Another great option to starting from scratch is buying or buying into an existing shop. That’s what I did and it has been amazing. I worked there for about 8 years then one of the 2 owners retired and bought his half. He carried my loan to him and I paid him off in 5 years using only money from my net profit. It was a great deal for both of us as he didn’t take a huge capital gains hit by me just taking a bank loan and giving him a large lump sum. I also knew exactly what I was getting into. We made some changes and haven’t looked back. Still stressful but not nearly on the level of starting from scratch.
Yes definitely an option for sure. The only issue with this finding a good shop to buy into. Unfortunately a lot of shops are poorly run. There are a lot of well run shops but usually they have some sort of exit plan
No less than 50k in the bank to start sounds about right. Where I am at though, it's basically impossible to get paid anywhere close to what we should. Shops here are stuck anywhere from 10-20 years ago, even as far back as the 80s.
I first started my shop almost 16 years ago now. I started out with almost no money. I did have to struggle in the beginning because all the money I made went to buy tools and equipment. Now I do very well. I have so many jobs that I have to turn down a lot of work.
Whats the view on parts accounts? In Denver when i stared I was able to start commercial accounts with AZ, Napa O reilys very easily. There is no reason to gouge people on parts but it is another source of profit outside of labor Keep up the great content. Thanks
It’s not about gouging. That’s one of the issues we have in our industry. Margins are margins. The reason parts margins are their is to cover overhead, warranty so on and so forth. It’s either have a healthy parts margin or your labor rate needs to be way higher. Overall gp margins need to be 60% usually it’s 70% on labor and 50-60% margins on parts. I used to have the same way of thinking. But once you sit down and start to learn and understand the numbers your realize you can’t run a successful profitable business without proper margins in place. Cant help people if you go out of business from not charging appropriately.
I started in my backyard garage, working evenings and weekends and then weeded myself off my day job eventually going full-time in my backyard garage now I have a brick and mortar three employees and multiple streams of income. Advice would be to learn accounting, financial literacy and understand how to manage a business of an income, statement and balance sheet.
@@Enrightauto my SCORE Mentor 👊🏻 beat that into me. That’s why I own multiple streams of income. Auto Repair Used Auto Dealers License Rental/Lease License
When I started in 1974 I started working at a Dodge dealership. I worked on everything including rebuilding transmissions, differentials, engines, m/cyl & w/cyls, calipers, w/shld wiper motors etc so it was a lot different than today. When you start out you not only need to have tools & equipment, be proficient at diagnosing & fixing cars but you need to have @$50K or more financed to open your shop but always have $$ set aside for the unexpected expenses to fix equipment & during slow times. It's nice to be specialized if you can get a customer base setup quickly but be ready to work on other makes to keep the shop running until you can specialize. Sometimes it's better to lease with the option to buy or start off in your home garage , if possible. This is a hard business and starting off requires a lot of sacrifices by you and your family so be prepared for the roller coaster ride however if you have the passion & willing to put in the time necessary at the start it is all worth it. There's nothing like having your name on your shop and having customers spread your name around. Once you establish your reputation for quality at competitive prices the customers will come in droves. Tools & equipment are expensive trying to work on everything, which I have done, but it is better to specialize in a make. It is now cheaper to buy from rebuilders or wholesalers like Rock Auto, time permitting, but you'll learn as you go and by all means stick with OEM as much as possible especially for electronic components. Buying cheap parts will ruin your day & cause you to lose $$ & customers especially if they break down & have to be towed so sometimes saving your customer $$ on parts is not the way to go. Always stand behind your work & if you break something be prepared to do the right thing even though it costs you $$. Once you have your shop up & running there is nothing more satisfying than when the holidays come around and you get customers bringing you all kinds of goodies and telling you how thankful they are you are their shop!!
