DIY Garage Business Idea Feedback please!

[HiFiCarGuy]

Wow, thanks for the response so far guys.

I don't really view money as being a HUGE obstacle. My dad is friends with a lot of people with a lot of money. I'm sure I could gather some investments with a smart well thought out business plan. Currently, my biggest concern is profitability. If you charge much over 10 or so, people are just going to go have it done by someone else.

Insurance is something I considered, but would it be THAT high with an iron-clad waiver? I actually made friends with the Lawyer that taught my business law class, so I can get some help from him, but of course I would hire someone to really make sure it's perfect. I guess I don't know enough about insurance to get a good grasp though.

I'm starting small. If anyone's familiar with the Metro-Detroit area, there's a little building that used to be Specmo (a speedo place and audio place) on woodward I think just south of 14 mile? in Royal Oak. This is a small place, a few bays with a showroom and a pretty big parking lot. It's been left alone for a while, and I'm not sure if it's due to high rent or what, but it's the size I'm thinking.

Also, hours would be weird...when people actually can work on their cars. I'd start with hours: wed, fri 4 pm to midnight and then saturday and sunday from say noon to 5. This way, operating costs wouldn't be too high to start but it would help get the word out. Because I'm a marketing major, most of my budget to start will be allocated to promotion. I'll get to schools, print, and even maybe some radio (depending on my budget).

Army, Navy, and Air Force bases already have this sort of thing on base so I've been able to talk to a few guys about how they were run. One I really liked. To fix the tool issue, there will be a locked tool area. Only myself or mechanic (or other employee) will have the key and when a person enters the garage they will be issued 10 chips. Each chip will be equal to one tool. The person gives me a chip, I hang it on a peg in the tool room with the corresponding bay number. Person brings the tool back, they get the chip back. This would allow people to have a max of 10 tools out at a time, and also if any chips are remaining on the peg when their time's up, they clearly still have that number of tools, and they won't be allowed to leave until the tool is returned.

The lifts and major machinery that could cause injury will only be operated by employees. This will avoid potential lawsuits or problems. I think lifts will actually be cheaper than pits, because with pits, I'd need to find a closed down quick lube place or something like that. Now, that would be an awesome place to start if I could find one. Perfect size and all

All I'd really need to do is iron out the insurance part...which I'm not sure how it works if waivers are signed. Oh and Joe, I wouldn't mind a business partner. Thanks for the responses again. You all really are my target market. I don't think I'd be able to attract the average car owner. It would be more for car guys...however I wouldn't turn them away. I think it would be a cool idea to offer workshops for beginning drivers, like how to change a tire, shizzle like that. There's a lot swirling around in my head, it's a matter of getting it out.

[ihatemygrandamg]

Its gona take a while to earn back all the money you would have to spend. I think its a great idea, but not sure if it would be successful. I would love something like this around me though,since i live in an apartment and I always have to borrow certain tools and use my friends' driveways to do my own work.

Like tomorow im using a friends driveway to put a header and magnaflow cat on my car. Bringing all my own hand tools and jack, but Ill have to use his sawzall.

[O1GAGT]

In theory the idea is great, however I don't see it working out too well.
Buying the building, all of the equipment, paying the utilities, taxes, employees, insurance, factoring in theft, ect. it will not be cheap. To turn a profit you would have to charge people at least 3/4 of most shops labor rates are, to utilize your facility and at that point most people would rather let someone else do it.

I will be graduating in May with a BS degree in Insurance and Risk Management.
I can tell you now that you are going to be paying alot for insurance, due to the fact that most admitted carriers will not even accept a risk such as this (there is not much to compare this type of business to and it carries a high risk).

If you can not get an admitted carrier (which there is a 85%+ chance you won't) you will have to go through a non-admitted carrier which is often referred to as surplus lines insurance, this type of insurance is not cheap by any means.

I am not too familiar with Michigan, but in some states "waivers" aren't worth the paper that they are written on. That would be something to check with when talking to a lawyer about the legal environment in your area. If I remember correctly from my classes, the legal environment around Detroit is horrible.

Good luck, but from looking at the overall aspects of the proposed business I am going to say that it wouldn't last.

