Starting a business

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Musclecarfan

New member
Hello all. I've been reading this forum for a few weeks now and feel that this is the place to ask about a new business opp. I am an investor/construction company owner/builder by trade and have been for many years.
Recently, I've been approached by a friend to finance a detail business. Now to be honest, I don't know a thing about this business, but my friend has been in the autobody business for 20 years and says he knows what he is doing. To be honest, I couldn't tell by looking if he did or did not know what he was talking about. It's just not my trade.
What I'd really appreciate is if any of you pro's could offer up an explanation of what's required and expected in this type of business, maybe what I could expect as a range for startup and continuing operation costs, and what to look for and look out for as an investor in this type of business.
He is currently talking 10-20K in start up costs per site with several sites proposed. He wants to roll the sites out one at a time with two in the first 3 months-approx. I am having questions regarding estimating labor costs, equipment and material range costs per vehicle, types and amounts to allow for overhead, and how much production can be expected per employee. The current thought is that the workers will do basic washes at $10-$12 per car and more detailed jobs at $50 and up. I am thinking thet these prices will not support the business.
Any thoughts or comments will be greatly appreciated.
Thanks.
 
Here is a price sheet from the shop that I breifly worked at. CLICK HERE TO SEE THE THREAD. Charging the prices you are talking about isn't going to work. You won't make a single dime doing it that way. Your employee attrition rate will be through the roof. They won't make any money if you are only charging 10 bucks to wash the car. They will only see a dollar of that and they may have spent 10 or 15 minutes on the car. No detailer is going to work for those kinds of wages. First you need to figure out how much you are willing to pay your help. Then tripple that and that is what you charge the customer. You have overhead in equipment, rent, insurance, advertising, etc. You won't make any money and you won't be able to keep employees unless you charge more. The prices on that checksheet are similar to what I charge working all by myself and with very little overhead. Being mobile and doing cars at dealerships where you can line up 50 cars a day to wash is where you are going to see some money. There are other ways too, but I think the real money is just doing the work yourself. I understand what you are trying to do, but your pricing is all wrong if you want to make any money. Charging 50 bucks for a detail will sink your company in a month.
 
Thanks guys for the replies.
Poorboy, This would be in Milwaukee, WI.

Jngrbrdman, Thanks for the info.I thought the pricing was too cheap by a long shot. The friend who has approached me on this "opportunity" is the one who is talking about the $10-$12 washes. I told him that I thought it was too cheap right from the start. He wants me to pay his kid (20 yrs old) a salary of $400 a week minimum, no matter how many cars are washed. With payroll tax and workers comp, this would be a cost to me of $500-$600 a week. I don't think he could wash 60+ cars a week, since the building is not set up as a drive through operation. I think the kid could MAYBE wash 2 cars an hour in a perfect situation and probably less than that. If you're talking about wash, clean tires, vacume, do windows and so on, I could never do my own car in much less than an hour. I see him doing 20-25 a week, max.,IF we could build up the business to that level from scratch in a short time. If extra help was needed, well-that would be another $500-$600 a week. The deal we seem to have on the location is good and seems workable at this time, but the labor cost, coupled with equipment and materials cost seems out of line with the proposed income.
I have asked my friend to come up with a workable business plan that a bank or small business lender would consider, but so far, none is in my hands.
I see your point about just doing it yourself, and I can't see where the current situation would work out without higher prices. If there's any way you can see to make this work or suggestions you have, I'm open to your help. It seems like there's money to be made in this business, but only by those who know what they're doing and can control their costs.
Once again, thanks for your input.
 
Hi Bill,

Jngrbrdman is right about charging more money. you can't have family and friends with set salaries on the payroll...and honestly, unless you have set up accounts with used car dealers and some new car dealers, it won't work. OVerhead, Overhead, Overhead....very similar to real estate's three L's ...
the ones that make money usually have unskilled laborers that can be told to stay home on rainy days or bad weather...doing this in WI is extremely hard as you will have tremendous slow downs in the winter without having pre-established accounts..multiple locations:nono more overhead...
before you go further and possibly ruin a friendship, make sure you have the business plan in place, and pass it by a banker for a possible loan for extra start up funds...they'll let you know real fast if you have a viable plan.
 
