Possible fixed location -- need help!

kapinnn · 08-23-07, 02:24

Soooooo, I decided to start looking at possible places for a detail shop. I wanted to get something already set with bays and a lift and guess what? Found one just down the street from me -- 10 minutes away.

This place seems perfect except for the price and I think the parking lot is a bit of overkill. It has 2 bays and a lift, an office, and a customer reception area with a restroom. Please check the pdf attachment. The previous shop at the location was a detail shop, which I had never noticed was there...

It's located right on a busy street in South Denver and very close to Cherry Hills, which is a very expensive neiborhood. This street (specially in this area) if full of used car dealers, body shops, 1 detail shop, tint shops, and various car shops.

I was wondering of what am I looking at in full cost to get a place like this? I've never owned a business before and I do understand I have to put a lot of time and effort in it. I was thinking about doing most of the work myself but having 1-2 assitants to answer phones, do the basics, and learn from me.

How do you guys with shops operate? I'm assuming you work Saturdays and Sundays but take either Monday or Tuesday off.

How is business during winter? It snows a few days (usually, last year was an anomally) in Denver and I think we get plenty of days above freezin point.

I currently am mobile and charge $50/hr. If I am catering to the same crowd will that stand? Should I up the charge to make up for overhead?

I dunno, just lots of questions in my mind right now.

Setec Astronomy · 08-23-07, 02:34

Holy crap that's beautiful. Is there room inside for more cars than just the two bays? Does it have floor drains so you can wash inside? I think in comparison to working mobile you will be more productive (working inside, no travel) so there will be some offset to what you might have to increase your hourly rate to make up for your fixed overhead.

Perhaps you can lease some of the lot space to a limo company. Do you have any idea why the previous shop failed?

kapinnn · 08-23-07, 02:41

No idea at all why it failed. I found it by looking for a vacuum shop. It's in a great area but I guess it's a bit hidden because the shop sits far back behind the parking lot. That might be the reason.

I wanna try to contact the owner but the real estate agent is an ***... I asked for info and it was almost like he did not want to sell the place. I had to ask if he could send me some info through e-mail or something...

I'll try to drive by it today and take more pics to show the area.

I wanna also set up a time to check it out in the inside. I'll be sure to take pics and note if there are internal drains. From the outside it looks like it can fit 3-4 cars inside, but I really don't know the building layout.

jsatek · 08-23-07, 02:43

Can detailing support that? In only 2 bays?
Suppose a 20% down of $140k and a commercial mortgage of $560k - very hard to get. You would be at about $4500 per month pending taxes.

Looks like a used car lot, maybe you buy the lot and detail out of it, and find some used car dealer to rent form you to lighten the load?

jsatek · 08-23-07, 02:46

Unless you have $300k liquid, I wouldn't think to do this, unless you want to be a landlord. Hopefully the rent collected form the place can support most of your mortgage.

kapinnn · 08-23-07, 02:48

Quote:

Originally Posted by jsatek

Can detailing support that? In only 2 bays?
Suppose a 20% down of $140k and a commercial mortgage of $560k - very hard to get. You would be at about $4500 per month pending taxes.

Looks like a used car lot, maybe you buy the lot and detail out of it, and find some used car dealer to rent form you to lighten the load?

Yep, a bit hefty for sure. Not sure if only detailing will cut it. There a lots of used car dealers in this same street. Not sure if the area can support another one. I'll keep looking for places as this one is out of my budget (by a lot!). I was just amazed it was so close to home and in such a great area.

todd@bsaw · 08-23-07, 02:52

I have fixed pricing for my shop, but it adjusts to about $70 per hour. It's great having a fixed location, but there is a lot to consider. I actually work Monday through Saturday with appointments only on Sundays. Most of my business is actually during the week. If you set up contracts with dealerships it is a good idea to dedicate one slow day to wholesale cars (Monday's are usually slow unless preceeded by a holiday weekend).

Currently, I use one wash bay that needs to get rinsed and sqeegeed after every car. I also don't think the lot is overkill. You can never have too much parking (we have way too little).

As for winters, we do better than you'd expect. I pick up a lot of private limo drivers that don't have the facility to wash their own cars in the freezing weather. Having a heated garage is a huge selling point in the colder climates that have snow.

todd@bsaw · 08-23-07, 02:58

Another thought that I do to help with costs...
Do as much as you can offer to cross-sell with everything automotive. Not quite the capacity that you are looking at, but we have 4 full service bays, 4 lube bays, and sell everything from tires to headlights. I also have a mobile glass guy, a PDR guy, a local paint shop, and a mobile tinter that work out of my shop for a portion of the profits.

Jimmy Buffit · 08-23-07, 03:05

That's simply not feasible with just two bays.
Not even close.
I would guess you'd have monthly fixed costs of over $14,000. That's $550 per day just to break-even. You'd need another $200 per day for income. That's 3.5 per day, everyday, six days a week. Every week.

Keep looking...

Jim

kapinnn · 08-23-07, 03:08

Quote:

Originally Posted by todd@bsaw

Another thought that I do to help with costs...
Do as much as you can offer to cross-sell with everything automotive. Not quite the capacity that you are looking at, but we have 4 full service bays, 4 lube bays, and sell everything from tires to headlights. I also have a mobile glass guy, a PDR guy, a local paint shop, and a mobile tinter that work out of my shop for a portion of the profits.

Jebus man! You do everything at your shop! That would be a little too much for someone like me to organize being that i've never owned a business. It is a possibility, however...

I want to find a bigger place with maybe more bays and cheaper. Maybe I can offer multiple services like you suggested. The tint shop, PDR, and glass do seem to interact with detailing in a way.

Thanks for the help!

kapinnn · 08-23-07, 03:10

Quote:

Originally Posted by Jimmy Buffit

That's simply not feasible with just two bays.
Not even close.
I would guess you'd have monthly fixed costs of over $14,000. That's $550 per day just to break-even. You'd need another $200 per day for income. That's 3.5 per day, everyday, six days a week. Every week.

Keep looking...

Jim

Very good points... I was actually looking for a place well under 1/2 mil and was hoping for 3-4 bays.

Let's see what we find! There is another place that looks abandoned down the street that used to be a Michelin tire shop. All wood construction but has like 7 bays... It's been out of business for as long as i've lived in this area (like 2 years) but I don't see a for rent or for sale sign anywhere...

Jakerooni · 08-23-07, 03:43

Yea owning it wouldn't be prudent with it being so limited in size. However if they were willing to lease it for considerably less and it had all the needed drains and hook ups I would say go for it. I lease my current location right now and it's proving very affordable. I'd at least ask if that was a possibility. I cold called on mine he never had a sign up or anything but I loved the location and took a shot. Sometimes they pay off.