NO INVESTORS!! Period. Any time you have someone putting money into a business they instantly become "partners". And you end up working for them. Develop a business plan, find a friendly bank and borrow the money. At least the bank won't stop in every day to see how their investment is going. And family member are the worst!! Do it yourself or not at all. Before I go...I wish you good fortune.
Now is the time to buy real estate. If you have no money, if a bank won't help you (although one should if you have a paying job), then see if the seller will take back a mortgage, or a second. Even if you just use it as your home (and perhaps rent out a couple bays), you should come out ahead....
Old post and I have bitten my tongue the whole time. Earlier this year I sold some property for a chunk of change. It was the first time in my life they called me "mister" at the bank. I got the bright idea to start a business. Now, 9 months later I realize that I would have been much happier buying an RV and gas. I didn't re-read this entire thread but some ol' boy summed it up when he said "you can work 12 hours a day 7days a week, or you can fish 12 hours a day,7 days a weeks and still be broke; your choice". I think he nailed it. Do not try to buy yourself a job. Rodney
Bought my place 20 years ago, LAND CONTRACT is the truth. Started out doing trans brake valve bodies, now have 8 bays and 10 techs, do a good bit of general repair and a lot of vintage vehicle work, still involved with race trans work with machine and torque converter shop. Land contract made it possible to pay the place off in less than 10 years with out the BS from the bank and the city. BS don't start unless property changes hands as in title transfer. After property is yours might want to get with a bank for line of credit and such. Worked for me, however I had the biz going pretty well at time of purchase and wife had good job. My house is on the property so I can attest it's great living at shop location cost wise but some times customers show up at the wrong time. If you do this, don't forget to stay on top of your taxes, find a good bookeeper, you will need one.
Skrayp, I would definately advise AGAINST your going into this business at this point. You don't seem to have a real grasp on what it will take to be successful from a financial point. For starters, you don't even know what codes, restrictions, permits, shop insurance, etc. are required and what their up-front and annual costs are? Second, no bank is going to loan you 100% of the purchase price. You'll need something like 20% cash as a down payment or related collateral or a valid cosigner. Again, I don't think you are looking at this aspect from a realistic point of view. Do you really understand what the on-going monthly expenses will be? Have you even asked to see the utility bills? What will the total nut be just to open the doors each day... mort payment, property tx, insurance, util, supplys, etc.... Have you worked up a basic financial plan to see how much revenue you'll have to generate (then divide by 2 to account for hard times) just to break even after tax on a monthly/annual basis (like someone said, you don't want to spend $200K just to buy yourself a $20K/yr job)? I hate to be the grinch that stole Christmas... but someone needs to force you to be more realistic about this. Much of this thread reminds me of the high school kid who became enfatuated with the town whore and ended up marrying her because none of his friends wanted risk hurting his feelings by telling him it was a very bad idea. Additionally, it sounds like you are becoming desparate to change your current situation even if it's a bad idea.... i.e. "wrong motivation". IMHO, there are some very good posts here by TagMan, JGMagoo1939, Rusty Kustoms, JDHolmes, Burnout2614 and a few others. You need to wait until you have a much more fully baked plan. Bottom line... you should find a way to enter into this business on a smaller, less expensive and more forgiving and realistic fashion than you have detailed in your posts. p.s I'm not a shop owner... I'm retired and been around the block a few times. Best of luck! X
I have worked for myself for 40 plus years,have seen the economy up and down. If one thing gets slow, there is always another to do when cars are involved. Just do good quality work. Word will get around, thats the best kind of advertisment. There is, and always will be, a market for race cars and hot rods
Do it now while your single and unemcumbered with debt and mortgage payments. Otherwise you will always wonder if you should have and kick yourself for not making the leap.
maybe buying a place is not the answer, possibly lease a building. it keeps the cost down. I like you allways worked for someone else I am a technician and worked 30 years for a dealership until 2 years ago when I opened my own shop, I do general auto repair and build classic cars and trucks. the repair side is where most of the money is comming from right now but the classic car side is steadily growing. have all of your equipment bought and paid for before you start to keep overhead down. get a good bookeper and repair a few hondas for a while till your buisness grows. I should have made the move when I was 30 not 48 but I was to nervous to try. like others said whats the worse that can happen?? go back to working for another shop? if you lease instead of buy you do not have a big investment especially if all the equipment is paid for.