[AaronGAGT]

I'm from Detroit area and there's one in Westland on Ford Road and Wayne Road, maybe check that out

[AaronGTR]

I know the building on woodward you are talking about, it would be a pretty good location. I think lifts would be better than pits because when you need to get the wheels off the ground to do suspension and brake work it's a lot faster with a lift. Also if you need to replace an engine or transmission you can drop it out the bottom.

I think it's a great idea. For people who know a little about working on cars but don't have the space or tools it would save them money. For kids who want to mod themselves but don't how to do it properly it would provide an environment to learn. The only question I really do see is like you said profitability. Will it make money? Even if the waiver/insurance stuff is taken care of and if you have capital to take care of buying tools and equipment... how many customers will you have? How many people living in apartments etc. have money to do mods? Will they come to your place if they just need to do small maintenance to save money? I'd say you just need to do some more research to determine your potential customer base before you can formulate a good business plan.

[archillasvante]

'wow' is all i can say. i thought of something similar when i first started working on cars and never had a garage to use. from reading the thread it sounds like everyone has a good idea of the ins and outs of the legal/insurance side of things.

if you ever need help with promoting this idea once you get it going, i'll be willing to do some marketing/web media promotion stuff in exchange for some garage rentals

[Exodus]

Sounds like a big project, Id do Alot of research. See what other kinds of prospects your going to target, if you only reach "car guys" you'll only be limiting yourself. You need to find a way to reach all sides of the spectrum including people w/ a very limited knowledge of cars. What can you offer these people, (discounts on automotive parts, free inspections could draw in a decent crowd, if you have a big lot you can have car shows and attract many people, free car wash, etc.)
An investment like this can go either way, really profitable or go broke.

[Pitter98]

I think it would be a cool idea, as I also live in an apartment and have a hard time finding a place to work on my car (I usually go to my brothers house which is 2 hours away). I hate to keep beating on what people have said already, but profitability would be the biggest thing.

For example:
Let's make some assumptions here to lay out some possibilities. Let's say you have 4 bays, are open 50 hours a week and charge $10 an hour per bay. Let's say you are on average about 50-60% occupied (you gotta be realistic with your numbers - especially for the first year or so - some times you're gonna be full and others you will be completely empty). That puts you around $20-$24 an hour for your income x 50 hours = about $1000-1200 a week. That equals out to about $52k to $60k a year - take your salary of $40k+/- and it doesn't leave a whole lot else to pay bills, mortgage, etc. If you can get up around 75% occupancy, you'll be up around $80k for the year - a little better, but still pretty lean. Plus you gotta figure insurance, taxes, heat & electricity, etc in there (they are a lot higher for a business).

Now, if you could find yourself a place with 8 bays, you would be in a lot better shape as you would have room to accommodate more paying customers. If you can get 50-60% occupancy in a facility of this size, you would be talking around $110k to $125k in revenues. Get it up around 75% and you're at about $150k - the numbers that you should really be pulling in if you want to have more than just yourself working there.

Now, you may have some more revenues from extra classes, rentals, etc that you could do, but you have to figure the bulk of your income on your bays being full. You could also charge more than $10 an hour, but you have to be careful of going too high or people will just go to a regular garage and have it done. It could work out as a business, but you have to make sure you have a big enough facility to accommodate a lot of cars on the busy days (weekends) - 8-10 bays+ would be ideal. I think it could be a cool business, but definitely look at your numbers a lot - they will make or break you.

[O1GAGT]

I can see the weekends as being very busy and the week days as being slow.

Another thought that crosses my mind is that are people really going to come in for an DIY oil change? Having to pay to use the facility would put the cost at about the same if not more than taking it to a typical fast lube.

Aside from that if fluid changes are going on, you are going to have to deal with the disposal of the used fluids. This means you will have to pay a company like Safety Clean to come in and dispose of these used fluids. Again not cheap and again driving up the cost that you are going to have to charge to use the facility.

Lastly, the average person when being charged per hour will rush to get the job done as to avoid paying extra. Which the end result will be more accidents and lawsuits.

