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.

Brian

Re: Going from a hobby to a business...need help
 

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!

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.

Brian

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,

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!

Brian

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.
http://www.directtire.com

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.

csnow...EXCELLENT POINTS!
 

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!

Brian

Larry bibleAnd 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.

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!

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.

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!

Brian

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.

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.

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.

Sounds like a fun business

afmcorp...your input isn't negative just realistic
 

My entire family are entrepreneurs. Thoroughly researching and putting together a solid business plan is simply good business.

All business have their own set of unique "issues" that may or may not make the business attractive. If it turns out that in order to provide the level of service that I have described the venture becomes prohibitively expensive than the project will either have to be scaled back or dumped entirely.

There are alot of uncertainties but each of the issues you desribe are easily quantified from the start.

Issues such as finding the "right" location and hiring the "right" people are not so easy to quantify and therfore present much more of a risk.

Thanks again for the input....

Brian

My comments about knowing the business is related more to how a shop is run, than knowing every technical detail. What raised the flag with me was that you did not seem to know the pros and cons of paying the techs commission or a salary.

I meant no disrespect or anything like that. My fear would be that if you had not been around a shop and understood the techs issues AND the customers issues and have experience handling both, my fear was your getting "eaten alive."

I think you have some great thoughts and since you're willing to ask and discuss, will get it sorted out. I am envious. This is something that I would like to do and have actually considered it.

If I were in a better location for such a venture I might pursue it. The problem for me is that I want my cake and be able to eat it too. I really enjoy living in the boondocks, but it would be somewhere between impossible and extremely difficult to pull off something like this where people make very little money.

Keep up the good thoughts.

Have a great day,

Larry...You are very helpful
 

I did not take your comments as disrespectful at all. I appreciate you taking the time to respond.

I understand the pro's and cons of the different compensation plans but just wasn't sure if one was more "acceptable" than the other. This is the case where I know what I have seen in the past but I am always looking for a better way :)

Part of this venture is really getting to understand the business. You guys are a great asset in that respect. Anytime I am even slightly out of my element I like to get as much information as possible. This will easily be a $1M deal and I want to make absolutely sure that it is realistic. If executed correctly I think that the shop could be a real success.

Thanks again guys!
Brian

i'm sorry i hit the wrong tab. i didn't mean to send.

i don't mean this to be negative but... all the responses to your inquiry dealt with only the customer aspect. frankly IMHO "if you build it they will come" is a fair statement. the business as you've described is wonderful. i know i would prefer walking in to a dealer like this one.

there is so much to consider. the real key as i see it is "DEBT". there can be so many surprises on any given day that while you think you have enough cash that day comes along and whappp! something major and your empty.

think about your building (place of business). i don't know where you are but you wouldn't put in skid row or an economically challenged area right. so you know you will need an up scale location. remember that 250k building i mentioned. well i know places that the dirt costs that much. the building you speak of won't be a pole barn either. the mechanical for this building, shop air supply, sprinklers, potable water, sewer & backflow prevention. OUCH!!!

one other word of advice is buy more dirt than you think you'll need. remember you may want to expand. if you're land locked you'll be facing a move.

well that's enough sour puss. i wish you all the best of luck. if you try hard you'll succeed.

craig

After you have a million in the ground and a half million in equpment and do all those things one should to one's employees (including health insurance for a family) you will be considered a thief by better than half the people on this board when you charge what it takes to support such a concept, probably including yourself.

I'd pick a different trade! In a few years no one with money will be paying to have their car repaired and the ones without money sure don't care about mahogany.

I have had my car serviced at three separate high-end "European" service and repair facilities, and all three of the places are leased by the owner. They do not own the land or the building.

I suppose in the long run it would be better to buy the land and the building, but I can see how it could be prohibitively expensive starting out.

I suggest that you take a look at the shop that the owners of this website own called MB Autowerks. I visited this shop when I was on a buiness trip to Atlanta, and I think it is one of the nicest, thoughtfully-laid-out independent shops I have ever visited. There is a link to the shop on the homepage.

The shop floor itself is huge, the walls are painted white, it is bright and airy. There is a glass partition separating the customer waiting area from the shop so that customers can look in and see the work being performed.

