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Login to post Forums » Grassroots Motorsports » Thinking of re-opening dead shop

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Jan. 23, 2009 10:25 a.m. skruffy Dork

Am I out of my mind? (rambling, all-over-the-place post follows)

I'm thinking about buying out my former employers equipment and starting up a new speed shop. He'd work for me as my engine builder and I'd run the business otherwise. We used to specialize in Porsche/Audi/VW/BMW, with an emphasis on Porsche race cars.

Personally, I don't think the automotive aftermarket is dead, but I fear we're in the wrong side of the country (Dayton, OH). Pending my business plan and figuring out if it would actually work, am I an idiot for even considering the idea?

The original shop died due to the owner just giving up. Business was piling up, people still wanted to get cars in and we were sitting on top of a berkeleying gold mine. He had a lot of personal problems and really sucked at running the business side of things. That was 5 years ago and things have changed dramatically with the economy and the automotive world in general. However, I still think the market is there for race/track day cars and retarded fast street cars, albeit a much, MUCH smaller one than before.

I still need to write up a plan and figure out if it even makes sense to try this right now. Getting any sort of small business loan, especially for something auto related, is going to be a nightmare.

What would I do differently? First and foremost, I'd start with a solid business plan to see if there's even a chance in hell of this being profitable. That would also give the company some sort of direction instead of firing randomly into the dark like we were before. Second, I'd keep it small. We don't need seven bays or a paint booth or any E36 M3 like that. Give me one lift and the alignment rack and I'll be set. Third would be getting E36 M3 done on time.

I've been pissed off about him ruining the shop for 5 years now. It was the only thing I ever really loved doing. I used to get up every morning and be excited about going to work that day. I want that again, but with stability and direction this time. I don't have any delusions about this being easy or particularly lucrative, but I'd rather do something I love than make lots of money being miserable.
Jan. 23, 2009 10:36 a.m. Snowdoggie Reader

It might work if you do it on a smaller scale. If the economy really tanks you might want Plan B to involve non-performance work patching back together daily drivers. There will be demand for that in bad times.
Jan. 23, 2009 10:39 a.m. ClemSparks UberDork

skruffy wrote:

I used to get up every morning and be excited about going to work that day. I want that again, but with stability and direction this time. I don't have any delusions about this being easy or particularly lucrative, but I'd rather do something I love than make lots of money being miserable.

You would likely wake up every moring excited again...but the stability part might not be so realistic. So therefore, there will be a fair amount of stress mixed in with that excitement.

Have you ever been self employed before? If so, you probably know what you're in for. If not, it's the school of hard knocks...but may be worth it.

Clem
Jan. 23, 2009 10:40 a.m. belteshazzar Dork

Sounds like you've got your head right. Start as small & simple as possible with an emphasis on low overhead.
Jan. 23, 2009 10:43 a.m. Tim Baxter Online Editor

My 2¢ (actual value may vary)

Figure out how the 'net factors into your plans. Nobody is a local business anymore.

Reach out to the ricer crowd. They want performance, they just may not know how to really get it.
Jan. 23, 2009 10:45 a.m. 93celicaGT2 Reader

If you really do end up doing this in the next year... put me on a notecard or something and send me an email. I need someone to do a cage in my car (want a 10 point) and the only local place i'm not sure i trust.

What other services would you be doing? Dayton is close enough for me to be a regular customer, and i'd rather pay someone on this board to work on my car.
Jan. 23, 2009 10:52 a.m. speedblind New Reader

Tim Baxter wrote:

My 2¢ (actual value may vary)

Figure out how the 'net factors into your plans. Nobody is a local business anymore.

Reach out to the ricer crowd. They want performance, they just may not know how to really get it.

I agree wholeheartedly. If it's parts you're planning to sell (doesn't seem like it from your description), then plan to be undersold by a thousand drop-shippers and ebay knockoff artists.

