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What to know in opening your own hot rod shop?

Discussion in 'The Hokey Ass Message Board' started by dirt slinger, Aug 28, 2013.

  1. dirt slinger
    Joined: Jan 30, 2010
    Posts: 644

    dirt slinger
    Member

    I'm needing some advice fellows. I'm thinking its time for a career change, something I enjoy. The opportunity for me to have my own small shop may be in the works. I want to know what are the pros and cons I may be over looking in this deal. I don't know everything but I do have decent knowledge of things. I do have friends that could help me with issues plus a search on the hamb and the net works wonders. What is ur take on this? All comments are appreciated.


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  2. Mr48chev
    Joined: Dec 28, 2007
    Posts: 25,362

    Mr48chev
    ALLIANCE MEMBER

    Most of the successful guys I know who opened a hot rod shop did so because people kept buying the cars they built for themselves out from under them as soon as they were finished or guys showed up wanting work done and that developed from a sideline evening and weekend deal to a full blown shop. If you have built a number of your own cars and or have been fairly successful with your sideline rod building it might be time to go at it full time.
     
  3. chinarus
    Joined: Nov 9, 2010
    Posts: 491

    chinarus
    Member
    from Georgia

    Running a business is a pain in the @## and costly to deal with the government paperwork.
    If you try to work for cash u are screwed at retirement age if you haven't kept most of it stashed in a mattress and didn't fund SS or your own retirement income. Don't forget if you get injured or sick to plan how are you going to deal with that if you are on the sidelines for weeks.
    If you have some very specific skills and a local reputation you can probably make it work but the 1 person shops I know don't generate much income.
     
  4. Jonnie King
    Joined: Aug 12, 2007
    Posts: 2,077

    Jonnie King
    Member
    from St. Louis

    dirt slinger...

    I wish you all the best ! I've had business's on my own since 1973, and one was a retail operation that I ran for 7 years.

    It's not easy, and you'll need a back-up cashflow system so that you can stay solvent in the early "lean" days. You're family-life/free-time will take a hit, so be prepared for that. And, even though you do your best, you will have a certain amount of complaints to deal with...and your goal should be "no unhappy customers", because "word of mouth" and customer referrals will help keep your business alive.

    But if you really have the ability and the drive to do the work you can do it.

    BTW: If you want to hear some tips from a legendary Hall Of Famer about what to do before starting your business, listen closely to some of the words from MIKE ALEXANDER. He knows what he's talking about as he and Larry had some problems in this respect:
    http://www.legends.thewwbc.net/gpage174.html

    Good luck !

    Jonnie www.legends.thewwbc.net
     
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  5. Jalopy Joker
    Joined: Sep 3, 2006
    Posts: 23,020

    Jalopy Joker
    Member

    "time for career change, something I enjoy". need more backround on you and your situation. hopefully there is someone to partner with to cover all of the upfront expenses until you get to the point of making a true fairly reliable income.
     
  6. dreracecar
    Joined: Aug 27, 2009
    Posts: 2,797

    dreracecar
    Member
    from so-cal

    Hows the economy where you live in TN ?
    And dont count on your freinds to keep your doors open and in this type of business,everyone wants to be your freind instead of a customer.
    Hot rodding is not a nessesity(although some may think it is) and unless money is flowing around where you live its hard to make a living at it.
     
  7. greybeard360
    Joined: Feb 28, 2008
    Posts: 1,333

    greybeard360
    Member

    You need to set up a payment plan with customers for big long term projects. Trust me, customers tend to forget they owe you. Be it weekly, monthly whatever, set a schedule and be hard nosed about it. Money stops coming in, work stops and storage begins. Put it in a contract and stick to it.

    This has been the hardest thing to overcome... cash flow.

    Even if it is a project that may only take a few weeks, get material money up front, keep good records of what you take in and spend and use a time clock !!! There is no book times for the stuff you will be doing so it is straight man hours.

    Estimates? Like I tell my customers... there is no way to estimate this stuff. My shop rate is what it is per man hour. (you will have to see what shop average is in your area and you will need 2 rates, mechanical and fabrication)
     
  8. old round fart
    Joined: Jun 9, 2008
    Posts: 134

    old round fart
    Member
    from Norman Ok.

    I have a friend that has a good shop going. He worked it while he did his day job and when he had 8-10 months of work waiting, he made the jump. Now he has 12-18 months of work waiting. He told me the other day the only complaints he has is his prices, but the work is worth paying for, so people are standing in line. Don't cut corners and be always be proud of your work and you will be successful. Good luck.
     
  9. B Bay Barn
    Joined: Dec 27, 2009
    Posts: 369

    B Bay Barn
    Member

  10. Jay Tyrrell
    Joined: Dec 9, 2007
    Posts: 1,631

    Jay Tyrrell
    Member

    I hope all the best if you go down that road but be careful.

