Hello, im new to this site and faily new to the autobody business. A few years ago while serving in Afghanistan i started my journey towards building a body shop business plan. Took me an entire year to develope it and honesty i built the place around family as im not body man or painter by any means. Ive learned a lot and still doing so on a daily basis, but my business is failing and i honestly dont know what to do at this point. I built the place very nice and have too much overhead, but have made it work for over a year and half now, however im hitting a point where im literally months if not a month away from failure. I work for the gov so im an offsite owner which has worked out well since my mother and father are the ones running the day to day operations.

I think our problem is that we are getting too many small jobs and not enough of the 5k plus jobs that i planned for. Im losing 2-4k a month at this point with only a few good months in the past year and half. I know for you all to be able to give me some good insight you will need to know more info and im willing to do whatever it takes at this point.

Please help!

Small town business: 7,000 population with 50,000 in a 25 mile radius. Over 400k into the body with 3 employees at this point. Im thinking i built to big to fast thinking they would come

It's a common problem, overextending based on potential. Honestly, you need to connect with some local business owners and network through that route to get some ideas and help, if the situation is even salvageable. I'm talking accountants and bankers, as well.

I can't imagine being remote and trying to run a business like that. You need to hit the street and forge relationships with all the local car dealers. If you can handle the pace and the constraints, getting to the point where you are an authorized facility for an insurance company would be good. They usually don't talk to you until you have a proven, viable business however.

Best of luck to you I know this must be stressful.

Get a tow truck, then make a deal with your local police department for every time they call you for a tow they get $$$, then set up a place to hold violators vehicles and they owe you X amoun of money per day.

Then since you have the tow truck you can tow people's cars to your buisness when they get into accidents = you repair their cars.


I think this is what one of the local guys in my town does..

chris wrote:It's a common problem, overextending based on potential. Honestly, you need to connect with some local business owners and network through that route to get some ideas and help, if the situation is even salvageable. I'm talking accountants and bankers, as well.

I can't imagine being remote and trying to run a business like that. You need to hit the street and forge relationships with all the local car dealers. If you can handle the pace and the constraints, getting to the point where you are an authorized facility for an insurance company would be good. They usually don't talk to you until you have a proven, viable business however.

Best of luck to you I know this must be stressful.

Thanks for the response. My GM has hit the street hard which has helped us make it this far (local used car places with minor dents, ect) but they're not the big jobs we need to make a profit. Im not complaining as they've helped a lot in keeping the doors open. Accountants is the current route im taking and have had several come into the businesss to pick their brains. DRP's would help trememdoulsy but like you said, you have to prove yourself first and a year and half isnt cutting it for the big dogs

wahoo wrote:Get a tow truck, then make a deal with your local police department for every time they call you for a tow they get $$$, then set up a place to hold violators vehicles and they owe you X amoun of money per day.

Then since you have the tow truck you can tow people's cars to your buisness when they get into accidents = you repair their cars.


I think this is what one of the local guys in my town does..

Where im at thats illegal and cut throat business. Tow truck would be nice if i could afford it as i built the fenced in area up to code with storing towed vehicles.

Right. So it's time for some hard decisions.

For now the first thing you need to do is cut costs. If your business model provides for profitable (or even breakeven) operation with a staff of three then you need to look at what those staff are doing. Any staff that are not directly contributing to earning revenue for the shop need to go. Simple as that. On the figures you have given, even reducing by one is going to put you back to close to breakeven.

Then you need to look at every aspect of the operation and look for ways to shave expenses. Are you using expensive products where there are cheaper alternatives? Are work practices costing you money in things like electricity? Perhaps you can shut down part of the building and save power. Look carefully at procedures in repairs. Can money be saved or time used better by better work practices? Look at the efficiency of your staff. Are they being utilised in the best possible manner? Is there any opportunity to change the way you pay your staff, i.e. by putting them on a lower base but an incentive that encourages them to achieve higher productivity and quality? Are you monitoring these key indicators?

Hard decisions, as I said. But necessary if you want to keep this business.

The next thing is availability of work. I don't think that I would have considered a local population of 7000 enough to warrant a panel shop. I'd ignore any population outside of a 10km radius - they just won't travel that far unless you are well established and have a really strong reputation, or you are much, much cheaper than the opposition (and you don't want to go down that road).

That said, look carefully at your pricing. Are you competitive? If you are competitive then what reason would a potential customer have to come to you rather than the opposition? What kind of advertising/sales promotion are you doing? Are you telling potential customers that you exist and giving them a reason to choose you?

