Considering purchasing into a General Auto repair shop. I have been told by the small businesses bureau and franchise companies I am considering that the majority of owners are in my category of being a auto enthusiast but not a mechanic. Which I have never met anyone that was not a mechanic that owned a shop. There are 3 shops local that I am considering purchasing all 3 of them are folks that retired. Any advice? insider tips?
Shop owner since 1987. Small shops income is directly attached to how hard, and how many hours, the owner is willing to work.
If you are hiring techs, all the good ones have jobs, and their bosses won't let them leave. All the open positions are filled by the same inadequate people running in circles.
Think about some of the discussions you see on this board. Do you really want to interact face to face with the tightwads that hate paying a fair price for the repair of their machine that is vastly more complicated than Apollo 11?
In reply to trigun7469 :
You are familiar with this, I hope. If scrolling through that for five minutes doesn't send you screaming into the night, you should be golden.
My father and I run a small operation in Southern California. He was formerly a tech, as was I. However, neither of us turn a wrench too often any more. We've been in business since 2010 as our own shop but he's been managing auto repair since the early 80's. There's nothing wrong with owning a shop as an "enthusiast" and not a technician. If the shop is small, though, it certainly pays off to be able to jump in and knock out a job or two when things get too busy. Also, biggest thing we've learned in 10 years now... Don't let the owner be the person to write the repair orders. When I took over writing the ROs, we gained roughly 10% gross profit just in properly billing our customers for the work that was done. As the owner, it is absolutely within his right to charge a customer less if he so chooses but you're essentially giving away the only profits the business makes.
In reply to E_NinjA :
plug your shop! Lots of us in so cal would love to give grm member some business
I did it for many years. I closed up shop largely because of the customers that cannot be satisfied. They refuse to buy the preventive services and then come in pissed off because it broke.
TurnerX19 said:I did it for many years. I closed up shop largely because of the customers that cannot be satisfied. They refuse to buy the preventive services and then come in pissed off because it broke.
That's the nice thing about working in the aftermarket space. People like to spend the money, it's a treat.
Flyin' Miata started as a Porsche/Audi/VW shop in 1983 and didn't go full-time into Miatas until 1996. I wasn't there at the time, but Bill doesn't seem to regret the change.
Never an owner, but general manager of a chain of 13 shops in TX for 7 years, so one step under the owner.
Our biggest trouble was getting good techs, keeping good techs, and finding ways of paying enough money to those techs that they didn't shop a more lucrative job.
My biggest strength was keeping a happy work environment for the folks. Also didn't hurt that I hired a really beautiful aspiring young lady as our transmission runner. I had a handful of actual transmission builders spread out at the locations and it was her job to pick up transmissions and deliver them to/from the builder/shops. I found that the techs were eager to work because it meant Aubrey the Pin Up Girl would be making a visit.
I remember one dry spell when we had nothing on the roster to do at one shop. The service writer got ill and parts were delayed. I told the guys if they wanted to take the day off they could, but I would like a couple techs there for possible walk-ins. All 7 of them showed up and spent 8 hours cleaning the shop, doing inventory, and installing a paging system for zero pay. Made me think I was doing something right. I ordered pizza and beer for everyone.
Curtis73 (Forum Supporter) said:Never an owner, but general manager of a chain of 13 shops in TX for 7 years, so one step under the owner.
Our biggest trouble was getting good techs, keeping good techs, and finding ways of paying enough money to those techs that they didn't shop a more lucrative job.
My biggest strength was keeping a happy work environment for the folks. Also didn't hurt that I hired a really beautiful aspiring young lady as our transmission runner. I had a handful of actual transmission builders spread out at the locations and it was her job to pick up transmissions and deliver them to/from the builder/shops. I found that the techs were eager to work because it meant Aubrey the Pin Up Girl would be making a visit.
I remember one dry spell when we had nothing on the roster to do at one shop. The service writer got ill and parts were delayed. I told the guys if they wanted to take the day off they could, but I would like a couple techs there for possible walk-ins. All 7 of them showed up and spent 8 hours cleaning the shop, doing inventory, and installing a paging system for zero pay. Made me think I was doing something right. I ordered pizza and beer for everyone.
Hot chicks
pizza
beer
damn!!!!! Wish you were my boss
In reply to Curtis73 (Forum Supporter) :
What? No pics of Aubrey? 
None with clothes on.
Kidding.
I don't think we're friends on FB, and that was 10 years ago.
Most shop owners, over 86%, are current or former techs.
A few rules for success.
