Going through my numbers

G

Gr8Fan

New member
Joined
Apr 19, 2013
Messages
14
Reaction score
0
Hi guys I'm going through some numbers so I can have a idea how much would be the overhead if I open up shop. The number I came up is about $4,000 a month and that's rent and three employees. I know I left out a few bills but those two are the big ones, so is 4k too much to start or not? simple.
To start I'm planning to wash and detail during the day and work at my job on the evenings. Just want to through it out there.
 
Do you currently have customers that you detail their cars? Would your 3 employees be 1099'd or hourly/salaried? Do you have your business name? If so is it registered and protected. Same goes domain name for website.

How is the demographics in your area? I know water bills and chemical clean-up may be an issue....again, I do not know the regulations in New Jersey. I would at least have some business 1st before taking that plunge.

What is your goal and do you have a business plan? Advertising?

I would look and see if the business model can sustain a $4K pop per month. Additionally, Detailing is alot of physical work....you will work evenings at your other job....man that will be tough!!

I currently have a business (going on 7 years) and the first 3 to 4 months it was tough. After that, once I got established I have never looked back. My business is in a COMPLETELY different field, however, I had similar questions as you did when I started. I am considering my detailing as a side business. I have been getting alot of requests from my regular customers in my main business asking me to detail their cars.

I am looking at how I can be effective and still make a profit and still maintain my current business. I will be going to their homes and detail their cars. The cars I plan on working on (so far) are 2 Bentley's. I am still trying to figure out the price. But before I even start I will be bonded for about $75K for peace of mind (something you will have to consider too).

I would come up with a more detailed plan and see how many cars need to be detailed for a break even cost. I know there are several other things to look at, however, this would be a start.
Man, one thing I do commend you for is that you have the Kahunas to consider starting your own business!! That is so cool!! Once you are successful (I know you will be) you will never want to work for anyone other than yourself!!

I salute you for considering your own business!! Way cool!!!
 
You should add in the other small expenses as well.

What exact expenses are you adding up? Here are a few things i've seen over the forums: water, electricity, security, taxes, supplies, bookkeeping, liability, garage keepers, internet/wifi, payroll, etc..
How big is the shop? Does it have/need a water reclamation system?
Do you have an established mobile detailing company already?
are your employees fully trained/knowledgable?
do you have solid methods/strategies for advertisement/marketing?
how much are you making now with detailing? you need to make enough to pay bills, keep shop open, and live.
do you have workflow structured with your employees?
Do you have a website? work shirts? business cards?
is your website actually driving traffic and converting to customers?
what services will you offer? are you at a healthy profit after every detail once payroll/employees/taxes are paid?

just a few thoughts :props:
 
Have you considered doing your detailing business as a side project 1st? You mentioned you are already employed. As I mentioned before I am considering it too.

Starting out as a side business may save you some headaches. Either way thebamboo23 from Houston nailed it on the head!!
 
Gr8Fan said:
Hi guys I'm going through some numbers so I can have a idea how much would be the overhead if I open up shop. The number I came up is about $4,000 a month and that's rent and three employees. I know I left out a few bills but those two are the big ones, so is 4k too much to start or not? simple.
To start I'm planning to wash and detail during the day and work at my job on the evenings. Just want to through it out there.
Click to expand...



Taxes, Supplies, Utilities, Insurance and Workmans Comp are something else you should factor in
 
Start out mobile

Little to no overhead to worry about. Start getting a customer base down and you won't have to worry about the $5000+ per month you need to make just to pay the bills.
 
Evan.J said:
Start out mobile

Little to no overhead to worry about. Start getting a customer base down and you won't have to worry about the $5000+ per month you need to make just to pay the bills.
Click to expand...


This sounds like a much more practical approach.
 
I would have to agree...start SMALLER than that. And when you have $8000 worth of work a month THEN open a $4000 a month shop.
 
Never start a business like this with employees. 1st off you need to ensure consistant quality which is hard when you start with 3 people as variables, 2nd you need overhead to be as low as you can while still providing great service. The only way to do that is keeping tax structure as simple as possible, tax deductions high and initial costs low. Mobile as mentioned is a great idea.

4k a month is huge overhead without established business and it's going to be alot to carry through the slow season and still manage. Your business plan should make rather clear what is too much inital overhead.

Don't look at adding employees until you have enough business that you can't keep up on your own. At that point you may consider contractors over employees though there are up and downs to either option.

Cost of equipment, cost of product, cost of client aquisition, insurance, advertising, it all adds up fast.

Walk before you run.
 
Two things people for get are!
Self employment tax! you have to pay 35% of any profit you make
quarterly taxes!
 
Pureshine said:
Two things people for get are!
Self employment tax! you have to pay 35% of any profit you make
quarterly taxes!
Click to expand...

Though I agree many people forget about taxes percentage depends on income since not all income is taxed at the same rate. I know SE is 15.3% of net for everyone who is self employed but when it comes to income tax the 1st 8,925 of net is taxed at 10%, the next 36,250 - 8,925 at 15% and so on meaning even if you are pulling in 100k net and in the 25% bracket it's not all taxed at 25%. I could be missing something though as I do business with Americans but don't currently live in the US. The fact you do have to pay income and SE taxes though is something to remember when setting up financials and also why you should use as many deductions as you can legally use.
 
Evan.J said:
Start out mobile

Little to no overhead to worry about. Start getting a customer base down and you won't have to worry about the $5000+ per month you need to make just to pay the bills.
Click to expand...

I agree with Evan. If you start off on a fixed location with a ton of overhead your chances of failure are greater then starting out mobile with almost zero overhead. Once your income is over $4k a month then consider if a fixed location is right for you. Yeah the location and the employees are big expenses however all the little things add up to a lot. Think of it this way. A jar of wax isnt on your list of big expenses because you could pick some up for $20 so why factor that in. But that wax plus tire and trim dressing plus washing soap plus chrome cleaner plus window cleaner plus pads plus compounds and polish plus carpet cleaner ect ect it adds up and now youre at $500 a month just in supplies.
 
Thanks everyone for those suggestions, def made me think. Is always good to read from the ones that went through it. Here in Jersey the commercial rent isn't cheap, for someone like me trying to build up a business from the bottom up with 15-25k is hard but nobody says building a business is easy. I think the best approach would be to build a client base first by doing it on weekends like some of you mention and then go from there.
 
I would just expand in the direction of fully mobile! If you market properly, don't cut corners, and have efficient business advice (accountant and Legal) then there is no reason why you can't make the equivalent or more income with a fully mobile operation. I know of business owners in Florida with fully mobile operations that net well over 300k a year after expenses and salaries. Look into High quality canopies with wind shields as well as car covers for multi-day projects (paint corrections). I opted for that option versus a shop and can personally vouch that if executed properly is far more cost efficient!
 
You must log in or register to reply here.
Back
Top