This thread is mainly geared towards all small business owners in the auto performance industry but all are welcome to contribute any input they may have. [B]Moderators, please sticky this![/B]

I am in the process of opening my own performance shop in Southern California. I don't have much experience in running a performance shop, but my partner does. I would be mainly running the back end of the business, while he would run the day to day operations. We do have some initial investments to put towards the business, but will need additional financing.

This industry is saturated with shops all over the place, especially Southern California. Lenders view performance shops as high risk loans. My biggest concern is being able to get approved for a loan through a financial institution. I don't have a proven track record as this would be my first shop. My other concerns are related to my lack of experience specifically in the performance shop industry. I have a background in marketing and finance, so i would be able to utilize my knowledge in those fields for my business.

With that in mind, please share your thoughts and opinions with me. Both good and bad.

My questions to you are:

1.What % (rough estimate) of performance shops are struggling?
2.What areas are performance shops struggling in the most? (i.e. marketing, finance, management)
3.Are their shops currently utilizing some type of 3rd party service to assist them with the operations of their business? If so, what types of firms are helping them?
4.To the best of your knowledge, are there any 3rd party companies that specialize offering services in the performance shop industry? If so, what services do they offer? (i.e. marketing, management, finance, accounting?)
5.In your opinion, why do some shops struggle more than others?
6.For the performance shops that are successful, what are they doing that others aren't?
7.Have any of you business owners used some type of 3rd party service to aid in the success of your business?
8. What are the benefits and drawbacks of utilizing a 3rd party firm to help me get the business on its feet?
9. Are their other options to help me with the core functions of the business? (i.e. management, accounting, finance)
10. For those that own their own peformance related business, how long have you been in business? What weaknesses did you have when you first started? Do you still find room for improvement? if so, in what areas?

I want to make sure things are done right, while covering all areas of the operations so that i can maximize the success rate of the company. It's better to plan everything out from the beginning so i know what it will take to make this business a success.

All feedback is welcome and greatly appreciated!

 

I dont have direct answers to most of your questions on how to operate the business other than the reasons why they fail. The owners have short-term mentalities and want to get rich quick. Therefore, once the business starts making money, they drain the company by investing in expensive show cars and high salaries instead of paying the price by growing the business over a few years, building a name with quality reputation instead of 100k customized show cars. Your business plan needs to clearly lay out your budgets and an estimate of your revenues before a bank will touch you.

Visit some shops that you admire and see what they do well. Emulate that and determine what your competitive advantage is going to be. Better service? Lower prices? Product differentiation? Service differentiation?

Above all have a clean place even if it is small to start (not flashy) and finish projects.

Good luck.

 

I would say that the most important thing to remember is the old cliche the customer comes first.

If you put out a quality product and keep your customers happy they're more likely to spread the word to help the business grow.

Like dgracer said don't try to get too big too fast. If you start taking on more than you can handle you will likely end up with incomplete work or lower quality work.
Focus on the quality of the work and not the quantity of customers initially. I've seen multiple shops that have tryed to take on more projects than they could handle and ended up with shotty work and a lack of attention to detail.

Finally, make sure there is something that can differentiate you from the rest of the shops out there. Whether it be customer service, a specialty, a clean shop and showroom, or just a high quality of craftsmanship. From the consumer's point of view I think those would be what I would be looking for in a shop.

As for the statistics and the professional side unfortunately I can't be of much help, but then again if you run it properly and keep your customer base happy and steadily growing, you should be successful and have nothing to worry about.

 

1. you should visit other shops and talk to them. =) this might help.

2. do more reasearch. what kinds of cars do you specialize in?

some of the longest running shops in my area are

Pitcrew
supervip motoring
autolink motorworks

i have seen shops come and go in a matter of a few months. your degrees will not help you if you dont reasearch, thats up to you bro.

 

You should also realize the thread is almost a year old

 

LOL

 

what is the point of reviving this thread?