are you a 'successful' shop owner in a larger city/town?

As I am now going into my 3 year, I am looking to pick your brain- I'm making some new decisions in my shop in the next few months. Hoping the HAMB can help me with my decisions.DOnt feel like you need to respond to it all- These are some of the things Im trying to see if I am doing right/wrong in my area (par for the course)


What major city are you near/in?
Own or rent your shop?
Hours you are open?
What is the size of your shop(sq ft)?
Cost of rent/mortage?
Hourly rate or set price?
If hourly, whats the rate?
Is that high /low /or about the same as others in your area?
Are you a sole proprietor/DBA?
LLC?
Corporation?
Do you have any partners(silent or otherwise)?
How many cars do you work on at one time?
How many staff do you have FT/ and PT?
Do you have a retail area?



What is the single biggest mistake you made in yur first few years?

If you dont feel comfortable letting the world know this info- feel free to PM me.
I appreciate the help.

 

Well my dads shop,The Old Car Shop in Norwood MA.He rents his shop,its small but he has use of a paint booth,in a body shop next door.His hours change all the time,but mostly 8-4,0r 8-5.His rent is not to high,thousand a month.He charges 50 dollors an hour,and it really isnt all the high of a price.My dads a one man operation,he has me when i can get there.He is building 2 cars right now.No retail store,but he can get parts,so I dont know if this will help,but here you go.

John JR.

 

How big is the shop? Does he do collision too?

 

I do own a shop ,and the BIGGEST problem I ever had was telling everyone alse all about my C.O.O. (cost of operation)and other areas of my business ....

 

I feel as if you are sincere in your questions and many may jump in, however they are actually federal guidelines concerning such a discussion.

I would suggest joining ASA ( Automotive Service Association) and then attending every thing they do, classes, seminars etc including marleting and many other benifits. SA is the aftermarlets largest service association 16,000 plus members and host events such as the annual CARS Convention in Vegas during the SEMA show each year. A hot rod shop might not be their average membership ( body shops and general repair) but the information gained would be there just the same.

 

It's only a 3 bay shop,and he doesnt do collision work,but when he has to he will do body work.He only does HotRods.And hes built lots of great cars over the years.

 

As a shop owner, I could give you all that info but I wonder what decisions you are grappling with.

My first five years were the toughest. Trying to build a customer base from nothing takes a while. I moved here from somewhere else and had no contacts at all.

 

well my first personal reaction is to say something not very nice , but then I would be stooping to your level.
Im trying to find out if I pay too much for where I am, charge too much ( or not enough) etc etc etc- I want to learn from thos who have been where I am now and are still around .

its people like you that probably want people like me and my shop to fail.

We are all in this hobby and industry TOGETHER- and if we dont treat each other with respect and sincerity - the hobby could fall apart and go away- not something Im willing to even see start to happen. Not very HAMB like I may add.

 

see that is where you are worng - it ISNT the same as collision- not even close and with no one around the area who does what I do - I need outside advice and thoughts from others. Thanks for the help though

 

I have a small construction business. Business is business no mater what you do.
If you are the only one around doing what you do, you first have to find out why (no demand for what you do?) OR if there's a demand for what you do you can name your own price.
My advice (worth what it's costing you) is to charge the fairest price for the best quality you can provide at whatever rate you need to live comfortable on, plus profits to stay in business and even grow the business...If you can't do that give it up.

 

By the way, shop rates around here (Modesto California, home of American Grafitti ) hover around $80.00 + an hour.

 

My father ran a small shop by himself in Gardner Mass for about 10 years. He did it out of his shop behind his house. He no longer lives there but he charged about 30 bucks an hour. But then again it was just him, and it wasn't a "real shop" he did it more as a side job since he is retired. From what he's taught me is you have to be honest and charge a fair price, some people will always bitch about how much you charge no matter what. So tell those people to take a hike... If you do good work and charge a decent price people WILL come to you.

