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Old 08-12-2003, 08:47 AM
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Join Date: Dec 2002
Posts: 154
Going from a hobby to a business...need help

Hey guys,

This is by far the most knowledgeable group of enthusiasts and technician's that I have come across to date on any forum.

Because so many of you are professional technicains or former technicians I thought that this would be a great place to get your opinion on a new business I would like to start.

The concept is nothing new...atleast not on the surface.

I would like to open a high end European auto repair facility. Currently, we have no such facilities in the affluent area of town and really only three or so in the central texas area.

I believe that with a very clean shop and upscale customer greeting/waiting area there is a good chance that the shop would do very well. I would also like to offer $10 rental vehicles becuase I see the lack of cheap alternate transportation to be a major deterent to independent shops. The image I have in mind for this shop is very upscale, Mahogany and leather. I want the shop to be comfortable and inviting for men as well as women. Most of all, I want to remove the intimdation factor and make the environment like this board, problem solving in with the customers interest always at the forefront.

However, before I go off and invest in this idea I would like to pull together a business plan that I could pitch to other interested investors.

My questions for you guys are:

What would a Master technician expect to make per book hour and actual hour at an independent shop?

Are you guys paid strictly by book hour or by book and actual time worked?

Is it customary for the employer to offer life/health/401K (I plan to do so)

What other things would you like to see your employer do that would make your time at work happier and more productive?

What type of tools would the tesh be expected to have vs. the employer.

Roughly, how much should I set aside for "tooling up" the shop? (aside form lifts and such)

I truly believe that the technicians will make you or break you and my biggest worry is not attracting business but attracting and retaining talented employees.

Any input you guys could give would be worth its weight in gold!!

Thanks so much for all your help guys.

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Old 08-12-2003, 09:07 AM
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Re: Going from a hobby to a business...need help

Originally posted by 95s420
Hey guys,

I believe that with a very clean shop and upscale customer greeting/waiting area there is a good chance that the shop would do very well.

I find it typical that you left out " do good work", but a typical MB owner would'nt know (care about) a rip off from a good diagnosis/repair, as long as they dont get dirty and their butts are comfy. har!har!
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Old 08-12-2003, 09:12 AM
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Join Date: Dec 2002
Posts: 154
Maybe I should have spelled it out but I

believe that by hiring good people and keeping them happy you will develop a reputation for doing "good work". Most everyone knows when they are being ripped off....sooner or later anyways. Good, reputable and honest work is the underpinning of a good shop and goes without saying in my opinion.

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Old 08-12-2003, 10:13 AM
Posts: n/a
I believe you are onto something and I would offer a few thoughts.

Check out MB Autowerks in the Home page of this site. This is exactly what these guys have done. The difference between them and what appears to be where you are coming from is that the person running the service side of MB Autowerks has lots of shop experience and MB experience. It sounds as if you do not.

Any business or company has a personality just like people have personalities. The personality of a shop will come primarily from the owner or proprieter. You are onto the fact that you need good people, but they will typically do the work in the way that is prescribed to them. It will be up to you to provide quality control. From this quality control, these people will learn what is expected of them or what they can get by with.

Quite frankly if you're not really familiar technically with auto service, I believe it will be difficult to set up a culture that will provide what you're customers are looking for. If you could have someone providing such expertise for you it would drastically increase your chance for success IMHO.

There are many elements that you will need to learn, and trial and error with your customers will be a risky way to learn them. It's always your last chance when you're making a first impression and in the business you are proposing, you may very well get only one chance with each customer.

I hope that I'm not too discouraging, I don't mean to be. I do, however, believe that you will need a good facility, but the quality of work and customer satisfaction is above all else. If you can prove to your clientele that they will get good work done at a fair price, most of them would be quite happy to sit on a five gallon bucket eating peanuts while waiting on their car. No amount of Mahogany and leather will make up for incompetent or overpriced work.

As far as how you pay your techs, there are generally two schools of thought: 1) pay them by the hour and price the work according to the flat rate manuals. 2) pay them commission based on the flat rate manuals.

Method 1 will typically provide a happier work force for a longer amount of time, but you will be carrying the risk of comeback work etc.

Method 2 will often lead to decension and often times to shortcut, shoddy work. If you are an experienced tech then you know how to spot the shortcuts and can prevent them. If you're not, the guys could get out of control. In either case sooner or later there will be those who will be upset.

My $0.02,
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Old 08-12-2003, 10:28 AM
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Join Date: Dec 2002
Posts: 154
Thanks for your input Larry! You have always

been very informative and I appreciate your thoughts. I also agree 100% with your critique. I should elaborate a little more though..

I do have quite a bit of "OTJ training". I worked as a technician in a domestic repair facility in college and worked as a parts monkey throughout high school. I even did a stint teaching auto tech for a vocational school some years back. I dont mean to imply that I am of the calibur of a formally trained tech but I can hold my own. FWIW, I did a Evap in a 740il last year unassisted with no repair maual and still beat the book . I know enough to know when I don't know what I am doing and to ask for help. Ideally, I hope to find a trustworthy shop foreman that shares my same vision of customer care.