Thanks poorboy. As someone who doesn't know the ins and outs of this business, I'm grateful for advice from those who do know. You all may have just saved me 20-40,000 and that's a lot in my book.
I will follow your advice and tell my friend that there are too many negatives that need to be addressed at this time. Perhaps if he can get these issues resolved, there may be some way to go ahead, but not at the current projected prices and not without concessions from his family/friends.
Thanks again, and I'm sure I'll have more questions.
Till the next time.
 
you're probably making a wise decision. if you have the money and he wants to borrow some with a secured note(like his home) then you would be ok, but body shop experience does not equal running a detailing business and the worst part of this business, is keeping good help!!!...even if you train someone, they will soon want more money and go out on their own...
If you want another opinion, contact Joe Kennedy ...he runs Auto Care USA in Buffalo NY and has been in business a long time...if he can make it in Buffalo, he must have some good business practices.
 
Are there more than 1 Auto Care USA places? I hear they love the ABC/FK1 systems for new cars. Been thinking of getting a Fall out Remover.
 
Woob said:
Are there more than 1 Auto Care USA places? I hear they love the ABC/FK1 systems for new cars. Been thinking of getting a Fall out Remover.
Click to expand...

I don't know and haven't talked to Joe for a while, buthe seems to make a living, but then again he's running the business, not just an investor:dunno
 
I totally agree with Steve, but with the exception of how the business is planned out and the 3 L's.

I live in Milwaukee Wi. and deal with a few place's on a Bus. level . There buisness boom's more so in winter that in summer. Mostly because of the abuse the car's take from winter salt ect...I'm not saying anyone is right or wrong , but it really depend's on the marketing is done.

Here is a classic example of how thing's can work , that maybe you think never would. I owned a commercial building on a main st. in a burb of Milw. (Gas station) I did'nrt own the bus. just the building. After they decided the liability were to high for auto repair's it was remodeled into a conv. store,but still had 3 service bay's (no lift's). The bus, owner approached me about running a self wash/ detail site.
After review of the plan I said go for it (as long as the rent get's paid...lol) They bay's got rented out by the hour or half hour and only 2 people allowed per bay , water & sewer & heat were provided. The rest had to be brought by the person renting the bay(cleaning suppies, wax ect...). Thing's were monitored bery close , but after word got out (after the first winter) it was booking out 2 week's in advance & in summer for the people who lived in apartment's ect.. who were car fanatic's it was usually booked out day's in advance. Sound's kind of crazy but it worked and was bonus income for the bus. owner. Keep in mind the conv, store was attached w/pump's so the self heated wash was a bonus in $$$ for the owner. After a few year's the owner sold out the store bus. and the new owner's approached my partner's and I for the buliding purchase and boooooom it was all done.

I would totally agree that this guy should have a bus./marketing plan and some major collateral put on the line of his own. ( HOUSE !!) like Steve said.

Just a little goofy story for ya.

Musclecarfan, I'm just west of milw. in a burb. if ya want to talk let me knoe PM or EMAIL me.
 
bill i own detailman inc for 18 years.i am completely mobile which cuts your overhead to almost nothing. to start i had a hose ,wet vac ,chemicals from walmart, power cord.used clients water and power at start but now have a van with water tank pressure washer power inverter etc.the key to business is clientele.i have thousands and never lack work.0 employees all independent contractors.i do cars jets boats cycles whatever.my men work on commision.i offer training in my town.
 
detailman1 said:
.i offer training in my town.www.nofreeadvertising.c0m.call for rates.my work featured recently on cover of jult issue of flying magazine.
Click to expand...

Detailman, this is awfully close to 'free advertising' which is not allowed on DC. Please be more careful about advertising and posting links that you will profit from as that is frowned upon by the admins here. If you want to be a sponsor contact Dwayne. No more free advertising please or the Fuzz will act with great vengance and furious anger.
 
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Let's just take the link out and leave it at that. No linking to sites that you profit off of. Share that information through emails or something.
 
Fallguy..that's probably a rare opportunity that you found, as most bays are used by mechanics, at least around here, whethter they pump gas or not. With the new EPA regulation going into effect quite a few years ago, many gas stations who could not spend the 500K to dig out the old tanks and replace them just went out of business and most were bulldozed. I check into one once and the rent was almost 3k per month..that was a lot of overhead to start with before heat/ac and electricity...

I think Musclecarfan, being only an investor in this business, would be in the shoes of most small business's ...only a few really survive:dunno
 
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