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Seeking words of wisdom...Opening new shop

Discussion in 'The Hokey Ass Message Board' started by alteredpilot, Jan 25, 2007.

  1. well, its now official. we decided to pull the trigger and go into business. we gave the tenant notice and are putting all the pieces together day by day. the financing is more than sufficient and i couldnt have asked for a better partner.

    now, we're not planning on fully going after the custom/classic crowd right away, but the plan is to expand into the other half of the property as that side of the business grows...late model stuff is a pain, but it pays well.

    so what i'd like is some words of wisdom and sage advice from business owners who have succeeded and those who have failed.

    is there any piece of equipment that you cant live without?
    anything you wish you would have done different?
    all that kind of stuff.

    i've got about 10 months to let this stuff sink in so make it juicy.
     
  2. First and foremost is get the fucking work DONE. I can't express this enough. DON'T book a bunch of jobs that'll just sit around. You or you customers don't want to see dead dogs lying around. I have a great word of mouth rep in my area. I attribute it to getting it DONE (did i mention this already?). Also, start your rates reasonable/cheap/lower than the next guy, or whatever it takes to get jobs in. As things progress, raise your rates until things "relax" a little. No matter how desperate for work, don't take on junk projects in an effort to generate money. The second a good job comes in, you'll NEVER get back on that "loser" project that you didn't want in the first place.
     
  3. "IF" i take on some bullshit project that the customer took apart and threw all the parts in a box, i tell him right to his face that i will HUMP his wallet like a little Chihuaha. You think by ripping this thing apart aimlessly was helping? WRONG! You'll pay me my shop rate for every second i spend figuring out what you did. Another thing that works great with bigger jobs and new customers is.....I tell them to bring in the car for a few days. I'll document exactly what i've done, and how many hours he owes me. If he doesn't think he's got his money's worth, he pays me HALF, and takes the car back. I've NEVER had anyone opt for the latter
     
  4. Like Grouch says, GET THEM DONE! I have a friend who knows all the sloooow shops in the area. He uses them for cheap storage. Be a shop that turns the work out and KEEPS promises.

    Good luck, Mitch.
     

  5. Big projects? Get half the money up front. DO NOT take/spend ANY of this money until you earn it. Leave it in a safe place, not in your checking account. Until you earn it, it's NOT YOURS! It's just to keep from fighting the customer when the time comes. You'd be surprised how many put a car in the shop with no money thinking it was going to take a lot longer (poor planning on the customer is common-they're idiots sometimes). You get another 1/4 of the money at the halfway(?) point, and the remaining 1/4 at the end.
     
  6. don't lie, don't cheat and by all means GET THE WORK DONE. Oh, and one other thing, try not to charge your customer for YOUR learning experience. If it takes you a little longer to figure out a problem, chaulk it up to class time. You'll know more the next time. Good luck with the start up.
     
  7. JOECOOL
    Joined: Jan 13, 2004
    Posts: 2,771

    JOECOOL
    Member

    I can't agree more on the timely completion of work. I am not in a retail shop right now but a good friend is.
    He accepts only two jobs at a time,he does not accept any more work until one of them is completed. He charges big bucks from the time the car is done until you pick it up .( no free storage).He does not allow anyone in his shop without an appointment.This gets rid of people (like Me who aren't busy ) from just dropping by and B.S.ing. He never does any work when customers are there.He only answers the phone from 7 till 9 in the morning and at home after 5 at night. He used to spend half his days talking with people about stupid stuff and had to work till midnight to finish.
    He now has a cars scheduled for 4 months ahead,and make a real good living.
    Just my opinion.I could be wrong
     
  8. Larry T
    Joined: Nov 24, 2004
    Posts: 7,875

    Larry T
    Member

    Know the business end of work. Know how much money it takes to keep the doors open every month. Keep good records if you're working by the hour. Try to keep your word on what something will cost and when it'll be done (I have lots of trouble with this one), even if it costs you money and you have to work overtime. Don't be the local hangout for your buddies.
     
  9. speedtool
    Joined: Oct 15, 2005
    Posts: 2,540

    speedtool
    BANNED

    There is some good info already noted here, let me add a few more.

