So the time has come and you’re thinking about striking out on your own. Starting a business is one of the biggest decisions a person can make, it’s easy to underestimate the amount of time and effort it takes to be successful. This is a list of things that almost every new business has to address.
- Locating a building
- Financing
- Government requirements
- Necessary equipment
- Customer service
- Employee relations
- Planning for retirement
Everyone that is in business for themselves arrived there by one of two ways. Either they bought an existing business, or they built one from scratch. I plan to cover both options. For this first article, let’s assume you are taking the “build your own” route. You may not realize it, but this planning stage is the most exciting and fun phase of the project.
The planning stage is where you think about how you would set everything up, where you will put your toolboxes and workbenches, the look of the building, the sign with your name on it, and all the current negatives that you won’t have to face or that you will do better. The possibilities are endless! There are no limits and you are excited!
I approach every big decision that I make with a “go/no go mentality”. I always make a list of the things that are for and against the decision to move forward and use that list to make the final determination. I encourage you to try this method yourself.
To begin with, it will be necessary to determine if the market can support another transmission shop- your new business. There are several formal ways to do this, but you can get a pretty good idea just by looking at how busy the shop is where you currently work. Are they usually scheduled out for three weeks, or are they keeping up with the demand?
Let’s assume your current employer is consistently scheduled three weeks out all of the time. Is it due to operational inefficiency or is there so much demand that they can’t keep up? If either of these things are true, there may be room in the market for another shop.
This goes under the GO column.
As an employee of the shop, you contribute to that shop’s production. If your shop is running inefficiently, ask yourself is there anything you can do to increase efficiency to increase production? Is your boss or manager the kind of person that would welcome suggestions from you? Would he/she recognize the value of your suggestions and increase your pay? Would more income and/or better conditions cool off your desire to open your own place?
Maybe one for the NO GO column.
Another thing to consider for the GO NO/GO list, what is your local demographic? I live near Whiteman Airforce Base. When it was a missile base, the demographic was my ideal customer. Then it switched to a B2 Bomber base which is a much more sophisticated (higher income) demographic. They didn’t fix their transmissions, they traded cars. The phone stopped ringing and it was very hard to sell transmission repair until the local demographic changed years later.
It is assumed that you have pretty much mastered your trade and can rebuild almost anything that would come through the door. If you have any doubts, you better rethink your situation. You will likely have to teach future employees “your way” of doing things and you can’t teach what you don’t know.
This would be one for the NO GO column.
As a lifelong mechanic I realize few of us have a long attention span, so I am going to wrap this first article up. My next installment will cover things to consider when looking for property. How to choose a good location vs a bad one, how to negotiate the financing, weather it’s better to rent or buy and how it will affect you when you are ready to retire.
I also want to make it clear that I am attempting to paint a very realistic picture of what a new business owner has to deal with. Being in business is not for everyone. Here are the numbers I could find:
- 22% fail before the first year ends.
- 49% fail before the fifth year
- 65% don’t make it to year ten.
Going into business for yourself is a life altering decision with long term and sometimes painful consequences. That is why fewer than 11% of the working age population in the United States are in business for themselves. It’s rewarding and it can also be very difficult.
I look forward to feedback and am easily found on Facebook where I participate in the Transmission Brotherhood and on my own FB page Kits Speed Shop.
