Starting a Mobile Repair Business

Michael from Clinton Mobile Technician Posted   Latest  
Discussion
Employment
Management

After being subject to an employer, many of us feel that "The Man" is not treating us well. We think that we could do their job better than they can. So we buy a business license, rent a space and wait for the business to pour in. I did this thirty years ago. I did not succeed.

There are multiple reasons for this failure.

  1. Location. I was not in an area with traffic. Only a few people knew where I was and the residents who lived around did not support the business.
  2. Advertising. I had no money. Therefore the advertising budget was zero.
  3. Fixed Costs. Every month the rent was due whether I had the business or not. Not just rent but power, heating fuel and telephone.
  4. Lack of Customer Base. I was not busy most of the time.
  5. Tools. I was just starting so I was not only buying the mechanic tools but also the shop tools and equipment.
  6. Working Two Jobs. In order to pay the bills, I worked two jobs. This took me away from running the business.
  7. Investment Capital. I did not have money to start the business. In working two jobs, at times I was going backward.
  8. Business acumen. I thought if I charged less that people would swarm to me. I had no waiting area and my shop was messy. (The list goes on) I was not a good businessman.

From one with experience, I can tell you that without having these areas covered properly, a brick and mortar shop will not survive. To have a shop work, You need to be prepared for the long haul. For me, having brick and mortar is not the answer. So what then? How can I control my customer base, lower advertising costs, focus on my business and lower fixed costs? I opted to go mobile.

In a mobile situation there are some factors to consider.

  1.  Area that you live. Depending on how rural your area is will determine how focused your client base is. The more rural, the less particular you can be.
  2. Climate. In a four season area consider that you are going to be working in the snow, extreme cold and extreme heat. Some days it just won't be possible to work unless you are working inside. Typically work slows down all around from Fall to Spring. Summer is the time to save your acorns. In warm weather states, the heat, rain and humidity can drain you.
  3. Client Base. Who do you want to serve? You can get more margin with the public. Catering to the public is very difficult and costly. Payment is a problem as well. I chose to work with shops. I have only had one bad check since working with shops.
  4. What is your focus? If you are going to do mechanical work, how will you transport your equipment? The fuel and vehicle costs are much higher when using a service truck vs. a passenger car. I chose to focus on diagnostics, electrical and programming. I can use a passenger car for this.
  5. How slim can you live? When you start out, most of your time will be in marketing. Make sure you are prepared to starve for a while. I worked a second job for 10 years building my mobile business. Patience is key for being successful. Are you good with people? If you are not, a mobile business is not for you.
  6. Tooling. In my case, most of my tools are electronic. 25% of my invoice goes toward current and future tool purchases. Scan tools have an average 5 year life cycle. Laptops have been lasting me about 2 years. There is always more to buy. About 15% of the ticket goes to subscriptions. Not just tool updates. GM, Ford, Chrysler, Toyota, Honda, Nissan all have online systems that you pay by the day, month or year. GM has moved to a per VIN system. I pay myself 40% of the ticket. The remaining 20% goes to other expenses. So when you charge a customer $100 to $200 for your time, keep in mind you have expenses to pay. This is why I only allow 40% of the ticket to go as my wage. I pay this to those who work for me as well.
  7. Avoid Debt. Most finance companies charge fees equal to or more than 20% interest on a tool lease. Considering the net profit for most businesses averages between 10% and 15% it would not take long to get under water. Sometimes there are emergencies and you got to have it now. Consider carefully when making large purchases.
  8. Don't Be The Cheapest. As a mobile technician, you have talents that others are willing to pay for. Don't think that you have to undercut the other guys. You have a premium service that is utilized as an option to the dealer. The customer is saving towing charges and saving face with their customer. You can charge equal to or more than the shops are charging. $100 or more per hour is not unreasonable. Less than that, it is just not worth it. Consider you are paying for all your expenses including health insurance, liability insurance, uniforms, car expenses and all listed above. If you are making $40 per hour, (40% of the rate) that is about what it costs an employer for a good technician once all the benefits are calculated. You should value yourself equal or greater than the shops technicians. You are the hero.
  9. Continued Education. Back in my 20's, I thought I was so smart. I did not need classes, nobody was smarter than me. Today, at 52, I realize that there is so much to learn out there. I attend classes every opportunity I can. Every night I have homework from the days activities. I am constantly studying and learning. The internet has opened up so much. Companies like ATG, CTI and NAPA have great classes. Every time I go to one I learn nuggets of information that help me.

