"DIY" Garage Business
Discussion
On another forum they are muting the idea of setting up a business where people can pay for use of car ramps in a workshop to work on their own car.
The initial idea is to have 4 lifts in a workshop and charge people approx £9 per hour for the use of them.
I am trying to point out there is absolutely no way something like this would get off the ground in the UK.
The costs I am imagining are something along these lines...
£25,000 tools
£25,000 ramps
£25,000 rent
£12,000 to refurbish the place
£20,000 liability insurance (with hefty excess)
£5,000 sundry expenses
£2,000 advertising
£5,000 business rates
£2,000 utility bills
£60,000 staff inc NI contributions etc
Am I right in thinking it would be an absolute nightmare to get insurance for something where you are allowing untrained members of the public to put their cars on ramps, walk about underneath them and do all kinds of dangerous stuff. I imagine the Health and Safety Executive would be pretty concerned too.
Bearing in mind at 100% occupancy, would would be turning over £36 per hour...
The initial idea is to have 4 lifts in a workshop and charge people approx £9 per hour for the use of them.
I am trying to point out there is absolutely no way something like this would get off the ground in the UK.
The costs I am imagining are something along these lines...
£25,000 tools
£25,000 ramps
£25,000 rent
£12,000 to refurbish the place
£20,000 liability insurance (with hefty excess)
£5,000 sundry expenses
£2,000 advertising
£5,000 business rates
£2,000 utility bills
£60,000 staff inc NI contributions etc
Am I right in thinking it would be an absolute nightmare to get insurance for something where you are allowing untrained members of the public to put their cars on ramps, walk about underneath them and do all kinds of dangerous stuff. I imagine the Health and Safety Executive would be pretty concerned too.
Bearing in mind at 100% occupancy, would would be turning over £36 per hour...
Muncher said:
The costs I am imagining are something along these lines...
£25,000 tools
£25,000 ramps
£25,000 rent
£12,000 to refurbish the place
£20,000 liability insurance (with hefty excess)
£5,000 sundry expenses
£2,000 advertising
£5,000 business rates
£2,000 utility bills
£60,000 staff inc NI contributions etc
I think you have over estimated some of the costs,
Are tools neccesary? Most DIYer's will have there own.
4 Ramps can be leased for a reasonable rate or bought for less than half your estimate.
Rent depends on location
Refurbishing depends on state of unit leased.
Not sure on the liability insurance.
Could cost more in advertising.
Business rates again dependant on location
Utility bills not far off
How many staff do you need? Only one to administer i would have thought?
Personally i think it could be a good idea but maybe need a little refining as most people would be doing the work in evenings and weekends and £9 p/h needs to be doubled.
>> Edited by Mikey G on Tuesday 7th March 14:03
If I was doing this, I would hire out the tools as well.
1) it is an additional revenue stream,
2) you can control the nicking of them a bit easier,
3) those that will attempt stuff themselves will often have basic tools, but not the ramps or access to air tools etc
4) get a local tool supply in on the gig. They supply tools, you can sell them or hire them out.
1) it is an additional revenue stream,
2) you can control the nicking of them a bit easier,
3) those that will attempt stuff themselves will often have basic tools, but not the ramps or access to air tools etc
4) get a local tool supply in on the gig. They supply tools, you can sell them or hire them out.
Can't see it working for various reasons:
1. When a car's on ramps having work done you could estimate that it's, say, a £2 hour job. The customer is not a professional engineer so it actually takes 4 hours. Meanwhile your next customer, who's booked the next slot is more than a little miffed.
2. Clearly it could only reach a finite geography. How far would people be prepared drive to have their car on a ramp and save a few bob? Not far I don't think.
3. As mentioned above, the insurance costs would be horrendous I reckon.
1. When a car's on ramps having work done you could estimate that it's, say, a £2 hour job. The customer is not a professional engineer so it actually takes 4 hours. Meanwhile your next customer, who's booked the next slot is more than a little miffed.
2. Clearly it could only reach a finite geography. How far would people be prepared drive to have their car on a ramp and save a few bob? Not far I don't think.
3. As mentioned above, the insurance costs would be horrendous I reckon.
I think tools would be essential. A set of tools enough for 4 customers to use at once, welders, air tools, pillar drills, there's a whole load of stuff that would be needed. If a single Snap On torque wrench can cost £300, I don't see it being difficult at all to spend £25k on tools.
I would have thought the insurers would insist on 2 members of staff being there at any one time (i.e. if one goes to the bogs).
As you're open for quite long hours you need at least one extra person, maybe 2, to rotate shifts.
I would have thought the insurers would insist on 2 members of staff being there at any one time (i.e. if one goes to the bogs).
As you're open for quite long hours you need at least one extra person, maybe 2, to rotate shifts.