    If you are opening a business make sure that you are thinking with your head and not with your heart. Just because you love hot rods doesn't mean you should make it a business. Can you show us some of your work?
    Jay
     
  11. greybeard360
    Joined: Feb 28, 2008
    Posts: 1,333

    greybeard360
    Member

    People always complain about the prices..... friends expect you to do a lot of add ons for nothing... if not whole jobs... LOL

    People don't have a clue as to how much work a person has to do to fabricate some of the small items that need to be made. Simple things too. I wonder if Cody Walls (59 Chevy wagon that is over the top cool) has ever kept track of the number of hours he has in that car. http://www.jalopyjournal.com/forum/showthread.php?t=458755&highlight=59+chevy+wagon

    A lot of people want cars like that but don't have a clue where to begin and if you were to tell them it would take 1000 man hours to do it... yup, it costs a bunch of money !
     
  12. You say you have good knowledge but you forgot the first thing, research. First thing you should have done is did a search on here as this same question has been round the block a few times on here. Starting a shop is a big pain in the ass and costly. you won't believe all the state and county bs you will have to go through and then their is the epa garbage that will open your eyes real fast. hope you are good at record keeping as there will be lots of it, and the stupid permits. Good luck!
     
  13. Don's Hot Rods
    Joined: Oct 7, 2005
    Posts: 8,319

    Don's Hot Rods
    Member
    from florida

    Here are some "rules" that I think would be important to making it a success:

    1) Remember that this is a business, not a fun project. You will have to run it as the thing that puts food on your table, not a place for friends and buddies to hang out and keep you from working. Time is money and there are only so many hours in the day. There are a lot of nice, friendly homeless guys. The guys who make money at a business do not allow anything to get in the way of their work time.

    2) You are doing this work/building this car for someone else......it is not your car so it really doesn't matter that you think it should be red, if the customer wants it blue he is paying the bill. Yes, you can offer professional suggestions, but ultimately he makes the calls.

    3) Have a very, no make that VERY, clear understanding up front of what you will be doing and how much budget the customer has. Some people have champagne tastes and a beer budget, and you will get a lot of people who think you are charging too much. Those are NOT the people you want as customers, you want the people who understand quality work takes time which equals a higher price tag.

    4) Put everything down in writing and have the customer sign and date it. The work order should be very clear and complete.

    5) Stay ahead of the customer moneywise. Get money up front to begin and keep getting money as work progresses. You are not a bank and will need that money, especially when you are new, for supplies and parts.

    6) You are NOT a storage facility. Every square foot of your shop costs you money each month. You need the customer to understand that he is not going to park the car there and then disappear for months or years. If that happens let him know you will be moving to take possession of the car for storage fees owed. Spell out the storage fee rate in you contract. Set a specific time for the car to be there and when it must leave when done.

    6) Do exactly what you promise and bring the customer in periodically to let them see the progress and approve what has been done. Keep the customer in the loop at all times.

    7) Lots of people are users. You will get the ones who talk a good game but who are out to get the most out of you with the least amount of money. I get them all day long, I research something for them and then they use that information to go on the internet and save some money. Not all people play by the same rules we do.

    8) When the job is done, make sure they sign off on the work and that you mark the paperwork as to all that was done and what was charged.

    9) Don't be afraid to turn down some work. I know you will be hungry for jobs in the beginning but no faster way to get in trouble than to take on one you can't do, or for a customer you really don't want.

    10) Doing "favors" for someone will bite you in the ass every time. Treat it as a business, not a charity.

    I had some work done by an upholstery shop and they quoted me a price. I put half down. When they were done they gave me a higher balance than I was expecting. When I questioned them they said "That price was just for the labor, we have no idea of the material costs until we are done !" WHAT !!!!!!!! Then tell me that up front. (I just ran into a friend who used the same shop and they ran the same game on him recently) That is no way to do business.

    Communication all the way through is the key. I find most problems come up when the customer hears one thing and you hear another. Make sure everyone is on the same page.

    Don
     
    Last edited: Aug 28, 2013
  14. treb11
    Joined: Jan 21, 2006
    Posts: 3,214

    treb11
    ALLIANCE MEMBER

    there is a major post in here loaded with priceless info. search for it.
     
  15. dirt slinger
    Joined: Jan 30, 2010
    Posts: 644

    dirt slinger
    Member

    There's some good info here. I have owned my own electrical business for about six years. That's where I learned of the govt red tape, permits, insurance, etc. I never said I was going to quit tomorrow and start a shop. I was wondering how I needed to approach this. I do have a bit of backup income, health insurance etc. most of my work on cars has been of my dads and a lot of racecars. I know that's not the same as a hotrod but I do have the passion and desire. Maybe I should try and finish up my truck so people can see some of what I can do. I never said I could do it all but I'm gonna try on my own ride. Better mine than someone else's.
    Of coarse I'm still undecided on this deal and was just curious. And yes I should have searched before hand.
    As far as the way people spend money on cars around here seems to be good. I have also seen some work from people around here and hear stories about them and wonder how they stay in business. I don't like to put my name on things unless its nice and neat.


