“If you owned a business you would know…”
How do you know that MikeInNH does not own a business?
Read his posts.
Part 1:
So you’re making BIG assumption. You’re saying that all these businesses that failed are because they were SUED???
This is a point you still don’t get.
It doesn’t matter if the liability cost is $1000 or $1,000,000 a year…The point I made OVER AND OVER again…is that even if the liability was $0…You can’t make a profit from this type of business. The OTHER costs make it way to costly to operate and still make a profit. It DOESN’T MATTER what the liability costs are. I’m NOT SAYING there isn’t a liability here…I’m saying it DOESN’T MATTER…because you’re NOT going to make any money in this type of business. Is this so hard to understand.
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Well Mike, it’s clear you keep trying to make a point over and over, but that doesn’t mean you have a point. I disagree with you opinion. If it weren’t for the liability issue I think you could make a profit.
Other than the liability issue, it’s a low overhead venture. A plain Jane building with lifts and some specialty tools for rent on the side. They pay up front for rental time in the bay and when the time’s up they get out of the bay or pay for some additional time.
It’s simple and easy to manage.
There are lots of repair jobs where the parts cost 10%-20% of the job and the rest is labor. But many, many people have no place to do their own work even though they have the skills to do it. By renting a work bay and doing your own work you can save big money instead of paying one of our techs $125 an hour to do a basic but time consuming job.
But it comes down to liability. In our shop, our insurance company forbids anyone to be in the shop area except our trained employees. Even our admin staff can’t venture back there, and certainly no customers. One bumped head, cut finger or stubbed toe and you have a potential lawsuit.
And in the rental bay business that’s exactly what you’re doing, you’re putting the customer in the service area that’s off limits to them in other shops. So clearly liability does matter. In fact it’s all that does matter, because otherwise this business could work. Now is that so hard for you to understand?
I’m going to rephrase this a little differently.
Company has a Starting point of A.
It’s goal is to reach C. Where C is to make a decent profit while paying very HIGH liability costs.
Before it can reach C it has to reach B. Where B is to make a decent profit while paying very LOW liability costs.
We both agree that C is NOT reachable.
I also contend that B is NOT REACHABLE. THEREFORE…C is MEANINGLESS.
It doesn’t matter if your liability costs are high…you’re NOT going to make a profit in this kind of business even if liability costs are low. So why even consider Liability costs…THEREFORE the statement that it’s the lawyers and insurance companies are the reason these businesses don’t exist is BOGUS.
This is one of those times when I’m on MikeInNH’s side. Apparently, you, Benzman, don’t understand
“Other than the liability issue, it’s a low overhead venture. A plain Jane building with lifts and some specialty tools for rent on the side”
that “tools for rent” is a liability issue, which is why most shops have a policy of not letting customers use their tools.
“low overhead”… that right there is funny, I don’t care who you are.
it’s a low overhead venture. A plain Jane building with lifts and some specialty tools for rent on the side.
I don’t know where you live…but here in the Boston area (WHICH THE OP WAS ASKING ABOUT) it’s NOT a low overhead venture.
A 5 bay garage with lifts is going to cost you a minimum of $15K/mo. If you can get it cheaper then that let me know where.
Heating in the Boston (MINIMUM of 6 months a year)…$2000/mo.
Electricity…$2000/mo.
Forget about hiring someone…no money for it. So don’t get sick. Also keep it open 7 days a week or 5 days a week at 10 hrs a day.
Just RENT and simple utilities you looking at spending $20k/mo. If you rent out the bays at lets say BEST CASE scenario of 70% on average for the year. Personally if you can average 50% for the year you’re doing GREAT…you’ll need a MINIMUM of $30/hr JUST to break even…and there are other expenses…like loss, theft, damage, phones, disposal of hazardous materials…etc.
And those figures are based on a company that is already established. When you first start up you better have some good cash on hand to cover your losses. If you can average 10% capacity your first year I’d be very very surprised. At 10%…after one year you’d be running at a loss of about $60k.
Now if you can do that cheaper where you live GREAT…But the OP is looking the Boston area.
Liability insurance…FORGET ABOUT IT…you can’t afford it.
Back in the 80s an ex-boss of mine who was a Subaru dealer found out the hard way about liability.
