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Leasing Commercial Shop Space

#1

primerbulb120

primerbulb120

I have decided to get out of landscaping and begin doing equipment repair and service full time. Been doing it from home, but I know I'm going to need a commercial shop space soon. What is the best way to go about finding a building to lease? I am clueless when it comes to real estate.


#2

B

bertsmobile1

Are you turning over enough currently to pay the lease & still be able to eat ?
How seasonal is it where you are ?
I had 3 bumper years when I took over the service run but it has not rained for the past 18 months so there has been no servicing, just repairs, mostly on hand helds and they are done at a loss most of the time if I was to pay a wage.
No great problem for me because my rent is 20 hours labour on the farm, but if I was paying rent I would have run the bank account down to zero quite some time ago.
All of the parts suppliers are running massive discounts at the present because the past 2 years nation wide have been poor and there are lots of brand new mowers turning up at auction houses from dealers who can not sell them or have gone bust.

Working out of home your overheads are almost nothing but running a shop they are massive.
Down here as a mobile mechanic my public liability is $ 1300 /pa the shop up the road pays over $ 5,000 /pa.
Then there is fire & thieft insurance , the workshop here is an old house so I have a home owners, self employed policy that is quite cheap but a stand alone workshop policy is 4 times as expensive
I used to sharpen about 50 chains a week but now plastic chain sharpening machines are every where for $ 30 so it is down to about 10 / month.
The retail shop up the road has to turn over $ 500/ week just to cover fixed costs and he owns the building.

So have a good think about it, find out the most expensive costs then compare it to your current income.
Do not count on extra through the door jobs cause there is no guarantee they will happen so if you are not making enough now to cover the fixed costs of a stand alone workshop, consider a bigger garage till you can.


#3

Boudreaux In Eunice La.

Boudreaux In Eunice La.

Yep what Bert said............... He lives in the most richest country in the world... The wages are great, but if you go eat at a restaurant it will cost you 40 to 50 bux for one person.... I have friends in OZ and they tell me that all the time.......

I live in the South like you do Primer, so we have a long mowing season and chainsaw work goes all year round as weedeaters also........ A lot of pressure washers are active all year round because of construction work digging trenches and PW's have clean them before you bring them back to the rental place.... Also Washing houses...........


Down here in Louisiana our power company CLECO is 500 bux for the deposit..... House or a biz.... First you have to have the water Co. to hook up first another 100 bux LAWCO... Then the city hits you for another 75 bux for a deposit on the sewerage part......

Then a occupational license from the city, then the school board tax license and then the La. State Tax license fee and the Federal Tax license fee........

It goes on and on plus the liability insurance..... Man It makes a person think about the American Dream come UNTRUE

Then comes your question about a building to lease, which is at least 400 bux a month or more in a nice area where you won't get broke into and lose a lot of money in tools and peoples equipment.....

A person nowadays has to have a deep pocket with a thick wad of 100 dollar bills to start a biz going for at least 6 months... Then a good wholesaler for parts to buy from... AND I mean wholesale prices..........

If you have a good client list and a good rep in town then you are in good shape.....

We just became a Briggs dealership last week over here in my area... There is one already and we got lucky on ours...I was a Briggs dealer back a long time and I think that helped us out.....

If you need some help on a wholesaler let me know Mon Ami ....

Plus Tard Mon Ami ~!~!


#4

B

bertsmobile1

Down here to get Briggs wholesale license I have to do a Briggs training course $ 1300 and keep a $20,000 inventory of Briggs parts ( mostly dead money ).
Kohler were happy to give a certificate on the strength of an internet test but they too require I keep a $ 20,000 inventory and have a $ 3,000 minimum order and a $12,000 minimum annual parts turn over if I want to become a Kohler agent
So there goes the better part of $ 50,000 just to hang 2 signs in the window.

OTOH the aftermarket suppliers , Stens & Gripskies are happy to have me on their books.
I finally got "trade" pricing from Jacks which is between 10% to 20% off their list price which effectively covers the shipping and the retail price from the USA is almost the same as the wholesale price I would get from Briggs and a lot less than the wholesale price from Kohler.

If you have a tax number you should be able to get a trade account with Oregon, Prime Line, Rotary & Stens and trade discounts from Jacks, Barretts , ME warehouse, E replacements etc so apart from plastic you should be covered for most parts.

