Hey everyone! I am just creating this post to get feedback and opinions. I used to be in the US Marines stationed at Camp Pendleton in Southern California, and I am a car junkie. Anyways, Camp Pendleton has an Auto Shop on base where you pay a certain rate per hour to work on your car. Some of the bays have lifts, some don’t. Also the price per hour includes all needed tool, air tools, specialty tools and pretty much anything you can think of. They also have a paint booth you can use as well. I think it was like 5 or 10 dollars per hour. I was actually talking with the president of my current company who by the way was a former Marine and knows about these on base auto shops, and I gave him the idea to open an auto shop similar to the ones on base. Basically a per hour place to work on your car DIY shop. I told him that it could bring in a lot of business and it gives people like you and me to work on our rides ie: motor swaps, exhaust, suspension, body work. The reality is that a lot of people have the skills to do most of the work, but either don’t have all of the RIGHT tools or place to do it. I think this would be a great opportunity and wanted to get the feedback of fellow HT members. This DIY Auto Shop would be located in Orange County. Maybe even a DYNO could be an option. All feedback is encouraged and appreciated.

 

Not trying to discourage you but here are things to consider:

1.) price of the lease
2.) price of insurance
3.) cost of tools
4.) all the permits you will need

many of this stuff might be subsidized by the militaty base on a break even or most likely at a loss

To make a business like this profitable might be hard.

You would have to keep those bays full, every day.
probably charge a bay fee, tool fees, hazardous disposal fees, maybe charge a higher rate on the weekends

I'm talking out my *** on this one... but I think the overhead costs would be very high, and your bay usage would not be very consistent. I would think that the fees would end up around $40/hour to turn a profit, and then charge some additional to help cover slow periods

Think about this, most shops charge around $75/hour for labor, and they charge a premuim for parts. If they pay out their mechanics at 10% of parts and 35-50% labor... 30-40% is to overheard and profit. (which is where I get the $40/hour)
They also do other things to make money that a rent-a-bay shop would not be able to take advantage of (ie: smogs and headlamp adjustments etc)

I'm not willing or able to pay $40/hour to use a shop & tool.. $5 to $10 yes... but not $40.




Modified by Crazydave at 4:03 PM 3/15/2007

 

Pulling some more numbers out of my ***:

Lets say a lease runs $10,000 a month .

Thats $120,000 a year.

Lets say you are open 12 hours/day every day of year.

You need to make $27.39/hour every hour you are open to pay the lease alone!


At half of that lease rate of $5,000 a month you would need to charge $13.70/hour, and have your bays full every hour of every day.


None of the stuff includes licences, staff, other fixed and variable costs, or most importantly tools and equipment.


And I would have to imagine that liability insurance would be out of the park


realistically, it's about $1 per square foot. A small shop 2- bays would be about $1000/mo. which means you need to make $2.73 per hour every hour you're open, just to pay the lease.

Now pay some punk kid minimum wage of $7.50 (plus all the other hidden costs of employee divide it by the two bays that you have and you end up passing on the costs of the employee to the two bays at $7.50/hour/

Now you are charging $10.23/hour for each bay. This again assumes that you can fill both bays 100% of the time you are open.

Just to lease the place and staff it is going to cost you the upper end of what people are probably willing to pay. And you haven't taken into account liabilty insurance, Tools, Equipement, permits, fees, and PROFIT.

Lets say you want to make a tiny wage of $30,000 a year for running this place.

That alone means you have to add $3.42 for each bay (again 100% usage)

So with no tools, no insurance, no equipment, no permits, etc.. you are looking at a charge of $13.65/hour assuming you can fill these bays 100% of the time

Now it's time to fill this place with tools. (Luckily these can last years)

If you spend only $100,000 on tools and equipment, and spread that cost over 5 years into 2 bays.... that adds $2.28/hour

now your rate to charge people is 15.93/hour.

You haven't yet paid your accountant, your insurance man, the City, the State.

I don't know what those fees will be, but I bet the insurance premiums will be high.


Still 15.93/ hour is pretty expensive, and you haven't paid for everything. You still have to pay for electricty too, and you're only making $30,000 year, you have no reserves, no way to pay for broken down equipement. You haven't paid your alarm company to protect your investment.

And the reality is you won't fill both bays 12 hours a day 365 days a year.

So lets assume you can fill on average 1 bay 12 hours a day 365 days year.
Your rate has just double to 31.86/ hour...

which is above what I am willing to pay




Modified by Crazydave at 5:22 PM 3/15/2007

 

I appreciate your feedback...im not worried about the numbers right now. Let my boss do that. He is a very successful business man and im sure he can figure that out. I just wanted to throw the idea out there to get feedback...

 

$5 to $10/ hour I might be willing to pay to work in a clean professional shop.

But not over $20/hour.

As a professional mechanic (which I am not) I would think that it would be worth up to $45/hour. But as as shade tree mechanic I am not willing to pay that much.

 

I like the idea...however dave has made some excellent points.

 

what you can do to attract customers to your shop is offer them parts delivery service from an autoparts store, at a reduced price to retail

Many shops charge a 100% markup on parts.
Meaning that you can buy these parts from the autoparts store and then tack on 30% to your shop renters. They will still see a discount of 20% on autoparts, and you will make money on the parts too!

 

wow crazydave...chock full of ideas!

 

Only down side is that dealers (honda, ford, etc) will only give shops a 10% discount on parts.