Local opportunity.....here`s the skinny

[BobbyMagee]

Hey all....

I`ve been lurking hereabouts for a few days trying to guage the general feeling / attitude among those who make detailing their full time gig.

My particular situation is as follows for those who are walking in the shoes I am about to step into. In general from my reading thus far it seems that the full timers here seem to be either real busy or on the verge of packing it in.

I am a local Contractor that focuses on communications with a healthy smattering of mechanical / welding services. My problem in these areas is that I am basically operating as a mobile contractor as my actual shop is 50 miles away and by extension so are my tools for the most part....shops loclly are non existant being as the economy here is bordering on a boom state.

In my industry there are many competitors with more sprouting every week it would seem. I am looking to focus my time and energy on a venture that has storefront and that would require alot less bouncing up the mountains and fighting for a piece of a pie baked primarily by the old boys network and served up in the backrooms of local government and established heavy hitters.

So......locally there is a detailing shop for sale owned currently by an established carpet cleaning company. The detailing end is something he has done on and off for years but has only recently started to market a little more alongside his carpet gig. It was supposed to be his wife`s hands on busines focus and shes has recently shattered the ball / socket of one of her shoulders. He has been alternating his days between his carpet gig and the detail shop; this is pushing him to burnout rapidly as the carpet thing is full time busy and the detail thing (i feel) would be but he has been slow playing it as he does not have the time to focus on the detailing.

He has decided to sell the detailing end.....I have all but decided to buy it.


The shop - 1000 sq feet c/w with 16 foot door, 18 foot ceiling, sump, recent white paint and is accessed by an included office, small work room and onsite bathroom.

The location is on a busy street, thru a local industrial area, that connects downtown with a couple of nearby residential areas.

Our town has a population of 25,000 with nearby outlying towns within a half day drive that bring the total to 40,000.

There is one other (two if you count a fellow doing it in his back yard) detailing outfit in town that does very little advertizing but is owned by the daughter of an adjacent toyota dealership. To book a spot in her shop you are looking at a weeks wait on the whole.

Local government is a major employer here and while the local economists here say we are not booming it is obvious we are certainly not in a depressed economy.

Advertizing is in place on one of our local radio stations even though he has been turning some folks away because he is not able to do both gigs full time.

Included are two hot water extraction units in good repair, large pressure washer, mid sized compressor, various fan and a couple of large industrial dusted fans for interior drying. Also there is some basic office equipment and parking for five not including his van......he wishes to maintain his store front and phone presence so we would be sharing a generous office space with room for seating and coffee etc.

He is willing to take one third of the asking price up front and is willing to carry the remaining balance. The asking price is in the lower mid five figures.

My current outstanding invoicing covers the up front amount and leaves a few grand to put up against our current debt load which amounts to roughly the amount we would give him up front.

I have crunched the numbers and to be able to run this thing I would have to see two cars per day at roughly 200 apiece based on a six day week. This allows myself and one other to draw a small but adequate wage. Basically with the rent, insurance, wages, repayment of his financing, keeping up with our lines of credit it would cost roughly 400 per day to open the door.

A couple of note of interest here is that the main competitor does ZERO advertizing outside of the yellow pages and seems to market themselves very little; yet they are very busy and I have heard tell of folks complaining of wet carpets and upholstery. Also they have no website at all.

I have found thru previous business endeavours that a website is critical these days...especially usefull when cold calling as it is very easy for prospective clients to see what you have to offer and do it at their leisure.

Anyway....thats it in a big nutshell. Does this ring any bells out there? Any folks been in this boat and if so is the boat still afloat?

Any response is welcome and appreciated.

p.s. I realise that in reality the odds are stacked against me as I am considering doing this without going thru the complete business plan / feasability study route and even more so when considering that winter is bearing down on us again......time is of the essence and the thought of him turning traffic away gives me considerable concern.

[Brenton]

I would dig a little deeper, do some surveys, and find out if you can get some commercial clients (real estate agents, car lots, small firms with decal ads). You won`t make a fortune on commercial clients, but it pays the bills as you train.

