Over the years I have spoken with many body shop entrepreneurs, and each has a unique story as to how they became an owner. Many were former technicians like I was, or oddly enough, some had multiple college degrees with no collision background.
As you’re reading this, you will likely fall into one of three camps:
Camp one: You’re an employee at a shop with no desire for ownership.
Camp two: You’re an employee but feel ownership is beyond your reach.
Camp three: You’re an owner.
For those in camp two, this month’s column is for you! You have likely been in the industry for at least five years, maybe have a family and feel owning a shop is impossible. As a former technician for 15 years, married and a father of three, I totally get it. Just the cost to buy groceries is unbelievable.
As an owner with many employees, I appreciate every one of them. I am responsible for providing a safe working environment, paying them their full worth for the value they provide, and showing them the utmost respect. Unfortunately, at end of the day, here is the hard reality, “You’re either building your own dreams or you are building someone else’s.”
There are hundreds of ways to become an owner, and here’s a short list:
- Buy the existing shop you are working in, if it is a smaller independent shop.
- Maybe in the short term, you can start working out of your garage/barn at your home.
- Find every shop within a 40-minute radius of your home, and you might just find an owner ready to sell.
- Possibly rent a 40’X60’ building that is zoned commercial.
- If you’re working at an MSO, go work for an independent who may be ready to sell in the next few years.
Likely the biggest hurdle you feel is, “Because I don’t have the money!” Most folks on the Facebook collision pages are saying $500k is the point of entry to open a shop. For me, I have several million dollars invested in my business, but fortunately all that cash wasn’t needed in the first year.
A few must haves:
- A building to legally work out of to rent or purchase.
- Paint booth: used ones online run $25-40k.
- Used resistance spot welder, possibly with some OEM approvals: $10-15k.
- Used frame machine: $6-8k.
- Used measuring system: $10-15K.
- Used air compressor: $2-3k.
- There are many other smaller tools you will need, like SPR rivet guns, paint guns etc.
Rule No.1: Do not take on a job if you don’t have the proper tools! You can sublet ADAS calibrations, alignments, towing etc. OEM certifications can come later. Point being, if you’re willing to sniff out deals, you could probably be running for under $200K. Some current owners are snickering right now, but many started with less than this. I know I did! There are always banks, SBA loans, etc., or maybe Uncle Joe will help fund your start up. Don’t forget, some sellers may be willing to provide seller financing.
What can you do right now?
- Work overtime and only spend $ on what it takes to survive. While living a life of frugality, set weekly, monthly, and yearly savings goals.
- Start reading or listening to good business books like, “Rich Dad, Poor Dad” by Robert Kiyosaki, “The Effective Executive” by Peter Drucker, “Small Numbers, Straight Talk’ by Greg Crabtree, and more.
- Start understanding everything you can about what good estimating is. Resources: Degweb.org, Collisionadvice.com, and Collisionhub.com.
- Talk with local paint jobbers, as they usually know which shops are thinking about selling.
- Read FenderBender cover to cover every month and listen to their podcasts, it’s all free!
- Find a mentor. Many owners outside of your market love to share their knowledge and give back.
Shop ownership is not for the weak. To be successful, plan on working 80-85 hours per week your first year or even two. Employee management takes constant work. You must be willing to put pride aside and learn from folks smarter than yourself. There is great money in collision repair, and you can become a multimillionaire WITH the right knowledge and drive. Obviously, a customer base is necessary, and we will save that one for another month.
In the Old Testament there was a fearless warrior named Benaiah. The book of Samuel tells of how, “He also went down into a pit on a snowy day and killed a lion.” For many, later in life is filled with pain, and that is the pain of REGRET! “They will regret the mountains they didn’t climb when they were younger but will have long forgotten the bumps and bruises it took to get there.”
