Take a chance or play it safe?

[Air Ready Auto]

I have been turning wrenches on one thing or another for the last 20 years. Everything from lawn mowers to missile launchers (my job in the Navy.) My friend and I have the opportunity to buy out an auto shop. It's in a good location and the shop is fully furnished with just about everything we would need. The current owner is retiring and his family doesn't want it so he is willing to let it go to us for pennies on the dollar. My friend and I have taken the current shop we work for and turned it from the joke of the town into a respected shop. I know that between the two of us we could do well, or at least not sink. What I'm worried about is being the owner. I have a family with three young kids. I'm worried about taking the risk at this point in my life. Before you ask, I trust my friend so I'm not worried about him backstabbing me. I've always had the cushion of not being the owner and not having those headaches to deal with. Jut show up to work, do the best I can, and get my paycheck. I've always done well and excelled wherever I've applied myself. Where I am now there isn't much room for growth and I've been feeling stuck in a rut lately. I know I have the management skills as I advanced quickly in the Navy and ran two work centers as well as a duty section. I know I have the technical skills to do the job. I'm worried about the economy and what is going to happen after the election. I'm worried about providing for my family. I'm worried about passing up this opportunity... Any advice/words of wisdom/encouragement/things to consider would be greatly appreciated.

[Venturous Randy]

You sound like you already have a good handle on knowing what you will need, what to expect and some of the frustrations of being the boss. This is one of those things you may regret later if you don't do it as it may be a good opportunity.

Couple things to consider. If the economy does drop, many people won't be buying new or newer cars, they will be getting what they have fixed. Another thing to consider is being able to stay up with all the electronics in newer cars with the knowledge and equipment required to fix them. Another thing to keep in mind is the legal side of running a business, from regulations to taxes and dealing with the public. Other than all that, it is a piece of cake.

Randy

[utadventure]

I think Randy is absolutely right regarding the economy. People will resist buying new in a poor economy.

 

Work with a trusted attorney and form a company in your state that will protect you and your family personally. Verify that there aren't any outstanding tax or legal issues.

 

Dave

[camos]

I know I have the technical skills to do the job. I'm worried about the economy and what is going to happen after the election. I'm worried about providing for my family. I'm worried about passing up this opportunity... Any advice/words of wisdom/encouragement/things to consider would be greatly appreciated.

That's a big question you are asking. It is almost inappropriate to be asking it here however, since we are almost like a family perhaps I am wrong about that. In any case, I'll take a stab at it.

 

I ran a small business for 30 years so I know there is more to it than just having the skills to provide the service you would be selling. You should do a serious self assessment of you and your partner's qualifications to handle accounting and tax requirements as well. Can you manage sourcing and payments of necessary inventory and tracking or controlling the costs of rent and utilities? Do you understand that all the money coming in is not yours until after all the bills are paid? There is far more to running an auto shop than just being a good mechanic.

 

Be realistic about your qualifications gained from military experience. Not meaning to be negative here but I currently work for an organization that hires a lot of ex-military. Many of the ex-officers who think they understand leadership roles don't actually know much of anything about running a business. The way governments and the military operate is far from representative of real life conditions in business.

 

I have seen a couple of instances of people who created successful business partnerships but when they expanded, hiring more employees they started to fail because their employees did not have the same level of personal commitment. Then there is the phenomenon of owners working 18 hours a day. Not just 8 or 9 hours at the "shop" but another 4 or 5 hours at home doing the books or chasing down inventory...or whatever.

 

Something else to consider is the shop you are interested in. Why is it not doing well? If part of the answer is location then perhaps you won't be able to do enough to turn the business around.

 

This is a big step and creating a business plan with an accounting firm and or a bank would likely be a very good thing to do prior to committing yourself to going ahead.

 

I don't know if that helps but you did ask.

Good luck with your decision.

[yamagrl]

I have made my living as a Self Employed/Small Business for 35 1/2 years.

