Needing to get a larger shop?

HateSwirls

HateSwirls

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Four months ago I opened my shop, when I first started there I figured a shop that holds four cars would be plenty.
Well, not so.


This is what I'm considering.

One, just buy a larger shop.
Two, keep the shop I have now and buy one similar in size a few miles away.

Reason I'm posting this is because I'd love to hear what you guys think.
Everyone knows of my location now, so is buying a larger shop the best way to go?
So much to think about, one is , a lot of my customers are driving over an hour to get to me, should I open another shop an hour away and keep the one I have now?

One more thing, something else that's taking up space are boats, on avg. 20 foot boats.
As of now I have three employees, one becoming very good under my supervision, hoping he has what it takes to become very good at paint corrections.

Getting complicated too fast.

Thanks In Advance
 
Wow, these are the kinds of problems that you WANT to have.

Do you have the personnel to have another location without you there to supervise them? If not it's clear you need to have a single location.
 
Sounds like you're in a similar situation my (non-detailing) business is in. I would look at where YOU will need to be and whether you can trust employees to manage and run a second shop.

If you don't have the people, you'll have to go at both ends detailing and managing the businesses. More money, more problems. My old boss who owns 4 stores plus wholesales now wishes he just kept his one shop.

Maybe a compromise? Larger shop maybe 30m away where you are now?
 
I would discourage a 2nd location unless you are there to verify the end product is 100% your way; It's your name on it!

I would suggest 1 location that is larger.

Boats are a PIA to have in a shop. If you want to do boats do them at the marina. Our Marina has 2-3 guys working most days detailing boats.
 
IMHO

If the employee is as good as you say,,,,,

I might suggest a 2nd location, a little further away than that what you were considering. If you can keep him, he may be able to run it and the further location will give you a different customer base.
 
ronkh57 said:
IMHO



If the employee is as good as you say,,,,,



I might suggest a 2nd location, a little further away than that what you were considering. If you can keep him, he may be able to run it and the further location will give you a different customer base.
Click to expand...


He's good at what he does, not sure he could manage it alone though.
All appointments come through me only, if I was to have two shops I'd have to work between the two, somehow, maybe work where I'm needed the most.
That's the part of it all, just not sure.

One thing I did think about was to have one shop just to get the cars washed and detailed then brought to me at the current shop for paint corrections , and so on.
 
Good luck running two locations. I ran two bars that were in walking distance from each other and it nearly drove me crazy. All businesses are similar, especially if you are detail oriented. It is next to impossible to manage two different locations and something not to suffer. I would go with the larger local and be there to give it your special attention. Don't stress yourself out worrying what is going on while you are away from shop Number one while in shop Number 2 or while on the road in between. Another possibility might be a partner with your same goals. Just my 2 cents.
 
First off - Awesome your business is going really well! :dblthumb2:

An interesting thread, certainly keen to read what people say.

Me personally - kind of in a similar situation. Demand for my services are growing fast, building too small to have multiple jobs in at once etc etc. Though opening another shop isn't really an option for me, as unlike you - we are a teeny tiny little town & an hour away for me is in a different town. Hahaha - geeze we're a small place.

I think, in my opinion, you have to ask yourself what you want to achieve with your business. Do you want to earn lots & lots of $$$? Are you doing it more for the fact you love detailing? Do you have a family, wife, kids?

I love what I do & I do pretty good out of it too. At first I just wanted to make enough to break even & make a little pocket money would be a bonus but the one thing I wanted the most was - to do the best work. Like yourself - It got very busy, rather quickly. Which is great, don't get me wrong.

I stepped back though. Before I made the journey to Florida for Boot Camp this year we were talking of taking on staff full time & possibly expanding in the future. I got back from Boot Camp & had a whole new perception of what I want, in life & business. Sure I like the $$$ you get from working 24/7 & I enjoy the things that come with it. For me - Boot Camp changed my life - being there & working with Mike, Nick & my other class mates was an amazing experience. I don't mean using polishers, making cars shine etc etc - I can do that here - it was being around other detailers with detailing in mind & that atmosphere was awesome. I don't need the 6 cars, 2 motorcycles, various assorted toys in the garage bla bla bla - I would be quite happy to give that all up & work purely to make it back to Autogeek to experience that again.

So - not so keen on hiring staff now, stepping back a bit & remembering why people wanted my services in the first place. I don't want to be the biggest shop with the most staff & making more $$$. I'm not stressing (as much) about fitting every job in the diary anymore - more time for family, which is great.

Sorry for the long winded story & unsure if this helps any at all. Hopefully you get some good opinions voiced here & you can make the best decision for your situation. :dblthumb2:

Aaryn NZ.
 
Aaryn NZ said:
First off - Awesome your business is going really well! :dblthumb2:



An interesting thread, certainly keen to read what people say.



Me personally - kind of in a similar situation. Demand for my services are growing fast, building too small to have multiple jobs in at once etc etc. Though opening another shop isn't really an option for me, as unlike you - we are a teeny tiny little town & an hour away for me is in a different town. Hahaha - geeze we're a small place.