A letter from an attorney who claimed a lady had tripped over an air hose in the shop while getting some paperwork out of her glove box and was now suffering chronic headaches cost my boss a few grand out of pocket just to keep this away from his insurance carrier and out of court.
And the husband/wife in question had (past tense) a personal relationship with my boss. Imagine if they were complete strangers.
(And this wife never tripped over anything. My boss walked the couple into the shop and I was also present when this allegedly happened.)
A couple of grand may not sound like much today but in early/mid 80s dollars and out of pocket it’s a bunch.
I bought the 4 post lift from an automotive supply company here in Massachusetts (North American Automotive Equipment - http://www.naautoequipment.com/aboutus.html ). They sell nationally. I had it delivered and put it together with the help of my boys - it’s tedious adjustments at the end, but not difficult. Most hydraulic lifts today are fool proof as far as safety. This lift has the typical spring lock safety which locks in every 6 inches. In addition, it has another safety in the unlikely event that one or more cables broke. My garage has 13+ foot ceilings so height wasn’t an issue. So far I have no complaints at all. One thing to keep in mind if you’re serious about buying one is that salesman will try and tell you to stay clear of any lifts made in China. The fact is, there are no hydraulic lifts (for the hobbyist/homeowner - less than 15K capacity), that are made here in the US. Some companies will claim that their lifts are manufacturered here, but they’re not - they’re “assembled” here - huge difference. At $3.00 a pound for US Steel, the lift I have would cost almost $6K if it was made here in the US. Also, the lift I have is tested at one and a half it’s rated capacity of 8K pounds.
Wow, that’s a lot of points you’re making there. In STERNLY written CAPS LOCKS as well…
Unfortunately, sternly written caps locks rarely changes my opinion.
While I respect your opinion Mike, I disagree with nearly point you made. So there we are, a dead horse beat into dust.
I shall now move my opinions on over to other threads. Hope to see you there.
OK you have the lift, other than the idea behind “if you want it done right you have to do it yourself” what kind of jobs would make sense for both the customer to want to do himself and that would make it possible for the shop owner to make a profit?
At the Dealership they used some fancy formula to come up with what each lift must generate to justify it’s existance and the figure was quite high. What would you have to charge a customer for the lift (I am thinking above 50.00 per hour) and with this rate would it work out to be a “win” for the customer? (again not taking into account those that value doing things themselves as they a an “unatural” factor).
I have seen “hole in the wall” no lift buildings zoned for auto repair in Palmdale CA (in the Mohave,North of L.A) bring 3000.00 a month in rent. I guess if I guy owned the building free and clear this could allow him to charge less, but this is also an “unatural” factor.
How about renting the space for a guy to do a restoration? perhaps that is an ideal customer for just a correctly zoned flat stall rental, still expensive for the "resto’ guy.
Around here the costs are much cheaper than on the coasts. A gentleman here (and this guy is a real weasel as I’ve known him for 40 years but not on a friendly basis) has a nice 6 bay building with a storage area that he rents out for about 800 a month.
The big problem with this business model in my opinion is that anyone who works on cars knows that few jobs go according to plan. It’s always something whether it be the wrong part, frozen bolts, no oddball tool for whatever, or plain old lack of ability.
What one perceives to be an easy 2 hour job can, and often does, turn into 6, or more.
Someone thinks this 2 hours at XX per hour will be a sweet deal and all of a sudden 6 hours later it’s closing time, their car is in pieces, and they’re hopelessly lost with no end in sight.
So now they’re mad at? The shop owner who must charge them for actual time and the stall space is costing them more than if they had simply had someone do the repair for them in the first place.
At that Subaru dealer I mentioned above we had a guy one time get mad at us and call Subaru of America on us for “not treating their customers with respect”. What he failed to tell them is that his car needed a clutch and he wanted to perform this repair himself outside in the parking lot with our equipment, tools, and “some advice if necessary”. What a jackaxx.
That’s not too far from me, I’m in the north shore area.
Thanks for the info, very much appreciated!
. In STERNLY written CAPS LOCKS as well
Just for the record…a whole sentence that’s caps locked is considered shouting…If it’s just one word it’s considered just EMPHASIZING…NOT shouting.
We may never see eye-to-eye on this…That’s fine. I respect your opinion also.