 

Nothing is more empowering than success! The financial rewards can be great!

 

There are a few things to consider.

 

 

• Are you well enough funded to make it through the hard times. Employees get paid first. There have been successive months that I got no pay. There was a couple of times that I was upside down and was doing everything I could to just stop the bleeding.
  
• The risks and rewards are huge. And like said above "Nothing is more empowering than success"
  
• Insurance: Business Liability, Worker Compensation as well as your's and your families health insurance, etc.
  
• Family responsibilities
  

 

I have enjoyed success but it was a long time coming. The time of my greatest sacrifice happened when I could least afford it.

 

Would I do it again if I knew then what I know now... all things considered... I don't have an answer...

The considerations are many... and your decision is your's to make. Ponder the possibilities and make your best decision. Of all of the advice that you receive, the best advice will come from that "Little voice inside". Whatever your decision, go forward with fervor and don't look back.

 

Good luck! I'll be pulling for you no matter...

 

Heather

 

[venturesome]

Follow your heart.... but be sure to take your brain with you!!!

[djh3]

Man that is a tough one. Liability insurance is something I would sure want to figure in the mix. Seems that is the new get rich scheme. I supose kind of depends on included shop equipment and technology equipment also. Scan tool , alignment machine etc. Is it up to date? If your in the biz you know what I mean.

[bongobobny]

Kind of hard to be a success in life WITHOUT taking some sort of risk!! It's hard work and a lot of hours but if you are determined you can make it...

[Air Ready Auto]

---

 

I have seen a couple of instances of people who created successful business partnerships but when they expanded, hiring more employees they started to fail because their employees did not have the same level of personal commitment. Then there is the phenomenon of owners working 18 hours a day. Not just 8 or 9 hours at the "shop" but another 4 or 5 hours at home doing the books or chasing down inventory...or whatever.

 

Something else to consider is the shop you are interested in. Why is it not doing well? If part of the answer is location then perhaps you won't be able to do enough to turn the business around.

 

I don't know if that helps but you did ask.

Good luck with your decision.

 

 

 

Trust me, I have no delusions about the time requirements involved in owning a business. The shop we are looking at is successful. The current owner has done well for himself. He is almost 68 and is just looking to be done with it all. None of his family want it and he is just wanting to sell it to someone who is going to keep it alive.

[videoarizona]

I'm with Heather. I was self-employed most of my business career. There are a whole slew of lessons I learned, and one that stands out is always plan for a rainy day. I made some very good money, and and still had lean times without a paycheck. All that carried me through was my knowledge that I knew I was good at my career, and the savings I saved just for those dead times.Remember, the rewards far outweigh the risks.

 

So get an attorney who will work with you, a young pup or oldie who is near retirement and knows business law, get an accountant (or hire the people who work for the current owner) and go over the cost of doing business. You will find that you won't be wrenching much as you should be on the front line with the customers...until you can hire a manager who knows wrenching but also enjoys working up front with customers.

 

Take some time and talk to the current owner. Ask him why does he think he succeeded? Pick his brain about his customers. Is he willing to step in once in a while if you need him? Will he help you with the transition?

 

Then go for it. Life is short....and remember...if things do go south...make sure you recognize when it's time to walk away and close the shop. Don't hang on until way to late. That's one of the biggest mistakes an owner can make. Loyalty to customers and employees is great but not at the expense of everything you and your partner are worth.

 

Oh...and ask your better half about this. Talk to her about your fears and your positives...She is your best sounding board.

 

You can do this.....and if you commit...go all the way...put your heart and soul into it. It is your business, right?

[camos]

Trust me, I have no delusions about the time requirements involved in owning a business. The shop we are looking at is successful. The current owner has done well for himself. He is almost 68 and is just looking to be done with it all. None of his family want it and he is just wanting to sell it to someone who is going to keep it alive.

