Unsure of whether to give the business a try.

[auto74]

Hi, looking for a different perspective on a possible business opportunity... sorry ahead of time for the long winded post

 

The business: 70 year old family owned service station that's gone downhill in the 15-20 years. Virtually idle, as old established client base literally dies off from old age.

 

The good:

1) 100% mortgage free. Taxes+insurance are the big bills.

2) 5 service bays. 2 bays with lifts (1 newish lift, 1 ancient lift), 2 bays with a 2 car long pit.

3) 50' street frontage 1 lot up from a busy intersection. ~15-20k cars per day on each cross street.

4) large enough lot for a small used car lot ~15 car space, still with room to access 2 large bay doors in front

5) large enough back lot for 30 cars... a 40x40 building would fit with some room to spare.

6) Reputation for honesty

 

The bad:

1) leaky office in disrepair, flat rubber roof over entire building. Would take me a couple of months to gut the office and fix the leaks., "elbow grease" work in my spare time

2) exterior of building needs some TLC, more "elbow grease" kind of work.

3) front lot needs to be repaved at some point, not too attractive

4) not much of an existing client base

5) old equip... almost 0 diag equipment.

6) old junk everywhere, nothing has been tossed in seemingly forever.

 

I'm in high tech and don't plan on quiting the day job as it probably pays more than I could make at this place anytime soon, since there is zero existing business. And I can use some of the cash I make now to try and invest in the business. It absolutely PAINS me to see the place completely under/misutilized like this and I've wanted the chance to do something, anything there even it ends in failure. At least I gave it a shot.

 

Possible ideas:

1) Lube shop that utilizes the pit. minimal investment in equip. Get people in and provide greate service that may lead to other repairs in the future. I've gotten mixed reports on lube shops... Seems like it an endangered business since oil changes are freebies with a new car and the 12,000 and 15,000 mile oil change recommendations. But, the few times I've staked out the other lube place a few miles down the road all three bays are packed.

 

2) Tire business. Maybe 10-15k in investment up front for a modest used tire changer and balancer. There are two existing old workhorse coats machines that aren't really good for doing newer alloy rims. Maybe pair up with Tire Rack for promotions.

3) Both lube and tire...

 

The idea is to start doing the gruntwork building improvement myself and with a helper until it gets to a point where I wouldn't be embarrased to have a client/customer walk into the office. There is a pretty trustworthy guy who rents one of the bays now who would love to get in on something like this. He'd do the most of the auto work till it ramps up and I would spend most of my time doing marketing to get people in the door.

 

I'm really not sure if an arrangement like this can even work. I want it to be a win-win for whoever is willing to take a chance and get involved. I believe the place could be a great business.

 

There is also the possibility of renting one or more bays to folks like car detailers. I've been at the office two times in the last month when someone came in and was looking for a bay to rent. A single rented bay can pay for around half the yearly taxes.

 

Any thoughts? Advice on how to set up a business partnership? Any other caveats?

 

[xrac]

Premium Member Content 

This content is hidden to guests, one of the benefits of a paid membership. Please login or register to view this content.

[auto74]

My advice would be to either sell the place or lease it out. I think you will find trying to do anything less than a full-time commitment will not turn out like you hope. The biggest mistake that people make is to start a business because they have a building. This is just my gut instinct.

 

Yeah, I hear you. Remote management probably isn't the best option.

 

Either way, no one will lease the place in it's current condition. I'd like to improve the place enough so someone can haul their equipment in and be up and running in 0 time.

[ATSAutomotive]

If you have a good job where you are at and from what I gather your family owns the building? I would fix it up and rent it out. Make money just being a landlord. Plus it doesn't sound like you really know this guy who would be doing the work during the day anyway. Very easy for him to rip you off without you knowing.

[auto74]

If you have a good job where you are at and from what I gather your family owns the building? I would fix it up and rent it out. Make money just being a landlord. Plus it doesn't sound like you really know this guy who would be doing the work during the day anyway. Very easy for him to rip you off without you knowing.

 

Yes, family owned. And a family member is there keeping an eye on things during normal business hours.

 

I know the guy pretty well. I'm not too concerned with getting ripped off by him. Also, I have a 10 camera security system that I'll be installing very soon. I'll know what's coming in and what's going out at all times of the day.

[ATSAutomotive]

^{Have a solid business plan before you start then. I would like to share my story real quick with you. I started my shop in 2009 with a very good friend of mine, best friend in fact. After 3 months, my fiancée and I had to kick him out of the business. Now the problem wasn't stealing or anything like that. The problem was, we didn't have enough work yet to pay both of us. We helped him out as much as we could. Gave him money a couple of times but told him that was it. We had an agreement that while we were getting started we would finance ourselves with after hours jobs, family, etc. Luckily I had a fiancée who could support me. He didn't follow through on his part and it created a rather large rift. Attorneys got involved and in the end he is no longer a part of the company. Moral of the story is even when you think you can trust someone, you can't always trust them. Just know what you are getting yourself in to before you start. Sorry not trying to deter you from business. I just want you to know what you will be getting yourself in to. The things we often think won't be a problem, often are. Write out a business plan and make sure it is SOLID.}

Edited September 10, 2013 by ATSAutomotive

[xrac]

Premium Member Content 

This content is hidden to guests, one of the benefits of a paid membership. Please login or register to view this content.

[phynny]

Xrac is right, walk away unless you're fully committed.

[ncautoshop]

and they mean FULLY committed!

Its hard work and a heck of a learning curve. Also Without some knowledge it will be very hard!

 

Sent from my DROID RAZR using Tapatalk 2

[FROGFINDER]

If you keep it, clean it up and make it look like a going concern and then lease it.

[mmotley]

Before I started my shop, I considered keeping my full time job and trying to start my business on the side. Looking back, there is absolutely no way I could have done that. Not enough time in the day. This also goes along with what others have said, even if you think you can trust this guy, there is a good chance the relationship will change. I've seen it happen with friends who went into business together and end up at a point where they no longer talk to one another. Just my 2 cents though... I'm still very new to the whole 'owner-operator business' thing.