So two good friends of mine currently run a shop out of their garage working on everything from Hot Rods to OT stuff. They are starting to grow out of the backyard mechanic thing and do not have room for all the business they are stacking up. There is a shop for rent locally for $1500 a month with three bays and two lifts. I currently Manage a large business working for someone else and they would like to get me on board helping run the place becasue I have some skills with P&l and stuff like that. I was just wondering what kind of overhead We would be looking at besides rent. Insurance etc, any other hidden costs to look at? Im just trying to get an idea from you other shop owners what kind of nut you have to crack on a monthly basis. They are currently doing $6,000 to $15,000 in profit a month with their client base and no commercial spot. Any advice would be appreciated!
For the electric bill, find out from the location you will be renting from what the business was that was there and then find out approximate cost for electricity from the electric company for that address...This should give an approximate idea for the electric bill + or - of course....always think the + side.... Insurance and bond may be required... The rest of it is basics like phone, garbage requirements, Length of lease and can the amount of business last that long....many times that business can just **** gone and then your stuck paying all those bills with less income.... just my .02
Thats profit. $6,000 is a slow month. $15,000 is busting ***. THey both currently work full time jobs as mechanics so that is just evenings and weekends and they have a waiting list of at least a month. The one guy is retiring from a government job and his son son is tired of working for a shop full of lazy people. It wont kill them or put them in the poorhouse if it doesnt work out but I told them I would do some recon for them and getter a beter idea of what they are looking at before they jump in
the insurance is what I am interested in. Leasing is a piece of cake in the Cleveland area. If you are in a year lease you are getting screwed. My current business is on a month to month becasue there is so much realestate available here
call your agent and ask them to look into it....tell them what your looking for and what the best plans are and they can give an estimate number....not sure how it works in your state....but with the world i am crawling towards...I am in process of doing the same thing.... May be preparing to do a business plan myself....
didnt ask them, just asked about profit they took to the bank after all expenses. They tackle some pretty serious jobs and knock them out pretty quick. They have a pretty good reputation around here.
personally i'd say go for it. research all your insurance and licensing first, but if you got several good guys, you can all work together, you already have a local rep, that's half the battle. they say most businesses go under in the first six months, most of the rest go under in the next six months, if you can last a year then you can last ten. i'd say if you are ready to commit to six months and willing to cut your ties if it doesn't work out then go for it. never hurts to try.
If they are making $3,000-$7500 each per week what are they doing working another job. With that kind of income a few slow weeks will just give them time to spend some of their money. You will pardon me it I call ********. I have 2 very good friends that are in this business, doing OK, and neither one has a yearly personal income income of $150,000-$375,000/year. I would think using your figures that ,with thier full time jobs it wouldn't be hard to turn a half million a year each. Of course, again, using your figures, they would have to "bust ***" to do the large number. Do you understand my skepticizm? Frank
Sure I'll ad some things........ Strickley mechanical or are we talking restoration work like body and paint work ? If you are looking at a former repair shop that has closed, then you have to go through the full gambit of soil samples to see if the ground is contaminated. Waste disposal of oils / batteries / tires and air conditioning freon collection units (6-8K alone) - you name it and if you don't have the proper permits then kiss it good bye. If they are back yard guys on the QT then sooner or later the Enviro - people will come and shut you down and all that money you made will be gone. It's easy to make the money if you didn't get ALL of your proper eviro - permits. Insurances/bonds / liability insurance etc. You didn't say if they had that so if they do - great - if they don't - I hope the hell a repair doesn't go bad and someone gets hurt or now it is the persons personal liability. Now if we are talking paint - WHOLE different situation as paints today ARE toxic and you best have your respirators / booths / and waste recepticals for paint. Again thousands of dollars. I will ***ume they are paying there taxes and they are in fact a legitimate commercial business. Home garage repair guys usually do make quick money IF they don't or haven't paid all the Fees / Certs /Enviro /insurance / bonds / taxes etc. I said this based on you not saying if they are or are not a commercial business now and with backyard garage guys - most are not. Just asking some questions that might not have been asked or thought of. I have seen many "backyard" guys step up into the commercial world and guess what - costs of overhead just went way up with what I listed above and now they don't quite make as much because or what they are REQUIRED by law - local and Feds especially enviro-**** / disposals / collections / spill containments etc. Damn Freon collection machines alone are enough to ruin a good weeks pay. If you say they are all legal then good and the transisition will be less $ painful to grow larger commercially.