I am sure others have good insights as well. I hope that my experience and suggestions can help those who want to be a mobile technician. As this is a discussion, feel free to comment. Sorry that this is such a long article. So much to cover. This is just the beginning.

+10

Adrean from Bakersfield

 

Diagnostician
 

This is the main reason I started mobile . If I would of opened up a shop, Obviously small in size due to not having a lot of capitol , I would of failed . Going mobile opened More opportunities for me to make money . As stated by you , I used a regular passenger car . Didn’t need to buy shop equipment So my startup money really wasn’t much , keep in mind I already had alot of the passth scopes and scanners . Today in age opening up a shop you will need A bit of capitol , because customers will not pour in the minute you open those doors . bills Need to be paid at home and at the business . 

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Bob from East Longmeadow

 

Diagnostician
 

Michael,

Thanks for a very informative post on this topic. I have been toying with the idea of going mobile but have not pulled the trigger yet. I'd like to ask a few questions if you don't mind. My current situation is Owner/Operator of my own shop since 1990. Right now it is just my wife (in the office) and me (in the shop). It has worked well for a long time but I am reaching the point in my life where I really don't want to do the heavy physical work anymore. Turning 61 tomorrow and have been turning wrenches for almost 40 years. 

Mechanical work has become drudgery for me and it doesn't excite me like it used to. What does keep my interest is electronics and computers and diagnostics. This is the kind of work I like to do and this is what I want to do exclusively. I just need to make it happen so let me ask you a few logistical questions.

How do you manage all your electronic equipment on the road? Do you rely an A/C power at the shops you visit or do you rely on battery power?

Do you have a charging station in your vehicle for your laptops and scanners?

Do you have spare batteries for your various tools?

What do you use for internet connectivity?

Do you do any disassembly work or do you rely on the shop techs to pull things apart when you need access to something?

I know we can't discuss fees but I would like to ask how you charge for different jobs. Do you charge by the hour for everything or do you have some sort of menu pricing? For instance, Program ECU = X or Diagnose MIL = X or Program new keys = X etc. etc.

How do you handle it if you can't complete a job in an hour?

How do you charge for a job that takes more than one trip?

My other option is to maintain the shop for the real tough jobs and go mobile for the run of the mill stuff. Don't really know if that would be feasible but it's an option.

I probably have more questions but that's enough for now. 

+2

Michael from Clinton

 

Mobile Technician
 

Hi Bob,

I carry a long extension cord for my Stable Power Supply. ( a must have) Sometimes I have to use it for the laptop but most of the time the battery will last through six or seven programming sessions. If the battery gets below 50% I make sure I can plug it in. Most shops are good to loan you a cord if you need it.

I do have a 400 Watt inverter in my vehicle. It comes in handy when a tool gets low on power. I have a key machine which draws more than 400 Watts. I have to plug it in with a cord. I am looking at changing over to a larger inverter and a second battery so that I can power it without a cord.

I really have not needed a spare battery.

For internet, I use my phone. Most shops in rural areas will have land line DSL. Shops have been good to share the internet password. Occasionally, I will use the shop internet because they are in a bad internet area.

Typically, when doing diagnostics, I have the shop owner send a technician to help me. It gives the technician some knowledge, plus I don't have to carry many tools. Even when I am on my own, I usually can get help to remove panels to get to wires.

Currently, we have two schedules. A flat fixed rate for programming and a per hour rate for diagnostics. We charge more for programming European cars. Domestic and Asian are the same rate. If we have to travel more than 45 minutes from our home base, we charge more for programming.

If the programming takes longer, we eat it. We try to estimate the diagnostic time. If it goes a little over, we eat it. If a estimated one hour diagnostic takes three hours, we make sure the shop manager or owner is in the loop. We can either stop and bill the shop or keep going. I have not had anyone give up yet. The minimum is one hour. Currently, we do not charge for travel time.

If we have to go back and it is a matter of research or grabbing another tool, we eat it. If the customer has a bad part or they need to do more work, we charge them full rate then one half the rate when we return.

If your shop is at your home and there is no real cost to it, I can see maintaining it. If you have to pay big utility bills and taxes, I would transition to the mobile service. 

This business is very taxing on your mind. You get your backside handed to you on a regular basis. Remember you are taking on jobs that one or more shops have failed to diagnose. It is not easy, but it is rewarding.