    If you hate paperwork, or aren't a math-lover get a good accountant. Mine was worth every penny I paid her, she kept me straightened out on my bills and financial/government forms. If some bureaucrat called, I referred them to her and she handled it. She sharpened up my business habits so I could keep working in the shop without going crazy in the office. AGAIN - worth every penny!

    If you plan on hiring employees she will have you fill out a Federal Employer Identification Number form (or Federal EID). Once you go federal - the city, county & state paperwork will pale in comparison. It won't double, triple, or quadruple - it will increase tenfold and you'll thank your lucky stars you hired a good accountant! DO IT!
     
  10. MyBootsOnFire
    Joined: Mar 15, 2004
    Posts: 181

    MyBootsOnFire
    Member

    My only advice is remember, no good deed goes unpunished. A lot of times when you try and be nice and do someone a favor it'll come back and bite you in the ass somehow. Although you've been working on cars for a while so you've probly seen this plenty. And as far as accounting goes, get yourself a copy of Quickbooks. Its a computer program that makes book keeping a lot less headache. Best of luck to you man!

    -chris
     
  11. evilone0528
    Joined: Jul 26, 2006
    Posts: 539

    evilone0528
    Member

    Lots of good info posted.My addition would be to put your ass hole hat on while you are in the shop.It sounds easy,but it isnt(fo me any way).It all business when in the shop.No deals,no haulf price,no pay ya later.Rember....its all about MONEY.It is no longer your hobby when you do it for a living.Take these words of wisdom,or be a slave to your shop(like me).It is now 2;42 AM and Im still at work.Dont be like me!!!!

    EVIL
     
  12. Shifty Shifterton
    Joined: Oct 1, 2006
    Posts: 4,964

    Shifty Shifterton
    Member

    Don't fall into the trap where collision work is more profitable because you're beating book time, raise the hourly rate for the custom side to make it equally profitable. Otherwise you'll end up favoring the collision side at the expense of the hot rod customers

    True story...... years ago I stole my car back from a shop in the middle of the night, bolt cutters and all. Quoted at 3-4 weeks, I specifically chose a collision shop because they turned cars quickly and didn't want my car in body shop hell for 6 months. They did all the bodywork and edging in the first week, and then let it sit untouched for 3 months while 20 collision cars came and went. They never received one cent for $1500 of work, and I instantly became a horror story customer. It became obvious that even though my car was full rate time and materials, it was less profitable and thus used as fill-in when collision work dried up.

    Best of luck with the shop.
     
  13. DrDano
    Joined: Jul 10, 2003
    Posts: 696

    DrDano
    Alliance Vendor

    +1 on what Speedtool said. Accountants will save you far more money than they charge if they are good. Case in point: 3 years ago against my better judgement I decided to use my own tax software. Had my accountant review it before I submitted it. They got me 4x more return than what they charged me to redo it. Worth every penny. If I'm ever audited its their mess, not mine.
     
  14. TrailerTrash
    Joined: Aug 4, 2006
    Posts: 34

    TrailerTrash
    Member
    1. Hydro Tech

    Make sure every customer signs a work order and agrees to the price/cost for repairs and don't any checks... especially from people you "know"!!
     
  15. MOPARMORTUARY
    Joined: Dec 14, 2006
    Posts: 232

    MOPARMORTUARY
    Member

    No matter what the circumstance do not let anyone have their car before it is paid in full. Good employees will either make or break you. Not always but usually with employees you get what you pay for. Find good employees and pay them to stay. If you hire someone and pay them well and they don't put out what it takes to make you money GET RID OF THEM! Another issue would be to Quality Control everything yourself, noone is goning to take care of your business like you! Pay a good accountant especially where employee payroll and taxes are concerned! Learn to say NO! when people bring you a peice of crap that you really don't want to work on. When you take that large project on have your customer view your progress and let him know ahead of time you want him to pay as you go. You have incentive to work on the car and he doesn't get a large bill at the end. If you do good work at a fair price (be fair to yourself) in a reasonable amount of time you will be succussful! Chad
     