If it's genuine service that you're providing, then I can see it surviving. I know of a couple Porsche-based shops that do quite well with the 3-5 year old off-lease/out of warranty cars. Most people that buy a Boxter once it's depreciated to 40% of its original value are shocked when they find how expensive repairs/maintenance can be.
Jan. 23, 2009 10:55 a.m. ManofFewWords Reader

PLEASE do not cater to the ricer crowd. When Joe Smith drops his 930 off, he doesn't want to be in the same shop with the check out boy from Walmart.
Jan. 23, 2009 11:00 a.m. Kramer Reader

It sounds like you're going head-to-head with Foreign Exchange in Moraine, if they're still doing business like they were when I worked in Dayton in 1997. But they seemed to be a premium shop, so you may do well by beating them on price.

You may start doing a lot of crap work on all makes just to make ends meet. By starting slow, in a slow time, you should do better than if you had to re-size a shop to meet the economy.

Now that Worldpac is in Fairfield, you should have decent access to foreign parts (that used to be a challenge in Dayton). KOI bought Spradlin out of Cincinnati and John's in Dayton, so they now are a decent supplier of foreign parts. And you have a decent NAPA store close by, with access to Altrom. Parts shouldn't be a problem. Don't let any of them stock much at your location--this just ties up your money. Pay cash for the parts and you'll start a good relationship that may help you in the future.

Also, farm your machine work out to other shops. Machine shops are getting tough to find, so you may have something there.

Keep your shop spotless (like I remember Foreign Exchange did), and you'll impress customers. It doesn't cost much to be clean, but a dirty shop will cost you customers.

Good luck. Be sure to draw customers from all the surrounding counties. Spending money on good marketing is wise.
Jan. 23, 2009 11:03 a.m. Kramer Reader

And who is that Warrior Racing guy in Tipp? He's got a great shop, but I don't see him doing much business (my brother lives in Tipp). Will he be a competitor?

Also, hook up with Motovicity in Detroit for your performance parts.
Jan. 23, 2009 11:17 a.m. fastEddie Dork

Didn't there used to be a german focused shop right there near the intersection of Springboro Pike and South Dixie (I think that side road is called Central Ave), just down from Southside Honda motorcycles? And I'm not thinking of F.E., they are a bit south on Springboro, right?

I say go for it man, sounds like something I'd like to do one of these days.
Jan. 23, 2009 11:24 a.m. alfadriver Reader

Was the performace shop more vintage racing, or straight up racing?

I think if I were to choose the easier lifestyle, it would be vintage, since that's mainly people with money trying to have a good time going fast, vs. straight up where if you are not in front, you are loosing money.

Vintage still seems quite big in the mid-west.

And it's a good idea to keep specialized, but be open to others who may ask for some work. For instance, near dayton is where my friend is doing the engine work for the land speed record Alfa seen in the most recent issue of CM. People like him might need some specialized machine work that good tools can give you.

Concentrate on making your customers happy. Money comes with that. New customers find out about it, and come, too.

I also think it's not a great idea to spread out too much- if you are vintage racing, don't do normal maitenence work. But be happy to sell your performance parts to those guys.

All in all, it sounds like a good idea. Few people in the world are excited every day to go to work. If you can do that, that's a HUGE accomplishment.

(oh, and take some basic business management classes... accounting, pricing, etc..)

Eric
Jan. 23, 2009 11:37 a.m. John Brown UltimaDork

Also if he is a VW guy there are ALWAYS a lot of people looking for good people for maintenance and performance.
Jan. 23, 2009 12:11 p.m. skruffy Dork

Well....

I'm not interested in selling performance parts at all. That market is beyond saturated and there isn't ANY money in it. Nor am I interested in the "ricer" crowd. None of them have any money and there's already a billion shops in the area that cater to that clientele.

We used to build cars for PCA club racing and HSR. We provided transportation and support (pitt crew, tire/brake changes) for clients on race/track days. I'd like to do that sort of stuff again, if the market can support it.

