Garages - Turnover and Profit?
Discussion
My best mate and I have been discussing the possibility of going into business with each other - by co-owning a garage. We're both 32 years old, been in our respective fields for over 15 years, and we're frustrated by the fact that we feel we can create so much more with our lives. After all, if you're going to work hard, you may as well reap the rewards!
I feel we're in a confident position. He is a mechanic with excellent knowledge, contacts, and links to potential employees that we could 'persuade' to come and join us. I'm a Network Manager with excellent communication skills, positive attitude and masses of patience. I'm also well versed with the technological side of things (network, cloud, CCTV, GDPR etc) and feel I could quickly learn the admin/finance side of running a garage. His sister also co-owns an incredibly successful garage (partly due to lack of competition), who are willing to provide us with guidance.
I think there's room for a good, honest garage with a few USPs ...
Ideally, we're looking to take over a garage from a retiring owner, whereby the business is ticking along, but could do better with an injection of cash, energy and passion. However I was wondering if any garage owners could give us a rough estimation of:
-Your annual turnover
-Your annual profit
-Annual insurance costs
-How many techs?
I understand this might be somewhat sensitive information - Feel free to PM and I'll delete once read. Any information is most appreciated. Aside from this, if you know anyone who is looking to sell a garage in Bucks/Berks area, please do let me know! I know there are sites to find garages for sale, which we are scouring on a regular basis, but you never know who might be reading this!
I feel we're in a confident position. He is a mechanic with excellent knowledge, contacts, and links to potential employees that we could 'persuade' to come and join us. I'm a Network Manager with excellent communication skills, positive attitude and masses of patience. I'm also well versed with the technological side of things (network, cloud, CCTV, GDPR etc) and feel I could quickly learn the admin/finance side of running a garage. His sister also co-owns an incredibly successful garage (partly due to lack of competition), who are willing to provide us with guidance.
I think there's room for a good, honest garage with a few USPs ...
Ideally, we're looking to take over a garage from a retiring owner, whereby the business is ticking along, but could do better with an injection of cash, energy and passion. However I was wondering if any garage owners could give us a rough estimation of:-Your annual turnover
-Your annual profit
-Annual insurance costs
-How many techs?
I understand this might be somewhat sensitive information - Feel free to PM and I'll delete once read. Any information is most appreciated. Aside from this, if you know anyone who is looking to sell a garage in Bucks/Berks area, please do let me know! I know there are sites to find garages for sale, which we are scouring on a regular basis, but you never know who might be reading this!
Have you looked at
https://uk.businessesforsale.com/
It has listings from most of the business transfer agents, and plenty of people list stuff themselves.
https://uk.businessesforsale.com/
It has listings from most of the business transfer agents, and plenty of people list stuff themselves.
Ikemi said:
My best mate and I have been discussing the possibility of going into business with each other - by co-owning a garage. We're both 32 years old, been in our respective fields for over 15 years, and we're frustrated by the fact that we feel we can create so much more with our lives. After all, if you're going to work hard, you may as well reap the rewards!
I feel we're in a confident position. He is a mechanic with excellent knowledge, contacts, and links to potential employees that we could 'persuade' to come and join us. I'm a Network Manager with excellent communication skills, positive attitude and masses of patience. I'm also well versed with the technological side of things (network, cloud, CCTV, GDPR etc) and feel I could quickly learn the admin/finance side of running a garage. His sister also co-owns an incredibly successful garage (partly due to lack of competition), who are willing to provide us with guidance.
I think there's room for a good, honest garage with a few USPs ... Ideally, we're looking to take over a garage from a retiring owner, whereby the business is ticking along, but could do better with an injection of cash, energy and passion. However I was wondering if any garage owners could give us a rough estimation of:
-Your annual turnover
-Your annual profit
-Annual insurance costs
-How many techs?
I understand this might be somewhat sensitive information - Feel free to PM and I'll delete once read. Any information is most appreciated. Aside from this, if you know anyone who is looking to sell a garage in Bucks/Berks area, please do let me know! I know there are sites to find garages for sale, which we are scouring on a regular basis, but you never know who might be reading this!