Now, look for other opportunities. If you are getting your share of motor vehicle work then what else could you use your facilities for. Talk to any business that may have some kind of need for refinishing. Are there waterways nearby? Boats need painting too. How about furniture? Refinishing kitchen cupboards can be a very good earner, allowing people to upgrade their kitchens without spending on all new cupboards. How about painting and staining of new furniture? Trucks? Trailers? Agricultural equipment? Metal fabricators? You have a buff and someone that can use it? Paint detailing - buff including correction, polish and brush touch small chips; great for people who want to sell their car and have it look its best or for fussy owners who don't have the time or ability to do it themselves. Which reminds me...are you upselling on every job you get?

What I'm saying is that you don't have the luxury of being able to limit yourself to a particular segment of the market.

Which brings me to size of job. Don't kid yourself that the size of the job is directly proportional to its profitability. Small jobs are way more profitable. Let me give you just one example:

I colour code parking sensors for a few of the local new car dealers. To do that I charge $80 for 1 set, $120 for 2 sets (same colour) or $150 for 3 sets. The job takes about 40 minutes. So, if I get 1 set then I'm getting $120/hour, 2 sets $180/hour and 3 sets $225/hour. The customer thinks that by sending 3 sets at a time they're saving money, and they are, per set. But doing 3 sets takes exactly the same time as doing 1 set and the costs of the extra paint are almost negligible - you just use what you might have thrown away because you can't mix such small quantities. Booth running costs are the same as are other things like preparation and clean up times. Very profitable work.

Now compare painting a set of parking sensors to painting a bar. For a bar the market rate is $300. But it takes 3 hours and you use 10 times more paint while your effective labour rate is less. Have a serious look at your bigger jobs. You'll find that they aren't as profitable as you think, not when looked at in terms of the time spent.

You work for the Government? Take some leave and get into the shop yourself. Sort it out - it's your business and your money that's at risk here.

In reading your post I can simply understand where your coming from. Having gone through a few years of opening and then closing my shop a dream I wanted to be reality for so long. I looked at the errors I made on my end and when it was too late tried to make the changed but it was much to late.

In a positive I can tell you some of my experiences so bare with me on this as I explain. It seems like time is something that costs the most money. Sometimes our plan doesn't work because long term solid foundation capital just isn't there and I think that's everyones issue. I can tell you this don't drop prices just to try and beat competition it just wont work. A lot of people think that by doing paint jobs for a fraction of the price brings money. In reality you spend more then 50% on just materials alone. How much profit could you possibly make at that rate?

Products are everything look at how much your investing and with what companys. Everyone loves 3m but face it a lot of times affordability is everything. Good products like Norton, Eagle, & Evercoat keep things low cost and quality good.

What type of work are you attracting? Are you just a production collision shop or do you do everything under the sun? Specialtys? (note custom cars don't bring you money just recognition which costs way more then its worth) people aren't paying the money because the money simply isn't there. Get DRP's INSURANCE INSURANCE!!!!! All day insurance company relationships are the way to go. Try your hardest stay off Craigslist on low priced ads been there done that does nothing but attract awful cheap people. I can honestly say got lucky for a while on this but soon there after learned.

In the end the only last advice I can give you is becareful with "partnerships" I can say personally they #1 reason my shop failed was horrible agreements based on so called "business partnerships". Friends & Family in business usually don't mix. I tried to help someone in the end I got burned ended up homeless and now 2 years later barely making it back up. So I say be smart make good choices that put your shop ahead. Stay off SOCIAL Media conflicts and the "competition" that trys to create false rumors etc. Im not really here to vent but I can tell you if I could do it all over I would do a lot of things different. So with that DONT TRUST ANYONE BUT YOU!

I wish you luck and hope you have the best success possible. Look into more market based training PPG offers business marketing courses etc. Again Good Luck!

as some1 already said, car detailing would be a good money spinner, offer pick ups and delivery for the 9-5 workers, company discounts for volume, ie, go see a company/business which has a heap of employees, offer them a deal that may "seem" too good to be true with detailing employees vehicles say once a month, pick up and delivered, they could take the cost out of employees pays before tax "salary sacrifice" so they don't pay tax on it (depending on your tax laws), see taxi companies and car rental places,
also is there a window tinting place nearby?? it does take a bit of practice (ive been doing it for 15yrs now and its a great money spinner, costs me around $30 in film and materials, takes me around 3hrs for a average sedan and I charge $260, I could charge way more as im over $100 cheaper than any1else in town but im not greedy and I don't rely on it for my main income, just do it as a hobby), you have a booth (great dust free area however don't have the fans goin!!),
have you looked into paintless dent removal, you can do it offsite and the kits are easily sourced.
try windscreen repairs, chips and minor cracks, they are easily repaired and the tools needed aren't that expensive, same as repairing scratched glass!!
home renovators often try to reuse their tiles in bathrooms, they can be sprayed pretty much the same as anything else, however they obviously need doing while still in the house!!
there are many things to make money, and plenty of it, but its a matter of how far do you stretch out, and if you say you do all these things, customers tend to ask "are they any good at any of these tasks"??
or simply put, 7000 ppl might not be enough to support your current business plan, maybe scale back to 1 admin and a paint guy who can also panel beat or vice versa, maybe a smaller site to save on rent, you can always upscale your workforce if things get behind, or you can wrk weekends for a while to catch up
good luck on the business, I hope you can sort it out, but as its already been said, family, friends and business don't mix, I charge EVERY1 the same for my services and I TRY not to employ family or friends, and if I do, its made clear that its a business transaction!! things can go sour real quickly.
krem

