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Would you open a service shop if you saw a market for it in your area?

  • Yes

    Votes: 8 66.7%
  • No

    Votes: 4 33.3%
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Discussion Starter · #1 ·
I thought this might be fun...

Last weekend I was cruising home from the store in my little town in Northern Colorado and saw a very well maintained 1964 VW Beetle. So, I stopped and spoke with the owner, an woman maybe in her 60's, and told her that I really liked her VW and told her about my current projects. After we had talked for a few minutes she asked for my business card... Of course, building VW's is just a hobby for me at this point, but I wrote down my name and number for her. She said she always has to go all the way to Ft Collins to get her VW serviced.

So, I started thinking and as I drove around town I started taking a mental inventory of vintage VW's in the area. I was suprised to find that there are a lot of VW owners in my area, but no service shops that are less than 35 miles away.

So, here's the poll question:
If you saw a market for opening a service shop in your area for a vehicle you were very familiar with and could do almost any repair out of your garage, would you open a shop out of your home?

P.S. Let's try to pretend that none of us are married....

I think it would be interesting to hear from some of you who might have tried this in the past.
 

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il enforcer
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Have you ever run your own company before? It is a lot of work and risk. I started mine when I was unemployed and on EI so was not having to leave a steady job and its $$.

Look into it further. Are you good with money? I learned to save in a hurry when times were slow and not much $$ were coming in.

I got lucky as my wife is a wiz building websites and running the office. I do my own accounting and the actual "work" If you have to pay for any of those it can cost you big.

I have switched most of my energies into the computer part of our company. There was a need for fast turn around times. When I was looking into the feasability of a c/repair company, I called around to get prices and laughed when I was told it could take up to 3 weeks to get my system serviced. Of course for an extra charge I would be moved up in the list.

I guarantee repairs within 48 hours. If I can't deliver I give a huge discount for every day longer that it takes. I can't compete with the big boys on parts pricing but they cannot match my service.

What can you offer the potential customer that no one else can?
Most companies fail due to lack of money. Do you have operating capital? Can you afford to loose it?

It has been slow this year but the wife has a great paying job so we have survived ( plus we sold a house ) .

We started another business this year and put an ad in the Yellow pages. We have only gotten ONE call from that ad but we are paying hundreds per month for it until next May.

Think long and hard. Good luck. If you have any other ?'s you can PM me.
 

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Come Home Safe Soldier
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It would be great, to have your own thing.Me and a guy were going to start our own Road service co.We checked into several things such as insurance,heavey pnuematic tools and two cube vans,air compressors for each,fuel costs,plus my neighborhood will not let me bring a commercial vehicle that size on my property.Cost flew up quick.Plus you need to develop a client base,I would get as many people coming to your house to have any repairs done,after enough time doing that you will know if you have the repeat customers to help when the infrequnt customers dry up.Always be prepared for bad monthhs,The holidays in particular.Anyone who works flat rate knows what I am talking about here.Man it sure would be nice to have that call out service though.
 

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When I was in school I did two things for income, work in construction (accidently making myself a terrazzo journeyman), and work in the shop (home shop) on other peoples cars. Made a lot of friends because I never charged enough and made a lot of enemies because some never paid what I asked (usually just parts). I did learn a lot though, and did a lot of horse trading for parts and shop tools. I'm not licenced and therefore could be heavily charged if I did something wrong that resulted in an injury, although, I suppose a licence wouldn't stop that.

A few very nice vehicles came out of that shop and I'm proud of them, but I doubt I could ever make much more than a living out of it. I'm still willing to give it a try though. There seems to be a heck of a market for restoring late dad's old hot rod. A few people have approached me about a few cars and seem to be willing to spend copious amounts of money to restore a special vehicle. I've never researched a vehicle like I have the Mustang, and I will be an absolute expert on the 1973 variety when I'm done, but this is the type of expert I would have to be for all the vehicles I restore if I were to get into the business. It is a lot of work, and payment should be comeriserate. The restoration business is the only type of business that I would leave my job for. I'm just not sure people would be willing to spend that kind of money for a vehicle, no matter how special it is.

Excellent thread
 

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current hot rod: CTS-V
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I'm getting the impression that you want to open a shop just for older VW's. I can't see there being enough of them around for it to be worth it for you to open a shop up. Most vintage Beetles don't get driven very much and you would need to have enough of them coming in to keep you busy all day. Factor in the costs to open the shop, rent, and that it will be a while before most people know you even exist, I would say No don't open it. I would say Yes to you working on them in your free time for some cash under the table.
 

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Try a small shop first. Maybe in your own garage and use your own tools. Then as your name gets out, start expanding. No risk that way. HG
 

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Tazz
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From my own experience I say NO!!!!!