Where we you 12 months ago!!I feel we're in a confident position. He is a mechanic with excellent knowledge, contacts, and links to potential employees that we could 'persuade' to come and join us. I'm a Network Manager with excellent communication skills, positive attitude and masses of patience. I'm also well versed with the technological side of things (network, cloud, CCTV, GDPR etc) and feel I could quickly learn the admin/finance side of running a garage. His sister also co-owns an incredibly successful garage (partly due to lack of competition), who are willing to provide us with guidance.
I think there's room for a good, honest garage with a few USPs ...
Ideally, we're looking to take over a garage from a retiring owner, whereby the business is ticking along, but could do better with an injection of cash, energy and passion. However I was wondering if any garage owners could give us a rough estimation of:-Your annual turnover
-Your annual profit
-Annual insurance costs
-How many techs?
I understand this might be somewhat sensitive information - Feel free to PM and I'll delete once read. Any information is most appreciated. Aside from this, if you know anyone who is looking to sell a garage in Bucks/Berks area, please do let me know! I know there are sites to find garages for sale, which we are scouring on a regular basis, but you never know who might be reading this!
Still, its closed now. I will send a PM.
Thanks for the replies so far! I'll answer them individually ...
We also have a list of mechanics who are good friends and good at their job, who have expressed an interest when we go ahead with this adventure!
My role would be everything else; Reception, phone/e-mails, ordering parts, finance, admin etc. Essentially, the pressure of running the business is shared, as is the financial risk
singlecoil said:
Have you looked at
https://uk.businessesforsale.com/
It has listings from most of the business transfer agents, and plenty of people list stuff themselves.
Thanks for the link! I must admit, I didn't know of this website. It gives us another resource to search for the right garage!https://uk.businessesforsale.com/
It has listings from most of the business transfer agents, and plenty of people list stuff themselves.
48k said:
A friend of mine who has serviced my cars for years is looking to sell his garage business but he's just south of Leicester which is possibly too far for you? (I'm just north of Milton Keynes and it's an hours drive for me now the 50 limit has gone from the M1)
Unfortunately, Leicester is a bit too far away for us, as we both live on the South Buckinghamshire/Berkshire border. However thank you for the suggestion! xjay1337 said:
Honestly you will want more than the one mechanic.
Certainly until your business has at least 5 or 6 mechanics do you need someone to look after the "cloud" side of things.
Ideally, we'd like to take over a garage that already has customer base, but is just plodding along. As such, it's more than likely the business may already have mechanics employed. We certainly wouldn't have just the one! Certainly until your business has at least 5 or 6 mechanics do you need someone to look after the "cloud" side of things.
We also have a list of mechanics who are good friends and good at their job, who have expressed an interest when we go ahead with this adventure! My role would be everything else; Reception, phone/e-mails, ordering parts, finance, admin etc. Essentially, the pressure of running the business is shared, as is the financial risk
monkfish1 said:
Where we you 12 months ago!!
Still, its closed now. I will send a PM.
I'm really sorry to hear that, monkfish1. Thanks for dropping me a message - I'll reply back to your PM when I have a free moment.Still, its closed now. I will send a PM.
Ikemi said:
Unfortunately, Leicester is a bit too far away for us, as we both live on the South Buckinghamshire/Berkshire border. However thank you for the suggestion!
No probs. I've just built him a new website so if you need anything doing let me know as I'm based just north of MK I think when you dig in to it you might be in for a shock how much work is involved and how much cost is involved. Having the latest diagnostic equipment and keeping the software up to date is not cheap, plus training and certifications eg. if you are going to be an MoT station, insurances, oil disposal charges etc. etc it soon mounts up. Hopefully you can find a USP (eg. my friend is a well regarded Land Rover specialist although he does cater for other models as well) otherwise it's just a race to the bottom on price with every other tom dick and harry. Best of luck with it.
I don't know much about car garages however my take on it.
First and foremost make 100% sure you are happy to lose that best friend. It might work out ok, and I hope it does, but I have personally seen the destruction running a business can do to friends and family. Its quite common and there are so many variables its a topic all on its own but just remember things can get very messy very quickly.
