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Old 03-29-2011, 07:45 PM
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pros and cons of starting a shop, is it worth it?

For the past few years i have thrown around the idea of starting a body shop. I know with the economy it will not be easy and would have to be at the top of my game every day. But is it really worth it? How about the guys who already own shops are you happy you made the decision? Is all the hard work financially worth it as well? i know your profit margin all depends on how you run your shop, how good you are and how much business you get etc. My biggest fear is leaving my job now which pays pretty good, to start a shop and be a total failure at it. I look at the shop I work at now and the owner always complains he's not making enough money, which we always hear even if the sales are up. Obviously in a production shop time is money but again is it better to be the owner or the worker?

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Old 03-29-2011, 09:44 PM
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I went into the "custom paint" biz part-time in '72. I always loved what I did... could pick the jobs I wanted to do... and did not have to count on it for survival.

In '85 I had enough of a reputation that I had a lot of repeat business established, so I decided to go full time. I quit my job, bought a building, hired some help, and opened up! "Hello, Paradise Custom!" :-)~

We got lots of work at first, and I kept adding people to cover the demand... but I ended up babysitting... shuffling papers... taking all of the risk... making less than my employees... and could only paint occasionally.

I tried doing some collision when it was slow, but found the insurance companies to use bullying tactics, and they didn't want to pay enough for quality work, so I quit doing that! It was NOT fun! }:-(

We were also doing lots of Corvette restos, so I tried to specialize in those. One day the economy changed... the market/hobby changed (as it always does!)... and Corvettes were out-of-style almost overnight! I went belly-up!

That was 20 years ago. Today I work alone... keep my overhead at an absolute minimum... am very diversified, and work in all parts of the car & bike hobby... and actually get to paint full time. I am far from getting rich, but love what I do every day!

You will have to weigh your financial needs... the risk of uncertain paydays... what you may have to sacrifice (like a retirement, insurance and paid vacations, etc.)... and whether your spouse is equally excited... AND SUPPORTIVE!!!. Mine didn't like having to share finacial responsibilities, so the divorce came after two years. Today I am with a person who actually cares about my happiness, and will do without nice things to make it possible.

Today I have no regrets... but you will have to decide what YOU can live with, and still be happy.
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Old 03-31-2011, 11:11 AM
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Pros and cons of starting shops

Today I have no regrets... but you will have to decide what YOU can live with, and still be happy.[/QUOTE]

Jay pretty much said it all, you have to be known, most body shop don't run ads on their place, so it's word of mouth. Jay has a customer base too work from, he is known around his area, there are lots of guys on here that will tell you the same. IT doesn't have to be a body shop, that's true with about any shop you try to start. If you do a bad job it comes back on you twice as hard. Try some work on the side and see how it goes. You need to buy supplies, and such .

Talk to other shop owners, but they might not be much help in your town, when you are going against them. get your ducks in a row, like Jay said get your wife on your side, and just don't feed her a bunch of BS to get her to agree. Sit down and lay it all out. I think I'm right in saying this unless you are very well known, and very good you can not live on custom work alone.

Bob
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Old 03-31-2011, 01:58 PM
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Quote:
Originally Posted by panelwagon62
Obviously in a production shop time is money but again is it better to be the owner or the worker?
You will never know till you try, as mentioned weight it out and judge the risk.

Up around here we have some chamber of commerce folks and others who can help out when it comes to starting ones own business. You may want to see whats out there for some free advice on starting up, some of the banks and such can help too. I have thought of it a time or too myself in my own line of work but apparently I am a company man
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Old 03-31-2011, 02:25 PM
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I opened my bodyshop when I was just 23 years old and kept it open for 13 years. I don't call it a success because in the end I failed but all in all 13 years is long enough to call it a success I guess.

The biggest comment I could ever make about starting your own business is that a good bodyman doesn't necessarly mean a good businessman, those are two completely different things. I was most certainly better at working on the cars than the business. If you want to open a business you best get some good business education under your belt. It comes at you pretty fierce once you open the doors, no time to think if you are also doing the repairing.