Using your model, you have:
- £62k startup (tools, ramps, renovation of facility). At 5%, that would require £3k to service that debt (rounded)
- £119k of operating costs (plus £3k of debt servicing)
Fully operational (@ £9 per hour, which we will assume is ex-VAT, as are all costs here).
An optimistic forecast is:
- 4 bays
- 60 hours per week at full capacity (ie 240 bay hours)
- 52 weeks per annum
= forecast income of £112k pa
I don't reckon your costs are too far out in the scale of things. You might get them down to £100k if that's the way you wanted to do it (e.g. your staff really could just be caretakers & clerks, not trained mechanics). However I think utilisation rates are hugely optimistic. Whilst there might be demand in a particular area, surely it would be heavily centred on weekends. I think you would be closer to 120 bay hours per week = £56k revenue.
Like many, I've dreamt of this idea, and I would suggest there are other routes:
- Run it as a hobby on the back of other activities (e.g. a working garage, utilising spare space). The real payback would be in building real loyalty with customers.
- Add value - mechanics available for hire (guiding and assisting); vehicle storage and maintenance; a welder; access to a machine shop, etc.
- Run it on a significantly bigger scale. Not just bays with ramps, but cheaper bays without ramps, car washing facility, parts shop.
Put all those together, and you could have a "Car Club" beside your normal business. Give customers the choice of DIY or renting equipment or manpower as they prefer. I could see it working, but it's a risky project that needs a millionaire to fund it - build the garage HE wants to house his cars, then invite others to hang around and contribute to using the facilities. I know of one company that does something a bit like this, but the sort of cars in the collections include phrases like "GTO" or "Lusso" or "SLR"...
When my six numbers come up, I'll show you how it should be done!
- £62k startup (tools, ramps, renovation of facility). At 5%, that would require £3k to service that debt (rounded)
- £119k of operating costs (plus £3k of debt servicing)
Fully operational (@ £9 per hour, which we will assume is ex-VAT, as are all costs here).
An optimistic forecast is:
- 4 bays
- 60 hours per week at full capacity (ie 240 bay hours)
- 52 weeks per annum
= forecast income of £112k pa
I don't reckon your costs are too far out in the scale of things. You might get them down to £100k if that's the way you wanted to do it (e.g. your staff really could just be caretakers & clerks, not trained mechanics). However I think utilisation rates are hugely optimistic. Whilst there might be demand in a particular area, surely it would be heavily centred on weekends. I think you would be closer to 120 bay hours per week = £56k revenue.
Like many, I've dreamt of this idea, and I would suggest there are other routes:
- Run it as a hobby on the back of other activities (e.g. a working garage, utilising spare space). The real payback would be in building real loyalty with customers.
- Add value - mechanics available for hire (guiding and assisting); vehicle storage and maintenance; a welder; access to a machine shop, etc.
- Run it on a significantly bigger scale. Not just bays with ramps, but cheaper bays without ramps, car washing facility, parts shop.
Put all those together, and you could have a "Car Club" beside your normal business. Give customers the choice of DIY or renting equipment or manpower as they prefer. I could see it working, but it's a risky project that needs a millionaire to fund it - build the garage HE wants to house his cars, then invite others to hang around and contribute to using the facilities. I know of one company that does something a bit like this, but the sort of cars in the collections include phrases like "GTO" or "Lusso" or "SLR"...
When my six numbers come up, I'll show you how it should be done!
My thinking was along the lines that you can insure a garage business allowing an untrained 16 year old YTS kid to climb around under the lift, but the paying customer isn't allowed anywhere near. So I was just thinking aloud that if the situation were different to paying customer renting the workspace for x hours, but it was a club or co-op of people owning the facilities that there might be other insurance options open. Quite possibly rubbish logic, but it's where my mind was headed.
There was a garage along precisely these lines in Milton Keynes.
In the early days of less sophisticated cars it struggled and took on oustide general work to help costs. Keeping bays available for DIY mechanics. But as cars became more and more complicated and specialist diagnostic kit was needed, interest from DIY dwindled to zero. It went bust.
In the early days of less sophisticated cars it struggled and took on oustide general work to help costs. Keeping bays available for DIY mechanics. But as cars became more and more complicated and specialist diagnostic kit was needed, interest from DIY dwindled to zero. It went bust.
I remember the one in Nottingham too. Cracking idea and I wish I could get access to something like that now. A while ago I was offered a bay in an existing garage (with lift and airlines) for around £85 per week - but I couldn't justify it at the time.
I imagine something like this would not be the main source of income and the real revenue would come from selling alongside the supply of the service, e.g. service items etc.
I imagine something like this would not be the main source of income and the real revenue would come from selling alongside the supply of the service, e.g. service items etc.
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