Some other points.
I went from an IT type job of 11 years to a very different low tech industry. Do not underestimate just how big of a difference it is working for a blue chip company to what is basically a very small business in a very low tech industry. This brings me onto employees, I employ a full time fitter (we run HGVs) and labourers and HGV drivers. They all bring some baggage. All of them. Some will have bad habits, others will bring their family problems, some will make mistakes that cost you money. In a big corporate environment these people still exist but no one cares because its not your money. Now you will care, and when you have an order book full of orders and you have half your staff off sick, on holiday and generally d*cking about you will find yourself awake at 3am trying to figure out how you will keep the customers happy.
This brings me onto the customers.... the majority are ok and pass under your watch without notice. But the bad ones, oh lordy they will get your attention alright. You will have to deal with everything from customers who straight up try and defraud you to those who just don't have a clue and take up too much time that they end up costing you money. Then there are the wanna be gangsters, real gangsters, OAPs (bless them), people who don't speak English, people who waste an hour of your time and don't buy anything... you get the drift.
That's the 2 big issues sorted, the employees and the customers.
The rest of running a business is actually alright!! Just remember you are no longer a free man, you will be working 7 days a week, 52 weeks a year. My business is semi retail / e-commerce / transport / logistics and its something you never get a break from. I can imagine a car garage will be similar. My friend runs one and he is open 6 days a week, 51 weeks a year. I have never known him take a holiday and I have known him for nearly 20 years. I also don't get much of a break, I take a couple off weeks at Christmas but that's it. The other 50 weeks I am working from 7am till usually around 6pm. Then I get home, eat something and then usually work for another hour or two. If we have a big job on the go I might work 20+ hours a day.
Financially you might think you are better off, but once you factor in the above then you might want to re-consider. I earn more now (we have been established coming up for 12 years) than I did at my old job, but not "more" given I work twice the hours.
Make sure you get a good accountant before you set up, make sure you run through your whole plan before with him / her. You will need some effort to learn good book keeping. My wife looks after ours and I still don't understand it. Watch your cash flow, having someone who is a bit of a control freak when it comes to money is a massive advantage, especially when work dries up.
Its a massive subject but defo consider everything before you go ahead.
First and foremost make 100% sure you are happy to lose that best friend. It might work out ok, and I hope it does, but I have personally seen the destruction running a business can do to friends and family. Its quite common and there are so many variables its a topic all on its own but just remember things can get very messy very quickly.
Some other points.
I went from an IT type job of 11 years to a very different low tech industry. Do not underestimate just how big of a difference it is working for a blue chip company to what is basically a very small business in a very low tech industry. This brings me onto employees, I employ a full time fitter (we run HGVs) and labourers and HGV drivers. They all bring some baggage. All of them. Some will have bad habits, others will bring their family problems, some will make mistakes that cost you money. In a big corporate environment these people still exist but no one cares because its not your money. Now you will care, and when you have an order book full of orders and you have half your staff off sick, on holiday and generally d*cking about you will find yourself awake at 3am trying to figure out how you will keep the customers happy.
This brings me onto the customers.... the majority are ok and pass under your watch without notice. But the bad ones, oh lordy they will get your attention alright. You will have to deal with everything from customers who straight up try and defraud you to those who just don't have a clue and take up too much time that they end up costing you money. Then there are the wanna be gangsters, real gangsters, OAPs (bless them), people who don't speak English, people who waste an hour of your time and don't buy anything... you get the drift.
That's the 2 big issues sorted, the employees and the customers.
The rest of running a business is actually alright!! Just remember you are no longer a free man, you will be working 7 days a week, 52 weeks a year. My business is semi retail / e-commerce / transport / logistics and its something you never get a break from. I can imagine a car garage will be similar. My friend runs one and he is open 6 days a week, 51 weeks a year. I have never known him take a holiday and I have known him for nearly 20 years. I also don't get much of a break, I take a couple off weeks at Christmas but that's it. The other 50 weeks I am working from 7am till usually around 6pm. Then I get home, eat something and then usually work for another hour or two. If we have a big job on the go I might work 20+ hours a day.