  16. Mudslinger
    Joined: Aug 3, 2005
    Posts: 1,964

    Mudslinger
    Member

    I ask for a deposit for parts, this is optional though. When it comes time to pay theres always an excuse. If you can get a few bucks in advance its not as bad. Make sure on the work order it says "vehicle will not be released until payment in full."
    Small jobs give them a set price. Big jobs give them a ball park idea and labor. Once they start fucking around they are paying for you to look at there car. By this IM talking about old cars. I have set and waited on UPS for bumpers, brackets, gas tanks etc because the owner insisted he was buying all the parts to save money. This usually translates into hes doing this without his wife knowing and its gonna be months before you get everything because he cant let her know what hes spending!
     
  17. I'll kick the dead horse...don't do it half-assed, don't spread yourself too thin, don't get distracted, & do it exactly how the customer wants unless it's dangerous.
     
  18. sodas38
    Joined: Sep 17, 2004
    Posts: 2,410

    sodas38
    Member

    I don't think you can stress enough the importance of reviewing your financials at least on a monthly basis. Get a good accountant, that doesn't mean you need to have him do everything, unless you are computer and math illiterate. At it also doesn't mean you need a high dollar accountant either. Your business is easy, so you shouldn't need a costly accountant. I am a commercial lender, specifically with start-up and infant businesses and all to often I ask them how they are doing and they struggle to even give me a clue. Most businesses that fail don't know it until its too late.

    Also, there are too many dead beats out there in this line of work, please don't be one of them.
     
  19. ChevyGirlRox
    Joined: May 13, 2005
    Posts: 3,491

    ChevyGirlRox
    Member
    from Ohio

    Don't seek work when what you have isn't done. Don't overbook yourself. Fix your mistakes at no cost to customers, even if it puts you a little behind. Keep good books of materials and time on each car. Charge for everything; every nut, every bolt, every piece of tape. I've seen guys get nickeled and dimed out of business before. Oh, and most importantly run it like a business. Don't do favors for your friends. What is that saying?...."If you can't get your enemies to pay you should at least get friends to" or something along those lines.
    I'm not sure of your history, but I really hope you have worked or managed a body shop before. Too often people go into business to create the end all, be all business out of a hate of businesses of the kind that have NO IDEA what they are getting into. Best of luck!

    EDIT: Oh, and one more thing. On long term projects bill your customers as least monthly if not weekly. A weekly invoice and progress report shows customers you have dedication. Plus a weekly bill most of the time isn't huge, but rather what you would hope for the customer to be a managable amount. If a customer gets the slightest bit behind STOP working on the car. Discuss the situation with them right away and see if they really have the funds to do the project. Don't buy their bull line of excuses. I'd say most of the population has no clue what they are getting into when starting a restoration project. Which I guess means you should also discuss costs and fees upfront. I know it is hard to estimate what you will get into with a car, but at least keep the customer informed.
     
  20. snapper
    Joined: Jan 4, 2004
    Posts: 531

    snapper
    Member
    from PNW

    Go with a ... L.L.C.... and Best of Luck.....H
     
  21. I have two friends that own their own shops. Last night I had one complaining to me that he has had a guys Chevelle stuck on the lift for almost two months. The owner doesn't have anymore money and hasn't handed over the suspension parts. The guy hasn't finished rebiulding the parts with new bushings and they are not painted yet. Now my buddy is about to put the car on skates and push it outside in the snow because the owner ran out of money. Be carefull of this.

    Another friends shop does mostly hot rod/ custom work. He does do some collision. The late model stuff is fast turn around and quick cash. The collision money pays the day to day bills. The money from the custom work is all gravey to him. You can do both.

    Good Luck!
     
  22. Mudslinger
    Joined: Aug 3, 2005
    Posts: 1,964

    Mudslinger
    Member

    We had a 40 convertible same deal. The shop owner said IM gonna tell him its outside. That back when we had tons of rain, he said I will give him an oar he can paddle around in it.
     
  23. fishtank
    Joined: Jul 11, 2003
    Posts: 244

    fishtank
    Member

    The most important thing when running any kind of business is to be honest. No matter what the cost. If you are upfront and honest, your customers will appreciate it and you will have fewer headaches.
     