If anything your investing in property,ill never be rich but as long as the bills are paid and I provide for my wife and kid I'm happy. I have nightmares about being employed at my old job again!!
After you look at the plus and minus including the numbers remember one thing you have no obligations you can always take on a job and run the shop on your off time i hear gene winfield works at night and the late painter crazy art (covina ca) would work at night
Take the jump. You'll regret it later in life if you don't. The best thing you can do at this point is make sure you're damn good at what you do. Make sure you have all the tools and equipment you need and make sure they're bought and paid for. Overhead will kick your ass. I worked out of my home garage for years before I was able to afford my own place. I investsed my money into a dump and built it up. Now, if my business ever takes a shit, I'll be able to sell the building and not lose my ass. I've also kept my 8-5 job. Retirement, benefits, and 401K are important to have. My only employees are my wife (book-keeper) and my best friend. My best friend is vested in this like I am. Every dime we make, we put back into the shop. That's the important part about keeping a regular job in the beginning. A luxury I have is my buddy also works for the same company I do from 8-5. I've found that letting your work speak for itself is the best route to go. If you put out quality work, people will seek you out. I didn't invest in the social media aspect of this game until recently, and I honestly can't tell you if it's helped or not. Good Luck with it, don't be scared to fail.
Do the research and complete a detailed business plan. As long as you make reasonable assumptions and the business makes sense, do it now..do not wait. I took a class that was just about free though the local university sbdc (small business development center) that walked you through the process. Real estate prices are great. You are young, single and unemcumbered with debt. Like someone else said, move in and keep the day job until you get enought to keep you busy. I started a business in 2009 (plumbing contractor) and we have grown steadily ever sense. We bought used equipment and heavily discounted inventory because everyone else was selling. Going into 2012, we are debt free (other than shop mortgage that is covered be additional rent income) and positioned to be very profitable. If you make conservative choices, a recession is a great time to start a business.
...Lots of good advise here, I have 3 life lessons to offer -You will get back what you are willing to put in -Keep your overheads down -Learn from previous places that you have worked at, even if it is how-not-to-do something Stuart
I admit, I do not know the ins and outs of what I can do with this place and what it will take to keep it afloat. The most important things I do not know yet are simply because I haven't asked yet. I've been wanting to stop in and talk to the guy doing bike repairs (owner) about utilities and zoning and such. I know you're not supposed to go over the realtor's head like that but the way I see it, I'm not ready to deal with that part yet. When looking at houses, I've always figured mortgages to be about $1,000 a month per $100,000 with insurance and taxes. City zoning and permits I will have to find out about. I know most body shops have to sign up for a 2 million dollar umbrella policy to get DRP work.I need to find out if I can install 3 phase and a paint booth. I do not own a house, I do have some credit card debt, but all my tools and equipment are paid for, and I have a lot. I lived with my mom for almost nine years to pay them off. If I can figure out a way to pay off my remaining debt, come up with a down payment, get loan approval, and negotiate a deal to where I can move in and treat it as a place of residence I can work on my own stuff at, I'm going to go for it. When I get a better idea of what I want to do with the place and what I'm allowed to do, I will set up an LLC or incorporate it so I can make prety much anything I do with it a brand to the company. That's legal, isn't it? LOL Yeah, some business classes. I need to get back on KatDawg and finish it too. Probably gonna do that first. Thanks a bunch guys, it really means a lot to me that you care enough to help steer a stranger in the right direction. I used to lie awake as far back as 10 years old, dreaming about this very thing. I drew up floor plans in art class for my perfect hot rod shop, recruited and delegated duties to all my friends, I even wrote stories in English class about it. I drew flames in study hall, smuggled car mags into class. I even slicked my hair back with brylcream before all you tatoo'd rockabilly guys hahaha. Back in about 1990, I had my dad take me to the barber shop to get a flat top with ducks, lol. He couldn't remember how to do it! The back of my head looked like a ducks ass....
