What does it take to start a Hotrod Shop?

[ironworks]

In the hot rod business your customer will always make more money in whatever they do then you will in your business.

[coolwelder62]

Rodger is right so listen to him.I think the shops that comand the big money are few and far between.And only some of those will stand the test of time.I am going back to doing industrial machine & design. And keep the car hobby to myself. I am tried of waiting for the customer to bring me a check or parts so I can keep working on there project. I have two cars left that belong to someone else then its no to everyone else.

[Rick D]

Originally Posted by ironworks

In the hot rod business your customer will always make more money in whatever they do then you will in your business.

You said right there Rodger!!! My brother inlaw said it best the other day, he was on one of his sons hard about school and getting good grades and such and his ex-wife said he should not be so hard on him and he told her " my sons will be members at the country club not work there" he is the manager at a private club and makes very good money, but the members are the ones giving that cash to him! If you have pasion and you love what you do you will never work a day in your life, but that doesn't mean you will get rich. I have had my owe place and you can make a living but now I work for the largest paint company in the world and I get to do what I love on the side. Plus I get a good price on the paint!!!

[HRBS]

17 years ago when it came time for my college decision there were two things I was "passionate" about. Architecture and cars. Both involved designing and creating someones dream. But one required a degree and the other could be played as a "hobby". So thats the direction I went.
My day job pays the bills and allowed me to build cars for myself over the years. After a few were built and sold, I began to get a rep for building "cool cars". More and more people would ask me to build them one and i refused quite a bit before I decided to do one. I established a business name, applied for a state license and opened a checking account in the businesses name. One turned into two, then three and so on untill I slowly outgrew the small 2 car garage I was working in. After a few cars I found that I had established a fine collection of tools and equipment. Today we are 4 strong, have a nice shop and are ALL part-timers. We all still have day jobs and work nights and weekends building our clients dreams. I am greatfull for the 3 guys I have and that they are just as eager to come to work as I am. This IMO allows us to be more passionate than ever because its almost a daily stress reliever. I have been very fortunete to have some loyal customers as well as new ones all by way of mouth. I rarely advertise yet maintain a comfortable work load. Honesty is one of the best policies. I dont promise the world and dont over book if I cant keep up. No hook line and sinker deals here.

[nvr2fst]

To make more money you need to do more work, to get more work comes with pay out for more exposure, more work comes with hiring more guys, which comes with more added bills. Its all about passion, if your in it for the funds only then you might as well open up a collision shop. If you have a great reputation and can charge a little more than your competitor most likely your not bringing in more income. A more reputable shop will have larger overhead, higher skilled employees which means higher payroll and more taxes due to the added income. It follows same suit for pretty much any company that does labor contracting.
A consumer most likely will always question the hours and always assume that it shouldn't take that long. If by chance you give the client a bid up front based on the work to be done, you would be pricing it so high to cover your butt just to make sure you don't lose and the consumer will think your out of line.
Your profit is based on payroll only. As Rodger stated earlier, production parts, t-shirts, etc will bring in your additional income but you need that "status" for people to buy your products.
Although Im in the construction industry, an example of a 70.00 rate with the average employee at 27.00 after all expense contributions have been paid the profit would be roughly 18/19% which is 12/14per man hour. This is based on corporate WI. and a very large overhead. When you achieve the 28% tax bracket on income it gets worse.
Keep in mind no matter how many employees you have, they will make mistakes now and then. You can not bill the customer for redo (ethically) and in the end, it's your company, your reputation and your mistake.

[GregWeld]

NVR --

Another good post... on "bidness".