Another great option to starting from scratch is buying or buying into an existing shop. That’s what I did and it has been amazing. I worked there for about 8 years then one of the 2 owners retired and bought his half. He carried my loan to him and I paid him off in 5 years using only money from my net profit. It was a great deal for both of us as he didn’t take a huge capital gains hit by me just taking a bank loan and giving him a large lump sum. I also knew exactly what I was getting into. We made some changes and haven’t looked back. Still stressful but not nearly on the level of starting from scratch.
Yes definitely an option for sure. The only issue with this finding a good shop to buy into. Unfortunately a lot of shops are poorly run. There are a lot of well run shops but usually they have some sort of exit plan
No less than 50k in the bank to start sounds about right. Where I am at though, it's basically impossible to get paid anywhere close to what we should. Shops here are stuck anywhere from 10-20 years ago, even as far back as the 80s.
That’s a lot of shops
I first started my shop almost 16 years ago now. I started out with almost no money. I did have to struggle in the beginning because all the money I made went to buy tools and equipment. Now I do very well. I have so many jobs that I have to turn down a lot of work.
Yea having no money early on can make it very rough for sure especially if you have high overhead personally and for the business
Whats the view on parts accounts? In Denver when i stared I was able to start commercial accounts with AZ, Napa O reilys very easily. There is no reason to gouge people on parts but it is another source of profit outside of labor
Keep up the great content. Thanks
It’s not about gouging. That’s one of the issues we have in our industry. Margins are margins. The reason parts margins are their is to cover overhead, warranty so on and so forth. It’s either have a healthy parts margin or your labor rate needs to be way higher. Overall gp margins need to be 60% usually it’s 70% on labor and 50-60% margins on parts.
I used to have the same way of thinking. But once you sit down and start to learn and understand the numbers your realize you can’t run a successful profitable business without proper margins in place.
Cant help people if you go out of business from not charging appropriately.
I started in my backyard garage, working evenings and weekends and then weeded myself off my day job eventually going full-time in my backyard garage now I have a brick and mortar three employees and multiple streams of income. Advice would be to learn accounting, financial literacy and understand how to manage a business of an income, statement and balance sheet.
100% just did a video on this on tik tok. So many owners don’t know their numbers it’s wild
@@Enrightauto my SCORE Mentor 👊🏻 beat that into me. That’s why I own multiple streams of income.
Auto Repair
Used Auto Dealers License
Rental/Lease License
Great intro. So much to cover. Personally three biggest things that you need are
1. Trash can
2. Broom
3. A good attorney
😂😂 I love it
When I started in 1974 I started working at a Dodge dealership. I worked on everything including rebuilding transmissions, differentials, engines, m/cyl & w/cyls, calipers, w/shld wiper motors etc so it was a lot different than today. When you start out you not only need to have tools & equipment, be proficient at diagnosing & fixing cars but you need to have @$50K or more financed to open your shop but always have $$ set aside for the unexpected expenses to fix equipment & during slow times. It's nice to be specialized if you can get a customer base setup quickly but be ready to work on other makes to keep the shop running until you can specialize. Sometimes it's better to lease with the option to buy or start off in your home garage , if possible. This is a hard business and starting off requires a lot of sacrifices by you and your family so be prepared for the roller coaster ride however if you have the passion & willing to put in the time necessary at the start it is all worth it. There's nothing like having your name on your shop and having customers spread your name around. Once you establish your reputation for quality at competitive prices the customers will come in droves. Tools & equipment are expensive trying to work on everything, which I have done, but it is better to specialize in a make. It is now cheaper to buy from rebuilders or wholesalers like Rock Auto, time permitting, but you'll learn as you go and by all means stick with OEM as much as possible especially for electronic components. Buying cheap parts will ruin your day & cause you to lose $$ & customers especially if they break down & have to be towed so sometimes saving your customer $$ on parts is not the way to go. Always stand behind your work & if you break something be prepared to do the right thing even though it costs you $$. Once you have your shop up & running there is nothing more satisfying than when the holidays come around and you get customers bringing you all kinds of goodies and telling you how thankful they are you are their shop!!
Love it great advice!