I think, in my opinion, you have to ask yourself what you want to achieve with your business. Do you want to earn lots & lots of $$$? Are you doing it more for the fact you love detailing? Do you have a family, wife, kids?



I love what I do & I do pretty good out of it too. At first I just wanted to make enough to break even & make a little pocket money would be a bonus but the one thing I wanted the most was - to do the best work. Like yourself - It got very busy, rather quickly. Which is great, don't get me wrong.



I stepped back though. Before I made the journey to Florida for Boot Camp this year we were talking of taking on staff full time & possibly expanding in the future. I got back from Boot Camp & had a whole new perception of what I want, in life & business. Sure I like the $$$ you get from working 24/7 & I enjoy the things that come with it. For me - Boot Camp changed my life - being there & working with Mike, Nick & my other class mates was an amazing experience. I don't mean using polishers, making cars shine etc etc - I can do that here - it was being around other detailers with detailing in mind & that atmosphere was awesome. I don't need the 6 cars, 2 motorcycles, various assorted toys in the garage bla bla bla - I would be quite happy to give that all up & work purely to make it back to Autogeek to experience that again.



So - not so keen on hiring staff now, stepping back a bit & remembering why people wanted my services in the first place. I don't want to be the biggest shop with the most staff & making more $$$. I'm not stressing (as much) about fitting every job in the diary anymore - more time for family, which is great.



Sorry for the long winded story & unsure if this helps any at all. Hopefully you get some good opinions voiced here & you can make the best decision for your situation. :dblthumb2:



Aaryn NZ.
Click to expand...


Thank you for the reply, great read, real life stuff. :)

It's funny, even busy as I am I still look at detailing as a "Hobbie", a great passion of mine.
I do have a family, just me and my wife these days,she too is always busy.
You'll never get rich in detailing, IMO anyway but for people to pay me to do something I love is awesome.

Thank you all for the replies, really does help.
I have someone that I know well that would just love to buy into my business , that would be helpful but to do that I would have to get the second shop, maybe instead of buying into the shop I have now he could pay for another shop, same size as I have now.

The demand is high here, something I knew going into my new venture.
I'm the only "Detail" shop here locally but as I said people drive over an hour to come to me even though there are detailers in the larger cities where they live.

I'm making good money but I'd do even better if I could find a way to take in more cars.
Hiring more employees just in my current shop wouldn't be enough being I can only fit four cars at a time, I have parking in the rear of my building but that's where we wash vehicles and to also park them once we're done with a vehicle.

Thanks again ,
Kevin
 
Kevin - have you run the #'s? Adding on the 2nd shop + additional staff = how much $. Once all the costs are added up + your time to go between (time not doing hands on work) are you really making more $. Or are you just doing more volume?

We just went thru this with my wife's biz. She was losing a few customers since she was so busy and no room to have more customers. So we went to a slightly bigger space to handle a little more volume, upped the price slightly for services and two things happened. Some of the cheap pain in the butt costomers left, but she added more higher end customers because of the location. Staffing is the same, but by increasing our location cost (nicer) by 10% the customer type shifted. Prices were adjusted/upped 4-10% depending on the service. Higher cost services were added.

Volume is up slightly from where it was a year ago, but the shift we saw was really customers moving to higher price point services. Oh and her tips have gone up substantially. What used to be 15-20% is now 20-25% of a more expensive service.

My point is I don't think always getting more volume is the answer. Having consistent customers with money is key. If they bring in their wealthly Freinds that is awesome. But we think the revenue per customer was more important to us. Treating these folks like they should be treated. At the end of the day these customers put the food on our table. I would rather have her work the same hours and us eat filet versus cubed steak. Oh and getting tips like tickets to the hockey game is always a nice tip, especially when it is in the sponsors box with a caterer & micro brew beer.

I hope my rambling makes some sense.
 
Ebg18t said:
Kevin - have you run the #'s? Adding on the 2nd shop + additional staff = how much $. Once all the costs are added up + your time to go between (time not doing hands on work) are you really making more $. Or are you just doing more volume?

We just went thru this with my wife's biz. She was losing a few customers since she was so busy and no room to have more customers. So we went to a slightly bigger space to handle a little more volume, upped the price slightly for services and two things happened. Some of the cheap pain in the butt costomers left, but she added more higher end customers because of the location. Staffing is the same, but by increasing our location cost (nicer) by 10% the customer type shifted. Prices were adjusted/upped 4-10% depending on the service. Higher cost services were added.

Volume is up slightly from where it was a year ago, but the shift we saw was really customers moving to higher price point services. Oh and her tips have gone up substantially. What used to be 15-20% is now 20-25% of a more expensive service.

My point is I don't think always getting more volume is the answer. Having consistent customers with money is key. If they bring in their wealthly Freinds that is awesome. But we think the revenue per customer was more important to us. Treating these folks like they should be treated. At the end of the day these customers put the food on our table. I would rather have her work the same hours and us eat filet versus cubed steak. Oh and getting tips like tickets to the hockey game is always a nice tip, especially when it is in the sponsors box with a caterer & micro brew beer.