My hope is that by attracting good employees and treating them fairly that they in turn will take care of the customer and you know the rest of the story...

Just out of curiosity, how many book hours could a "small" shop with three or four techs hope to do in a week? Just wondering if there are any good "rule of thumbs" here?

Thanks again for your time!

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Old 08-12-2003, 10:31 AM
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Join Date: May 2002
Location: Mass
Posts: 1,127
Good luck, though I would have to say that some of the most popular shops in my area have zero fluff. In contrast, I know a 'mahogany & leather' place that carefully screwed over (meaning deliberate mechanical fraud) customers for about 5 years before their reputation caught up with them. Almost got me, in fact...

I guess that I'm not sure the fancy facade is the most sound portion of your business plan. You will have to carry those upfront costs for some time. Very common for new businesses to fail by getting overextended at startup.

I like the loaner car part. This is a huge draw in my area. Invest in that, then folks will not need to spend much time in the waiting room. One guy I met who runs a repair shop has an arrangement with a used car dealer, such that every loaner car is actually for sale, and getting a test drive! Very clever...

If you want to study a very successful small auto business that made it big on reputation, customer service, and those key loaner cars, have a look at Direct Tire & Auto in the suburban Boston area. They now have 4 locations.

They are not the cheapest, but they have managed to steal substantial business from the big franchises even though they essentially did a 'full frontal assault' by doing mostly 'commodity' services (slogan: "We will Tire, Brake, Shock, and Exhaust you!").
They even opened their new locations proximate to the chains, yet they are always booked solid.
Anyways, not precisely your niche, but an interesting case study.

Generally, I would say that folks have a very low level of trust when it come to repair shops. They often rank highest among complaints to consumer agencies. Friends consult me all the time to validate estimates or inspect repairs that have been done, usually because they think they have been, or are about to get screwed. While I have actually seen many very bad operators, most of the time folks think they are getting screwed simply because they do not understand what is involved, and know full well that their ignorance COULD be capitalized upon.

For this reason, I believe that what most shops do very poorly is to educate (or at least attempt to educate) consumers about what is being done on their cars. This means pulling them out of the waiting room and into the bay to see it for themselves, always showing them the worn parts after the fact, and just generally treating them as intelligent (though perhaps ignorant) beings.

Even if they do not really understand it all, this exercise will build trust, and a viable business for the long term.

JMHO. Good luck.
1986 300E 5-Speed 240k mi.
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Old 08-12-2003, 10:41 AM
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Posts: 154

You hit the nail on the head EXACTLY....

What you described was "educating your customer". I agree 100% that most customers may not fully grasp the technical aspect of the repair but they will feel much more at ease with the shop and that is an excellent way to build trust....and it costs almost nothing!

This philosophy is exactly what I would like to bring to the business. I see that is really lacking...atleast where I am from.

With regards to the rental car side...thanks for the input. I will investigate that avenue as well.

I do not for a minute believe that a "wood and leather" waiting room will ensure the success of any business. But...lets not forget that an ever growing populace of luxury car drivers are women and that they value these attributes highly. If you doubt that simply look at the trend toward "Exxon Supermart" type gas stations. They too know that clean and well lit means more business.

I believe it to be a small investment toward a more professional and hopefully reputable experience for the customer.

Thanks again for all the help!

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Old 08-12-2003, 11:50 AM
Posts: n/a
Larry bible
Any business or company has a personality just like people have personalities. The personality of a shop will come primarily from the owner or proprieter.
And some of them are awful personalities.
Have you read the book Gung Ho? Great book. Great message.
Briefly, for the employees, set worthy goals and values, work together in an atmosphere of open information- no secrets, and cheer each other on. I think a perfect business would make the customers part of this process.
There are so many auto businesses out there that have screwed over so many customers that it will take years to build the trust that you will need. Some people have done it though. You can too. Just remember to keep good ethics at the top of your value's list, even when the electric and rent bills are overdue. Good Luck! I think you have a worthy idea.
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Old 08-12-2003, 01:20 PM
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Join Date: Dec 2002
Location: Grand Rapids, MI
Posts: 766
A consumer's perspective:
The shop that does my MB is clean but not at all posh; its advantage is an owner who's a very knowledgeable and experienced tech himself, very straightforward, honest and good. They flat-rate by the book on most things, but do make it right if they goof, and will accommodate an owner's reasonable preferences. Example--My 560SL burned oil after the first change they did, which was also the first I did for the then-new-to-me car; they'd used 10W30 (see manual for recommendations). I switched it over myself to 20-50 high-mileage-formula Valvoline. At the next change, I asked for the same oil I was using; they said "no problem", ordered it and did it.
My preferences--I don't need walnut and leather, but like a clean, well-kept shop with comfortable furniture that's not worn out. If you're choosing between upscale looks and a usable quiet room for me to do work while I wait, please give me the latter; a separate "quiet waiting room" is extremely helpful, and access to power so I can use my laptop while waiting is too. Coffee's always nice, and reasonably priced access to a vehicle is really helpful; I'll pay $15-20 if I need one and say "thank you".