-dont have the owner write service
-exit schedule like a doctor's office, with 90% of customers you know a window of 3 weeks of when they'll have driven, 6k, 7500, or 10k miles next based on their mileage and service records. Schedule that next service before they leave. And set a reminder in your Google calendar to order pads and rotors three or four days ahead of time since the courtesy inspection that you did today showed that the pads were at 3/32nds. Let your client know that next time they come in they'll probably need brakes, give a current estimate and that next time they're in you'll check them out to make sure they're still safe and have an up to the date estimate for them, as parts prices fluctuate, upon arrival. In the meantime you'll already have the parts there, meaning you don't have to pull the car in and out of the shop and wait 90 minutes for parts to arrive. Then from a convenience factor your client won't need to bring the vehicle back. This also works for any scheduled maintenance including timing belts water pumps spark plugs and down the list. Too many shops order that stuff once a job has been sold. When the conversation about it should have occurred the previous time the customer was in. As an owner that's 6-12 minutes for a tech to set the lift park the car bring the keys back get keys for another car pull it in the shop and reset the lift. Do you want to pay your techs to turn wrenches and make hours or to be lot porters?
Don't be open weekends. If you want to retain the best techs, work life balance is important. Alternating or rotating weekends doesn't cut it from a quality work life balance. Also say a vehicle has a job sold on a Saturday at 2:30pm, when are the parts to complete that job going to arrive? More than likely Monday morning. Which should already be scheduled. So now you have a tech who came in a Saturday, found and diaged an issue, the job was sold he still didn't make hours, the customer has a few days to price shop or watch youtube videos, is low key upset (not with you, but in general) as something is not right with their vehicle, or it's still at the shop and your Monday is overbooked. Weekends, at best are really a break even proposition and not worth the damage regarding work life balance and reflection upon ownership. Will you be there EVERY weekend? Would you want to be? Attracting good techs is difficult, every weekend off is a good start. The only exceptional make to this, is if your state has yearly safety inspections. If you want to be open for only safety inspections, not even oil changes, on the weekend and simply schedule work out based upon what comes in, then have at it. You'll lose 40% of the potential saleable work, but in all honesty, most shops can't keep up with incoming workflow from inspections. You really need 4 techs to 1 inspector to be able to do so.
Have a plan to get out. And I don't mean that as a deterrent or negative. But have a retirement date, a succession plan including who will likely be the future owner. Will it be a family member? Are you looking to groom a tech or service advisor to eventually take over that role?
Work on trailers. People with trailers have toys. So they can either afford toys or want their weekends free to be able to enjoy their toys, which means they'd rather not work on them in their own time. 90% of the work on them is brakes, wheel bearings, lighting, tires or wiring.
I expected The Capt would chime in and I expected he would have deep wisdom. Expectations met!
You should also talk to The Capt by phone.
trigun7469 said:Considering purchasing into a General Auto repair shop. I have been told by the small businesses bureau and franchise companies I am considering that the majority of owners are in my category of being a auto enthusiast but not a mechanic. Which I have never met anyone that was not a mechanic that owned a shop. There are 3 shops local that I am considering purchasing all 3 of them are folks that retired. Any advice? insider tips?
The places you are considering, are the current owners already retired and the shops are closed and need reopened, or currently running and you are buying a turnkey operation? Is all the shop equipment and specialty tools included?
Do you have business management experience?
In reply to gearheadmb :
They are already retired, but most of the equipment and tools are there (but need maintenance and/or replaced). I have some management experience and have 20 years of customer service experience. I am in talks with 3 franchises, one of the franchises is headed by a friend who I have worked on projects before and have a good working relationship and honest communication line. I like the idea of a franchise because there is a lot I do not know and they can mentor me.
In reply to trigun7469 :
If you don't mind disclosing the franchise options, I can tell you which one I'd be more likely to go with.
In reply to captdownshift (Forum Supporter) :
Rad Air Complete Car Care (my friend owns a franchise and is the support for new franchises)
Midas
AAMCO
I am open to review others.
In reply to trigun7469 :
With regards to ownership support and training of management and staff
1) Christian Brothers
2) Meineke (seriously, they've made huge strides in the past 5-7 years)
3) AAMCO
If you're not able to get a christian brothers or Meineke in the location due to the territory being claimed, then I wouldn't compete as a franchise within that area. I'd get with Napa regarding being an autocare center and technet. I'd also sign up for myshopmanager immediately.
Not much to add but I've noticed a bunch of small gas station service shops nearby all sporting a new corporate livery. Metro Motor.
Kind of an overnight transition.
Different gas brands but that means nothing here as one guy owns almost all the different gas stations.
In reply to captdownshift (Forum Supporter) :
Interesting about the exit plan.
I worked with a lot of pump rep firms that are second generation and this was a big problem. Second generation easily took over from parents but third generation never had an interest and the current owner needed the money from the sale of the business.
I have seen top employees do the buyout to make the transition- something to think about.
In reply to captdownshift (Forum Supporter) :
I looked at CBAC, but couldn't believe how expensive there franchise fee of $135,000. Most places are $35k, with a royality clause. They aren't looking in my area, but I will contact them. There was a Meineke in my city already, but they closed and reopened as a non-franchise. There was a AAMCO, but it closed and reopened as a Monro, I believe they are new owners. The AAMCO has a lot of bad reviews.
My customers consist mainly of Independent (non-dealer) auto repair shops. So I am not a shop owner but the business of the Auto Repair Shops is my business. There is a lot of really good advice given above. (I'll mostly repeat some from above but may add in some others below.)