Two of my biker friends approached me with the idea of a bike shop in my garage...the customers were idiots and it wasn't all that much fun...closed the doors within 3years. I enjoyed the shop sponsored drag bike and building our own choppers but the people we had to deal with were unreasonable! People brought me junk and wanted a tuneup to fix all their problems?? I guess I just don't play well with others!


Tazz


Rat Rods Rule!
 
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Sounds like a fun deal, but not really very promissing in my opinion. I am not questioning your ability, just the market. Trying to depend only on the older VW's for business is really limiting your work. In my experience, most owners of them will dispose of them when they get to the point that they require regular service. You may need to open up your specialization a little, like to include all VW's. That could be a real pain, cause they put the engine in the wrong end on the newer Bugs.

If I enjoyed working on them and had the time, I would do it in my spare time. That would give you an idea how much business is out there. The costs of opening a shop, with license and insurances is extremely high. Those costs don't reduce when the work isn't there.

Before I would consider owning another business(been there, done that), I would have to have enough money to pay atleast 1 years worth of business expenses. The expenses would include insurance, utilities, taxes, rent, advertising, and also my salary. That is just considerations for the business. You also need to consider how you are going to live, because I would not really plan to take any money out of the business for my salary for atleast 6 months.
 

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Well, we did something similar last year so maybe some of what we have gone through will be helpful in your decision. There are 3 partners in the business we setup as a c corp. The cost of doing all the fees for the local filing, having a consulting firm help setup the corp and the city fees ended up somewhere around 2K. The City of St Paul required quite a few specific licenses as well as the normal fire inspections etc. So there are a number of hoops to jump through. The shop we have has been in use for years as a hot rod shop first then a detailing shop and now us, we still had to get zoning variences because it was basically a very large garage in a residential area.

We started business based on a specific type of vehicle and have been branching out. There has never been a shortage of work, but the costs of doing business are amazing. For the most part, most any income we have made in the business has been put back into it for tools, equipment etc. 3 of us do this about 20 hours a day and pretty much get by just barely by choice. It isn't a big income business in a small scale. We havn't had to advertize at all and we can't keep up with the work just from word of mouth. It is just now starting to get to a point where we are able to pull paychecks out we are now looking at larger spaces. Mind you, all this was done on 0 for a budget and just the tools I had initially. If you have some financing options, it may help, but paying them back just adds to the overhead. All in all, I would do it again in a heartbeat, but it is a rough road. Follow all the steps though and don't skip the business plan, you will be constantly referring to it.
 

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Discussion Starter · #12 ·
Hey thanks for all of the replies! It seems like many of you have had some experience in this area and it sounds like most that have are telling me to be really careful! I'll take that advise!

I was not really going to try an all-out shop at the start. I was thinking more along the lines of putting a flyer up in the local post-office and doing the work in the evenings and on the weekends while I keep my full-time job. I know how most VW shops operate that work on older VW's and they will tell every customer that they have to adjust the valves every time they change the oil....Sounds very intimidating for most people, but only takes about 20minutes, a 13mm wrench, flathead screwdriver, and a feeler guage. They only take 2-1/2 quarts of oil and the oil screen and gaskets new are about $4. For an oil change we're talking about 30minutes of work and $8 max of my time and money. I can probably charge at least $20 for that service.

Like I said in my first post, I think there is a market for it in the area, so I think I might give it a shot. I won't be jumping in head first and quitting my job, but just as a side business to see if I could turn it into a full-time business. I also thought about getting together with the guy at my VW shop to get some special pricing on parts...Heck, maybe he'd be willing to go in together.
 

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Kenneth Howard hates you...
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Remember this....people in YOUR area are driving 35miles to get their VW worked on...If you do good, and treat your customers right, word of mouth travels faster than anything....What's to say that people won't drive 35 miles YOUR way to let you work on their VWs....I say go for it!:thumbup: What do you have to lose? Except for some of your own time....When you do well, you will gain experience,knowledge...and best of all $$$$
I wish you well!
WEIMER
 

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You definately don't have to go into this with "geez, I sure hope this works!" attitude. Why don't you find a couple of other specialty shops around and see if you can speak to the people who run them? Do a little research on small businesses of this kind. I think you could make it work if you had the right gimmiks...
 

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i dont think you should start a shop, becouse if you do, you will be forced into working on cars, and soon loose intrest. i have a buddy who tried it, before, he was more into cars than me, now he rides bikes and doesn't own a car


jj
 

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Discussion Starter · #16 ·
New Idea!

Well, I want to first thank everyone who replied to this thread! And while I believe the poll is now closed I couldn't help but notice that while many valid points are made for reasons NOT to open a shop the poll still shows a 66% to 33% in favor of opening one.

