| Register/Subscribe Home |
|
ONLINE FEATURES
Book Reviews
BW Video
Columnists
Interactive Gallery
Newsletters
Past Covers
Philanthropy
Podcasts
Special Reports
BLOGS
Auto Beat
Bangalore Tigers
Blogspotting
Brand New Day
Byte of the Apple
Economics Unbound
Eye on Asia
Fine On Media
Green Biz
Hot Property
Investing Insights
Management IQ
NEXT: Innovation
NussbaumOnDesign
Tech Beat
Working Parents
TECHNOLOGY
J.D. Power Ratings
Product Reviews
Tech Stats
Wildstrom: Tech Maven
AUTOS
Home Page
Auto Reviews
Classic Cars
Car Care & Safety
Hybrids
INNOVATION
& DESIGN Home Page Architecture Brand Equity Auto Design Game Room SMALLBIZ Smart Answers Success Stories Today's Tip INVESTING Investing: Europe Annual Reports BW 50 S&P Picks & Pans Stock Screeners Free S&P Stock Report SCOREBOARDS Hot Growth 100 Mutual Funds Info Tech 100 S&P 500 B-SCHOOLS Undergrad Programs MBA Blogs MBA Profiles MBA Rankings Who's Hiring Grads | | JUNE 29, 2000 SMART ANSWERS Can a Successful Car Mechanic Drive Off on His Own? Good skills aren't enough. Without plenty of ambition, organization, and a good location, you'll end up getting wrecked
Q: I've been a mechanic for more than 30 years and can fix any car, foreign or domestic. I have my own tools and some heavy equipment, but I've always worked for someone else. Now I have the opportunity to open my own shop in a pretty good location. What are my chances of making it? --M.H., Colton, Calif. A: The details of your situation -- including just how determined you are to be a successful entrepreneur -- factor so heavily into your question that's almost impossible to give you a complete answer. Studies show that about half of small businesses with employees aren't operating five years after they open, and about 64% close their doors sometime during their first decade -- either due to a positive event such as a sale or merger or due to failure. Entrepreneurs who get startup training, write a formal business plan, and have access to mentoring from other business owners are more likely to succeed, the studies show. But dry statistics really don't have much bearing on you personally, experts say. "This is a situation where it's not what you know, but who you know and whether you have the ability to attract customers. It's a question of personality and expertise over industry statistics," says Bill Gartner, a small-business research expert with the University of Southern California's entrepreneurial program. Building a business is a very different proposition from being an employee, he says, and technical ability does not necessarily mean you have the financial savvy or entrepreneurial drive to be your own boss. The car-repair industry also tends to be a tough proposition for small-business owners, says Mitch Lenko of the Journal of Small Business & Entrepreneurship, published by Centennial College in Ontario, Canada. Margins are slim and getting slimmer, due to the increasing use of computerized diagnostics (some cars now have 15 interfaced computers on board) and high-tech repair equipment. Plus, it's difficult for independent repair shops to do enough volume to compete with the service departments of large dealerships, Lenko says. "When they try to [compete on] price, they begin to suffer." Still, it counts for something that you have 30 years of experience and already own the tools and equipment you'll need, says Bill Haas, mechanical-division manager for the Automotive Service Assn. (ASA), a 12,000-member industry group in Bedford, Tex. Make sure you thoroughly research your location -- all-important in the repair business, he says. If it's inconvenient for people to bring their cars to you, your shop won't thrive. If you're in a rough part of town, customers won't be comfortable leaving their cars overnight. If many drivers in your neighborhood lease their cars, they'll take them to the dealer to be serviced. You should also consider the appropriate size for your shop, Haas says. If you have two or three repair bays, you might get away with operating a one-man show. But if you're looking to buy a 10-bay facility, you'll have to attract enough business to cover a large overhead. And you'll have to find qualified mechanics to work for you, not a given since the industry now faces a shortage of about 60,000 mechanics, Haas says. A larger shop will also need administrative and staff. Will you specialize in a particular make or model of car, or do general repairs? Again, you'll need to research the area to find out if having a specialty makes sense. How will you market your shop? Do you have strong interpersonal skills for communicating with your customers? "People are spending more and more money to repair their cars. Someone has to explain what they are paying for, in terms they can understand, and create trust so they feel comfortable opening their wallets," Haas says. Still, he adds, the need for more car-repair shops is clear, and an experienced mechanic with the right location and ambition should be able to make a business work. "There are fewer and fewer places to have your automobile serviced today," Haas says. "All the corner gas stations that used to do seasonal tune-ups and maintenance are gone, and instead of repairs and service, they all sell bread and milk." For more information, statistics, industry trends, and technical training, consider joining the ASA, which has a $150 annual membership fee. The group's Web site, www.asashop.org, is a good place to start your research, along with its AutoInc. Magazine, which has a link on the ASA site. Have a question about running your business? Ask our small-business experts. Send us an E-mail at smartanswers@businessweek.com, or write to Smart Answers, BW Online, 46th Floor, 1221 Avenue of the Americas, New York, NY 10020. Please include your real name and phone number in case we need more information; only your initials and city will be printed. Because of the volume of mail, we won't be able to respond to all questions personally.  By Karen E. Klein  | | |
 Copyright 2000, by The McGraw-Hill Companies Inc. All rights reserved.Terms of Use | Privacy Policy |
Printer-Friendly Version