If they are top end doing $15,000 a month in profit that would be $3,000 a week between two people ,meaning $1500 a week per person with very little overhead. I think you may have read wrong or added wrong.... Thats about $70,000 a year
No paint work, strictly mechanical. The shop is currently up and running the owner just wants to retire and will continue to work there untill it is rented out so no weirdness there. The guys name the lease will be in works for the city so all the city stuff will be taken care of. I do not know what kind of permits you need for chemicals but I know he has a place he currently takes his 50 gallon drums of oil and antifreeze to, to recycle. His backyard shop is a pretty serious deal now so I do not think he has a whole lot to deal with other than the business license and insurance which I can make a call on. Just trying to get a rough idea on what kind of many shop insurance is going to run and what kind of coverage you need
Well, some clarification is needed. You state the $6K - $15K pofit was monthly and weekly. That is a huge difference. If it is $6K/month between the 2 of them, that is $36K/year each. If they have to pay you plus the overhead of a shop it goes down from there. At $7.5K/month each, it is $90K annually before paying you and the overhead. This is before income taxes. I don't know if there is a state income tax in Ohio, but your looking at 20% - 30% in Federal taxes, plus your FICA tax at 15.3% because they are self employed.
we bought propery in bedford oh. and had a building put up and the mortgage is lower than the rent we were paying. might want to look into buying.
I never stated it was weekly. Thats is a monthly number someone misread it earlier and made a post about it. That is part time so I would ***ume working more hours that week in a commercial location those numbers would go up. There is a state and regional income tax in Ohio that would have to be looked into, there is also a new school district tax that just came on the boards two months ago. I curently run a large business so this is all the stuff I am familiar with. I can run a normal retail location no problem and know all the ins and outs of it. Its the insurance that has to do with working on other peoples stuff that can cause death that I am new too. Teh chemical thing was another good point to look into I am going to do some more digging on that I will bring that up to them, but I think they want something they can walk away from if its a disaster
I am not going to explain to you how mechanics bill jobs if you dont already know but its not cut and dry work on a car for 3 hours and charge $120 for $40 an hour at 3 hours. Anyway.. I know what they make and what kind of work comes out of there. I run an eight million dollar a year business currently and know what I am doing with the figures. My questions was about overhead of an autoshop.
OK not to sound like a jack monkey....but if you run an 8 million dollar business, would you not know the basics for setting up the business and knowing what the expectations are, SPECIFICALLY insurance and the such for the nut to crack?? ....again...not trying to be a jack monkey....just asking is all....
haha, thats Why Im even consider geting in on this with them. I have watched there business explode after the economy tanked. I have seen local shops less outfitted than this "home garage" so they may have a bit of an advantage.
little different compared to the buissness I run, My overhead is roughly $240,000 a month. Insurance on a 30,000 sguare foot building with 3 million in inventory is a little different. Its hard to break that down to a smaller business. Plus obviously I run it and do not own it hence me being on the Hamb and not Yachters of america or something. If there is a small shop owner on here that wants to give me a breakdown cool. If not no worries I will make some calls tommorrow and get it figured out. I just wanted a rough idea sheesh
I am in the process of doing the same research....but I also do not currently run a business....I am just a lowly schmuk.....I am HOPING someday to have my own thing going....but hey......until then I still gotta do that thing.... oh and by the way, I have a few folks I know that own their own companies that post anywhere from 6-10 million a year and none of them are part of the Yachters of America....heh....jus sayin
Just about everything, motor work suspension, can do computer stuff on the new vehicles. Its pretty much a full service shop. Decent body work, they cant paint worth a **** lol..not that I think they are going to do any of that at the shop
I had a shop for 2 years with a day job. I was one foot in and one foot out, and it never got off the ground. I spent more time gobbling up equipment then i did drumming up business. When the dust settled I had a decently equipped shop, and had to close my doors. A rolling business card goes a long way, along with one customer who loves to cut checks. If you guys can make it work more power to you.
You better go back and reread your own post as you clearly stated it was a weekly figure. I believe post no.6. I used YOUR figures when I posted .................do the math yourself. Frank
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