Financially you might think you are better off, but once you factor in the above then you might want to re-consider. I earn more now (we have been established coming up for 12 years) than I did at my old job, but not "more" given I work twice the hours.
Make sure you get a good accountant before you set up, make sure you run through your whole plan before with him / her. You will need some effort to learn good book keeping. My wife looks after ours and I still don't understand it. Watch your cash flow, having someone who is a bit of a control freak when it comes to money is a massive advantage, especially when work dries up.
Its a massive subject but defo consider everything before you go ahead.
Those are some good points! I'd honestly hope that my mate and I would talk through any issues (we're both pretty practical, realistic, problem solving individuals) between us regarding the business and hopefully keep 'business' and 'non-business' lives separate. Unfortunately, we will never fully know until we actually give it a go ...
Out of interest, do you know why other friendships/families have collapsed due to business decisions? Money related issues?
As for customers and workforce, I imagine it's the same in most public-facing jobs. Even in IT you have a few clients/employees who make life hard. Fortunately, there are far more nice clients/employees than horrible ones! Taking that example one step further, if I created an IT business and employed staff, those staff also come with baggage. It's fair to say no one is free of baggage. I guess it just depends on how heavy/troublesome said baggage is!
Out of interest, do you know why other friendships/families have collapsed due to business decisions? Money related issues?
As for customers and workforce, I imagine it's the same in most public-facing jobs. Even in IT you have a few clients/employees who make life hard. Fortunately, there are far more nice clients/employees than horrible ones! Taking that example one step further, if I created an IT business and employed staff, those staff also come with baggage. It's fair to say no one is free of baggage. I guess it just depends on how heavy/troublesome said baggage is!
You may be best mates but you really do need a shareholders agreement between you to resolve various issues:
Conflict
Someone dies or is incapacitated
Someone wants out etc etc etc
We are currently going through this process with legal advisor. Happy to pass his details on if you want....
Conflict
Someone dies or is incapacitated
Someone wants out etc etc etc
We are currently going through this process with legal advisor. Happy to pass his details on if you want....
Not money just clash of personalities / one party trying to stamp their authority on the other etc even though it was joint ownership.
I know others who have had similar problems, some along the same lines others different issues but same ultimate outcome.
I now work with my wife and we are 50/50 and its still very difficult. Work is pretty much all we do and if we have a disagreement in work it makes things difficult at home. The stress of running your own business is something you cant fathom unless you have been there.
I know others who have had similar problems, some along the same lines others different issues but same ultimate outcome.
I now work with my wife and we are 50/50 and its still very difficult. Work is pretty much all we do and if we have a disagreement in work it makes things difficult at home. The stress of running your own business is something you cant fathom unless you have been there.
No experience of garages, but half-own a small business and employ 3 staff.
A few things to consider:
anyone you employ has the potential to be costly and cause trouble.
annual leave, public holiday entitlement, sick pay, maternity/paternity arrangements can be difficult to juggle
personalities can clash, more so in small teams
staff are staff, not friends/pals
any business that deals with the public has to deal with the small % that will be awkward no matter how good a service they get.
That's some of the negatives. Positives: a good team can carry you though tough times, and it can feel good to be in control of your own destiny.
A few things to consider:
anyone you employ has the potential to be costly and cause trouble.
annual leave, public holiday entitlement, sick pay, maternity/paternity arrangements can be difficult to juggle
personalities can clash, more so in small teams
staff are staff, not friends/pals
any business that deals with the public has to deal with the small % that will be awkward no matter how good a service they get.
That's some of the negatives. Positives: a good team can carry you though tough times, and it can feel good to be in control of your own destiny.
Biggest problem I foresee is that your pal is a mechanic and he doesn't need a GDPR clued up oppo to run the business. Unless you have cash what are you actually bringing to the party? Might seem harsh but when he's knee deep in gearbox oil he won't give a s
te that you just tweaked the website SEO. Office skills are near useless in a small garage.