 

I agree a Body shop and custom/resto shop are not the same.I worked as a bodyman for over 20 years and ran a number of them.Yes some stuff is the same.But this is alot harder.When I open my custom/resto shop a year ago I had to rethink the way to run this shop.I find it harder to run a custom/resto shop.Work is long term and not ever day you have money coming in. My shop is 2500 square feet, which we rent for $1300 a month, we have 8 project on the floor now.Our hours are from 9 to 6 but we work a few nights a week and some Saturdays.We charge a hourly rate and if we can, we give set prices,very rearly that happens. I have a partner and one other employee who is part time.Because custom work is not big in these parts we only charge $30 a hour. not very high but pays the bills.This will change over time because it is this low to get the interest out there and to build a customer base. Main thing is our door rate meets our needs to run the shop. That is right,no big money being made.Also our shop does regular bodywork and paint which we charge $45 a hour and this helps with the living expences.We don`t do all overs paint jobs but just small paint work,touch ups and ever now and agian a small insurance job,Hell we even paint house doors!!Hay it pays the bills. It is not easy running a custom/resto shop.It might look cool from the out side but because it is a business where labour is a big part you will find that getting jobs out the door on time can be hard.I find that you alway run into problems you were never ready for.Biggest problem with running the shop and doing the work to,is it can be hard to put in a good 8 hour day.Dealing with customers, ordering parts,and paperwork etc.This is why the nights and Saturdays come into play.seems I get more done after hours.Well I think I covered all your qustions.Hope this helps

 

I wasn't stooping to any level,
Maybe if you had worded your request a little different ,(like you did )in the post that you tryed to say that I may not have responded to you as easy as you wanted me to,you would have gotten a better responce,
If you want something from your area maybe you should have asked for that!
I've been in business for 24 years and a lot of time we all have to eat a little crow,and at my age I have eaten my share ,If I did stoop to low and stepped on your toes, excuse me
But by no means did I think that telling you that my cost of operation was none of your business,would offend you ...Sorry again ..
I have to go now and ask the fellow at the next shop down the road if he wants to compare our
utilities,taxes,insure,materials,payroll,theif loss,tools,lease,and it seems like a thousand other things.........
SORRY once again chopshop ,But I have no idea what the cost for Woburn MA ,would be....
I try to be a good father ,son, friend ,business man and HAMBer
soooooooooooo
Once again I'll say I'm sorry.................

 

well so far Ive had a bunch of repsonses here and by PM with some great advice. I am hoping that someone can chat with me , get inside my head and point me in the right driection . I have a great clientele- busy as hell , waiting list etc etc etc, but I dont feel we are growing and I know I am missing something. Hopefully the HAMB will give me insight.

 

You forgot to mention that you have a great website too...How's the retail sales at the shop? Is there anyone else in your area catering to the do-it-yourselfers? Maybe that's an area you need to look at.

Glenn

 

Well I am an ididit dealer (among others)and no one close to me is so that is going well. I have limited space for retail - mostly thru the website if anyone is intersted in somehting. Luckily I can offer the work to install too if they want it.
And thanks about the webist- THAT works really well- my customers like to see their work being done and if someone new comes along they can see the stages of what we do and go from there.
Ill have to tell my wife- she does the website- it will make her day.

 

Making shops like this grow is harder they you think.I did alot of research when I open my shop.One thing I learned is not to go too big,it can kill you.Be happy with a small shop and don`t dream about being the next TV hostest.The bigger shops are for the most part in the right location,Cal! and alot of these grow by getting involved with the right people.We all can`t have 20 or more million dollor clients.For ever 100 shops there is one big boy.I myself have a no change in hell of that happening.I have too much agianst me.Living in Canada,Living on the East coast and living on a island,all play a part in how big my business will grow.I have heard a number of stories of guys that made it big but need to go to Cal to do it.I am content making a living doing something I love and take it one step at a time. Another factor you over looking is much of the big name guys mas produce products.This is where they make their money.It is easy to do!!Find something easy and cheep to make and something ever hot rodder wants and sell it world wide.See that easy to do!Now I`m dreaming

 

Been in business same location 25 years and I can still remember the first few years they were the hardest. Lots of doubts and working for nothing. Expect to put a lot more in than you get out till you get a customer base built up. Once you get some good ones that don't make you feel like a thief for charging them what you gotta have to live do whatever it takes to keep them happy. Happy customers pay your bills for you. Good luck.