[cavingman]

the chips thin is a great idea. but like someone mentioned earlier, get a deopsit. 100 bucks or something. if that chip doesnt come back, neither does they're 100 bucks

As a former mechanic who now works on drill rigs, and is now without the availability of an automotive lift, this is a fantastic idea IMO. Getting tired of the parkinglot at my apartment.

[Mike Jung]

Originally Posted by cavingman

the chips thin is a great idea. but like someone mentioned earlier, get a deopsit. 100 bucks or something. if that chip doesnt come back, neither does they're 100 bucks ...

Nothing like a little incentive.

Example:
When at work:
We rent out photo equipment that is a high "replacement" value, & we don't know of the client (example: an US based photographer in town for a film gallery shoot).
If we do not get various paperwork (like a "Certificate of Insurance" for proof of rental coverage, with our store listed as a loss payee) & confirmation of the jobs they are doing in-town locally:
We will take a replacement value damage security deposit; like on their American Express Card, as a purchase charge.
Upon return of the rental equipment in "same as condition": we settle the rental bill & refund the damage security deposit.

I have heard of damage security deposits of going through for like $60K Cdn before.
When a photo shoot came down at the last moment, & other business arrangements could not be made / or where the client has chosen not make them ahead of time.
Nothing like seeing a "Vice-President" of something at Disney come in to lay their Amex card for the charge, for their ABC network film gallery shoot.

Apparently, this is standard procedure for over-seas photo equipment rental; in the UK.
After-all, what is to prevent you from "renting" the equipment, & hoping on to an airplane back to where ever you are from ?

& it also acts to cover the rental bill, if the the client runs out of funds during the job.
(Bills could add up fast, if they are using their credit cards all over the city to pay for expenses. You want to make sure that you get your chunk of the bills guaranteed.)


Off-Topic:
I heard of the Le Royal Méridien King Edward Hotel taking a security deposit of $2500 Cdn upon checking-in.
So it is not that un-heard of.

[cavingman]

We rent drill pipe for recently sold 1.8 mil drill rigs at my job for start up companies trying to make some profit before going all out on the equipment.
one piece of this pipe costs 800 or 900 dollars i think. each one is about 25ft and the rig i work on can drill 3/4 of a mile before it cannot pull the pipe out any longer due to the weight. the rig can pull 120000 lbs out of the ground.
imagine the deposit companies have to put down to rent that stuff

[Mike Jung]

Originally Posted by cavingman

We rent drill pipe for recently sold 1.8 mil drill rigs at my job for start up companies trying to make some profit before going all out on the equipment.
one piece of this pipe costs 800 or 900 dollars i think. each one is about 25ft and the rig i work on can drill 3/4 of a mile before it cannot pull the pipe out any longer due to the weight. the rig can pull 120000 lbs out of the ground.
imagine the deposit companies have to put down to rent that stuff

^
What, you don't take a IOU Note ?

How about a "cheque" ?
I swear, we are good for it
(We know that a cheque is not valued at anything, until it clears the banking system.)




But we (at work) deal with the general public also at work; & not just people from the industry.
So it might be alittle different, when dealing with businesses.

Example:
Wiliam F. White or PS Production Services that deal in motion picture & TV lighting, & grip equipment.
(So I heard) Will take a Certificate of Insurance (showing production insurance coverage for rental equipment & business liability) & will invoice (or paid on return of the rental equipment) known companies/productions.
But they mostly deal with people in the industry.

[99GTCoupe]

I think I'd have to cruise on down to your shop every once in awhile
I'd be happy to lend some money and help to a fellow GAer. Plus, I can use the help sometimes and I want to be handier with my car as well. I'm the type of person where if you give me the tools, instructions, time and maybe a bit of help I can do pretty much anything. And I'm only like 10 minutes tops from the actual Loop.

I'd love to see something like this

[pauljs75]

I like the idea, and I'd check out such a place or use it if it was available. (No garage of my own or any other proper work area.) Such places are few and far between because of litigious society in the U.S. and difficulty getting such operations insured. (As others have mentioned already) But if you could somehow figure out how to make a workable legal waiver and get covered - then you're ahead in the game. Also if you're providing some tools - you're going to have to figure out how to prevent theft. Maybe have some check-in/check-out scheme involving ID and a security deposit.