The mower mechanic I know who makes the most profit does fixed cost annual servicing of push mowers at the customers home.
He does 15 to 30 services @ $ 45 each per day, no repairs at all.
He has a small van and because he knows exactly what he will be servicing just loads the parts required for that days work and of course has the runs organised to be very compact.
Because there is no repairs, just servicing, each job is very quick and because he buys blades in bulk packs ( 100 to 1000) he pays $ 0.75 for a blade& bolt set I pay $ 4.50 for and retail for $ 7.00.

The customer of course sees themselves getting $ 50 ( retail ) worth of parts fitted for $ 45 so think they are getting a bargan.
HE passes a few repairs on to me that are near enough to my service footprint.

SO there is a slightly different approach and all that will cost is a slick web page and face book equivalent.
And as Rod says, it is a regular run so he organises to have 9 free weeks a year so he gets holidays without cost and is available for birthdays, anniversaries etc

My special service is a gate key service for all the local contactors so they drop their gear off on the way home , I repair / service it overnight and they pick it up in the morning on route to their first job which could be anything from 3am to 9am, a service they can not get from any other mower service or shop.
Those who I can trust will also pop in and pick up stuff in the morning like spare blades, oil, chaps, earmuffs etc etc. again some thing they can do with any other retailer ( and yes I do have cameras in the store room ).
The contractors do not get discounts on this service ( 10% off spares ) and are happy to pay full price to avoid having equipment in a repair shop for a week or having a crew hang around to 8 am so they can drop it off to a regular shop.


#5

primerbulb120

primerbulb120

Are you turning over enough currently to pay the lease & still be able to eat ?
How seasonal is it where you are ?
I had 3 bumper years when I took over the service run but it has not rained for the past 18 months so there has been no servicing, just repairs, mostly on hand helds and they are done at a loss most of the time if I was to pay a wage.
No great problem for me because my rent is 20 hours labour on the farm, but if I was paying rent I would have run the bank account down to zero quite some time ago.
All of the parts suppliers are running massive discounts at the present because the past 2 years nation wide have been poor and there are lots of brand new mowers turning up at auction houses from dealers who can not sell them or have gone bust.

Working out of home your overheads are almost nothing but running a shop they are massive.
Down here as a mobile mechanic my public liability is $ 1300 /pa the shop up the road pays over $ 5,000 /pa.
Then there is fire & thieft insurance , the workshop here is an old house so I have a home owners, self employed policy that is quite cheap but a stand alone workshop policy is 4 times as expensive
I used to sharpen about 50 chains a week but now plastic chain sharpening machines are every where for $ 30 so it is down to about 10 / month.
The retail shop up the road has to turn over $ 500/ week just to cover fixed costs and he owns the building.

So have a good think about it, find out the most expensive costs then compare it to your current income.
Do not count on extra through the door jobs cause there is no guarantee they will happen so if you are not making enough now to cover the fixed costs of a stand alone workshop, consider a bigger garage till you can.

In answer to your questions:

-Income from the shop will not have to support me until year two or three. Not going to go into the whole situation, but basically it just needs to support itself for the first few years.

-Work in FL is a little slow in the winter, but the majority of the year there is a ton of work to be done. Finding work won't be a problem - there aren't a lot of good shops around here, and the few good ones always have a long backlog of work. Hardest thing, apparently, is finding good mechanics. Two shops have gone out of business because they couldn't find any good mechanics. I am in a rapidly growing area with tons of homeowners and LCOs, the majority of whom are clueless when it comes to equipment service and repair.

-I have the money for a bigger garage, but no space. :frown:


#6

primerbulb120

primerbulb120

Yep what Bert said............... He lives in the most richest country in the world... The wages are great, but if you go eat at a restaurant it will cost you 40 to 50 bux for one person.... I have friends in OZ and they tell me that all the time.......

I live in the South like you do Primer, so we have a long mowing season and chainsaw work goes all year round as weedeaters also........ A lot of pressure washers are active all year round because of construction work digging trenches and PW's have clean them before you bring them back to the rental place.... Also Washing houses...........


Down here in Louisiana our power company CLECO is 500 bux for the deposit..... House or a biz.... First you have to have the water Co. to hook up first another 100 bux LAWCO... Then the city hits you for another 75 bux for a deposit on the sewerage part......

Then a occupational license from the city, then the school board tax license and then the La. State Tax license fee and the Federal Tax license fee........

