Would like some advice and opinions

Chris_Hamilton

Trying to be the best me, I can be
Just would like some opinions on this if you guys don't mind. I am seriously considering leasing a working Body Shop from the current Owner. Paint booth and a low end frame machine are included. I don't know what else, I'll find out tomorrow. Price is $2500 per month. He is going to want first and last and and an unspecified additional amount upfront. Building is 5000 square feet, insulated, heated, and cooled. It is located on a major 4 lane highway just north of Amherst VA. It also has a large fenced lot that he used with his towing service. Essentially it is a working Shop that has been there for 20 years or so. He claims that he has a backlog of one month.

Wat do you guys think? The monthly rate seems high but around here there are hardly any buildings available. I also like the idea that it is ready to work, so no real downtime trying to prep a building. I can handle running the Business. I've done it for others in the past.

Just want your thoughts. :confused:
 
The business would be yours? or still the existing (his)? As far as rent that always depends on the location/availability.
Sounds like more than a one man show to cover the overhead and expenses and still make a profit.
Yes, he would still own the building and the paint booth and frame machine but the business would be mine. I would be leasing the building and equipment.
It would be just me to start with. I know I'll have to put in a lot of hours.

As for overhead I've been trying to come up with what that would be and some numbers.

What I can think of now,
Electric
Phone
Business license
CCC (estimating software)
Paint and body supplies
Taxes??
Solvent waste removal
Advertising

What else am I missing?
 
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Here's a link to the Craigslist ad. It's an hour away from my home but around here available buildngs are few and far between.

 
Don't know. I want to be able to work for myself. I'm tired of doing this for others. Just want to be my own man. :)

I've owned a Shop before, when I was in my late 20's. I failed spectacularly though, but I learned a lot of hard lessons.
 
Chris, most of the local shops around here are selling out to larger conglomerates, so the same name everywhere now.

Is a small one-owner shop still competitive in such a market?

Do you entertain buying the business and property outright vs leasing so you really are your own man, and so when the large conglomerate rolls into town it’s you and not the lease holder who gets to decide on selling and making the big bucks
 
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One hour is too far if you are going to be working long hours imho…

Don
I would probably stay there some nights. At least at first. I'm willing to make some sacrifices.

Chris, most of the local shops around here are selling out to larger conglomerates, so the same name everywhere now.

Is a small one-owner shop still competitive in such a market?

Do you entertain buying the business and property outright vs leading so you really are your own man, and so when the large conglomerate rolls into town it’s you and not the lease holder who gets to decide on selling

Robert, none of those "chain" shops are around here yet. As for competitive, we all write using the same software so most every Shop will be close. They will probably be able to get supplies much cheaper. I'm not married to being a Collision Shop for the rest of my working life though.

As for purchase, who knows? At the present time I would not be able to purchase it, but who knows what the future holds.

The way I look at it is, if I wait for the perfect opportunity, I will be waiting a long time. This may not be perfect but it does offer me a chance to get started.
 
First off, find out from a realtor or the like if that price is in line with other real estate. A premium based on the fact that it's been a running business has to be taken with a grain of salt, unless much is known about its reputation.

Secondly, it's almost suicidal to try to run that type of operation alone. If you can't go in with a right hand man, you'll need to hire one very soon. The work flow needed to generate positive cash flow (if you are doing everything right, insurance and all that) is probably very close to what one guy can achieve with max effort. And then your back will give out. So you will need help.
 
Chris, how old are you? I'm 57 and don't own a shop but man, I'm feel old. This work takes a toll. If you love it and it doesn't feel like work, then go for it. There's a book called E-myth that explains what Crash said about not being the Jack of all trades. You'll want support personnel to cover your weaknesses. Beat of luck to you and your dream!
 
I'm old enough AAE.:) 49 to be precise. I do love it.... wish I didn't but I do. I know the toll it takes, lived it for the past 28-29 years. I don't have any illusions of getting rich. I just want a chance. I have come really dislike doing this for others. So many bad owners that I've worked for that take, take, take, demand more, more, more, and never give anything back. To old to change careers and I can't make it doing restorations in my area so I got to do something.

Crash, I figure about 1000 dollars a month on top of the lease amount for expenses, if I keep everything relatively basic.
CCC Comp Est Subscription
basic liability insurance (owner would have property insurance)
contract for solvent waste removal
electricity
water (not sure if it is town water or a well more than likely a well)
phone/internet
initial cost of a business license
property taxes(??)

What else am I missing?
 
Here's a few:

Shop supplies (not everything is covered by the paint material charge)
Building repairs (owners are bad at making timely repairs)
Equipment leases/purchases/repairs
Interest charges (these are likely, at first)
Accounting/bookkeeping
Dues and subscriptions (not just CCC, you'll need periodic access to OEM and scanner data)
Heat
Office Supplies

There are other nickel and dime categories as well, but trust that they will add up. I vastly underestimated how much it would all add up to. Shop supplies like sandpaper, tape, booth filters, and a hundred other things besides actual paint have been surprisingly expensive for us, which is why it's #1 on my list.
 
Secondly, it's almost suicidal to try to run that type of operation alone. If you can't go in with a right hand man, you'll need to hire one very soon. The work flow needed to generate positive cash flow (if you are doing everything right, insurance and all that) is probably very close to what one guy can achieve with max effort. And then your back will give out. So you will need help.
Very well put. You will need at least one decent helper to make profit. The overhead will eat up all you can do. The lease seems very reasonable (Nothing down here that cheap, if you can find it) but those months get shorter as time goes by. I am fortunate to have a pretty good repeat customer base, but those slow months always seem to come right when you get a little cushion, and eat it up.
 
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