As for the job thing... NE Illinois isn't much better. (At least if you pick graphic design as a major. )

[cmtapanes]

Yes, the Arm Forces have these type of facilities for their soldiers. I was born and race in the Republic of Panama and I had access to the U.S. military facilities in Panama and they had a Mechanic Shop where you paid around $10 dollars and they let you use the liift and you could check out some tools as well. There was a Wood Shop as well, and I just to work there helping out people with their proyects and give them the tools they needed during the summer.

My friend here in Miami is the owner of a mechanic shop and I we where talking about openning a Do It Your Self Shop as well. He like the idea but that was a discussion during some beers after work and we never talk about that again.

In another note! The only requirement to use the facilities was to take a saturday safety class and a picture ID was provided for to you and was required to show the ID every time. Under 18 yrs old kids where allow to be on the shop as long they where with their parent and had taken the safety class.

Originally Posted by HiFiCarGuy

Wow, thanks for the response so far guys.

I don't really view money as being a HUGE obstacle. My dad is friends with a lot of people with a lot of money. I'm sure I could gather some investments with a smart well thought out business plan. Currently, my biggest concern is profitability. If you charge much over 10 or so, people are just going to go have it done by someone else.

Insurance is something I considered, but would it be THAT high with an iron-clad waiver? I actually made friends with the Lawyer that taught my business law class, so I can get some help from him, but of course I would hire someone to really make sure it's perfect. I guess I don't know enough about insurance to get a good grasp though.

I'm starting small. If anyone's familiar with the Metro-Detroit area, there's a little building that used to be Specmo (a speedo place and audio place) on woodward I think just south of 14 mile? in Royal Oak. This is a small place, a few bays with a showroom and a pretty big parking lot. It's been left alone for a while, and I'm not sure if it's due to high rent or what, but it's the size I'm thinking.

Also, hours would be weird...when people actually can work on their cars. I'd start with hours: wed, fri 4 pm to midnight and then saturday and sunday from say noon to 5. This way, operating costs wouldn't be too high to start but it would help get the word out. Because I'm a marketing major, most of my budget to start will be allocated to promotion. I'll get to schools, print, and even maybe some radio (depending on my budget).

Army, Navy, and Air Force bases already have this sort of thing on base so I've been able to talk to a few guys about how they were run. One I really liked. To fix the tool issue, there will be a locked tool area. Only myself or mechanic (or other employee) will have the key and when a person enters the garage they will be issued 10 chips. Each chip will be equal to one tool. The person gives me a chip, I hang it on a peg in the tool room with the corresponding bay number. Person brings the tool back, they get the chip back. This would allow people to have a max of 10 tools out at a time, and also if any chips are remaining on the peg when their time's up, they clearly still have that number of tools, and they won't be allowed to leave until the tool is returned.

The lifts and major machinery that could cause injury will only be operated by employees. This will avoid potential lawsuits or problems. I think lifts will actually be cheaper than pits, because with pits, I'd need to find a closed down quick lube place or something like that. Now, that would be an awesome place to start if I could find one. Perfect size and all

All I'd really need to do is iron out the insurance part...which I'm not sure how it works if waivers are signed. Oh and Joe, I wouldn't mind a business partner. Thanks for the responses again. You all really are my target market. I don't think I'd be able to attract the average car owner. It would be more for car guys...however I wouldn't turn them away. I think it would be a cool idea to offer workshops for beginning drivers, like how to change a tire, shizzle like that. There's a lot swirling around in my head, it's a matter of getting it out.

[Mike Jung]

Someone has taken this idea & made it happen: http://www.cleartheairhrconsulting.com

[pkron05]

From what I see from their website, it's an exact replica of military hobby shops like the one I used in Virginia Beach, except for the price increase (we were charged $3/hr). I'd really like to see how they are handling the legal side of things. Little pricey, but I guess it's needed to be profitable.

I have a bad feeling about their lack of lifts though. The base shop had eleven 2-post lifts, 6 low-rise lifts, and 6 open bays, and there still was always a waiting line at night and on the weekends. People will stop coming if they have to wait for a lift to open up at this place.

[notsoaveragej0e]

Cool!