Partners rarely work out and very rarely work out in the automotive trade. It's very hard work in a very full market. Taking over an existing place is a better idea than starting from scratch though although initial set up isn't too bad. Overheads will kill you unless you are specialising and charging more or have a big volume of work coming through.
Oh just to add nobody is ever happy and it's almost totally sole destroying. Good luck
If your pal is on a good wage and doesn't have to deal with all the crap that comes from modern retail customers he would be a fool to leave his job.
te that you just tweaked the website SEO. Office skills are near useless in a small garage.Partners rarely work out and very rarely work out in the automotive trade. It's very hard work in a very full market. Taking over an existing place is a better idea than starting from scratch though although initial set up isn't too bad. Overheads will kill you unless you are specialising and charging more or have a big volume of work coming through.
Oh just to add nobody is ever happy and it's almost totally sole destroying. Good luck
If your pal is on a good wage and doesn't have to deal with all the crap that comes from modern retail customers he would be a fool to leave his job.
fridaypassion said:
Biggest problem I foresee is that your pal is a mechanic and he doesn't need a GDPR clued up oppo to run the business.
Without pissing on the OP's chips, 100% this. It's absolutely inevitable as time passes and the friend realises he's spending all the time and doing all the 'hard' stuff and getting the same money there will be a fall out.
Admin and finance? Is that on site or off? Every day or some of the time? Could a virtual assistant or similar not do that for not a lot of money? The other stuff mentioned is pretty irrelevant for a garage.
If the OP is out every day securing contract work for fleets or taxis or something then I'd look at it differently, as that's valuable. More so than spannering. But paying invoices and answering the phone?
But then I'd never go into business with a friend, nor employ one.
I went into business with two friends. We all agreed that we needed a decent shareholders' agreement and we drafted one ourselves, mostly thanks to a template my lawyer brother provided. A couple of years into the venture we fell out professionally and referred to the agreement to work things out. We ran through the clauses, agreed the way forward and split. We're all still friends and see each other socially. All is good. Without the agreement we would have fought like hell, so I can only reinforce that you put one in place and follow it rigorously if you have a difference of opinion. I would never go into business with friends without one. I had a 4 hour pub lunch with one of them today (to discuss other ventures) and we both agreed that it was pivotal to us remaining friends - you have a disagreement, you fall out professionally, but you stay friends because you follow the rules of disengagement.
technodup said:
fridaypassion said:
Biggest problem I foresee is that your pal is a mechanic and he doesn't need a GDPR clued up oppo to run the business.
Without pissing on the OP's chips, 100% this. It's absolutely inevitable as time passes and the friend realises he's spending all the time and doing all the 'hard' stuff and getting the same money there will be a fall out.
Admin and finance? Is that on site or off? Every day or some of the time? Could a virtual assistant or similar not do that for not a lot of money? The other stuff mentioned is pretty irrelevant for a garage.
If the OP is out every day securing contract work for fleets or taxis or something then I'd look at it differently, as that's valuable. More so than spannering. But paying invoices and answering the phone?
I think we both need to talk to a few garages. We’ve contacted a few who are willing to provide us with some advice! Considering the service I’ve experienced at other garages, I genuinely think we have a chance of creating something successful. Every new business has it’s downsides and reasons not to be, but if it was all so bad, wouldn’t every garage owner leap at the chance for full time employment? Why start your own garage/business at all?
Wibbles - Absolutely! That sounds like a mandatory step!
technodup said:
fridaypassion said:
Biggest problem I foresee is that your pal is a mechanic and he doesn't need a GDPR clued up oppo to run the business.
Without pissing on the OP's chips, 100% this. The vast majority of great mechanics are crap at admin and dealing with customers, they hate doing it and do it badly.
The most successful garages are run or managed by someone who doesn't distract himself by trying to be on the tools and the workshop staff recognise that his job is to keep those pesky customers away from them and they appreciate him/her doing it.
Any workshop with 3+ techs working in it will benefit from someone driving the desk efficiently.
(For credibility, I do diagnostics for the trade and am in and out of numerous different workshops every day, it's easy to see which ones are working hard and which are working smart).
On the other hand, the comments about having a partner are 100% correct, pretty rare that partnerships last the distance.
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