There are refreshments available, e.g. water, coffee, etc. There is a waiting area with sofa's, chairs, a coffee table, end tables, etc., and a TV.

They also have cubicles so that a business person can get some work done, make phone calls, hook up the lap top, etc.

Regarding pay, I have noticed that the independent shops that I've visited pay their employees either by the hour or a flat salary per month.

Last, the mechanic that I frequented that fixed my Japanese / American cars injured his back on the job and decided to sell his business because he could no longer do the work. He ended up moving to Las Vegas and opening a used car lot.

I believe he sold his business for around $150,000. Of course, the buyer took over the lease of the building and the name of the building. I suppose the buyer also inherited the hoists and other "fixed equipment" in the shop, e.g. lights, air compressors (anchored into the ground with hoses snaked overhead), etc. I'm sure the new buyer had to provide some tools of his own.

I also believe the mechanics that are hired are responsible for their own tools.

As a business consultant, helping businesses to stay and grow in business and helping new businesses to start, I allow myself to give you a few hints.
Why do you want to start a business: To satisfy customers?? To show your competence and good work?? Because you like cars?? To fill a local need?? NO.**** TO MAKE MONEY. If you have any other reason but to generate profits, you must be either very rich to absorb the looses or simply a masochist.
First thing you need to do: Set up your profit objectives (be realistic). Then, from this number, work your way up/down a P&L.
How much sales you need to achieve, profit margin, and meet the expected (and unexpected) expenses, Be very pessimistic on sales and profits, and do not forget a single expense. (worst case scenario). You should make several passes with your P&L looking at different scenarios.
Then you ask yourself what is required in terms of capital investment to meet the profit objectives. (that's where the wood/leather come into play). How will you recruit your customers? What are your fixed expenses vs. variable expenses (which will give you the minimum sales/profit necessary to stay afloat). what is your fall back position (if sales/profits are not there and expenses are higher than anticipated)
Starting a business is a numbers game and should never be for the fulfillment of a dream (That OK if the numbers agree)
Most people starting new businesses spend a lot of time, efforts and thoughts on what they will do (wood-leather, loaners, appearance, service level etc.) and not enough time on sales planning, sales programs, profits generation, expenses control and all aspects of business management. You are not in business to repair cars. You must be in business to make profits. Fixing cars is the ''HOW'', as are employees, facility, tools and equipment.
I could write a book about ''the wrong way to plan for a new business'' and an other book reporting failures I have seen because of not focusing on the key elements (sales, margin, expenses) These elements must be the BASIC of any business plan.
jackD

suginami/jackd
 

You guys are thinking exactly what I am. Initially, I will lease the facilities unless there is a large probability of appreciation then I might have to reevaluate.

Jackd....What you said is the bottom line truth. A business is in business to make money. THAT is my area of expertise. I have an undergraduate degree in Finance from a top three school and a Master's degree in Finace/capital management. I know the P&L like the back of my hand and can put togther a realistic business plan that can be sold to a group of investors or a bank. I know the in's and outs of running a small business and although I may not be an expert at running a shop I believe I could be within the first year.

I believe that the employees should be accountable for their work. If it is shoddy, I will know because customers will complain. I plan to send out customer survey cards and personally contact each customer that rates our service less than "excellent". I believe that customer feedback loop is broken in most companies and that by paying attention to the customer you can learn a great deal about your own operation.

I have got a meeting with a shop owner in Houston who has implemented this model at his own place (domestic auto's) and has done extremely well. I hope to glean a few valuable insights on my visit.

I have alot of confidence in this approach and I appreciate all the input that you guys are giving.

Keep the good ideas coming!

Thanks guys,
Brian

I'm not a finacial genious or I wouldn't have invested as much money in auto repair. But I have found over time that buying ones building is much cheaper and in the long run about all one will take from the business.

We paid off our first building 13 years ago and are most of the way through our second. We rent the first to another shop who has wanted to buy but the cost of the mortage land taxes etc keep him paying rent. if he had bought 13 years ago he would have something now. As it stands his business is only a job.