It goes on and on plus the liability insurance..... Man It makes a person think about the American Dream come UNTRUE

Then comes your question about a building to lease, which is at least 400 bux a month or more in a nice area where you won't get broke into and lose a lot of money in tools and peoples equipment.....

A person nowadays has to have a deep pocket with a thick wad of 100 dollar bills to start a biz going for at least 6 months... Then a good wholesaler for parts to buy from... AND I mean wholesale prices..........

If you have a good client list and a good rep in town then you are in good shape.....

We just became a Briggs dealership last week over here in my area... There is one already and we got lucky on ours...I was a Briggs dealer back a long time and I think that helped us out.....

If you need some help on a wholesaler let me know Mon Ami ....

Plus Tard Mon Ami ~!~!

One of my clients is a very large construction company, so I have work from them year round, only problem is where to store the equipment they bring me. :confused2:

What wholesaler do you use?


#7

primerbulb120

primerbulb120

Down here to get Briggs wholesale license I have to do a Briggs training course $ 1300 and keep a $20,000 inventory of Briggs parts ( mostly dead money ).
Kohler were happy to give a certificate on the strength of an internet test but they too require I keep a $ 20,000 inventory and have a $ 3,000 minimum order and a $12,000 minimum annual parts turn over if I want to become a Kohler agent
So there goes the better part of $ 50,000 just to hang 2 signs in the window.

OTOH the aftermarket suppliers , Stens & Gripskies are happy to have me on their books.
I finally got "trade" pricing from Jacks which is between 10% to 20% off their list price which effectively covers the shipping and the retail price from the USA is almost the same as the wholesale price I would get from Briggs and a lot less than the wholesale price from Kohler.

If you have a tax number you should be able to get a trade account with Oregon, Prime Line, Rotary & Stens and trade discounts from Jacks, Barretts , ME warehouse, E replacements etc so apart from plastic you should be covered for most parts.

The mower mechanic I know who makes the most profit does fixed cost annual servicing of push mowers at the customers home.
He does 15 to 30 services @ $ 45 each per day, no repairs at all.
He has a small van and because he knows exactly what he will be servicing just loads the parts required for that days work and of course has the runs organised to be very compact.
Because there is no repairs, just servicing, each job is very quick and because he buys blades in bulk packs ( 100 to 1000) he pays $ 0.75 for a blade& bolt set I pay $ 4.50 for and retail for $ 7.00.

The customer of course sees themselves getting $ 50 ( retail ) worth of parts fitted for $ 45 so think they are getting a bargan.
HE passes a few repairs on to me that are near enough to my service footprint.

SO there is a slightly different approach and all that will cost is a slick web page and face book equivalent.
And as Rod says, it is a regular run so he organises to have 9 free weeks a year so he gets holidays without cost and is available for birthdays, anniversaries etc

My special service is a gate key service for all the local contactors so they drop their gear off on the way home , I repair / service it overnight and they pick it up in the morning on route to their first job which could be anything from 3am to 9am, a service they can not get from any other mower service or shop.
Those who I can trust will also pop in and pick up stuff in the morning like spare blades, oil, chaps, earmuffs etc etc. again some thing they can do with any other retailer ( and yes I do have cameras in the store room ).
The contractors do not get discounts on this service ( 10% off spares ) and are happy to pay full price to avoid having equipment in a repair shop for a week or having a crew hang around to 8 am so they can drop it off to a regular shop.

I don't intend to become anyone's dealer, or a "glass front" store as you refer to some of them. Just repairs and service. Only equipment I'll sell is the broken equipment I fix and flip.

I do have a tax ID from the landscaping business, and so far can get Briggs, Oregon, Snapper, Walbro and Zama through Power Distributors. They were happy to give me an account over the phone because I was a landscaping business, most of the other distributors want to send a rep out to inspect your shop before they give you an account.


#8

primerbulb120

primerbulb120

Thanks to all of you for the responses, and please keep them coming. I appreciate the feedback!

There is one "fix-and-flip" person in the area who rented some sort of warehouse space to work out of. I just don't want to get shut down by local gov't for running my shop out of my home or out of an improper commercial space.


#9

Boudreaux In Eunice La.

Boudreaux In Eunice La.

Yes that's my wholesaler Power Distributers. You didn't have to fill any paper work out for them ???


