee a successful relationship as your partner may have different views on the direction of the business, have less motivation, etc...

 

In your shoes I would just hire. Possibly offer incentives such as profit sharing or some sort of growth perks.

Link to comment
Share on other sites

I don't care for partners. I would get a good service advisor and a top tier tech. I would give the technician a weekly 40 hour guarantee to start with, and an incentive over 40 flat rate hours. A good service advisor can run the front counter while you get a feel to how this type of business flows. You will need start-up capital banked to keep your head above water until you get a customer base. Good luck.

Link to comment
Share on other sites

No partner! Period!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! We take on partners because of our own insecurity and 99% of the time live to regret the decision. Making someone a partner doesn't make them as invested as you are.

Agreed. Do not get a partner. Hire the skillset you need. Ultimately, it will be your leadership that determines how well the shop is run, not your technical ability.

  • Like 3
Link to comment
Share on other sites

Start marketing and hiring BEFORE you open. I'd start by going for some commercial accounts, car lots, delivery places, even other shops. Here's what I learned way down the road: car lots usually are cheap BUT it only takes 1 that you can train to be the ideal customer ( higher priced cars on their lot), if you're good at diagnostics you can definitely get work from other shops! Have the service writer call your old customers, advertise on free classified sites, look for other advertising opportunities. There are many ideas that work for my area and may work in other areas. I just happened to learn them rather late...school of hard knocks.

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?

         13 comments
      Most shop owners would agree that the independent auto repair industry has been too cheap for too long regarding its pricing and labor rates. However, can we keep raising our labor rates and prices until we achieve the profit we desire and need? Is it that simple?
      The first step in achieving your required gross and net profit is understanding your numbers and establishing the correct labor and part margins. The next step is to find your business's inefficiencies that impact high production levels.
      Here are a few things to consider. First, do you have the workflow processes in place that is conducive to high production? What about your shop layout? Do you have all the right tools and equipment? Do you have a continuous training program in place? Are technicians waiting to use a particular scanner or waiting to access information from the shop's workstation computer?
      And lastly, are all the estimates written correctly? Is the labor correct for each job? Are you allowing extra time for rust, older vehicles, labor jobs with no parts included, and the fact that many published labor times are wrong? Let's not forget that perhaps the most significant labor loss is not charging enough labor time for testing, electrical work, and other complicated repairs.  
      Once you have determined the correct labor rate and pricing, review your entire operation. Then, tighten up on all those labor leaks and inefficiencies. Improving production and paying close attention to the labor on each job will add much-needed dollars to your bottom line.
  • Similar Topics

    • By ASOG Podcast
      Free Diagnostic Time: Is It Worth It for Auto Repair Shops?
    • By carmcapriotto
      Recorded Live at Vision 2023, the wives tell all! Find out what it's like being a wife, mom, and business partner with their husbands.
      Shelly Fleischman, Automotive Alley, Arcade, NY. Listen to Jim’s previous episodes HERE.
      Liz Perkins, L1 Automotive Diagnostics and Program, L1 Automotive Training.
      Nicole Barrett, Barrett Automotive, Cornelia, Georgia.
      Show Notes
      How did you get involved in the business? What is your role? How do you re-energize?  What is your awesome news? Are you a rule maker or rule breaker? Implementing EOS (Entrepreneurial Operating System) Implementing systems and procedures Work-life balance, how do you juggle the business and your family?  
      Additional links about EOS
       
      Implementing EOS with Barry Barrett: Four Shop Owners Share Their Success [RR 686] The Power of EOS: 2 Day Leadership Meeting [RR 719] Barry Barrett's 7 Part Series on EOS
      Thanks to our Partners, AAPEX and NAPA TRACS. Set your sights on Las Vegas in 2023. Mark your calendar now … October 31 - Nov 2, 2023, AAPEX - Now more than ever. And don’t miss the next free AAPEX webinar. Register now at AAPEXSHOW.COM 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 NAPATRACS.com Connect with the Podcast: -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
      This week Hunt discusses the basics behind debt and how to pay your debt down in a safe manor.
      • What factors go into evaluating whether debt is a good option or not?
      • How does leverage work with debt and how do you analyze the situation to make sure it will be a profitable one?
      • Do I actually want to be debt free or is this debt making me more money than it is costing me?
      • How do I select what debt to start paying down first?
      Thanks to our sponsor partner NAPA TRACS
      NAPATRACS.com
       
      Hunt Demarest, CPA
      Paar Melis and Associates – Accountants Specializing in Automotive Repair
      Visit us Online : www.paarmelis.com
      Email Hunt: [email protected]
      Get a copy of my Book : Download Here
      Click to go to the Podcast on Remarkable Results Radio
    • By carmcapriotto
      This shop is too slow. This shop is too busy. This shop doesn’t know either way. It wasn’t long ago that we heard a good bit of chatter regarding shops who were experiencing slow days but most recently we have experienced shops on the other end of the spectrum. They’re too busy and have mentioned pausing their marketing. In this episode, we discuss what shops can do to shift their marketing instead of stopping all together.
      Talking Points
      The too-busy shop trend - sound crazy, but true. Mistake: stop marketing. Busy today does not mean busy tomorrow. Stopping all marketing creates a roller coaster effect Everything is great until one day it isn’t Do you own a business or do you own a job? It’s time to grow up. Never stop marketing; pivot instead. Change messaging to less sales/promotion and more culture Start hiring Focus on brand building Messaging Shift to: More company culture Brand awareness Great Place to work Customer Acquisition Ads Community Relations Social Media SEO Customer Retention Emails Texting Social Media    
      Thanks to our partner, RepairPal. Visit the Web HERE
       
      How To Get In Touch
      Website - https://independentautodieselrepair.com/ 
      Facebook - https://www.facebook.com/IndependentAutoandDieselRepair
      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 rabail_mushtaq
      Hey there,
      Amplify 2023 is just around the corner and we can't wait! The conference will be the first-of-its-kind event for auto repair shop owners, powered by AutoLeap, featuring:
      13 sessions from industry experts and seasoned shop owners
      14 top associations and training institutes 
      The conference will also offer unique opportunities for you to network with your peers, play games and win exciting prizes: 
      Discuss all aspects of shop management in a networking lounge
      Snap your best picture to take part in a photo contest
      Test your trivia skills with fun quizzes
      Top the leaderboard by competing for the most points
      Take your observation skills into action by participating in a scavenger hunt
      Join in on the after-party
      You will have the chance to win big. Our prizes include:
      Kamado Joe Joe Jr. 13.5 inch Portable Charcoal Grill
      DEWALT Mechanics Tool Set - 192 piece
      Bose QuietComfort 45 Bluetooth Noise Canceling Headphones
      Samsung Galaxy Tab A8
      And much more! 
      Register today and join us at Amplify on March 24 for a full-day immersive virtual experience starting at 9 AM ET.

       


  • By nptrb, in Automotive Industry,

    By nptrb, in Automotive Industry,

    By nptrb, in Automotive Industry,

  • Our Sponsors



×
×
  • Create New...