Starting a Mobile Repair Business
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.
- 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.
- Advertising. I had no money. Therefore the advertising budget was zero.
- Fixed Costs. Every month the rent was due whether I had the business or not. Not just rent but power, heating fuel and telephone.
- Lack of Customer Base. I was not busy most of the time.
- Tools. I was just starting so I was not only buying the mechanic tools but also the shop tools and equipment.
- Working Two Jobs. In order to pay the bills, I worked two jobs. This took me away from running the business.
- Investment Capital. I did not have money to start the business. In working two jobs, at times I was going backward.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
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
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
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
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.
Great info, thank you Michael.
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
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.
As always I am again honored to present at our awesome event and look forward to see all you guys!
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.
For sure. I look forward to seeing you
here's a few thoughts .. - 25% for tooling ! - w0w!! - I am in New York, and I can not get paid by larger customers without Workmans Comp and Liability.. - if I was to spend 25% on Equipment an Subscriptions, I'd be done - let me suggest 10%, if thats not enough .. - YOU need to raise your rate - find someone to feed you steady work-- - in my instance CARMAX buys tons of lease return
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
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
Absolutely wonderful read.....EXTREMELY candid and honest with us and yourself as well. Most people cannot be honest in explanation and they fill the voids with a whole lot of fluff....not in this case. This was insightful and locked in. The points made should be taken into intense and serious consideration for anyone of you choosing brick and mortar (been there) or mobile (considering this)…
Hi Samuel, Yup, the grass is always greener on the other side of the fence. Guys watch me work and think I make so much money. Not really, I made more as a tech in 2008. You may make more while actually producing but consider you drive to work 5 to 10 times a day! Sometimes the commute is 45 minutes one way. The satisfaction comes when you find an issue that has been stumping the shop staff for…