#10

B

bertsmobile1

No idea about local zoning regulations over there.
My shop is the old farmhouse on a friends farm which has an A1 ( Agriculture only ) classification as it is on a flood plain between 2 rivers.
Thus I am Berts Mobile Mower Repairs.
The only downside is I cannot put up a sign, but all of my work comes from the local newspaper, and my sponsorship of the local primary school ( they get a reconditioned ride on each year for a raffle prize & 1/2 dozen free service vouchers ).
The trailers both have signs on them and are both parked where the signs can be read by passing cars, but not on the fence line where they could be considered an advertisement.

As for reliable mechanics, a perpetual problem here as well which is why I am a one man business.
The shop front up the hill has the owner in the workshop , wife in the office/ retail space + 1 apprentice + a couple of old car mechanics who work from home and do overflow as and when required.

I had a trainee for 1 year but can not have apprentice cause I do not have trade papers he mainly did pick up and was good at it.
The previous owner had a couple of high school kids who did pick ups & deliveries, washes and details ( yes he polished mowers before they got returned ).
Two of those "kids" have just rented an old mechanical workshop and set up a wash & detail business while they are in college.

Strongly suggest you avoid taking on staff till you have established a reputation because a sloppy or bad one will earn you a dud reputation.
Think seriously about the overnight servicing for landscapers & yard teams as a landscaper yourself you know how much grief not having your plant available cause.
I would have been broke without them and all it requires is knowing what gear they have and keeping all of the service items for them in stock.
The previous operator gave them big discounts but I have found the overnight turn around and early morning access was what they really wanted price was not a problem.

The downside of being a sole operator is I need to carry a larger parts inventory as I can only accomodate 6 ride ons for repair at anyone time and some times it can take 3 months for parts to come in.
I have 5 "loan" ride ons and about the same number of walk behinds which I do loan out when a repair is going to take a long time.
These are all mowers bought in & repaired but are too old or too ugly ( sounds like me ) to sell retail but I do sell about 1/3 of them to customers who borrowed them.
Most have no hoods or torn seats and as you will find people will not buy a mower with no hood and new hoods make then too expensive to sell at a profit.


#11

primerbulb120

primerbulb120

So the local government is okay with you running the business on agricultural zoning as long as you don't put up a sign? There are lots of unused barns and greenhouses near me, just not much industrial zoned commercial space.


#12

B

bertsmobile1

Yep.
In theory I fix mowers on site ie MOBILE so it is not a workshop, it is a depot.
In practice I only ever do minor repairs on site and bring most back to the shop where all the good tools are.
The insurance company was fine just so long as I had sufficient camera coverage,
Two shots on the front & back gates and two angles again on each door.
They gave me $ 100,000 property thieft coverage. It is registered as a home business.

It will just depend upon how you want to run the business.
I pick up and deliver and from being on here you will have seen here, a lot of folk have big mowers but small or no trailer.
The shop up the road charges $ 50 to pick up, I do it for free.
The brand name big boxes charge $ 90 each way.
Remember we are talking Aust monopoly money so you can halve that for USA $.
Thus there are not many people coming & going, it does not look like a shop , no external signage, no people parking out front.
As a "home" business I do not need council approval to opperate so no OH&S visits, no EPA inspections.
However if you are planning on being an employer then things will need to be different as the premisis will need a license
Before you get too far pop down to your local government information centre and get all of the hand out fact sheets on opening & running a small or home business.
Over here it is all laid out, black & white.
The department of Labour & Industry has a flyer showing everything I have to provide employees right down to toilets to employee ratio, washing / changing / eating fcilities etc.

If you want to kick off as a one man op then you should be able to get by renting a disused barn.
Drive around the area and look inside the doors, most likely you will see a lot of SMALL shops in there.
I mow about 5 acres of road verge that the council formerly had to do, so that keeps me in the councils good books.

If it were me I would give it a year or two before I ended up with all the liabilities being an employer imposes on me.
Thus if it looks like it is not going to work you are not too far out of pocket.
Local authorities are funny things.
The landlord used to be a vet and has a clinic in the near by town.
She close it down & the local real estate agent wanted to rent the office , reception & parking space.
However the council would not allow the estate agent to occupy the space till it had been deregistered and a vet clinic which would cost several thousand as there had to be a full bio-hazzard audit done on the building & unsealed ( lawn & garden ) areas.
The same council was happy for coffe shop to open in what used to be the mechanical workshop of a petrol station


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