That's a big plus to going ahead with your plan. I still think you need to know why this business is being offered for less than it appears to be worth.

 

Owning and building a successful business is very rewarding. Statistically more people fail than succeed so it seems to me the best advice anyone can give is to rely on preparation rather than on luck. Something I have learned over the years is the more you know, the more you realize you don't know. You can take bigger chances when you are single but not so much when you have family responsibilities.

 

Most cities have a small business association where you can likely get some general advice prior to proceeding without disclosing your potentially good deal.

[cowpuc]

IMHO = WOWZY your getting some great advice here Ready! Thought I might add:

 

I was personally considering a partnership before I opened my bike shop. Another really good friend who had suffered through the loss of a business, and even worse yet - the loss of a really good friendship - strongly suggested I do some digging into issues that seem to plague Partnerships when compared to Sole Proprietorships and make my decision after doing so. I would suggest you and your future business partner take some time to study up a little on Business Partnerships and try to get a good handle on what can and often does cause them issues.. Avoid the possible pitfalls by identifying their potential and working ahead of them!!

 

Wishing you ALL nothing but the very best in your life's new endeavor!!

Puc

[yamagrl]

IMHO = WOWZY your getting some great advice here Ready! Thought I might add:

 

I was personally considering a partnership before I opened my bike shop. Another really good friend who had suffered through the loss of a business, and even worse yet - the loss of a really good friendship - strongly suggested I do some digging into issues that seem to plague Partnerships when compared to Sole Proprietorships and make my decision after doing so. I would suggest you and your future business partner take some time to study up a little on Business Partnerships and try to get a good handle on what can and often does cause them issues.. Avoid the possible pitfalls by identifying their potential and working ahead of them!!

 

Wishing you ALL nothing but the very best in your life's new endeavor!!

Puc

 

I think this might be the best suggestion yet. A Partnership is like a marriage only more complex.

[gggGary]

Random thoughts from a guy who spent 30 years in retail in several partnerships and as a sole owner.

Forget holding tools, that isn't what a business owner needs to do.

People skills are #1

So are financial skills LOL

Employees will rip you off. Repeat this often.

Your co owner will have different goals than you. Have a dissolution plan clearly spelled out. This may save ruining the business later.

Yes the auto business is changing, the role for independent shops and repair is shrinking.

You have to be willing to reinvent your business on a regular basis What is important to your customer is constantly changing.

You will live the business 24/7 it will never be far from your mind.

Good luck whatever your choice.

[Du-Rron]

Take all the above advice to heart. Then, also go to the Small Business Administration

 

http://www.sba.gov

[Trader]

Make sure you have a written agreement with your partner that also lays out expectations ,job responsibilities, and exit strategy for both parties.

The fact he is a friend means very little in business.

 

Don't be overly daunted by the office work.

I owned a one man sign shop and my wife had a very successful beauty salon with 5 employees.

I did all the bookkeeping and payroll myself and still worked 12 hour shifts at my job.

We hired an accountant to do our yearly taxes.

 

Software packages like Quickbooks make it pretty simple.

You can pay someone to set it up and then you just put in the data.

It really is not bad at all.

 

There have been comments about managers and employees but, unless I missed it, you didn't mention how many bays or if any employees.

 

A service business is dependant on repeat clients.

NEVER do anything cheap or underhanded. Word of mouth is your best advertising....but one bad review will cancel out many many good reviews.

Its only human nature. We expect good service and don't usually tell people when you get what you expect unless something exceptional happens.

But if you get lousy service or even get ripped off then EVERYBODY hears about it!

 

Keeping up with The cost of all the diagnostics and misc. equipment is a consideration...as well as making sure you are insured and isolated from personal liability if anyone tries to sue or if things go bad.

 

A positive is that it is an established business so you shouldn't have the normal gradual increase of a start-up.