Of course there'd be the oil changes/maintenance on street cars to keep the lights on lolz
Jan. 23, 2009 12:39 p.m. 914Driver Dork

My two cents.....

My buddy owns a shop that does German, never domestic and the only Jap car he looks under is my 4-Runner.

Customers of a certain age and income bracket appreciate a good car and have been through junkers and Jiffy-Lubes before. It's not the shop that makes the money, it's the owner, wrench or Tech that gives clear diagnosis and good customer service at fair market value. Most customers have dealt with assembly line/by the book & costly Dealerships. Believe me, a trusted mechanic will succeed.

Paul has had his share of malcontents and dead beats, but his base is solid and it's all by word of mouth. His little three bay gig is a blessing to three Rolls-Royce owners, one local, two come from Florida during "the season".

If a few racers stop in, put their cars out front as a come on; but your bread and butter is someone like us with a little more income.

Dan
Jan. 23, 2009 1:12 p.m. alfadriver Reader

skruffy wrote:

Well....

We used to build cars for PCA club racing and HSR. We provided transportation and support (pitt crew, tire/brake changes) for clients on race/track days. I'd like to do that sort of stuff again, if the market can support it.

Of course there'd be the oil changes/maintenance on street cars to keep the lights on lolz

IMHO. Based on the Alfa shop that's around here, I would bet you can have a pretty strong clientele to support that business. Roman Tucker has an all Alfa shop just outside of Detroit- has a couple of very wealthy customers who love vintage racing.

His "trick" though, is that he's one serious expert at restoring one of the more rare Alfas in the world- the GTA. And he's got a knack for finding incredibly rare racing cars (at least in the Alfa world).

So- find a handful of clients, and specialize in something unique as a side.
Jan. 23, 2009 1:33 p.m. JFX001 HalfDork

I'd say go for it.

IIRC, the Porsche Garage Mahal is in Dayton, right? See if you can leave a few business cards there, and get involved with a few different Audi/VW/Porsche Clubs.Word of mouth is good.

I haven't heard of any "go to guys" here in the Columbus area for straight up honest mechanic work (not saying that there aren't any)...but there is one vintage dealership in Powell that I believe does some work.

Your contacts with the SVRA and HSR, plus the Ohio SCCA regions should provide leads as well.

Good luck,

John
Jan. 23, 2009 1:33 p.m. poopshovel Dork

914Driver wrote:

My two cents.....

My buddy owns a shop that does German, never domestic and the only Jap car he looks under is my 4-Runner.

Customers of a certain age and income bracket appreciate a good car and have been through junkers and Jiffy-Lubes before. It's not the shop that makes the money, it's the owner, wrench or Tech that gives clear diagnosis and good customer service at fair market value. Most customers have dealt with assembly line/by the book & costly Dealerships. Believe me, a trusted mechanic will succeed.

Paul has had his share of malcontents and dead beats, but his base is solid and it's all by word of mouth. His little three bay gig is a blessing to three Rolls-Royce owners, one local, two come from Florida during "the season".

If a few racers stop in, put their cars out front as a come on; but your bread and butter is someone like us with a little more income.

Dan

+1 to all of the above. On the extremely rare occasion that I let someone else work on my stuff, I go to an independently owned place that's ~45 minutes away from my house. The guys are HONEST, experienced, and their prices are reasonable. Turnaround is a bit slow, but I'll take "cheap" and "right" over fast any day.I won't go anywhere else.

Personally, I agree that a specialty shop is a great idea too, even if it starts out as an "Import" shop and narrows its way down to something more specific.

Also, the common thinking among economists is that a slow economy is the greatest time to start a business. You've got a metric berkeley ton of buying power if this guy is hurting for cash and ready to sell.

