Quote:
Originally Posted by rice_classic
I will match your rough style with a very rough style of my own!
Well I think $10k/mo is a non-starter for this type of enterprise period. I'm looking at a facility where I could get 5 bays for ~2k/mo. Liability and other various business insurances for adequate coverage would probably be the same amount/mo as per commented on by the owner of a shop like this "Insurance is almost as much as the rent, if not the same" and his shop isn't exactly on Rodeo Drive.
Rent + insurances = $4k/mo 48k/year
Tool replacement and repair most likely $10k, maybe even less depending on what get's stolen.
Rental @ 20/hr is way to low.
For market rates in this area it's be $40/hr.. maybe $35 but since this would not be a "bring your own tool" type of shop it starts at $40. Special tools, welder, tire machine, assistance form a Pro... all extra. Estimated Average Revenue per billable hour would be ~$50. You take all profits and divide by hours billed. That way your ARPU incorporates upsell items like assisted service, special tool rental, vending machine sales, product sales, etc etc. ARPU may actually be higher than $50.
Assume 5 bays at 25% occupancy with 10hrs open per day @ 7 days a week.
350 hrs/week -75% = 87.5hr * $50 = $4375/week = 227,500/year.
227,500 -
rent/ins 48,000-
loss/repair 10,000-
2 employees 90,000-
Misc and Tax 15,000
Initial tax burden will be low due to initial capex and using a 10 year linear depreciation of the expensive bits.
$64,500. Not rad, but that's at 25% operational efficiency and it doesn't take into account the money from the full-service bay at all which could be another $50k/year all on it's own.
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I can not for one second imagine enough people willing to pay $50 an hour to work on their own car to even run at 25%. Also not sure where you are going to buy or lease a large enough property for $2000 a month but that could be totally a regional thing. A full service shop can get away with tight bays since there are usually only so many techs but something like this is going to require extra space so everybody isn't tripping over each other.
Also the costs I stated are Canadian so they tend to run higher anyway (and no you can not use the exchange rate to convert to U.S. prices since it would all be in CDN $s).
I just don't see it as being a feasible business model even with some full service and sales involved as both of these also raise your overhead.