+2

Edwin from Charleston

 

Mobile Technician
 

I have been mobile since 1994. My business model has changed since then but if i had to do it all over again I wouldn't have changed a thing. Work smart not hard. No your stuff and take care of your customers. 

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Bob from East Longmeadow

 

Diagnostician
 

Great info, thank you Michael.

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Eric from Peoria

 

Mobile Technician
 

How do you manage all your electronic equipment on the road? Do you rely an A/C power at the shops you visit or do you rely on battery power?

AC (2500 pure sine 5000 watt surge inverter) and 12 V DC

Do you have a charging station in your vehicle for your laptops and scanners?

Yes

Do you have spare batteries for your various tools?

Yes

What do you use for internet connectivity?

4 GLTE wireless router, Hotspot 

Do you do any disassembly work or do you rely on the shop techs to pull things apart when you need access to something?

very little- our job is to diag- theirs is to repair...

I know we can't discuss fees but I would like to ask how you charge for different jobs. Do you charge by the hour for everything or do you have some sort of menu pricing? For instance, Program ECU = X or Diagnose MIL = X or Program new keys = X etc. etc.

Set fees for pre/post scans, programming, ADAS etc and most diag. -Hourly for for more complex stuff. straight time on electrical and network

How do you handle it if you can't complete a job in an hour?

Bill more time :-)

How do you charge for a job that takes more than one trip?

See above answer ^^^^ :-)

My other option is to maintain the shop for the real tough jobs and go mobile for the run of the mill stuff. Don't really know if that would be feasible but it's an option.

Hard to serve 2 masters....

I probably have more questions but that's enough for now. 

+2

David from Philadelphia

 

Diagnostician
 

Awesome, awesome, awesome reply Eric, I will have some similar questions for you this weekend at Super Saturday. Looking forward to picking your brain about a few things. Great questions Bob Powell, helped open my eyes to some things that I overlooked. 

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Eric from Peoria

 

Mobile Technician
 

As always I am again honored to present at our awesome event and look forward to see all you guys!

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Bob from East Longmeadow

 

Diagnostician
 

Eric,

Thank you for the reply. I will see you at the Massachusetts TST meeting in a couple weeks and maybe we can discuss this in a little more detail if time permits.

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Eric from Peoria

 

Mobile Technician
 

For sure. I look forward to seeing you 

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Bruce from Avon

 

Mobile Technician
 

here's a few thoughts ..

  1. 25% for tooling !
  2. w0w!!
  3. I am in New York, and I can not get paid by larger customers without Workmans Comp and Liability..
  4. if I was to spend 25% on Equipment an Subscriptions, I'd be done
  5. let me suggest 10%, if thats not enough ..
  6. YOU need to raise your rate
  7. find someone to feed you steady work--
  8. in my instance CARMAX buys tons of lease return Mercedes, the local dealer won't talk to anyone for less that $5k
  9. I bought the Star and Xentry to service them, its steady work
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Michael from Clinton

 

Mobile Technician
 

Hi Bruce,

We do mainly programming with some diagnostics mixed in. We also try to cover most car lines. So our numbers may not be the same as yours.

Reasons for the 25% number...

GM has changed their pricing on programming software. Their new price for each flash is higher than 25% just for the software.

Toyota has a high rate for re-programming software exceeding 25%. We do not do enough Toyota business to buy a yearly subscription.

Chrysler has gone off the rails with their dual software platform. Around $2800 per year. Still we are about 10% on them for software.

Ford is fairly reasonable for software. We are about 5% on them.

VW and Audi, we are maybe 50% due to how many we see right now.

Nissan is getting better with all the RWD and CVT transmission failures. Maybe at 10% for the software. Should go down next year.

Advanced Diagnostics MVP for keys. We are around 25% on theirs.

We have other various tools that have annual subscriptions. They add to the cost.

We spend about $20K a year on diagnostic tools and still have more to buy. Every time we think we are caught up, one fails or a new one is released. Eventually we would like that number to fall.

Giving the potential worst case numbers is more humane than leading them to believe they will make bank. If you are at 10% that is fantastic. I would like to get there someday.

+2

Bruce from Avon

 

Mobile Technician
 

here's my viewpoint--

I can not, in my market get more than 125/auto for diag

but

thats the first hour .. after that it's pass, or go..more $

these cars have already been looked at, they want to take advantage of me

I un-bundle EVERYTHING

--GM Access ..bingo!

need a LSID --bingo!!

otherwise, you are running around like crazy, for no money

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