Well, I have done as many of you suggested and researched the possibility of opening a service shop. I agree with many of you who claim that opening a shop would make me less passionate about my hobby since I would now be required to do something I once enjoyed. I thought about this and have decided to switch gears a little bit....No pun intended....

I have strayed from the service shop where I perform the repairs on vehicles. Instead, I have decided to adapt an idea I learned about in the military. On post we always had bays that you could rent by the hour, some had lifts in them and others had dugouts, but you paid an hourly fee for the use of the bay and could even loan out tools if you needed. This provided the folks who had some know-how to have a place to work on their cars in a nice, spacious, heated garage. With access to lift equipment, computers, etc.

After thinking this over for a while my main question is how much would the average Joe pay per hour for a place to work on their cars? I started my business plan with a figure of $10/hr for a dug-out bay and $15/hr for a bay with a lift....It was about where I wanted to be as far as making it worth-while financially, but it seems like it might be a little bit high....? Any tool rentals would be an additional cost to the standard hourly rental fee, however you are more than welcome to bring your own tools. Maybe I would start with 4 bays (2 with lifts and 2 with dugouts) and a car pressure washer in a fifth "bay" (maybe outdoors). I would want to look for a place that has room for expansion which could be used as fenced-in parking and temporary storage of cars (30 days or less) at a fee.

Let me know what you all think..... If I can justify a market for this then I will probably go with it!
 

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Come Home Safe Soldier
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I swear I thought about that before.I never checked into it.I am kinda like the guy in the patent commercial.Upset that someone stole his Clapper idea.The only downfall I could think of ,and this is a big one to ponder,would be insurance.You would probably have to carry a large amount of it.Not that everyone is that way,but what if someone gets hurt and decides it is in their best interest to sue you for a loota dough.Juries love giving out high dollar settlements.
 

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VWFan,

I think that's a great idea too. I've thought about the same thing since I remember it from the military too.

I think there's a huge market for it in the right place. I think market research is key. There are a ton of promotional things that could be done. I would think you could fill a lot of bays and store a lot of cars. Location would be a prime consideration as well as security costs.

You need to check on liability insurance for sure but I wouldn't think it would be a big deal. You just need to know the amount to factor into your model.

I'd sure be interested to hear some of your assumptions and marketing ideas.

Wally
 

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Discussion Starter · #19 ·
Thanks! As far as the insurance is concerned I figured that everyone who became a customer would also become a member of the garage. As a member there would be a waiver of insurance liability that each member would sign and that would be kept on file. Each time a tool is "rented" out the member would receive a 30min (or appropriate time length) block of instruction on proper use and safety, during this time the member would not be charged the bay fee as it is for our safety and the safety of our members. This would be recorded in the computer and the members would be re-certified every 6 months.

I was looking into steel buildings and found that you can get a decent sized unit capable of 4 bays for less than $30,000. Lifts are in the $2500.00 range and concrete work might be a little pricey (have not checked that yet, but I do have a lot of friends in concrete). The property becomes the big issue. Commercial property seems to be about twice as expensive as residential property. I figure it would cost about $100K to get the equipment started plus the cost of land.....What I have found so far is about $4.00 per square foot-Yikes!!! Although that may be for developed land I am not sure... I have not looked into the option of leasing yet.

I checked out some web-sites on business building and how to solicit investors, so I will continue working it out...

I would like to find out more about how to calculate marketability in an area. It seems that there is a lot of calculated guess-work involved in the process, so any suggestions on how you get these figures would be very helpful!!!

I am pretty excited about this....I would love to work for myself one day!
 

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Those are good creative ideas on the insurance side. I think you'll still need some though.

I was thinking more about finding an existing building rather than a new one. With the economic downturn in my area they're plentiful. That also keeps my commitment lower. Should be cheaper in the short run. You can always build a new one later.

I think you could get some good research by polling customers as they leave parts stores (with the stores permission of course). You're right though there's a lot of guess work. You could try mailing surveys as well. There's quite a bit of info on forecasting from those results.

You're best bet is to work through the scenario (pessimistically) and see what the cash flow potential is. Then couple that with whatever market research you can get. Contact your local chamber of commerce for demographic info. Couple that with anything you can find on demographics of parts store customers and you might be able to correlate some numbers. Racing organizations like NASCAR and probably NHRA can help with that kind info if you're a member. Might help to find out what are the most common parts sold and how long it takes to replace them. That should be pretty standard info too.

You're going to need some money (your own) and some credit (whatever you can come up with) to pull it all off. Ideally you won't need any investors but whatever works. My gut tells me it's a really good idea. Of course if I would happen to find any of this info I'll gladly forward it to you.

Later....
Wally
 
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