What does it take to start a Hotrod Shop? - Page 3 - Lateral-g Forums

**GregWeld** · #21 12-26-2009, 03:25 PM

The oldest saying in almost any business --

"You want to make a small fortune in the car building business -- start with a large one..."

You can substitute any business for "car building"... the same applies. The number one failure of any small business is the lack of capital to support the business GROWTH... By that I mean - let's say you start out with one car to build - then half way through - some friends of that guy come by and want you to build them a car too... now all of a sudden you have TWO 50K projects... but you don't have the shop space - the tools - the manpower... and you don't have the re$ources to do the 'above'.... so you can't capitalize on your business because you lack the capital. You can't afford to stay small - and you can't afford to expand either... BIG PITFAL. IF you can get lucky enough to get two or three customers willing to commit -- AND you can make that next step - then you have a good chance to succeed. So start now to plan on how you're going to go live - if the opportunity presents itself.

ironworks · #22 12-26-2009, 05:21 PM

Really at the end of the day you have to want to build cars more then anything else. If you get into this business thinking your going to rake in the dough, Your extremely mislead. There are very few shops that make great money. I could count a 1/2 dozen that might. And they are not Foose design and Radrides ( parts and T shirts is where it is at). The margin on your labor in this industry is very low, the amount of money it takes for skilled workers is very high and you have to take it in the shorts on the big dollar builds. They have an even thinner margin. Anytime your profit is built into the hourly rate, meaning you have to work x amount of hours times your margin to make good money, you will always run out of time before you make good money.

Now if you can figure out how to estimate quality work and make money on every estimate, you might make great money, but there is not way to estimate perfection.

Tom Hanna of drag race fame was a master metal man. I asked him this summer why he got out so many years ago to sell pet collars, Yeah dog cat and horse collars. He said the only way to make money is to close your tool box. He realized that time was not on his side to build hot rods and make money. So now 20 plus years later he makes so much money from his pet collar business that he can build whatever for whoever and not have to get some customer to pay for it. That is my dream, I just wish I was as smart as that guy.

Vegas69 · #23 12-26-2009, 06:04 PM

So what are you saying Rodger? Do it for the love of the game?

Doing something you are passionate about is underated. Part of me is not sure I would want to be in the car business even though it's a passion for me. Once you cross that line and make it work........ Real Estate certainly isn't my passion but it pays the bills alright. Sometimes I wonder how dominant I could be with the passion, but then I just think it would ruin the fun. Even though it's different, as a 19 year old kid I decided auto mechanics was the direction I wanted to go. Went out and got a degree at one of the best schools, was apprenticed by one of the best techs, slung parts for a few years. You just can't get rich working against the clock. I realized at 22 that I had mixed up passion and work. I didn't like new cars, they suck. I liked the hobby. To this day, my experience working on new cars ruins it a little. I still catch myself getting irritated thinking I'm trying to beat the clock over 10 years later. Are you mixing up a passion in trade for a job?

**GregWeld** · #24 12-26-2009, 06:09 PM

Todd --

Very "insightful" post... and you raise a very good question.

RE: ROGER -- He does this because what else would anyone do in Bakersfield... right??

awr68 · #25 12-26-2009, 06:16 PM

Todd, I have been told many times not to cross that line and to leave it a hobby!

ironworks · #26 12-26-2009, 06:17 PM

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

coolwelder62 · #27 12-26-2009, 07:01 PM

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 · #28 12-26-2009, 07:04 PM

Quote:

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 · #29 12-26-2009, 08:33 PM

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 · #30 12-27-2009, 08:58 AM

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.