 

I had a shop in San Antonio thru most of the 90s..big city but kinda low budget, car wash 50cents and two tacos for 99...we were a pretty big operation, located in an old car dealership bldg. with a showroom..my "partner" had big dreams and the rest of the shop and workers with me as manager had to scramble to keep up, till we eventually imploded. I learned more about what not to do than the other way around..It was too big to do by myself, so the advice about don't have a partner is from a bad experience, but you can't do it all by yourself..you should have somebody you can trust that will take up some slack so you can do what you do best and keep up quality control..Don't run it as a pyramid scheme where you are desperate for new business to get the cash to finish old projects and pay bills, because you spent the first customers cash already on your own projects, old scotch, and fetching strippers (like my partner)..We did some very nice cars, and had some ambitious projects(we built a 56 Olds 2DRHT stationwagon) but, they need to be finished..My partner wanted to reel in the people that would pay fifty thousand for a muscle car or classic restoration, which is great but not in an area like San Antonio, I wanted to have fill-in projects, the customer that could pay five thousand for 6 to 12V V8 conversion and IFS, he thought it was chickenfeed, in the meantime the workers were drag racing to the bank to cash thier paychecks because they knew that the last two guys were probably SOL......

 

i dont own a custom shop but i do own ONTIME RECOVERY (repo company)im in atlanta georgia...i would say you would have to have a certian price for major things like chop tops$6000.00,paint job,$7000.00 examples...body work hourly rate ,rust repair hourly ,floor pan replacement ..price per section..collision work you preety much have to go by the estimate rate....i would have a sign that says the rates when someone is standing in your office..my thoughts

 

What major city are you near/in?
CARSON, CA SOUTHERN CALI

Own or rent your shop?
RENT

Hours you are open? 8-6

What is the size of your shop(sq ft)? 900

Cost of rent/mortage? 825

Hourly rate or set price? SET

If hourly, whats the rate?

Is that high /low /or about the same as others in your area?
LOW

Do you have any partners(silent or otherwise)?
NO

How many cars do you work on at one time?
2 AT THE MOST

How many staff do you have FT/ and PT?
1 PT

Do you have a retail area?
NO


IF ANYONE WANTS SOME WORK WE DO EVERYTHING EXCEPT FINAL PAINT AS OF RIGHT NOW SO IF YOUR IN MY AREA AND WANNA TALK MESSAGE ME

 

Sounds like an I.R.S. trap. But, not to sound like a jackass, after 3 years don't you have an idea if you're charging too much or paying too much rent? After 3 years, your profit margin's gotta tell you something. Are you busy? Do most people accept your estimates, or go elsewhere after you give an estimate? Are you getting repeat business? After 3 years you should have your answers.

 

Hey Lenny:
Ray Smith here.One of the responses mentioned Federal guidelines relating to such discussions.What he was referring to is basically that if two or more people get together for the purposes of discussing ANYTHING related to pricing in a particular field,it is grounds for bring charges of conspiracy to fix prices and it is a serious(and Federal)offense.When I worked at the dealership,I used to attend parts and service club meetings of the area dealers and that was a TABOO subject.

Not having lived in Massachusetts for a number of years and knowing how widely prices vary from area to area,it is difficult to lay out any real guidelines.

One thing I learned was that before you even consider opening any type of business,you really have to sit down with an accountant and come up with a figure of what it costs just to open your doors for business each day.That requires figuring in rent,utilities,salaries,advertising,"payoffs"(if you live in certain un-named areas)and a whole raft of other things that the average person would never think of but what a competent(and honest)accountant would.Whatever his fee is,it is worth every cent(and it's a business write-off).

Rates vary incredibly from town to town there.In the auto dealer circle I was in,the shop rates varied as much as $20 per hour and that was nearly 25 years ago!As to parts pricing it was hard to vary much between dealers who sold the same type of vehicles as the parts source was the same,but they did.Some of the dealers were big into wholesaling to shops,so the discounts were better there.this could bite you in the ass though as the shop sales suffered a bit and the dealer principals were only looking at the bottom line.It was a bit of a trade off most of the time.

