OK Guys, HELP! I have a chance to buy a body/paint shop here in So Cal. What concerns would you fellow HAMBers have??? i.e. paint booth certs., transfer of ownership, any new EPA regs., what effect will the new AB32 have on it........ANY info would be great. Thanks.
never was in CA but did a lot of auto bondo in MN and a good month was when you could pay your parts bills why are they selling ?? too rich to work any more!! rember you are prostituting your body to the evils of solvents and lots of other hazardous stuff for a few measly$$
Good Point - why are they selling. Get a look at the books to see what they actually clear every month and the previous years tax returns. Does the shop have a good rep?
Well if you buying an existing shop in Cali, make sure it has all of the certificates it needs before hand. You can't use solvent based paints in Cali anymore, all water borne. Plus exhaust permits etc. If you have the money and it has steady business and you can do the work or have some really good employees.
make sure that all there equipment meets current epa regulations, and yes look and see what there profits were in the past few years and see what people say about them. Whats there reputation?
I'd also check into the "cradle to the grave" law that attaches you to any hazardous waste until the day you die,and make sure that you know other regulations. I would also have someone inspect the building very closely,you may want to even check soil tests if its a worry. I don't live in Cali, just BFE Iowa, I do know they watch you guys wayyyyyy more closely than they do here.
yes check permits and liecenses, and zoning and building inspection reports. do not buy the exsisiting business, you can get stuck with unknowns, buy the machinery and then lease the name and signs but then start to slowly change to your own name, and remember any employees alot will not stay long with a new owner, and have a bunch cash after the sale to run the biz cash flow will be the worst probelm in the 1st year remember most body shops do not have steady repeat busines like a reg repair shop chekc with the insurance compines to see what they think about the place. also used automotive equipement is not worth that much the most important bid low real low you cn always go up real hard go lower bid. and pennies on the doller is the target price
I'd pass , labour rate to low compared to mechanical rate , to much back stabbing , to much insurance politics , hard to find good craftsmen that aren't drunks or have personal problems ,to many backyard shops , jobers & dealers sell materials to anyone for what you can by it for ,heat , hydro , taxes ,I could go on
make sure the shop has all the zoning, the permits etc... I would also say that the high end of spray booths would be usi italia or blowtherm. but of cours its only as good as its maintained. Also car-o-liner makes a nice frame machine , I forget the model that has the targets and lazer measuring systems. Also there are a few computer generated estimating systems out there, ADP<CCC<MITCHELL no hand written estimates for work are accepted anymore unless your a fool. Also are you a licensed appraiser/estimator? Is the shop a DRP for any insurance companies? Do you have any felony convictions? All this should be taken into consideration as well as continuing education from ASE/I-CAR etc. bubbs
If your real serious I would also get legal advice and check into a L.L.C or incorporate yourself. Make sure you legally separate yourself from your business entity. That way if you do go belly up, or get sued, or whatever, they will have a tougher time taking away from your personal property. Like your house, personal car , or the computer your looking at.
id say first and foremost, are you up on all the new cali laws yourself? meaning are you planning on actually working in the shop, and are you cali certified to use all the new systems, or are you going to try and have the current employees still run the show and you just try and collect and do books?
My first quote of profanity on The Hamb. But in this one rare instant, I have to agree. But if you just can't help yourself, and don't mind getting cancer at 50, it might be for you. But remember, the skilled craftsmen that used to work at shops in this country are all dead or retired. There is really no one good left. Good luck You really need to make sure you are great at business AND be a pro at every aspect of anything going on paint, body, or mechanical in the shop. You need to know all the short cuts the guys are going to try before they even know they are going to do them so you can head them off. If you are not insanely great at BOTH the above, you are screwed. Also, make sure you have tons of cash to blow the first 2 years. It is not easy being king. A sincere good luck.
All I can say is someone wants out for a reason, if it was breaking the bank they wouldnt want out. A good thing to remember always if someone wants out of anything there is usually a good reason... I dont want or will pay for anyone's leftovers from business to chicks....
You may have the cart before the horse. Maybe you've heard the term "due diligence". That entails learning everything you possibly can, not only about the business you're perhaps intending to buy, but also about the industry you're thinking of entering. Your profile says you're in construction, so you've got some learnin' to do. Unlike some I'm not trying to discourage you, but it's not an easy business. I did it, did well, and retired. The guy I sold mine to purchased a very successful business, that was more profitable than most in the industry. His "problem" was he thought the most important thing he did was count the money and succeeded in killing a thriving business in a couple years. A business is like a wheel barrel, it don't move if you don't push it. Doing body work is a small part of the business, the uninformed and inexperienced will be shocked by that, but then there's a reason more people fail at business than succeed. Again, I say that with no anymous, it's just that some people know how to do what a business does, and others know how to run the business. Running the business is what keeps it alive. If you have the skills to do that you can run just about any business, no matter what it does. Some things to think about, besides some of the good things that others pointed out above about permits, liabilities, having legal council and so on. Almost every transaction will be three party. You, who wants to satisfy your customer, the vehicle owner who wants the best job ever done without paying for it, and the insurance company who controls it's costs and improves it's profitability by not paying too much (or even a fair amount many times). Whichever of those two are in alignment with one another wins at the expense of the other. Not your usual business scenario, but many have been successful at navigating it, but it wasn't just because they were skilled body or paint guys. It was because they knew how to market their business, earn the customers loyalty before the work is done, control costs, successfully hire and fire employees, control costs, work within onerous regulations (most especially in Cali which by most small business associations is rated as THE most business unfriendly state in the union)................oh and control costs. It mostly depends on your skills, and how diciplined you are at applying them. Sure, you need investment capital, and you can't overpay to get in, but most of all you need to REALLY know how to run a business.