My shop charge is $30/hour, but that doesn`t work in my community (sounds like yours in many ways, though ours may be a little lower income). I have to charge a set fee:
$11.99-$14.99 wash & dry (for building clients)
$19.99-$39.99 wash & vac
$49.95-$64.95 wash & wax
$59.95-$79.95 int clean (crevices, jambs, windows, vac, dressing)
+$30-$40 for shampoo
polishing $30/hour

So $200 a car seems high. I am actually making more like $22-$23/hour based on the time it takes, with 2-3 guys helping. If your economy can bear $40/hour (which is on the high end here; though I know of some that charge the same as mechanics, most charge 1/2-2/3 of local mechanics), then it would take 60 hours/week for you to open the doors. As a manager, I find when I was by myself, I needed 2 hours per 8 hours of billing to run the business. Now I need 4 hours/day of management, with 2-3 guys helping.

Your numbers don`t seem to fit your economy, IMHO.

Now, with 1000 sq. ft, you could have 3 guys helping without much problem, a little less in winter perhaps. Perhaps your business needs help to optimize.

And 1 week wait for detailing isn`t busy. I am uncomfortable if I am not booked well into the week ahead. I will think I`ve "made it" when I`m 65% booked 2 weeks ahead, with 1/3 space for commercial accounts, walk-ins, etc.

I love the work, my shop is doing great (some cash flow issues since I just doubled my account work this summer, but okay), but I hate it and would sell at a loss to work for someone else. Be sure this is for you.

Finally, I would suggest you visit a detailer in another city for a week to get a feel how it works in an efficient shop. I would love just one day in a medium-high end well established operation. I`d vacuum for free to see how it all works and fits together.

[BobbyMagee]

Local mechanics here are charging near 100/hr as a shop rate.

I went down to see the operation yesterday and helped him out with an industrial maintenance truck.

We debugged, washed & dryed the exterior, cleaned up the wheels & tires.

Also cleaned the cab, hot water extracted the upholstry, cleaned the glass,
treated the plastics / vinyl, detailed the cab and installed new seat covers.

The current operator charges 300 for this service.....

The other shop in town charges roughly double your rates.....

Heres a bit from a the other shops pricing

"copper package....
chemical wash and dry
chamois dry
engine rinse
vinyl detail
interior vacuum
floor mats
windows
door jams headliner
wheels and tires
exterior hand wax ( where possible)

from 198.50

add shampoo seats and carpets...

249.50

add polish and wax

374.95

add interior fabric protection and paint protection

449.95

Their lowest priced service....54.95 for exterior wash, vacuum, vinyl wipe, windows....

Actually the lowest is 29.95 for hand washing.

They also charge 65/hr for pet hair, feces, urine, smoke damage, exterior tar....add also 10 percent for small sport utes, 20 percent for mid size sport utes and 30 percent for full size utes.

I anticipate charging more via estimates @ a shop rate of 75/hr with no special added charges for the grungy stuff....grungy just takes a little longer.

Anyway.....I go to work it for him and clean the place up and such for a while until I get the numbers on order.


See ya

Bob

[Brenton]

Then that sounds doable. Just make sure it is viable with running the business time calculated in.

[BobbyMagee]

Yes.....the running the thing part.....can`t we just overlook that one..please? j/k

Seems like the smartest thing to do is get the fellow to sign a first right of refusal type of contract and work the show for an hourly wage until the money end of things is squared away.....otherwise I fear it may take a few weks to get everything in order. And during those few weeks he is doing it as he can and turning business away in the meantime.

Anyway....just called the other outfit and got a quote to wash and dry my truck. clean and detail the interior, do the glass and steam clean the carpet and seats.

218.00

The soonest they can "squeeze" me in is the 14th of next month......interestingly; I made a doctor appointment today as well.....I can get in Thursday..lol.

Actually PEI I was hoping that it might be you that responded to my post as it seems you have been on a real roller coaster ride and if I was gonna get the real goods it would likely be from you.....I know the maritimes is not the greatest economy to be in, especially for business`s that focus on what is for most a luxury expenditure.

Not often your buddy tells you the truck is down `cause he got a nasty stain on the carpet......"it`s gonna be two weeks before i can get it out so I guess I`m walking....damn the luck!!"

Bob

Thanks again