NFT5 wrote:How about furniture? Refinishing kitchen cupboards can be a very good earner, allowing people to upgrade their kitchens without spending on all new cupboards. How about painting and staining of new furniture?

That's a can of worms you don't want to open. First, if you paint them in the facility, then someone's got to remove the counter tops, which can is tricky even with laminate, but even harder if they are granite, quartz, or solid surface. You'd have to subcontract that out, unless you want to hire a couple of experienced installers and hope to keep them busy every week. Then someone has to remove and reinstall all the cabinets and molding. One person could probably do this, but sometimes you'd need two people if they aren't individual cabinets. I've done tear-outs where a single upper cabinet is 10' long. I work alone, so I just take bust it apart (I now only do conventional remodeling).

When did do cabinet repainting, I either ordered new unfinished doors or refinished the old doors in my finishing room, then sprayed the cabinet boxes in place in the kitchen. Spraying the doors isn't something that you can do in a day. Unless you have an elaborate overhead conveyor system and a drying oven, you'll have to spray one side of the doors with base coat (I used conversion varnish), put them on a drying rack, wait 35 minutes for them to dry, then spray the other side. Wait 35 minutes. Scuff sand front and back. Apply another coat of base coat. Scuff sand again. Apply two or three coats of top coat, with the flipping, waiting, sanding on those too. Then you have to package them for transport so they do not get damaged.

I checked pricing with four different custom, pre-finished door manufacturers so see if it was feasible to buy them ready to install, but they were so expensive that it wiped out any cost savings for the customer. Then you've got to go into sleazy salesman mode to sell the job, lie to them, rely on their ignorance, and tell them they're saving 50% of the cost of a new remodel. Not my style.

You'll also have to get a hinge boring machine or drill press jig, because they'll want the hidden hinges.

It effectively took a week from receiving a shipment of doors to having them in my trailer ready to go. It didn't actually take a week, but it's not like I could schedule a remodel at the same time.

Then there's the onsite spraying. You've got to mask off all the floors, walls, ceilings sometimes, counter tops, and appliances. This is something that is laborious, tedious, and time consuming. You also have to put up plastic barrier and some sort of ventilation to draw out the fumes and overspray and keep it out of the rest of the house. It would take me two or three full days just doing the prep work. I'd start Monday morning, and my goal was to do the actual spraying on Thursday morning. Doors, drawer fronts, and handles on Friday.

All told, it took me, as a one man remodeling company, two weeks to do a "recoloring." I made about the same profit as a conventional remodeling that takes a week to complete. The physical toll that recoloring took on my 51 year old body was the main reason I quit doing it, but I have plenty of conventional remodeling to keep me busy.

That said, I saw huge potential with this part of my business. There are tens of thousands of older houses in my area and plenty of homeowners who can spend $5000, but not $12,000. I'm not sure that you could build a company with employees around it. On a $5000 recoloring, I'd walk away with $3000 profit. When you start paying employees or subcontractors to do this same work, you'll really have to do a lot of volume, and the exponential increase in headaches that comes from having others working for you makes life miserable. I'm sure that more successful people just work through those problems, keeping their eyes on the prize ($$$), but I don't tolerate idiots very well.

I'd say go full bore with auto refinishing and detailing, or completely change to another business. Mixing the two seems desperate and strange, even though some of the skills and the equipment are common to both. I'd also caution against trying to be all things to all people. Pick a couple of things you're good at and focus on being the best at those. I used to do cabinet refacing, cabinet recoloring, and conventional remodeling. Now I just to the conventional work. Business focused, work is steady, and I'm less stressed.

I've been down in the dumps to the point that I was seriously considering throwing in the towel and going to truck driving school, but things are good now. I hope you can get it to work.

Good luck. Semper Fi.