Reading all these good posts on here dredges up some good memories. I've owned and operated 3 of my own businesses - and sit on the board or am an investor in others. So I'm only tossing in my usual .00000003 worth of opinion - and none of our opinions is worth much except to take the info and digest it. In the end - everyone can open a business and some will stay in business and make a living for many years - some will fail within a year - one out of 10 might be considered 'successful'. Some of the best businesses are the ones that can be replicated (franchised)... hot rod building is NOT one of those. Some businesses can find a way to build more things faster and cheaper... hot rod building is NOT one of those. So for me - to hear the guys that speak to the passion side of the business... that is the clearest message and probably the best advice that can be offered. If you can get out of bed every day - and go do something that you love to do - to whatever "level" that is... and pay your bills... and be proud... then that's probably something you should be happy to attain.

I liken this to Steve Rupps comments about a camera purchase... when he said -- "the best camera is the one you have with you". How simple - and how true... owning the best camera is worthless if it's at home when you want to take a shot... in that case the best camera might be your cell phone.

So here's the advice I'm going to put forth.

Go ahead and give your ideas a try. Start a shop or start a project - and see where it goes. What the hell do you have to lose... if it works out.. Great! If not - you've learned something... But you're never going to have the perfect opportunity - or the perfect time - or enough money etc. So might as well just get down and dirty and get acting on your dreams. Just don't hawk your house - your wife - or anything else that affects OTHERS... It's like gambling - you've also got to be smart enough to know when to fold if things don't go as planned (which they NEVER will in business!). Start it out any way that works for YOU. But start - otherwise you're never going to know.

[nvr2fst]

Originally Posted by GregWeld

NVR --

Another good post... on "bidness".

Reading all these good posts on here dredges up some good memories. I've owned and operated 3 of my own businesses - and sit on the board or am an investor in others. So I'm only tossing in my usual .00000003 worth of opinion - and none of our opinions is worth much except to take the info and digest it. In the end - everyone can open a business and some will stay in business and make a living for many years - some will fail within a year - one out of 10 might be considered 'successful'. Some of the best businesses are the ones that can be replicated (franchised)... hot rod building is NOT one of those. Some businesses can find a way to build more things faster and cheaper... hot rod building is NOT one of those. So for me - to hear the guys that speak to the passion side of the business... that is the clearest message and probably the best advice that can be offered. If you can get out of bed every day - and go do something that you love to do - to whatever "level" that is... and pay your bills... and be proud... then that's probably something you should be happy to attain.

I liken this to Steve Rupps comments about a camera purchase... when he said -- "the best camera is the one you have with you". How simple - and how true... owning the best camera is worthless if it's at home when you want to take a shot... in that case the best camera might be your cell phone.

So here's the advice I'm going to put forth.

Go ahead and give your ideas a try. Start a shop or start a project - and see where it goes. What the hell do you have to lose... if it works out.. Great! If not - you've learned something... But you're never going to have the perfect opportunity - or the perfect time - or enough money etc. So might as well just get down and dirty and get acting on your dreams. Just don't hawk your house - your wife - or anything else that affects OTHERS... It's like gambling - you've also got to be smart enough to know when to fold if things don't go as planned (which they NEVER will in business!). Start it out any way that works for YOU. But start - otherwise you're never going to know.

Here Here Greg, well put. You cant vision income upfront. Its a gamble on a yearly basis. As long as you have work and love your job in the end thats all that counts. I started from scratch 20 yrs ago bought 2 other construction companies along the way to collaborate with mine and venturing into a distribution company of construction products within the next two weeks. Is it serious profit, NO, but I enjoy it. Once your company has its limits you either need to be comfortable with it or look into adding on to it. (labor with product) The biggest thing I've learned in business is not to carry all the reigns. Business owners have a tendency to be controlling and with that said you will end up doing all the work yourself and have no free time to enjoy life.

[novanutcase]

A lot of great advice so I'm only going to add that, at least in Rodgers case, he also has Workers Comp to deal with which many don't realize is a HUGE pain!

I used to own a factory that employed around 250 people. The WC premiums were INSANE!! Add having to deal with false claims, etc. and your margin shrinks to almost nothing!

One step at a time OP....as mentioned before, build the best car you can on your dime and then work from their. If you wanna get rich this ain't the business to do it.

John