 

Have the old owner stay on for a couple of months during the transition and during that time send a notice to every customer on his books informing them that you are taking over and will continue providing the great service they expect. (unless he doesn't have a good reputation then just promote yourself emphasizing friendly ETHICAL service)

 

People want a mechanic they can trust...that is the most important quality. If you save them a few bucks on a job...make sure they know it!

 

Finally, remember, you have skills that are needed pretty much anywhere.

It sounds like you are not thrilled with your current job and If your new shop fails, you can get a job anywhere.

 

The satisfaction and potential for growth from owning your own business is fantastic.

 

my two cents?

 

GO FOR IT!!!!!!

[Flyinfool]

There has been all great advise above. And most of my thoughts are already spelled out.

I had the opportunity to buy the company that I worked for really cheap back when I was in my 30s and single with no responsibilities to anyone other than my self. To this day I still keep kicking myself for not taking the chance. You will never know for sure if you have the right stuff if you never try.

 

One of the big points is to have legal help to be sure you are protected in the future, best of friends do not always remain best of friends once they become partners. I have seen it with to many of my friends. No such thing as an agreement if it is not in writing. This is a business and no longer a friendship. You have to treat it that way. Not to say that you can no longer be friends with your friend, but treating business as business will maximize the chances of remaining friends. Verbal agreements always are remembered differently over time. The words on a paper do not change with time.

 

My sisters hubby along with a partner worked at an auto repair shop right out of high school. They were of good character that just could not go along with the shop owners requirement that the bill be padded with unneeded parts as often as possible. You know the cheap easy stuff like air filters and PCV valves. The 2 of them started their own shop and made the reputation of not being the cheapest place around, but the bill was low because they made a real effort to reuse any part that could be safely reused, even if it made the job a bit more difficult for them. If they knew a customer had money issues they would patch something up for cheap but make sure that the customer knew it was a temporary fix to get by till they could fix it right. AND ONLY replace parts that really need replacing. That alone accounted for a huge amount of word of mouth advertising that made them so busy they had to turn work away at times.

 

I wish you the best of for which ever road you choose.

Edited September 19, 2016 by Flyinfool

[Dragonslayer]

How bad do you want it? Would be my first question. If you want it with all of your heart and are willing to fight every inch of the way, Then do it. Don't let anybody deter you and you will be a success.

 

If you doubt yourself stay where you are.

[Jrichard]

GREAT Words of business wisdom from ALL who responded!!!!--------------NOV.8th--------------the day of GLOOM or GREAT JUBLATION----------people Tend to hold on to there hard earned $$$$$$$$$-------prior 2 and after an ELECTION:-----for the first 6 months after the DC festivities-------------thus saith!!!

[Yammer Dan]

I would have loved to have a chance like that again. Read Puc's and FlyingFools posts again. And my advice?? I'd GO FOR IT!! But just check everything first. And make sure you won't need to spend all you make for outside help on the business end of it!! GOOD LUCK in whatever you decide.

[SilvrT]

 

One of the big points is to have legal help to be sure you are protected in the future, best of friends do not always remain best of friends once they become partners. I have seen it with to many of my friends. No such thing as an agreement if it is not in writing. This is a business and no longer a friendship. You have to treat it that way. Not to say that you can no longer be friends with your friend, but treating business as business will maximize the chances of remaining friends. Verbal agreements always are remembered differently over time. The words on a paper do not change with time.

 

 

Although I have been in business, I have nothing to add except to say the above words are MOST IMPORTANT.

 

A friend is only a friend as long as they want to be and they can turn on you as quick as a tomcat.

 

Best of luck in your future endeavor.

[RedRider]

Is the current owner open to staying around for 6 months or so as a consultant (yes, you will likely need to pay him)? That may help with the learning curve of running your own business. He has certainly learned a few things over the years that will be helpful to you.

 

My local indy auto shop is busier than ever. He is honest, does good work, and charges a fair price. He also doesn't work on weekend as that is family time.

 

Go for it. Good luck.

 

RR