As Steve Brotherton so clearly stated, you ain’t gonna get rich in this business – and he ought to know, he’s been doing it a while. So if your main reason for getting into this field is to make money, then perhaps you should search for a more lucrative investment vehicle.
According to Malcolm Forbes – a guy who knows a thing or two about making money -- "The biggest mistake people make in life is not trying to make a living at doing what they most enjoy."

Obviously, if the numbers don’t work then don’t do it.
Here’s a quick quiz. Which of the following businesses would you choose?

A) A septic tank pumping business. You drive the truck, pump the tanks, and you clear $200K per year profit.
B) 95s420’s aforementioned import auto facility – lets say he clears $100K per year.

For my money, it’s going to be option “B”. Am I a sucker because I’m giving up $100K per year? Maybe! But I’d be doing what I wanted to do, and could still provide a comfortable living for me and my family.

And keep in mind that if you need to do a high volume to make the margins acceptable, then you may want to reconsider. Because if you plan to spend 15 minutes with each customer “educating” them, and your shop has 40 customers per day, that’s 10 hours each day spent “hand-holding”. It’s good customer service, but is it realistic?

Just my 2 cents. (Arguably worth that!)

Jeff Pierce

I think I see where you're coming from with your concept. I'd like to offer my own take on the "theme", if you will.

We have two fairly upscale shops on the same street. One is an MB specialist, the other a Volvo specialist. The MB shop looks very expensive and is of very nice brick construction. The Volvo shop has clapboard siding and looks vaguely like what one might expect to find in Sweden.

The MB shop gives off a very stuffy, rich-guy-smoking-a-cigar vibe. It's very plush, to be certain. They have certified techs and have a good reputation. The atmosphere says "we're here to make you feel important."

The Volvo shop is neat and clean, the techs all wear coveralls. The lobby is nothing to get excited about - asphalt tile floor, decent chairs, and a smattering of Volvo-related art work. They also have a window looking out into the shop area. The whole atmosphere says "we're here to fix cars".

Which one is always packed? The Volvo shop.

My point? People will not percieve the "perks" as having value. They'll figure that if you didn't have to pay for all that leather and mahogany, you might not have to charge them $3,000 for a valve job. Rich people - and I get the impression that's who you're trying to attract - are often more attracted to a shop they percieve as "all business" because they know how expensive the leather and mahogany are. There aren't enough of those people who need to feel important to keep you in business. Besides, those tend to be the same people who will argue over prices for everything, blame you for stuff that isn't your fault, and generally annoy the crap out of you.

Certainly getting a lot of 'realistic' feedback, aren't you...

I'm not so certain the auto biz is really as bad as some folks say, though I'm sure regional factors vary dramatically.

In my region, demand is now way up, because supply is way down.

Pretty much every repair/filling station has now been converted into a 'quickie-mart'. Fewer hassles for their absentee owners, and good margins. 'Highest and best use' has commercial land getting converted into housing developments. Remaining commercial land is being turned into 'big box' stores and shopping malls. Zoning boards frown on repair shops as a use. Many established shops have closed simply because they got an offer on their land that they could not refuse.
The real estate cost barriers have raised the bar for those interested in entering the business.

At the same time, the number of people becoming auto mechanics has fallen dramatically, just like for most fields that require getting one's hands dirty.

So this sounds bad, right? But those shops that have survived are really booked, with seemingly little regard to 'quality of service' factors. Competition is not much of an incentive to provide good service in the current market. Folks still need their cars repaired. There are more people, and more cars per capita than ever. If one can overcome these high 'costs of entry' factors and build it, they will come, because supply is low, and demand is very high.

Anyways, that is the situation in my region.
Better than the software biz right now...

Your points are all well received
 

I should clarify that the entire "theme" of this business is not wood and leather. In fact, this is simply an additional modest investment upfront to improve the image of the shop. I intend to charge only on the high end of what other independents in the area charge and still nowhere near that of the dealer.

If you are unsure as to whether or not the "upscale" look will sell just take a look at any of the dealers. They have tons of non-warranty business because many owners are not willing to go to a greasy smoke filled shop that is inconvenient and does not cater to their needs.