Twenty five or so years ago specialty shops weren't as plentiful as they are today so I'm assuming that there is a real competitive scene today.Also there weren't anywhere as many people involved in the sport and most of them chose to do their own work;farming out only what they were incapable of doing on their own.

I think one of the biggest factors in this type of business is:don't take on more than you capable of handling in a REASONABLE period of time.The worst thing in the world is having cars celebrate ANNIVERSARIES in your shop.When you give an estimate to a customer,make sure he understands it is just that;AN ESTIMATE.The worst thing that can happen is to give a customer a quote and then;upon getting into the car,finding a considerbly larger amount of work has to be done to make it right.Customers DO NOT like surprises;especially monetary ones.

Another biggie is if you tell a customer it will be done in 3 months,make sure it is.This is why the estimate needs to be as accurate as possible.As a friend(and ex-outlaw biker)told me once:"When you do right,no one remembers;and when you do wrong,no one forgets"

Most businesses(whatever the field)won't even begin to turn a profit for at least 3 years and this is something you have to be prepared for and why the vast majority fail in the first years.A lot of this is usually do to the sudden increase in the number of "friends"you suddenly acquire.A word: You have NO friends in business.Write this on the blackboard 100 times.You have,"acquaintances" and "enemies" and that is all.This includes "family". You are in business for one reason:to make a living.If someone persists in "hanging" around,give him a time card to puch when he comes through the door,and charge him DOUBLE the shop rate.This is a good way to lose friends and hangers-on and hopefully they will get the idea.No one ever said being a prick was easy.

Anyway i'm still a little spacey from the Autorama weekend so I'll shut up now.I'm going to try and make the Father's Day Memorial run this year(hopefully the Safari will be back together)so maybe we'll hook up then AFTER work! TTYL
Ray



I am by no means a savvy businessman but I see the ones who are and this is what THEY say.

 

Thanks for pointing this out. I had NO IDEA about this, as I'm sure most of us here had no clue either.

I was reading this thread, and didn't understand the negative vibe, but that puts it into perspective.

 

Price fixing , collusion, predatory pricing..reminds me of the 80s and 90s and being a mom-and-pop waste disposal business..the big eastern companies Waste Management, Browning-Ferris came through here like a Wal-Mart cutting prices 50%, their salesmen giving stuff away to get business..They were so big they didn't have to worry about the IRS..I had lawyers tell me the mountain of paperwork to fight them wasn't worth it....

 

Wicked busy (Boston term going on there) but still not sure if I am getting raped by the customers- sometimes I feel like I give it away-and after 3 years Im not so sure.

Want to also add I ran a million dollar dealership body shop BEFORE I went into business for myself- so Im not a newbie at this, but it IS a different animal when it involves hot rods and not collision work- at least around here.

Had to move after a year so it was starting over again cuz my first location SUCKED ASS . Couldnt get the correct permits and wanted to do things the right way so I didnt have the town or Feds or IRS or anythign breathing down my back....plus the landlord pushed me out and made my last 2 months there a living hell- never realized he wanted the space for himself after I had all the work re done to the place...
Cost me $35,000 to move and set up shop with the right stuff- Had to buy a spray booth etc etc etc.

Getting repeat business and have a waiting list- they do want MY (the shop's) work. SO thats a good sign.

Just feel like Im missing something that may be key in actually making this also a financial success. Maybe its just the nature of the beast in this area to be in debt up to your eyeballs for a business- who knows?
I guess when a 2/3 BR home goes for $350- 400K in my area- I gotta realize that my expenses will be more than in a small Midwest town.

I really appreciate all the comments and PM's Ive gotten about this. You are all welcomed at my shop ANYTIME to visit,hang out and have a beer (or coffee).
Thanks

 

You can find a lot of great business advice from your local chapter of the U.S. Small Business Association. They can steer you towards advisors who have experience in a variety of businesses in your area.

http://www.sba.gov/

Good luck!