Independent shop owners - current or previous
 

Any independent Audi, BMW, Mercedes, Porsche, etc shop owners willing to share insight with someone looking to go down that path? Would really appreciate it.

May be better to PM me - thanks!

I'm an accountant but work/have worked with indie shops in the past.

number one thing lacking is discipline on the part of the owner. typically you see a guy who's great at wrenching and wants the entire bill for himself but has no idea how to actually run a shop and manage other people.

if you think you can beat these issues then explore further. if you don't then I suggest you find the best option is be employed by others.

No partners, no employees is the best way. Saves a lot of headaches and payouts and paper work. LLC or S corp. Working for someone sucks, but it's easier.

I help organizations

Echoing Barnett’as comment, I think the common pitfall here like any business is totally underestimating the activities away from the wrench

Marketing/sales/admin/inventory and parts etc

Keep in mind as well, the more decisions the more delays

Some things to figure out:
-what do you do when a potential or past customer want to drop in and gab?
-what do you do if someone is surprised by the price tag?
-what do you do if a project hits a decision point and you can’t continue
- what do you do so that you don’t spend all of your time juggling stalled project ( or active projects) versus working on them
- what do you do

Lots more questions, each with multiple good answers both preventative and remedial

Also know that currently those business service opportunities have plateaued. The large margins per job, especially maintenance have all but disapeared. As it was told to me recently, if you have that kind of cash and time - look into something else that will have better growth and less reliant on highly skilled labor.

A LOT of truth here in my experience. I was great at producing the product, but not good at running the company. Early on I realized I wasn’t a businessman, I was just a man running a business. I eventually found a good office manager and was lucky to have an important vendor who saw my success as key to theirs. Things were great for 15 years, then they started getting greedy. Caught my manager embezzling and after she was gone discovered the vendor was grossly padding his invoices (with her collusion). I took over running the company and hired someone to do the work. I was pretty good at it by then, but I was miserable sitting there crunching numbers and dealing with employees while my replacement did all the creative work.

A great example of this is MKS Performance in Camarillo, CA. He just went out of business, a couple years after opening...NOT from a lack of customers. He had them stacked up trying to get in there. He lost it due to poor cash-flow management.

The owner was a certified Porsche technician at a local Porsche dealer. A super nice guy and EXCELLENT mechanic. He developed a strong following and jumped out on his own...Unfortunately, with XXXXX business management or P&L experience. When you are put COD on parts, and cars start stacking up without parts to put them back together, even loyal customers start getting angry.

Edit: I'm editing this to say "poor business management and P&L experience". I can't say for sure that he had ZERO business experience.

If I had to do it over again, I would be side jobbing out of my garage at home . Cash .
I probably made more money in my parents driveway when I was young, then I do now .
There are a ton of expenses you have to deal with . Bis insurance is $ , Repair and invoicing software is $ , tools are $$$$. Your job is never done.
Make sure you love it , it is hard work, and not always rewarding . Like the gambler said above, seems to me, the opportunities to make the dough are shrinking .

I have done it both ways. At one time , I had a larger shop with employees. I sat in the office all day, answered phones, ordered parts, wrote invoices, called customers,sold jobs etc. I had it figured out pretty well, and started to make good money, but I HATED my job so bad, I was near the edge. I was made to fix stuff not invoice others doing it . I moved to the country ,bought a small building and have been solo for 17 years now .
Managing employees is tough. If you are going to go this route, make sure you have some experience at doing it. I made a lot mistakes here .

Many good pieces of advice here but this one is near the top of the list.

I don't own a shop but I do own a small business with 18 employees.

Since my business is a dental specialty (periodontics) I can say that the above analogy (one head mechanic directing many "extension" junior people) does not attract the kind of customers you want in order to make ends meet (at least in my business). Good people with $$$ who find value in what you do are more attracted to John Walker's current business model. The "Groupon crowd" is attracted to Afterburn's model and those folks are not the customers (patients in my case) that you want.

100%

Afterburn's model appears fine with the stipulation genuine quality is delivered. Supervisor also has to be savvy enough to speak intelligently with customers and develop a relationship of trust with the mechanics. (I would melt down. I can handle three things effectively. Nine, no.)

The quality required in periodontics can't be comparable. Also, even the el-cheapo dentistry volume shops have to have dentists to do most work. They are not junior even if in the bottom half of their class.

I have read business models for an Earl Scheib/Maaco type shop that roughly sounded like Afterburns model but quality was, stated in various words, secondary.

^^^^Of course it was - as you won't find quality people to work for you under those terms^^^^^

To my first response to the OP's question - my former service director now owns a small (5) bay euro shop. Has 2 main techs, 1 young up and comer. It was a indie Saab shop years ago, then they had to expand to other makes just prior to 2006 as those opportunities evaporated.

Primarily now BMW, VW, Audi. But last year gross was less than prior. So he's now looking to expand to service Jaguar

There is margin in generic cars. Struts, rotors, timing belts, etc. It's easy work. However, along with generic cars, especially genuine POS generic cars, comes the mentality of the not so well heeled customer. Frankly, many are broke.

The ones that are cool, I keep around and do a little semi-charity work. Others, I just tell them the price and they go away. Unfortunately, that's after doing the first job for them.

In a five bay shop you don't have the luxury of assessing psychological profiles. That is getting into more serious business.

Why do you want to go down this path?

One specialty shop I know of has the owner with his own bay. His techs have the others. Supervision is not something they require. His value is in running interference as well as taking care of administration (including parts ordering etc) so they can be productive

He closes his door to the public three days a week.
The other days are by appointment only, and he schedules those appointments carefully so that he doesn't have many people interrupting the shop if at all on those days.

He spends a lot of his time on social media marketing his shop by publicizing projects and adventures the shop has been involved in. he takes in high end work, project work and turns away anything that doesn't fit his exact mold. I have no idea how long it took him to build not so much a customer base but a following and brand awareness

Wow thanks for all the interest and replies. A lot to take away from every post. Many have commented on the realities of running a business. This I know quite well albeit with much larger companies....I’m currently the President of one. But I grew up working side by side with my father in a small business. I have a pretty good idea what I would be getting into from that perspective.

This is probably more where I was seeking insight:

These specific market / industry dynamics. I am very curious what others know/think about the nature of demand for service of this type (not a ***** box dd but not a Pagani either) and the conditions facing service providers.

Thanks again- am grateful for every word and opinion

What would you like to know? I'll do my best to answer. You can email me directly. There is a closed Facebook group for those thinking about starting a shop, not solely Euro though. I am not on it, but I see it linked to the Auto Shop Owners Group I am on. The group I am on is like any other group. A few really smart dialed in people and then the rest... :)

https://www.facebook.com/groups/194321714486392/

Margins are still there to be had, if they weren't shops would be closing. I am happy to share offline with you some details of how I run my business and what I have found to work and make it successful.

If you want a business (employees) and not a job (one man show) then it requires the same level of marketing, SOPs, HR etc that any successful business does. An auto business is not unique in that regard, it is a customer service business first and foremost, whose product is servicing the clients needs for their vehicle. I love taking care of clients, getting to know them and tailoring the service specifically to their needs. I also love helping my staff grow in their skills and business knowledge so it is a perfect match for me.

I am sure our business models are very different, but I get the feeling that Mr Alton runs a top notch repair facility. I always try to pay attention when he speaks about his business.