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  16. wagoon78
    Joined: Nov 13, 2008
    Posts: 349

    wagoon78
    ALLIANCE MEMBER

    You can never have too much money in the bank. Run lean and mean and make sure you stay on top of collecting your money. When you have cash reserves you can make better business decisions. If you need the money, you may not be able to make the best decision.

    I run a business and if I had all the money in that people owe me, my car would be a lot nicer.
     
  17. hemiboy
    Joined: Apr 21, 2005
    Posts: 248

    hemiboy
    Member

    have a detailed contract up front, especially regarding payment times and what happens if you are not paid on time. Keep a timecard record of all work done on the customers car- list what was done, how much time, etc. Set up a payment plan, bi-weekly or monthly. If they miss a payment, let them know by registered letter that they have now switched to storage and their car goes to the back of the line. Make sure they understand this up front. Keep excellent records, hard coplies of all agreements and letters. Lastly, try to work on "Car" guys vehicles. Much easier as they tend to understand the costs better than joe average.
     
  18. allstarderrick
    Joined: Jul 23, 2007
    Posts: 603

    allstarderrick
    Member

    I've been in business full time doing this since 2000. The biggest thing other then keeping a good reputation and paying your bills is finding the right customers and keeping your overhead down.
     
  19. eaglebeak
    Joined: Sep 17, 2007
    Posts: 1,066

    eaglebeak
    Member

    50% up front
    Balance on delivery
    Storage $50 per day.
     
  20. txturbo
    Joined: Oct 23, 2009
    Posts: 1,771

    txturbo
    Member

    If I ever started doing work for other people there is only one way I would do it. I've learned my lesson.....put everything they want done on paper....divide it up into stages/phases and put a dollar figure on each stage/phase. Get money down to get started....then when you complete the first stage....payment is due before the next stage begins. Otherwise it gets sidelined until payment is made. After 60-90 days from notification....it goes up for sale. You both sign it. This allows the customer to get the work done and know exactly what they will get for the money. It will also eliminate those guys with show car dreams and an unemployment check income from using your shop space for storage cuz there mom sold her house and it can't sit in her yard anymore types.


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  21. Veronyn
    Joined: Aug 8, 2013
    Posts: 22

    Veronyn
    Member
    from kansas

    Yeah. I wouldn't go it alone because that could mean a huge loss on your part. The best thing you can do is look for a good location..somewhere there aren't hot rod shops for quite a ways. The economy is pretty bad right now, so you want to also make sure its an area where people have secure jobs and money that they could actually spend on things like that.
     
  22. mustang6147
    Joined: Feb 26, 2010
    Posts: 1,847

    mustang6147
    Member
    from Kent, Ohio

    The first and foremost thing I see as a must, is Name recognition. This is usually achieved by a quality build and a once in a lifetime circumstance.

    Meaning a coined phrase or name, and a quality product that sets you apart from the rest. Look at the rod builders today.
     
  23. hoof22
    Joined: Jan 15, 2008
    Posts: 530

    hoof22
    Member


    What he said x 2. Been running my own businesses for 30 years, had a shop for 20 years. Be prepared to make LOTS of sacrifices, like to your social life, your family life, etc. Running a business isn't an 8 or 10 hour or even a 12 hour a day deal, it's 24/7! If you're not working on a job, you'll be thinking about working, and what you need to do next, what you forgot to do. A business takes far more than just working with your hands. You need marketing, accounting, Gov regulations and permits, customer relations, tons of paper work, and if you end up with employes, that's a whole other ball game, the list is endless. Should you incorporate? Sole proprietor? LLC? $30k-$50k-$100k? for equipment & start up costs. There's SO much more than most people think. It takes a certain mind set to pull it off, and it is NOT FOR EVERYONE. Read all the info you can get your hands on, talk to as many business owners as you can, (most will be happy to share their experiences), and then sit down and have a nice long talk with yourself...

    BEST OF LUCK!

    Eric
     
    Last edited: Aug 28, 2013
  24. tobyflh
    Joined: Nov 5, 2008
    Posts: 421

    tobyflh
    Member
    from Peru il

    I've seen many talented people in different trades go under because they can't run a business. I've also seen talented people own a business and have someone run it for them (part or full time) so they can do the work they do. This helps them do what they do and keep the people away from them who will just eat up there time with bs. In the hot rod field to many people want free info, look at all your cool stuff, asking prices for things they can't afford, try to get everything for nothing. But you probably already know that.
     