I lost my job of ten years to the owner going out of business. I do trailer service and repair work as well as truck accessories. I was paid very well and my head spun when he told me the news. At the time my wife stayed home with our two boys. He gave me two months notice. After a couple of weeks I asked him if I found a place if he would work me a deal for all of the tools and equipment. He said yes. I found a shop with little cost of rent but on the Main st. I rented it and opened and ad soon as the other shop closed. That was in june of 2007. I made more money that first year that the I have any of the years since. Partly due to the fact of having more overhead now. Like an additional 2500 or so on between insurance, phone book advertising, security system, health insurance, etc. I need to do an additional 6500 a month or so to generate the profit to clear the additional overhead. So would I do it again, ABSOLUTELY. It takes some planning, some adapting, patience, and a little help from above. One thing I tend to do is wait until I get a little chunk in the bank before I buy something I don't really need. I always want that reserve. Right now I just started doing some commercials. It cost me me but in the end I think it will pay off. Someone mentioned a good bookkeeper. You don't need a good bookkeeper. You need a good accountant that will spend a little time with you to teach you how to do the books properly. Bookkeeping is very simple, it takes a little education and a lot of organization. Tax preparation is not to be messed with, leave it for your accountant. Sorry for the run on. If I were you, I would try to get a 6 month lease and give it a go. Don't try to by the place. Its like buying a new car without full coverage insurance for your first car. GOOD LUCK
Just keep your overhead minimal and manageable at first, buy the goodies when you can afford them & when they are required, advice that I took and swear by. GL
It is way easier and more fun to build an engine or do a first class restoration then run a business. Do you want to build hot rods, or run a business? They are not remotely the same thing. Good luck whatever you do
You don't need more than 2000 sq feet to start. There should be one man on every car taking space in your shop if you are running a planned machine. So there is no reason for more than 1000sq feet except tools etc. For 1 guy. Good luck
You HAVE to go over the realtor head and find out on your own unless the realtor will put down what they tell you in writing so you have recourse if they are wrong. Some realtors will tell you anything to sell you, IMHO they are in the same catagory as used car salesmen (no offense to "honest" realtors or car salesmen). My brother bought a house because it had a shop on the property, the realtor told him he could run his buisness there, it was zoned commercial. House payment more then he had but cheaper then his present house morgage and shop morgage combined. After selling what he had he bought this new place. After setting up the zoning people shut him down, informed him it was resedental only and no chance of a variance. Realtor denied telling him anything about zoning. Now he has an inflated home morgage and is looking for a shop. FWIW I was scared to death when I went to work for myself 30 years ago. It's a LOT tougher then it looks and I gave up a couple times and went to work for someone else. Been back on my own now 15 years, I know I'll never work for someone else again if I can help it. Nothing like being your own boss. Like some others said, KISS, keep it simple. Worst mistake I ever did was try to get big. Funny thing is when I had a big 7500 ft shop with 5/6 employees I never had anymore money at the end of the week (more often less) then I did when it was just me in a small 1500 ft shop. I did have 20 times the stress with the big shop! A lot of differance trying to cover $20,000 a month overhead compared to $2000, more so I feel in a bad economy. Good luck
Lots of excellent advice from so many. Even before you go into business take a look at yourself, you will need these traits: 1. You need to be a people person (very important) 2. You'll need excellent telephone skills 3. Lots of patients adjective bearing provocation, annoyance, misfortune, delay, hardship, pain, etc., with fortitude and calm and without complaint, anger, or the like. 4. Computer skills 5. Lots of endurance for the long hours 6. A very organized person CRUISER
Only if he's a doctor. Otherwise, you're looking for customers. And patience. Lots of patience. <grin> I would LOVE to open my own shop, and do what I love for a living. However, the problem with doing what you love for a living is that your hobby becomes work - that's happen to me before (I'm already on my 2nd career). Be prepared to find a new hobby - something to take your mind OFF of work. That downtime will be really rare, and even more important than ever!
I am an CPA and Controller of a $1B multinational company. I also started a machine shop 3 1/2 years ago on the side. Bought the building, no lease, and got most of the equipment at auction... good condition and 1/4 the normal price. I do my own books obviously and have alot of discount legal help from the army of attorneys at work PM me if you want, I can give you some ideas of things to look into - insurance, etc. Phone may be easier than typing. There is no right answer to all of this. Good luck
, Answer) I appreciate that. I like seeing your posts on here. I think I'd like to meet you someday. Do you still have the shop in NC? You're right. There is no good answer, but I like to consider different views. I'm a pretty analytical person, I think that's why I'm good at fixing things. Once I get some good questions for you, I might take you up on your offer! Thanks again everybody. If anything, this is therapeutic for me. I don't have many people here at home to confide in, except some old drunks that warned me away from body work before I got too far into it. Their intentions are good, but the vibe isn't. That $h*t is contagious.
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