Assuming there's a big check involved, I'd definitely recommend buying the building if that's an option. Renting sucks. Ask me how I know. I'd also consider purchasing a dyno if that's an option. A once-a-month dyno-day for local RACERS at 10 bucks (?) a pull is a great way to get the racing community in your shop, and show them you know your E36 M3.

EDIT: Also, be careful about keeping the former owner as an employee. If you choose to do so, I hope it works out better for you than it did for me.
Jan. 23, 2009 1:36 p.m. JFX001 HalfDork

JFX001 wrote:

I'd say go for it.

IIRC, the Porsche Garage Mahal is in Dayton, right? See if you can leave a few business cards there, and get involved with a few different Audi/VW/Porsche Clubs.Word of mouth is good.

I haven't heard of any "go to guys" here in the Columbus area for straight up honest mechanic work (not saying that there aren't any except BIGTSV here on the board )...but there is one vintage dealership in Powell that I believe does some work.

Your contacts with the SVRA and HSR, plus the Ohio SCCA regions should provide leads as well.

Good luck,

John
Jan. 23, 2009 2:05 p.m. skruffy Dork

poopshovel wrote: EDIT: Also, be careful about keeping the former owner as an employee. If you choose to do so, I hope it works out better for you than it did for me.

Eh, we used to be inseparable when I worked for him and have remained close friends. He brings an incredible amount of experience to the table as well. Oh, and he taught me everything I know about wrenching on stuff. He's decided to become a professional fisherman and is doing the car stuff to finance fishing.

At the end of the original shops run it was just the two of us for a few years. We work well together.
Jan. 23, 2009 2:12 p.m. nickel_dime HalfDork

Quality, quality, quality. Most people don't mind paying for quality and an honest shop is hard to find. Don't short cut jobs to make extra money and you should be fine. Word will get around.
Jan. 23, 2009 2:31 p.m. benzbaron Reader

Just b/c people have an expensive car is no guarantee they'll pay to have it fixed. My mercedes mechanic has trouble with people buying 80k dollar cars then not want to pay $1000 to have the thing fixed properly.

I've noticed the markup on synthetic oil changes and figured if you use a "special" synthetic oils you can generate money if people are willing to spend 80$ for and oil change. You want to distinguish yourself from the competition by using different products/services.

If you have smog you might also consider becoming a smog guru, it took me 2 years of rangling to get my car to pass so if you know what you are doing you can make money keeping those exotics registered.
Jan. 23, 2009 2:48 p.m. dyintorace HalfDork

I use an independent exclusively. He's a great guy, charges fair labor rates and knows BMW's inside and out. I haven't darkened the doorstep of the local dealer in many years.

His downfall, though, is that he's a one man band. His wife runs the business side, but he is the sole mechanic. He is constantly juggling the mundane oil changes with the (much) higher dollar projects and builds, which then end up taking way too long. That and the shop is really dirty. As noted in a previous post, keep the shop clean. It's not hard if you start with a painted floor and clients will appreciate it.
Jan. 23, 2009 2:52 p.m. cwh Dork

There is a shop next door to my office in Hollywood FL, Hardee's Tire. They are famous for good work at a fair price. Good reports on Angie's list, etc. I would not take a vehicle anywhere else. They do NOT specialize in performance cars but are well qualified to do most anything. They are hurting big time with the economy right now. The owner told me today that he had not taken a salary in 4 months. BE CAREFUL, it's nasty out there.
Jan. 23, 2009 3:06 p.m. poopshovel Dork

skruffy wrote:

poopshovel wrote: EDIT: Also, be careful about keeping the former owner as an employee. If you choose to do so, I hope it works out better for you than it did for me.

Eh, we used to be inseparable when I worked for him and have remained close friends. He brings an incredible amount of experience to the table as well. Oh, and he taught me everything I know about wrenching on stuff. He's decided to become a professional fisherman and is doing the car stuff to finance fishing.

At the end of the original shops run it was just the two of us for a few years. We work well together.

COOL! Best of luck in whatever you decide to do!

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