  25. Set up a business plan.
    Take in the work that you can do with the tools and equipment in your shop.
    Stay away from a "partnership"
    Start small and use the advice from Don
    Have insurance on you and the shop
    Stay away from trying to do it all.
    Have your wife or good friend answer the phone to screen calls.
    Interruptions will cost you double as will come-backs from rushing a job.
    Take a break in the middle of the day to get focused.
    Expect to work 12-16 hours a day, 7 days a week to start up.
    Set your open business hours to accommodate the working people.
    12-8 PM, every one works from 9-5 so how can they bring you work.....??????
    sat 8-12, close the door and get to work so you are not interruped.
    Make sure your shop can accomodate all of the cars you are working on...
    Leaving out a car is asking from problems.
    make a check list on each car so you don't put the wrong part in the wrong car....
    ^^^advertise^^^^ make up a cool short name that tells a little about what you do.
    stay away from the "service "work i.e.: oil changes, tune-ups, brake work, unless it is part of a whole project.
    Have enough shop space that you can work on two or three cars at a time.
    keep track of time on each car so the bill will be accurate.
    it would help to get "hooked" up with a tow company
    good luck

    Now I just need to get some start up money and I am ready......
    I have the insurance, shop tools and found a shop with enough space.......
     
  26. theHIGHLANDER
    Joined: Jun 3, 2005
    Posts: 7,719

    theHIGHLANDER
    Member

    I went from 2000 to 4000sqft, then from 4000 to 5100sqft, then to 1200sqft, then back to work for an employer. With employers at the helm I went through more than a dozen workers to establish the final crew. A long and ridiculous story of why and where I'm at now would NOT be believable by 99% of the membership here. Some know those reasons and know them to be true, and like me, still don't believe it. So where am I at now? 1200sqft and a solo act...again. Slowly but surely I'll work into something I can do the best and offer only that. Full builds will soon be mine-all-mine. I'm very confident I can do a car or 2 a year and live well upon the sale no matter how long it takes. I have a good reputation, mostly for my honesty and quality. I eat my mistakes and never fucked anyone out of so much as a trim screw. I have perhaps 4 clients who'd fire up big 6 figure jobs to me right now and I don't pursue it. I used to love what I do more than almost anything. After 40yrs, not so much. If this sounds negative or as if I've failed, quite the contrary. Nobody will OWN THEIR JOB the way you want them to. I say nobody in very broad terms because they are indeed out there. Can you survive long enough to find them? Right now, I believe I couldn't in light of the rising cost of running a shop with workers. You want profit? You'd better have at least 2-3 guys that you'd trust with a key to the place 24/7. If you have them it could be grand, you can get rich (cough-cough), or you can simply live well. I don't hate what I do but my passion is tired and rusty. Are you physically fit as well? After 40yrs my frame is rusty too. I can't run against the rev limiter for 12hrs straight anymore.

    Nothing is more rewarding than answering to that fuckin dickhead over the top of your bathroom sink and nobody else. He has all the answers you need. The rest is just "technical". Well, money too but...
     
  27. bonechop
    Joined: Apr 19, 2009
    Posts: 30

    bonechop
    Member
    from NW Indiana

    Lock down as much as you can up front, plans and money!! File your business as SUB S, so no one can take your house etc. Get a really good accountant. Grow slow!!
     
  28. prpmmp
    Joined: Dec 12, 2011
    Posts: 981

    prpmmp
    ALLIANCE MEMBER

    Priceless!! I think you have done well and your parents taught you well(and would be proud) Pete
     
  29. SMOG_GUY
    Joined: Jun 28, 2011
    Posts: 388

    SMOG_GUY
    Member
    from Dinuba

    Recently won experience:
    Keep regular work hours. My customers assume I've gone out of business if I'm 5 minutes late to work.
    Hire helpers with the same care you would if you were buying a new car or house.
    Help is NOT all the same.
    Pay bills first, before you pay yourself.
    Pay bills the afternoon of the day they came in, if you can.
    I would pay local parts store on a purchase by purchase basis or day by day basis at first.
    No credit card purchases unless there's no other way.
    Get mad AFTER you know all the facts, not before. Especially with the help.
    Get ready for 14-16-18 hour days, at least af first.
    If you take a partner he'd better be Tom Edison, Henry Ford and Donald Trump all put together.
    No booze and drugs at work. Really turns some people off and is not professional.
    My wife was extremely caustic and critical of my work life for years. Are you ready for something like that?
    Get ready for the bargain hunters trying your defenses. Sometimes best friends and family members are the worst!
    You will probably experience the highest highs and lowest lows of your life. Are you ready?
    Sincerely--Good Luck!
     
  30. J scow
    Joined: Mar 3, 2010
    Posts: 489

    J scow
    Member
    from Seattle

    It takes a lot of money to make a little money in the automotive industry.

    For example I am looking at a parts bill for $521.81

    I'll make $130
     

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