You are REALLY going to have a hard time finding quality help. I am asked several times a week by shop owners/managers if I can send techs or service writers their way. (and I always have to honestly answer that I don't know of any quality individuals who are looking.)
TRUST is the key separator between GREAT shops and the others. You want customers who trust you to keep their car in safe, efficient operating order. You do not want customers who see you as a necessary evil. Don't waste your time on those customers. Specifically, you want the customer that briefly describes the problem or noise the car is making while handing you the keys and saying, "call me when it's fixed." You do not want the customer that leads with "how much is this going to cost?" Your challenge is to work with the right customers. And again, TRUST is the key.
Don't do work for used car dealers. They don't want to pay what you're worth and I'm told they don't actually like to pay period.
Personally, the independent shops that aren't franchises look like a much more pleasant workplaces to me than franchises. That's just my experience from my unique vantage point.
And I just want to reiterate that I don't see any bad advice being given so far in the thread. Lots of good stuff!
In reply to trigun7469 :
Just my outside observations. When I think of Aamco I think they are just a transmission service company. My fear is their narrow scope. If they rebuild transmissions, my fear is that they will certainly see my car as needing a full transmission rebuild. Sort of the wisdom that if you see every problem as a nail then you will see every tool as a hammer.
But, more important than this, I see transmissions as the second line of business that Aamco offers. My impression is that their first line of business is FINANCING. This is further driven home to me when I go to their website. Look at that page. It is generally broken into 3 segments. In the top 3rd of the page we get an overview that highlights Coupons, Tips and Financing options. The 2nd 3rd of the page is all dedicated to financing. Not until the final 3rd do we get to trust, quality, value. This all leaves me leery. To me, it just screams of predatory lending on overcharged repairs, But, even if the repair prices are not overcharged the profit will certainly be made up on the lending. Like buy here, pay here lots, I have this feeling that Aamco doesn't really want your business if it turns out you are going to pay cash (denying the store to make the long dollar from the financing.)
Sure, I bet there are Aamco owners making some good money which thereby makes it a good franchise but I'm not sure if they are a model I would want to play in.
Also noted...Their website calls Aamco "Total Car Repair". My guess is they are trying to get out of the "one trick pony" game and into repeat customers for more general repair. Interesting because another crticism I was going to have with Aamco is that as "transmission only" there would seem to be very little repeat customers.
I'm going to put my plugged nickle in here from the tech standpoint.
I've worked the AAMCO franchise, just they started the "complete auto repair" BS. It is a big money grab, as every car rolling in is a $3k deal at minimum, unless its a LOF. I replaced several engines in cars that didn't deserve them, like 2.7 powered LH bodies. Lots of high mileage JY deals too. Trans "rebuilder" was a guy that didn't deserve to be rebuilding anything, great R&R guy but not a rebuilder. Lots of these franchises have barely competent owners who couldn't run a lemonade stand. Lots of people who just want the quick buck and screw you guys. Lots of substandard equipment that gets thrown onto the tech's back to supply, like a $4k solus or the like. My dad used to work for the local west Michigan based AAMCO back in the early 80's and they were a great company with owners that maybe didn't know "how to business", but they knew how to keep customers and employees happy and still make lots of money.
Biggest problems I see or have seen, is that automobiles have gotten so complex, you have to stay well ahead of the curve in diagnostic equipment availability, if you want to work on anything past about 2000, that isn't just simple maintenance. This is a big hole that needs to be filled but with automakers offering stupid low rates and allowing buyers to borrow home loan amounts of money for a vehicle, it is hard to justify being in this segment, unless you want to deal with lower income demographics that don't or have the money to pay for your time.
As far as the "techs", I wasn't nor did I attend any formal training, just learned from my dad, uncle, and various Hot Rod and Super Ford magazines growing up. Most of the formal trained techs have crippling student loan debt, about 30k, on top of now needing the weekly wrench coaches, to have anything to work on todays vehicles. Most schools don't force the students to buy any tools, just grab from the "tool room". They are groomed to come out to "have the best training in the world" attitude, when they couldn't fix a Huffy single speed bike. This is on top of labor times that keep getting trimmed back to a point where "you can't even grab a wrench fast enough" before you aren't making any money for yourself. Or you are "forced" into upselling the snake oil services to turn hours, which is why repair places leave a general distaste in the mouth of the public and where everyone "has a buddy who can do it cheaper".
Back to the regular discussion....
In reply to John Welsh (Moderate Supporter) :
Regarding your last statement (I'm sure you already realize this but stating it for others who read): There are actually lots of repeat customers for transmission shops. They are general repair shops that farm out the specialty work to a transmission shop. You find lots of coopetition in the auto repair world. A good shop that doesn't have an alignment machine will happily have a car aligned for their customer. Same goes with tires, custom exhaust, etc.
From my viewpoint the shops that specialize (particularly transmissions) generally have more business than they need.
Not sure if that fits with the OPs scope of "general auto repair" but it's certainly something to consider for an aspiring entrepreneur.
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