The best shop I've ever worked with: The local Lincoln-Mercury dealer. A big shop, but I usually got the same guy on writeup, who soon knew my name and remembered things about my car. He knew enough to be able to give quick, straightforward answers such as, "The brakes shouldn't be pulsating at 12,000 miles. You've got a sticky caliper, and it's a warranty issue. Leave it with us, we'll give you a loaner, and it'll be ready by 5." This after I'd paid a GM dealer for two rotor turnings at 10,000-mile intervals on a GM car, also still under warranty.

What I ultimately need from you as a mechanic is what you need from me as a physician: Respect, competence, integrity, and the knowledge we can trust each other. Give me that and you've got my business.

Best of luck--sounds to me like you're on the right track!
Craig Bethune

'97 SL500, 40th anniversary edition

'04 Olds Bravada (SWMBO's)
'06 Lexus ES330
'89 560SL (sold)

SL--Anything else is just a Mercedes.
(Kudos to whoever said it first)
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Old 08-12-2003, 01:20 PM
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Larry Bible said it all.

Some of us see it all of the time, especially in technical positions.

Let a non-technical person interview someone for a "tech" position and you'll end up with someone who is likely 2nd/3rd tier.

In order to own a technically oriented business you have to know the tech side of that business.

Good luck.
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Old 08-12-2003, 01:40 PM
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Thanks for all the great input guys..

I agree that the owner should be technically competent....that I am. But I disagree that the owner has to be a Master technician personally.

I am currently in the high tech sector and can tell you that you NEVER want an engineer running your company. I see this as no different. By saying that the owner must also be a technician almost also implies little or no trust on the part of the employer toward his/her people. It's the old debate over whether employees should be trusted to do the right thing or they need to be hand held.

What I will agree on though is that hiring the right people is crucial and that mistakes will be made in the process. However, the true character of a business is not necessarily if they make a mistake here and there but rather if they do the right thing when that mistake is made. Customers are generally quite understanding if you are willing to make things right and you dont make a habit out of making mistakes.

That also means holding your people accountable for doing a good job and praising/rewarding them when they do. In my book it's pretty straightforward. Many times as managers we are required to higher people into jobs that we ourselves could not do 100%. That is where the trust part comes in. It is usually pretty obvious when people aren't working out. Excessive customer complaints will come to light very quickly.

The bottom line is that this business should focus on the overall satisfaction of the customer. That is why this is different. Many shops are technically competent and do a good job but only a few can do a good job and make the customers visit as stress free and convenient as possible. Do you know that right now if I wanted to have one of the indies here work on my vehicle I would either have to get a ride or rent a $30/car? In my book that just isn't an option.

Thanks again for all the construtive feedback guys. I really appreciate your input!

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Old 08-12-2003, 01:51 PM
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Someone else in this forum wrote something to the effect of, "You own a MB either to show off or because you appreciate the fine machinery and are proud to own the same."
Brian, from the things that you have writen I can see you have pride. Wood and leather will give more pride than a card table and chair. Go for it. Create something of quality that you, your associates and your family can be proud of. If done properly, the leather and wood will be on a par with the organization.
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Old 08-12-2003, 02:26 PM
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bmunse...Thanks for the encouragement..

I have a very strong vision of what I would like this business to be and I appreciate your enthusiasm.

I began work on the business plan this week and hope to be able to pitch the idea to some investors soon.

I'll let you guys know how it goes.
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Old 08-12-2003, 02:27 PM
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now for the negative.

do you know how much a 401k is to fund. health care remember you'll be paying for the 180lb man just like the 300lb man at 3 times the rate as the 180.

while your techs are giving your customers top class service they won't be working on many cars per day which means your profits go down ( or you can say income from that job) so that means you'll have to have more techs. more techs mean more payroll

someone mentioned being a doctor. you can't function your office profitably if you see just 6 people per hour. what is the number 20 0r 30 per hour?

tooling well you will have to have every available tool known to mankind...because if you need it you can't rely on a tech to have those 600.00$ spring compressor. so what's the cost who knows. it has taken me almost 13 years to own the tools needed for my work. i supply all the hand and power tools and measuring tools. that way i know the quality of the equipment is good and up to my standards.

and i believe you want to have enough solvent cash to fund the operation for at least 1 year maybe more. remember you'll probably have to carry the business for 6 months to a year until you get enough clients to turn a true profit.

now the new building. say you can bring it in 250k you'll need to have at least 50k just to qualify for just the building. especially if the bank knows you're a startup. if you don't have anybody on your team that has direct experience with this venture again you'll take a hit from the bank.
Thanks Much!

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Old 08-12-2003, 02:35 PM
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Sounds like a fun business
Make it a great day!
Jay E.

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