K, this is going to be a long one.!!!
We are a mobile business doing leather, vinyl upholstery repair. Our main bread and butter are the automotive dealerships. We also do interior repairs- really anything on the inside of a vehicle we can repair. My husband is the tech. We are a one man show.

Other services include windshield chip repairs / automotive pinstripes and decals. Also, boats, leather furniture.

We have a website and are going to be starting a retail side. We will be adding leather cleaners, conditioners, etc.

There is alot of travel involved in this business. We just made a move to be more centrally located to our accounts, and I am not happy living here.

We have the opportunity to purchase a detail shop in the city, which we just moved from! ; with a population of 335,000.

The asking price is $39,000. The purchase will include training in the details; and equipment. The existing business pays rent of $700.00 / month. There is enough room in the bay area for 2 vehicles. It's not a fancy building and is in an industrial area. I've seen the financial statements and would defintely have them looked over by an accountant. The detail shop is just into its 3rd year.

This is my idea:
We would have a family member learn the detail trade work; who is not presently involved in our business at all. He would run the detail shop.
This person would also be taught the windshield repairs and decals. (In the early stages); and the other repairs in stages.
We would offer the services that we presently do for our existing business to the detail shop customers.

Stage 1)
The technichian that does all of the repair work for our current business would continue to do the highest revenue accounts.

We would offer windshield chip repairs, and other repairs on specific days of the week. (i.e) - Mondays- Thursday and Saturdays. -by appointment. He'd be working 6 days a week in the beginning until the other is fully trained in the repair work.
I would also be involved in training in the detail work to assist as needed.

Stage 2)
Cross-training. The detailer would be learning the leather repair and other repairs. Once he is fully trained, we would offer ALL services on a daily basis.
The fellow that presently owns the detail shop is a one man show. He has established accounts, but of course it's free will. He has an ad in the yellow pages, but no website. I believe with a good optimized website the revenue would also increase, and with having the skills to do the windshield repairs, leather repairs, etc. ... more revenue??

Any thoughts on this or ideas?
Thanks!

Allie,

First make sure the 3yrs financial statements include the federal tax returns...unless the statements are audited and signed by a CPA, you should consider them next to worthless.

I don't think you should get your expectations too high about increasing the business significantly with a website. I've never looked on the internet for a detailer to do my car and I question how many people do. That money might be better spent on good signage and local advertising.

It doesn't make a lot of sense to spend time and money on a media that exposes you to hundreds of millions of people, when only those in your immediate area are actually potential customers.

As far as the asking price for the detail business. Because it's an individual that currently owns, runs, and does the work there's a higher risk of losing customers with a ownership change than if the customers had a relationship with a number of different people where most were going to be staying. I certainly wouldn't pay more than 1x the net profit as supported by tax returns. This means that if you manage to maintain most of the existing customer base it'll pay for itself in a year.

Your training plans etc are too convuluted for me to comment on so I'll just assume it's something you feel will work for you.
Good luck

Thanks for your input Denny.

We would definitely have tax returns reviewed and audited.

As far as the website. We launched one for our existing business and it paid for itself in the first week. The respnse far exceeded our expectations.

I did a google trend and auto detailing seems to be googled alot.
Marketing professionals say that 70% of consumers look online for services as opposed to the phone book. The cost of the website is not a huge expense.

Thanks again

Few Questions to Ask?

This could work out?
Some important questions to ask are:

What is the current revenue of the detail shop per year?
How many other detail shops are in this city, who are they, what % of the market share does this current detail shop presently own 5%?
How many people currently are needed to run this detail shop?
Are you going to want to stick with it at least 5 years in this city and/or current location?
Adding on supplies to leather repair increases your revenue stream if you have a good service response.
Increase your pricing with different packages based on time will also be an opportunity. Turnaround time can receive higher $$ depending on how it is marketed.
One final-don't try and be all things, find your niche,leather repair and supplies and fully execute that first.

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