My idea is to bridge the dealer and independent experience and charge somewhere in the middle. I can tell you that the % of women that take their vehicles to the dealer versus the independent is much much higher. Why is this?

I 100% agree that you can easily go overboard with customer service and "glitz". I am more interested in a clean and comfortable environment than marble bathrooms and oriental rugs. Tile floors, leather couches and a quiet waiting area are a minor invenstment that can only help.

We must remember that most everyone on this board is far more technically atune than your average joe. To that extent extra perks might not be worth much. However, to the executive that values conveniece and courtesy and is still pleased with the quality of the work he will be hooked.

Worst case, If the plan didnt work out what have you lost? You lose the glitz and concentrate on hiring the best techs possible and you are no worse off than before.

I appreciate the pointers because they help me anticipate questions relating to the business plan and allow me to address them early.

as always, kep the great input coming.


Brian

As I see it the monthly costs for repairing and maintaining an auto at a professional shop are approaching the monthly lease costs for medium priced luxury cars.

I'll give you todays example: An associate from the BMW Tech Group had a customer with a 95 540i in Orlando with no reverse gear. He has the car at the dealer and they want $7500 for a rebuilt unit ready to drive. My friend also would install a BMW rebuilt but list price is $4500. My friend tells his customer to call us as he knows that we rebuild transmissions.

The customer calls and the reverse failure in a 5HP30 is a pattern failure. A plastic check ball is ground down from whirling in a rough cast aluminum chamber. The car is trucked 100miles and we just finished with it. Seven hours labor- $476, $200 in special BMW fluid, $45 for the filter. The ball is part of a kit of balls and springs, who knows what it cost.

The point is that most shops won't touch this type of work. If I had replaced the trans for $4500 plus $400 labor I would have made more on my 20% on the parts than the whole ticket this time. And I would have saved him over 2 grand from the dealer price. He may wind up there anyway. When the ball blows through the check hole reverse and forward are applied up til second gear. He drove it through that point one time and then towed it and it has 140k on it, but it has worked great in the 30+ miles I have driven it.

Over all you have to be pretty good and pretty lucky to make a living doing it my way. More often the wise choice would be the dealer rebuild.

If this logic takes you to the dealer rebuild decision and if that kind of logic dominates your business choice you will be at that monthy cost point I was talking about to your customers. If you choose to fix, then you will really need the techs and really need to be equipted.

Brian,

At the risk of sounding sexist, I think the reason a disproportionate number of women take their cars to the dealer is that they have no idea about any aspect of their cars. (To be fair to women, I think most men are the same way.)
And they're convinced that the dealer "really knows" the car --after all they sold it to them!
So I think it requires more than a just a clean facility -- you have to educate them to the reality that they're being ripped off at the dealership.

And for the record, I think your idea is a sound one. You clearly have the business savvy to figure out if it's viable. Just don't overestimate your ability to draw customers -- no product ever "sells itself". And when it comes to getting and holding onto good techs: it's tough to match the pay rate of a dealership when you're undercutting their labor rate by $20/hour.

In case you haven't figured it out -- I've thought long and hard about a very similar concept. I hope you can pull it off. And I'd love to "pick your brain" if you do.

Good luck.

Jeff Pierce

Why have I used the same Garage for over 20 Years.
 

This thread set me thinking.

I have had a string of MB's serviced and maintained by the same people for over 20 years now.

The reasons are fairly simple.

1/ They do the work correctly, first time, at a fair price.

2/ They do not mind if I go over to talk to the mechanic who did the work.

3/ The always "Listen" to the customer when he has a problem. They do not assume they know it all.
Mind you they do know an amazing amount.

4/ They give me feed back about the condition of cars I own and advice when I think of changing.

5/ They are "Nice" people who have no pretentions and can relate to their customers.

6/ Being a prudent person with money, that's how i afford MB's, I appreciate that they do not spend a lot of money on the "Glitz" of a smart waiting area Etc. Etc.
It's clean, has chairs, some magazines and a free coffee machine
That's all anyone needs and I would be helping to pay for it if they switched to leather & walnut.

By the way, they started from scratch, having worked for the local MB Dealer.
They now have a very nice business with many loyal regular customers.

Regards

Mike




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