Here's my advice , work out of you house untill you get cot , I know a few still doing it for over 20 30 FUCKIN years
not sure about california,but alot of new nationwide EPA laws go into effect jan 11th.so maybe that's why he's wanting to sell???
I read the title of this thread and immediately thought to myself "This'll probably end badly" I'd shy away.
Damn..... DAMN....... Excuse me while I go fucking kill myself...... I don't know much about CA body shop business structure(other than what I read in the trade journals), but I'm closing in on 30 years on my own in the business here in TN. I'm not rich, but I don't have cancer and take pride in my work AND I don't mind getting up and going there every day. PM me any specific questions and I'll be glad to share my experiences
Thanks Mike, Your reponse made my day! I think we all sometimes forget that this guy could actually be successful! Hell, I have to remind myself that I made a living in a stranger business than auto body and paint.. Thanks for the reality check!
The short answer is-you've answered your own question. If you don't already know the answers to your questions, you have no business considering the purchase. Sounds like you should start slow, do it on the side while keeping your fuill time job, develop contacts,develop a reputation, research how to run a business and what all the regs are, get an idea of liability laws, insurance costs, the times it takes to really do the job,how to make estimates,etc. Take courses in accounting and business management, learn how to run Excel and Quicken, stash away alot of cash and then you might possible know how crazy you are.
yea, but you got mad skills, chuck.....I'm just stoopid I take it back----DON'T GET INTO THE BODY/PAINT BIZ!!!!!...(eventually, nobody will do it and I can charge MILLIONS! muuuuahahahaha!)
I don't have cancer , I think most people in the trade take pride in their work, I still like working on & building cars . It's having to have a pocket of cash to get insurance jobs into the shop , then knocking the deductable off for the customer , supplying a free rental car half the time to someone that's got the worst driving record in the world ,just to keep one of your emplyees busy that didn't show up for work, waiting up to 6 months or more to get paid on corporate jobs, Like i said I could go on . I camb down now Iam I glad I sold out 5 3/4 years ago Excuse me while I go fucking kill myself...... I don't know much about CA body shop business structure(other than what I read in the trade journals), but I'm closing in on 30 years on my own in the business here in TN. I'm not rich, but I don't have cancer and take pride in my work AND I don't mind getting up and going there every day. PM me any specific questions and I'll be glad to share my experiences[/QUOTE]
All good advice above. You have to be able to cultivate good relationships with your customers AND the insurance companies. Juggling the two is where the REAL fun is when running/owning a body shop. Also, I see some shops that have major turnover of employees. Trying to keep labor cheap will bite you in the butt. One good guy will make you more money than 3 "cheap" guys. peace
I know of 4 shops in socal that are either selling out or closing because of the new rules and regs. Guys are tired of all the envryo crap and permit crap and the insurance co cutting bids to the point of just making payroll, not to mention the taxes the state gets. I had 2 shops years ago and got rid of both at the start of all the epa crap, i seen the writing on the wall and decided time to change careers.
Thanks a ton guys. A bit more info on me and this business venture......I have painted quite a few cars in the past but just as a hobby and yes I am a construction super by trade so I would not be "on hands" with the majority of the work. This is an existing high end shop with employees, dealership contracts as well as an approved shop by a few insurance companies. As with the construction gig this would be more of a management move. With my history with cars I feel it would really help with this transition??? I totally agree this is a HUGE step and all of the info and advice is and will help me make my final decision. Keep the info flowing!!!
I don't know of your past employment experience..but I am very close to just going out on my own full-time...been doing it for 12 years on the side in the garage, buying tools and equipment as I could pay cash for them so I would be able to start with no overhead other than the building..we also have a different car culture here in the land of corn n beans...it's too hard to depend on other peoples disposable income for hot rods, but if you will specialize in ins. work..you might be ok...as long as you already have an "in" in the insurance company...as a previous employee of several large scale collision shops...I have watched other whine-ass, cut-throat bodymen and painters fight over hours and piss n moan about low pay and have come to one conclusion... everyone in America should have to own their own business at least once..it might make them a better employee for someone else when they can't hack the stress or realize how much it costs to operate....
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