The bodyshop business is ran by government agencies around here, between air quality, hazardous waste, fire, etc. you are kept pretty busy with non-repair stuff.

Brian
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Old 03-31-2011, 08:31 PM
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Worst is having employees that come in late and disrespect you.I co own a shop with my father and brother Jaime.I have been disrespected a few times being called a B*&%) a few times.I have fired these type of people doing this.
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Old 04-01-2011, 02:37 AM
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Not body work but general repair, I have been in business twice. Had some good times and some not so good. The not so good was breaking past the point where I could hire a good full time employee.
I still do it part time, pick and choose jobs but mostly small engines now.
It seems like the only paint and body guys making it around here now are collision repair.
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Old 04-01-2011, 07:12 AM
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I'm thinking that to start a business, any business in today's economic climate might be foolish and a good way to learn a bankruptcy lawyer intimately. PA is not a hotbed of raging starter business and a specialty shop, opened by a virtual unknown is not something you should put a lot of money into. Gov't/EPA policies will kill your bottom line. This new Obamacare health law is going to be the death knell of many marginally profitable companies. As suggested above, try a few jobs on the side in a decent location. Run it as a business, keeping profit and loss sheets - there are inexpensive computer programs for small businesses. Know what your tools are and keep track of them (dam' the decent ones are expensive). Know your suppliers - sometimes perceived loyalty to one can cost you a decent profit - he might care, but he needs to be profitable too. You have to be competitive in your pricing. Then of course, honest in your dealings with your customers as far as quality, price and schedule (deliverables).

Did I ever own a shop - no tho I did manage a small garage PT for two different owners while doing my 'day' job. I made a better then decent salary with the company I worked for, but all of the same rules of business applied -

Dave W
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Old 04-01-2011, 09:52 AM
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As I said earlier... but not too specifically... working part-time is more fun, and no threat to your earning a living. You can choose to do only the jobs you like.... or even play arond with your own stuff. Once you have an established business, you would have the option to expand it. Of course part-time projects would take much longer to complete, so let the customer know and see if that works for him.
__________________________________________________ _____________

Here are some tips that have worked very well for me for the last few decades:


1- "Low overhead", so you can survive the dips in the economy that always come every 10 years or so... and also keep you prices more attractive to customers.


2- Quality! Treat every job like it's your "business card". It is your reputation at stake! If the guy doesn't want to spend enough to do it right... pass on the job!


3- "Attitude"! This is car hobby is supposed to be fun. Not just for you, but for your customers. Make it a good experience by being honest.

Communicate well, so that you understand what is expected, and they know what's going on.

Also be reliable! If you tell somebody how long it will take, try to be close, or let them know about delays ASAP. ...or about how much it will cost, if something is found that will affect the final total.

Treat the customer with respect. You don't have to like him, or his thoughts...but there is no reason good enough to be disrespectful.

In the end, all customers expect good quality... but what will keep you in business, and bring new customers, is... "how you DO business".



4- Warranty. If something fails that is your responsibility... like adhesion, shinkage, or blistering... fix it with a smile. He will come back to you with his next project... and also send his friends over! :-)

Things you cannot be responsible for: Gas damage, rock chips, and of course telephone poles, vandalism, IEDs (roadside bombs), and other vehicles. :-) A small number of people will expect this. :-)


5- Lastly, if you do this very long, you will, on rare occasions, find a problem customer. Cheerfully (and respectfully) finish the job... then always be "too busy" when he wants you to do another project.

Also, if you sense a person will be difficult to work with... pass!


Good Luck, whatever you decide.

Last edited by TucsonJay; 04-01-2011 at 10:07 AM.
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Old 04-01-2011, 02:47 PM
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I have a good friend who had a hot rod shop in So. Cal.....he was/is a very nice (too nice sometimes) guy and some of his customers basically took advantage of that. They would leave cars at his shop to be worked on and never pay him a cent. I told him to get money up front and have them sign a contract for work and parts needed along with a payment schedule.

