What would it cost to equip and operate a garage?

Discussion in 'General Discussion' started by Dec, Dec 2, 2008.

  1. Dec

    Dec Hardcore MB Enthusiast

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    Could anyone give me an educated estimate as to what it might cost to equip and run a garage specializing in the repair and service of Mercedes cars?

    The garage would be approximately 4,000sq feet, basically a shell with all the usual utilities like power, water etc.
    I don’t know exactly what would be needed in the way of tools and equipment, as I am not in the motor trade.

    Equipment?
    All the equipment would be new and there would be, for example about 6 car lifts, work benches, tools, specialist tools, ventilation, tracking and diagnostic equipment, in short every thing that you would find in a well equipped main dealer workshop.

    Labor Costs?
    There would be 1 Manager, 4 Technicians 1 Apprentice 1 parts assistant and 1 general assistant.
    The Manager would be a very well qualified and an ex-Mercedes Technician, (as opposed to a glorified receptionist) and know the job well, the wages would need to reflect these qualities.
    The 4 Technicians would also be very experienced and paid accordingly.

    Other Annual Costs?
    WIS and EPC annual subscription, Star updates, public and employer liability insurance, rates and any other charges. Obviously standard costs like electricity, heating, and telephone are easy to estimate it’s the items above that are an unknown.

    There are no budget restraints on this, it will cost whatever it costs using new equipment only.
    Likewise there is no requirement to save on labor costs by employing 4 apprentices and 1 Technician, it is knowledge and experience that are the main requirements.

    I don’t expect an accurate estimate, just a rough idea.

    One last question, what would be a typical amount of hours for the average Mercedes car to spend in a garage for service and/or repair in a 12-month period? Or to put it another way, how many cars would be needed to keep 4 Technician busy in a 12 month period.


    Dec
     
  2. nick mercedes

    nick mercedes MB Club Veteran

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    Why does it need to be new?
     
  3. Alfie

    Alfie Authorised Forum Sponsor Authorised Forum Sponsor

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    I'm sure Olly will be able to help you with this one.

    But given the current economic climate are you sure that you want to be putting up this sort of money in a such a high initial investment venture?
     
  4. A210AMG

    A210AMG MB Club Veteran

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    I would think if your setting up you would be looking for second hand stuff?

    As you get more business, established then you could look at buing newer / better equipment?
     
  5. lynall

    lynall Hardcore MB Enthusiast

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    Dont forget accounts.

    Regarding equip have a look on e-bay at 2 and 4 post lifts not worth buying second hand, especially if it damages someones very expensive car.

    Also all employees 18% ni contributions:eek:



    Lynall
     
  6. verytalldave

    verytalldave Hardcore MB Enthusiast

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    Also, some of the costs will be area dependant.
    Cheaper in the north, more expensive in the home counties.
     
  7. nick mercedes

    nick mercedes MB Club Veteran

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    Equipment?

    Ramps are about £2.5k each (Chinese ones are cheap but usless)
    Big compressor £2k
    Big Snap On box full of tools £10k each
    Airtools £1k
    Bunded oil tanks, waste oil tanks, some sort of star system, jacks, press, benches - another £20k or so?

    Labor Costs?
    There would be 1 Manager, 4 Technicians 1 Apprentice 1 parts assistant and 1 general assistant.

    £150k a year for that lot?

    Other Annual Costs?
    WIS and EPC annual subscription, Star updates, public and employer liability insurance, rates and any other charges. Obviously standard costs like electricity, heating, and telephone are

    Rates are half rent usually.

    Insurance £4k a year?

    There are no budget restraints on this, it will cost whatever it costs using new equipment only.

    Why use new when there's loads of good quality used equipment floating around?
     
  8. bigbobs cl

    bigbobs cl Hardcore MB Enthusiast

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    Keep your eyes and ears open for any dealers/indies that may be going under. May be able to buy any specialist tools from them!

    Bob
     
  9. OP
    OP
    Dec

    Dec Hardcore MB Enthusiast

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    Just to point out, I am not actually starting a garage, I am exploring the possibility and what it might cost in terms of equipment, labor and other costs.

    Nick, doesn’t need to be new, perfectly good used equipment can be got for less than new but for the purposes of the original questions and to get an idea of costs, I specified new only.

    Alfie, I wouldn’t have that kind of money at all, but I am exploring a way around that problem, once I can get an idea of what it might cost.

    Dave, the more expensive the area the better, that is, for the purposes of the estimate, lets say London

    Dec
     
  10. Ade B

    Ade B Hardcore MB Enthusiast

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    If you need an architect ;)

    Ade
     
  11. Rory

    Rory MB Club Veteran

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    I reckon £250K would be nearer - that's total payroll cost, including NI etc.

    Unless the OP is an accountant then finance & HR functions, even outsourced, would be another £50K.

    Don't forget that with that many staff one of them is always going to be on holiday or off sick so not producing any revenue.
     
  12. Rovinghawk

    Rovinghawk Hardcore MB Enthusiast

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    My point follows on from this- 6 ramps for 4 techies & 1 apprentice, not all of whom will always be around? Surely 4/5 is sufficient.

    RH
     
  13. Diesel Benz

    Diesel Benz Hardcore MB Enthusiast

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    I might volunteer for a mechanic. Reminds about training costs. :rolleyes:
     
  14. bolide

    bolide Hardcore MB Enthusiast

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  15. lil.smartie

    lil.smartie Hardcore MB Enthusiast

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    Insurance I'd say more than £4k don't forget road risks for test drives etc we deal only in Smarts and our total insurance bill is closer to £6k!

    Kate
     
  16. talltimtam

    talltimtam Hardcore MB Enthusiast

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    If you need to ask prices, then your in the wrong game.
     
  17. dino645

    dino645 Hardcore MB Enthusiast

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    If your stuck for a business plan, let me know. It won't cost you anything.
     
  18. c240yaz

    c240yaz Hardcore MB Enthusiast

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    A mate of mine started up 2 years ago. £80K from the bank to get up and running. That was for an MOT station, two ramps, MOT specification, exact fitting, distances from walls etc, rolling brake tester, headlight alignment, health and safety regulations etc, customer viewing area, toilet, kitchen facilties, office, bills.....and that is not for purchasing the garage, he has to lease that from the council.

    You are only allowed 1 apprentice to a certain number of time served mechs. There are rules on this. Not sure on the ratio.

    He already had his own hand tools, so no cost there.

    The best way to make money in the garage business is to have an MOT testing station. He says that is a must.
     
  19. bolide

    bolide Hardcore MB Enthusiast

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    Servicing the loan on that plus rent, business rates, insurance, waste disposal, electricity, gas, wages, NI & accountancy fees can't be easy

    Nick Froome
    www.w124.co.uk
     
  20. OP
    OP
    Dec

    Dec Hardcore MB Enthusiast

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    Thanks everyone for the feed back, broadly in line with that of my own thinking. Now I am not actually starting a garage, I am exploring the feasibility of an idea that could involve the setting up of a garage, but not as we know it, I will explain myself later.

    Dec
     

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