Hello all. I've been researching a lot recently and I i found this site last night. After reading some of the other posts I still haven't found an answer to my most pressing question. How do you forecast the first year of revenue for a new to me but "kind of" existing business?
I'll try to keep this short and to the point, if I miss something, I'll address the comment and edit the original post. I apologize for all grammer, punctuation, etc, I'm on my phone typing this.
My background is in auto sales and management. I have worked in Franchise stores for almost 20years, and opened my own Independent dealership in 2017 (6years as of October). Out of highschool I went to trade school and received my AAS as an auto tech, however I ended up in sales instead of wrenching. I do a large amount of the diagnosis and repair for my dealership, subing out what I'm not comfortable with based on knowledge, tools, time, space etc. I have a Bachelor's in Finance so I'm comfortable with numbers.
I have reached my limit with my current facility and after a few discussions with my landlord, there is no realistic option to change that. They won't sell the building nor sign a long term lease if I made improvements to the building. (Property is owned by elderly parent, kids will likely sell. My area is only 1/4 of the property, there are many issues that make the entire property very unappealing). I am operating out of a small building with a single stall bay. The bay does not have a floor drain, and is not high enough for a full size lift so I have a half lift, like what someone would have in their garage.
I have located a property that would suite my needs nicely, however with today's commercial lending market, this is a much tougher application process then I was expecting. I had initial talks to the owner about CFD and those talks have stalled as he just wants to cash out. If I am able to purchase this facility I will be expanding into customer pay as well as servicing my inventory. Sales and service will be at that location. I will also be hiring a employee or two right off the bat.
The property is an existing automotive shop established in 1971. The facility is quite large with ample parking and 6 bays, two with hoists. The owner is selling it property only for one price not the business as a whole. He was roughly an additional 1/6 of the purchase price for the business. There is basically no value to the business as he doesn't have a customer list (still working on paper and pencil, not a single computer in the building); the business structure is operating under an assumed name which he doesn't have registered with the state as trademarked, as the current business, nor as a DBA; there is no established credit for the business; and his books are not remotely accurate as he constantly brags about keeping cash off the books. The owner has worked their for 30 years, having bought out his boss 10 years ago. This shop has been running with the owner and a young inexperienced tech (19 first auto job) for a while now. They primarily do maintenance, belts, brakes, tires, hoses, etc.
Auto repair in this area is unbelievably busy, and I know it will not be difficult to get the customer pay side up and running. I know most of the owners around and my average wait is anywhere from 1 to 3 weeks out. My preferred service shop is part of a dealer group, and they haven't been allowed to do any customer pay work for almost 5 months. My second favorite shop is so busy that I'm looking at 3 weeks out for a appointment. The local Toyota dealership was a 3 week wait for a 4x4 diagnosis as well (needed for auction claim)
My plan is to start with two techs keeping the young tech he has currently (pending interviewing him) and poach a master tech I know. If I dedicate 3 of the 6 bays to customer work with those two doing the work, how would you project the first year revenue?
