Self Service Auto Repair Shop: thoughts?

[Justin.b]

Originally Posted by WhiteFRS69

places like this may be better near cities and area with lower income, hard working people trying to save a few bucks but dont have the tools to do the things they want to do

The 'can barely keep an old car on the road' crowd is probably not the best target customer pool if you're going to start a business.

It's ok to focus on that group if you're able to sell them more expensive services as they move up. If you open this in a low-income area, those people are going to move away the first chance they get.

-Justin

[Tcoat]

Originally Posted by Justin.b

If you open this in a low-income area, those people are going to move away the first chance they get.

-Justin

With your tools and supplies.

[Justin.b]

Originally Posted by Tcoat

With your tools and supplies.

I didn't want to be the one to say it, but that is true. This is also the crowd most likely to shrink your inventory. Also, the most likely demographic to stage a slip and fall or other injury to bring a lawsuit. After a couple of those, the income from letting customers on the shop floor won't even offset the liability insurance.

-Justin

[rice_classic]

"If it was easy, everyone would be doing it."

But I found the solution.. No seriously, I really did!

The answer is... LIVE THERE, because it's your house! Just change the business model.. Don't open it to strangers, instead rent the bays out to friends and fellow enthusiasts. Make it a "club". OMG I want this house!

26 Garage bay house: https://olympic.craigslist.org/reb/5255042312.html

[Alex0827a]

I'd had a similar idea a while back. My thought was to have a full service shop with about 8 bays and to have 1 always available for DIY, use the rest for regular service stuff. Then later in the day (noon-ish to around 10) on weekends have a couple more reserved for DIY (and I'm thinking labor scheduling here). Add a service that allows customers to order parts and ship to us instead of having $1000 worth of parts waiting on their porch where anyone can take them. Also have a couple meets a week, maybe the occasional model-specific one. I have an advertising idea as well that would be incredibly helpful where I am (Auto-X is 30 mins north, and some of the biggest car shows in the country are 30 mins south (Carlisle). Put the business right in the middle, and you'd have immense market exposure through simple, cheap advertising instead of having commercials.

[56186]

The insurance would cost a fortune to run a place like this. The risk of all the unlicensed people working on cars and trucks hoisted over their head. Who knows if they smoked or drank before they showed up. Sounds like a liability nightmare.

[Dave-ROR]

Originally Posted by rice_classic

I've been growingly more and more interested in this business model.

Have you visited one? Would you?

example: http://stewsgarage.com/

A lot of folks talk about how they "like to do their own repairs" so it stands to reason that cheap time in a bay with a lift with provided tools would be palpable for many especially those living in an apartment or those who just don't own a bunch tools.

What I'm seeing is the trend toward a hybrid offering:
-Self service
-Assisted service for a few bucks more (basically a mechanic advises)
-Full Service

Your thoughts?

The best way to do this is to really be a shop and offer this on the side with proper liability insurance because I don't think you'd make enough without it being a shop most of the time.


Having said that, I've helped a buddy with his car at a fab shop that does do this on the side. It's good, although I have better tools so having to bring my tools to work on his car at some random shop kinda blows. Normally I use a buddy's lift (free in exchange for all the car work I've helped him with over the past 15 years) but that's gone currently (selling the house it was at and building a new garage on his new property) so I'm back to jackstands and crap. For any work that would require a lift I would do the lift rental thing but only if I knew I could be done with it quickly so I wouldn't do a full car rebuild, engine rebuild, etc in a situation where I have to rent a lift. Minor work it's not worth my time vs jackstands, etc. So for me, if it's free rock on, but for a fee it has to be just the right job that's far easier with a lift but won't take more than a night.

[Tcoat]

OK some rough numbers (very rough I didn't get quotes):

A 10 bay facility fully equipped, with ample parking in a neighbourhood that people will come to = $10K a month lease/payment ($120K year)


Liability insurance of $20 million a year (may not be enough in the sue happy U.S.) = $10K a month ($120K a year)


Building maintenance, tool replacement and equipment repair $20K a year


Four staff (may need more) wages, benefits, comp insurance costs, employment costs = $200K a year (If using skilled techs this could double)


Utilities, grounds upkeep = $10k a year


Business fees and taxes = $20 a year


Total expenses $490K a year (This is conservative with rough numbers provided by my plant Comptroller)


Rental at $20 an hour if all booths filled for 8 hours a day for 300 days = $480K


Soooo, unless you can cut some costs you are going to lose your shirt.

[SVTSHC]

Damn I wish they had one of these near me. I work at a dealership but it's annoyingly hard to find time to work on my car while the shop is open and I live in a 26 story building with a shared garage (so no work allowed).

[rice_classic]

Originally Posted by Tcoat

OK some rough numbers (very rough I didn't get quotes):

A 10 bay facility fully equipped, with ample parking in a neighbourhood that people will come to = $10K a month lease/payment ($120K year)


Liability insurance of $20 million a year (may not be enough in the sue happy U.S.) = $10K a month ($120K a year)


Building maintenance, tool replacement and equipment repair $20K a year


Four staff (may need more) wages, benefits, comp insurance costs, employment costs = $200K a year (If using skilled techs this could double)


Utilities, grounds upkeep = $10k a year


Business fees and taxes = $20 a year


Total expenses $490K a year (This is conservative with rough numbers provided by my plant Comptroller)


Rental at $20 an hour if all booths filled for 8 hours a day for 300 days = $480K


Soooo, unless you can cut some costs you are going to lose your shirt.

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.

[Tcoat]

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.

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.

[babydriver]

https://www.facebook.com/permalink.p...78395465740603


http://www.loyalaustin.com/home.html

I think these guys run the shop just as a sort of hobby. Lift charge is $25/hr, which is not unreasonable.

The FR-S is mine.

[Tcoat]

Originally Posted by babydriver

https://www.facebook.com/permalink.p...78395465740603


http://www.loyalaustin.com/home.html

I think these guys run the shop just as a sort of hobby. Lift charge is $25/hr, which is not unreasonable.

The FR-S is mine.

Yes $25 or at a max $30 would be reasonable but let's face it if you need to work on your car at a place that rents space you likely don't have a lot of cash to throw around.

[rice_classic]

Originally Posted by Tcoat

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%.

They aren't paying $50/hr. They are paying $40/hr with a lift or $30 with no lift. The $50/hr is ARPU (average revenue per unit). But the median income in this area is quite high so those prices are perfectly reasonable for this area. The parking garages that charge $60-100 per car to park at the Seahawks games are some of the first ones to fill up. People who work downtown commonly pay $300-400/month for parking memberships just so they can park downtown to work. Spending $50 to do something your dealership is going charge $300 for seems pretty reasonable. The standard shop rate for labor is $100/hr in many shops and dealerships it's 110-140/hr. Shit just costs more in the PacNW, almost on par with SanFran.

If I was in Texas or Utah then yes, $20-25/hr makes sense. Also if this was a "bring your own tools" type of shop then I would charge less (less overhead) and more $$ opportunity for tool rental. But one of the target demographics are folks that don't own a bunch of tools (apt dwellers) so I think it's better to be fully outfitted and build that into the cost.


Compare these 2. One's in Kirkland (expensive city) and the other is in Kent (less expensive city). Both seems to be making it work. The one in Kent I believe is planning to open a second location too.

http://stewsgarage.com/ (Kirkland)
http://selfservegarage.com/ (kent)