The only last point I’d like to make…On Friday after work I went to work out…And there was an Ambulance at the health club. Some guy broke his ankle while playing basketball. If lawyers or insurance companies had anything to do with a rent-a-bay store from staying in business…then they’d have a field day with health clubs. I’ve been going to THIS club for almost 15 years. Since then there have been a few broken bones…cuts, bruises, and at least 3 heart attaches (one had a heart attache in the sauna and died). And those are the ones that I know about. The club is still open…Sauna was NEVER shut down…My membership rates haven’t changed in 15 years…Membership is about the same as it was when I started. If what you say is true…then I’m amazed there are any health clubs open anywhere. Liability costs should be in the MILLIONS.
Now that’s freakin’ hilarious! Where do these people come up with these ideas? I mean really, what planet do they live on where this would make any sense at all? It’s been said before but the analogy of bringing your own ingredients into McDs and asking to use their grill etc to make your burger should seem ludicrous to almost anyone, yet these people still exist and they walk among us…
Ahh, but I fondly remember in the 70’s where the stall rental was $3 / hour and the lift rental was $5 / hour … 14 stalls on Saturday and Sunday were 90% full, the shop was a M-F 8-5 and the weekends were for do-it-yourselfers. A parts man would loan out basic tools, rent specialized tools and sell oil, brake, PS fluid etc. A roving Saturday mechanic would offer needed advice/ some assistance. And for those unfortunate to find they need a head gasket or intake manifold gaskets, several parts runs were made per day. When some one was stuck, many hands were available to roll a car out of the shop to the back lot to be stored ( daily charge ). Considering the time saved to use the air hose, impact wrenches, parts washers, sand blasters, drum or disk lathes, etc, one could save so much time doing simple things, that would normally cost a fortune at the dealer. No do it yourselfer was likely to have parts washers at home, much less a lift that allowed one to rotate wheels as fast as a mechanic. I learned to change my tranny in 35 minutes, rebuild my 4 banger engine in a morning, change shock absorbers in a McPherson strut with ease with the help I got from others and shared my knowledge with others leaning the basics. Today cars are more complicated but with guidance the basics can still be taught. The lawyers in Washington don’t seem to have a clue about accelerator problems with Toyota. The automotive manufacturer wants to blame a mechanical problem because it is a lawyers / bean counter’s opinion that is the cheapest manufacturer disclaimer of liability fix. To this silicon valley engineer, I believe it is a firmware problem where the embedded code can not deal properly with a failing sensor or actuator, that might be having an intermittent connection that shows up under rare but not so unusual conditions. These might include but not limited to such as an off scale condition, bounce condition, temperature change contact impedance dependent condition that shows up occasionally in a few million road hours, but not in a testing lab. The problem is endemic in many cars, and the lack of training in junior embedded software engineers. It will get worse as the nation’s car fleet ages and more connections age and oxidize. So we haven’t heard the end of it. Lucky for me I can still rent a lift or torch or a plasma cutter or a OBD diagnostic if I need one for the same 70’s pricing. I just wish some retired mechanics could donate some of their time to bring up a new generation of people that have a love for doing the job right in a shop where expertise and space is available. Dealers could do this and gain future business versus drive people away with $180/ hour service charges …
Not in Boston, but these guys have a booming business here in Salt Lake and they don’t charge $50 per hour.
http://www.wrench-it.com/index.php?option=com_content&view=article&id=1&Itemid=8
Most military installations have a DIY car craft center. They’re MASSIVE money losers. Operating overhead, environmental and safety compliance - both of which come at considerable cost to the operator these days - and liability make it prohibitive for most private enterprises. And liability is a huge factor, not just with reference to use of the lift, but in use of the power tools, electrical equipment, falling into the pit, dropping tools, personal injuries. Then there’s theft, abuse and misuse of equipment. It’s a business plan that seldom makes it past the first look. For the honest DIY’er, it would be a boon. But for the provider, the risk and cost would outweigh benefit or profit.
Proves my point…If INSURANCE AND LAWYERS were the cause of the high prices then this place couldn’t exist in Utah either.
It’s NOT the liability or lawyers…As I said…here in the Boston rent/ownership is among the highest in the country. Co-worker just closed on a house in Lexington MA…Small two bedroom cape…on 1/4 acre lot on a busy street (fix-er-upper)…$650,000.
After nam I was stationed at Ft Campbell KY. We had two very nice DIY car centers. I couldn’t afford a car without one of those.