  24. 2manybillz
    Joined: May 30, 2005
    Posts: 835

    2manybillz
    Member

    In addition to what's been posted about honesty, know your actual costs and make at least a small profit on everything. Do favors and be Mr. nice guy on your own time (if ya have any left), don't let it cut into your business. It won't help out anybody, especially yourself if ya don't have enough positive cash flow to stay in operation.
     
  25. rixrex
    Joined: Jun 25, 2006
    Posts: 1,433

    rixrex
    Member

    I learned more about what not to do...First, there is only so much time in the day and you have only so much energy, you can't do it all yourself..Having a partner/staff that you trust is imperative..the downside, I was the "nuts and bolts" guy in the back, getting it all in place and getting the job done..my partner was the guy up front,answering the phone,shaking hands, shifting the money around..After about three years of serious frame-off work,painting,customizing, me and the crew showed up for work one morning, about three weeks before Christmas, and the landlord had us locked out of the building..my partner was three months behind on rent, etc.etc. It can be tough, especially when you love the work.....
     
  26. MyBootsOnFire
    Joined: Mar 15, 2004
    Posts: 181

    MyBootsOnFire
    Member

    I almost forgot to mention it. One of the best things we ever did at our shop was get invoices that the customer signs when they drop off their car. At the bottom rite above where they sign there's a lil paragraph about how if they don't show up with cash to pay when the car is finished basically they have so many days to make arrangements and if they don't we start a lein on the car. We have no desire to own everyone's car, but when its there in writing it kinda lites a fire under their ass to pick up their car when its done and pay for it. Before we had these we had guys leaving their finished cars at the shop all the time, like it was free storage or something.
     
  27. G V Gordon
    Joined: Oct 29, 2002
    Posts: 5,713

    G V Gordon
    Member
    from Enid OK

    Accounts recievable have sunk more small business ventures than anything else. Get paid for your work. You have no friends where your livelyhood is concerned. Get the money before the car leaves. Work when it's time to work, Play when it's time to play.
    Think that's about it.
    GV
     
  28. You never stated what this business is, but everyone assumed it's a rod shop of some sort. If you love working on cars, you will be disappointed, because the majority of time will be spend on the business. Unless you have a partner or a wife to keep everything in line, you won't be working much on cars.
    The one thing most guys in business don't think about and it is probably the most important is marketing.
    George Barris wasn't a success because he was a good body man. He was a success because he knew how to market. He hired guys all day long to do the work that he took credit for.
    Marketing is the key to any business.
     
  29. 5window
    Joined: Jan 29, 2005
    Posts: 9,517

    5window
    Member

    Here's what I've learned after 11 years as a business owner-admittedly a different business,but still dealing with people:

    Have an accountant do your books.
    Have a lawyer look over all of your agreements,including your estimate forms and customer agreements.

    Don't under-capitalize.

    Do what you say you will do,when you say you will get it done.

    Give everyone a written estimate. Make sure they know it is an estimate. If you go over,notify them and have them authorize the overage. Get them to sign the estimate and make a deposit.

    Word of mouth is your best advertising. Maybe give a reward (coffee shop gift certificate-or work out a deal with an autoparts store for an in=store discount) for those who refer others to you AND that referral gives you the job.

    Yellow pages are overated. Basically people only use it to find you.

    Do the best job you can with the best materials you can find.

    Price yourself close to the top. You really don't want the customers that are looking only for cheap. If others work for less,they should know what they are worth.

    DO NOT have the same person responsible for collecting the money,especially the cash, recording the payments and making the bank deposit-unless it is you. ( learned this the very hard way.)


    Thank everyone for coming to you. whether or not they gave you this job-maybe you'll get the next one.

    Talk to kids in high school,give advice-they'll have cars pretty soon. Ditto talking to Rotary,Kiwanis, etc.those folks likely have funds or insurance and will likely not drive too well!

    Be true to your self, fair to all and don't let the ones that are SOB's wear you down.

    Good luck>
     
  30. Im majoring in business at a local community college. Ive learned more in this thread than in the classes..
     

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