I said they are just storing their cars with you....get serious with these guys, you're running a business. Well he didn't want to pi-- off his "friends" so he never followed my suggestions, then his "BEST" friend that worked for him got hooked on drugs and started stealing his parts and parts off of customers cars. Needless to say he folded and moved away, moral of this, you HAVE to be a Business Man, not a friend.....good luck.
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Old 04-01-2011, 03:33 PM
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I usually get 2/3rds down, and explain that about 1/3rd will go for materials, leaving about 50% toward labor.

On big jobs I ask for materials cost and at least $1k to $2K toward labor. When that is close to being used up, I ask for a further deposit.

The logic is that I don't come out of pocket for materials, and if at the end, I didn't get the final balance (like a bad check or something), at least I got paid most of the labor. At least that won't threaten a business collapse.
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Old 04-01-2011, 06:37 PM
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Tuscon Jay really covered it all. With great detail and obvious strength in experience.
Everything he said I have found as truth in my own experience.
The toughest and most important thing is to remember to have discipline to handle the cash (profit) correctly.
I have seen guys who had a buttload of money after a few weeks and forgetting everything, spend it on all kinds of stuff, only to realize there folly when the parts bill or paint bill comes to the shop and there is no money to pay it. The same goes for the tax part of the business, keeping on top of state monthly sales tax payments and figures, as well as federal quarterly tax payments and figures is easy if you keep track of things well.
forgetting to save the funds to pay them can get overwhelming in a hurry.
And save any and all reciepts as they may be used if they qualify.
One last thing is you need a great bookkeeper overall to really make it as profitable as possible. After all you have enough to do to put out a great product.
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Old 04-02-2011, 08:22 AM
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Originally Posted by MARTINSR
If you want to open a business you best get some good business education under your belt.
This is good advice. Many people don't realize all the paperwork and taxes you have to keep up with when running a small business. It would be good to have some experience or knowledge before opening your doors.
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Old 04-02-2011, 10:37 AM
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#1 reason for business failure is treating the money like it was yours . it is not. just about every guy i have seen fail brought it upon himself . living far beyond his means . you dont just open a business. you make a business plan and follow it. you have to have great banking relations with a good line of credit for working capital . the days of getting half up front are all but gone. all that shows is the shop is broke and cant fund its self to do the job. i always advise anyone to walk away from a 50% up front deal. it's not my place to fund your business and i'm not paying for labor not done. i get paid when the work is complete. if you draw 1/2 up front you still have 100% of the job to do for half the pay.

what you need
location,location,location
good business plan on paper including marketing plans
good cpa to take care of taxes
good banker to back your plan
contact the score program for help
and most important is to set your home budget as low as possible. no new cars or toys.

and acquire a taste for beenyweenies and crackers
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Old 04-02-2011, 11:02 AM
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Shine, you have some great points said so much better than I did. I love the money isn't yours angle. Ohhhhh is it easy to spend that money sitting there, much more money than you ever saw in your home bank account, but it ISN'T YOURS!

And the big deposits, oh yeah, that is a HUGE warning flag if you ask me. If you are a customer it is a huge warning flag AND if you are a shop that needs that money up front it is a HUGE warning flag too!

There should be no reason what so ever to get any up front unless there is some serious money being spent on some expensive parts or something, that wouldn't be out of line. But it isn't like when you need a deposit to order parts and you don't have any car there yet, you need SOMETHING that says they are going to come and buy those parts. But when you are taking the car in, you have the car, you keep the car if they don't pay. Nope, I say kick *** on the job and get your payment for it. If it is made CLEAR to the customer (there is that business training, communication is one of the things you need to learn) that in a month there is going to be a bill for $10,000 and he needs to be ready. You read the customer (there's that communication again) and should have a pretty good idea if the guy really will have that money. If you have doubts have the guy come by weekly and pay you for the work you have done that week. If he isn't willing to do that, you move on to the next car or you sell news papers or something.

Brian
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