I hope my rambling makes some sense.
Click to expand...


Makes a lot of sense to me.
Here's the problem, or is it a problem?

I'm backed up, turning people away or having to put them on schedule two weeks down the road.
I really don't like being backed up with so much work, I still do one car at a time.

After we're done with a vehicle it goes through an inspection by me only, then and only then I call the customer for pickup.
People ask me all the time if there's anyway to get their vehicles done earlier than later, my answer to them is always the same, "Sorry I just can't get you in now".

Do I want more volume?

Not really, my goal is to be able to keep up and most important to assure each customer is happy with our work.
 
You haven't given us enough information to help you make this decision. As other have suggested run the numbers and figure out the opportunity cost.

Are you only swamped now because of the excitement of spring detailing? Is this going to last? All these things matter. I might just stay there for a full year to see exactly how each month is going to play out and choose a shop that is going to meet your yearly needs, not just when you are swamped.

I'm hoping for you this will be steady business (good problem to have) but I don't want to see you jump the gun at the start of spring when things MIGHT drop off in a couple months.

Anyway to shift some of the work outside? Even if you have to set up a canopy to work under? Or just stored completed details?

Can your processes be improved to be faster and more efficient? Maybe you'll be able to get an extra 1-2 cars done per day if you tighten up your process and procedures.

I think moving would be one option but I think you could make what you have work in the short run, but I think if things continue growing you'll need a new shop anyway...

Touch decision.
 
Like Setec said, Kevin...this is a wonderful "problem"to have. I like to look at it as a great business challenge...a nice growing pain.

Lots of great advice but better yet, lots of great questions for you to answer or at least think about. I am in the camp of a single, larger location IF it can be supported in the long run. I also like Scott's questions and you may have already addressed them but, if not, you need to accurately assess why this challenge has presented itself now. Is it sustainable? Not knowing what you do, it sounds like it can.

I also like Scott's thoughts on tightening up methods, processes etc and looking for efficencies before jumping the gun. Are there any opportunities to get more capacity out of your current operation? That doesn't solve the distant customer syndrome but they are being served now. It might compress your scheduling a bit and you can book that customer one week ahead instead of two if you can find some efficiencies. That doesn't mean to stretch the rubber band too tight, just a good solid look around at equipment and motion studies to start.

Having said all that, i am still liking one, single location and bigger. And that's after looking good and hard at the demographics and customer behavior. A nice big house, well advertised with a good solid base of customers would be, to me, easier to manage. Plus the fact people will recognize your name and quality of service provided. "Take it over to Kevin's place on Main St. He's the best!". I've never been a fan of diluting your product and name by spreading it out with other locations until a good, solid reputation is firmly established. Sure McDonalds can do it because everyone already knows McD's.

A good "home" that's efficiantly operated would be fun to manage! Then the next time this question pops up it might be easily made with known objectives.

I love these business discussions and never take them lightly. These are people's lives that they are asking about and there is plenty of good solid experience shared by others.
 
Puckman said:
Like Setec said
Click to expand...

Well, I think Scott@IncrediblyDetailed had the most salient point--which is, is this just a seasonal fluctuation?

They certainly make some outdoor awnings (not pop-up), which you see sometimes at people's homes or frequently at the "detailing" center at a tunnel wash--that would seem to be a good way to increase the shop capacity to some degree without too much commitment--presuming the shop layout allows for that.
 
I think the idea of adding a awning or two, or well secured pop ups, and maybe adding an employee or two would be a good temp fix if you can do that there. Adding another location would double your overhead expenses and possibly make you less profitable in the short term. Plus the initial cash outlay to get everything secured/set up and the stress of try to manage two locations that are not to close together. Also, depends on your management style. It would be hard for someone who micro-manages to have to separate locations. If you want two shops, you are going to have to let go of some of your power and delegate.
 
How long did it take for you to get backed up with customers? I definitely agree with the seasonal concerns. I would go from being booked 2 weeks out to looking for customers, you just never know. So while it could seem like your business grew exponentially in just the short 4 months, I'm willing to bet the numbers could tell a different story if you opened in July. Odds are 4 months out from July you would have been looking for customers possibly. Four months out from July puts you dead winter, four months out from December puts you at the start of detailing season. I would probably try to go a full year before deciding to pull the trigger on a second shop.

Could possibly consider a price increase if the demand is that great. The only complaints I ever had were from people ordering the cheapest package then wanting to the world. Or whatever your cheapest packages are, consider a price increase on just those packages or possibly even eliminating them.

The problem with a 2nd shop is quality control, you just can't manage the quality control of both shops, sure you can put business systems in place for both, but beauty is in the eye of the beholder and only you can ensure every car meets your standards. With a second shop you start to lose a little of that quality. You may trust the other manager with your life, but human nature is human nature, no one is going to care for your product as much as you do.

So in a nutshell, I'd consider waiting a year before opening a second shop and possibly a small price increase if the demand supports it.
 
Have you considered a mobile operation instead of a second shop? The biggest upside is lower cost vs a 2nd location. The downside is it might cannibalize some of your current shop sales.
 
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