Need some Info
09-09-2004, 09:14 AM
#1
Guest
Posts: n/a
Okay, here is the background info. In Medicine Hat we have a population of about 60,000. In the Surrounding area we have Dunmore (pop. 1000), Redcliff (pop. 4708), and Brooks (pop. 15,000). Also many people will drive an hour from western Sask. to save the PST (13%?). Maple Creek has 4,000 people and Swift Current has 17,000 but is prbably close enough to Regina to worry too much about.
We have currently three shops that sell and install car audio, Visions, Futureshop, and an independant shop called ACC. There are also only two shops that deal with the tuner scene or custom cars in general. The Visions here is a two car bay, FS is one car, and ACC could fit about 8-10 if they didn't have crap laying all over the place. Right now three or four is the max they could work on.
I have learned from ACC's installer that he wishes to seek employment with me at FS. I found this interesting and asked why. He said ACC can no longer get any new stock due to monetary problems. Me and another member of the board have been throwing around the idea of opening a shop here for awhile, the main problem for me is money, I have none. The main problem for him would be moving I think. Now we probably have had plenty of oppurtunity to buy out his business but he has asked outrageous amount for what you would get. He has no good lines (he carries JVC, Clarion, and Panasonic) and has no real shop equipment to speak of (his biggest shop tool is a jigsaw, no table saw, no compressor etc.) So I have just been biding my time waiting till I can just lease the shop without inheriting any of his headaches he would pass on. It seems that the time may be coming (Question 1, how long can a shop operate with no new stock coming in?) that I seriously look into this. So what I would like to know from anyone out there running an independant shop is.
What are the average opening orders from some of your lines? You don't have to name names but if you could give me an idea of whether they are your entry line, high end line, whether it is a well known brand or something you have to educate the consumer on more.
How long after opening it took to turn a profit?
How important is location and more importantly access to your business.
What contibution dealer work for remote starters and video does for the success of your business.
Thanks in advance.
We have currently three shops that sell and install car audio, Visions, Futureshop, and an independant shop called ACC. There are also only two shops that deal with the tuner scene or custom cars in general. The Visions here is a two car bay, FS is one car, and ACC could fit about 8-10 if they didn't have crap laying all over the place. Right now three or four is the max they could work on.
I have learned from ACC's installer that he wishes to seek employment with me at FS. I found this interesting and asked why. He said ACC can no longer get any new stock due to monetary problems. Me and another member of the board have been throwing around the idea of opening a shop here for awhile, the main problem for me is money, I have none. The main problem for him would be moving I think. Now we probably have had plenty of oppurtunity to buy out his business but he has asked outrageous amount for what you would get. He has no good lines (he carries JVC, Clarion, and Panasonic) and has no real shop equipment to speak of (his biggest shop tool is a jigsaw, no table saw, no compressor etc.) So I have just been biding my time waiting till I can just lease the shop without inheriting any of his headaches he would pass on. It seems that the time may be coming (Question 1, how long can a shop operate with no new stock coming in?) that I seriously look into this. So what I would like to know from anyone out there running an independant shop is.
What are the average opening orders from some of your lines? You don't have to name names but if you could give me an idea of whether they are your entry line, high end line, whether it is a well known brand or something you have to educate the consumer on more.
How long after opening it took to turn a profit?
How important is location and more importantly access to your business.
What contibution dealer work for remote starters and video does for the success of your business.
Thanks in advance.
09-09-2004, 11:24 AM
#2
I just don't think I have enough in my fingers to type all of this. My first store turned a profit in the first year and every year since. This is due to the end of life as I knew it. I was now tied to the store 6 days a week.
Opening orders were on the average of $10000.00. Displays had to be purchased. Location is hella important. If nobody knows the new store name and can put your face to it, they are not going to go looing for it. If once you are established for 4 years or so and have built a name for yourself, that is when you should consider moving. Access to the business is important, nobody likes a crowded parking lot or having to make illegal turns to get into it. Dealer work for us accounts for less than 2% of our business (the dealers here are a scared and behind the times bunch). Video as well is not even a significant portion of our business. Our population is a fraction of what your is however.
In retrospect when I had the opportunity I should have set up camp in Kelowna where I came from, I would have been way further ahead. Population is a must if you are going to survive. While you may consider that he has no good lines, these lines that he has are a must these days. Consider that most of the cd player market is below $300.00. With that mix of lines you have quite a selection to offer. Throw Eclipse into the mix and well, they just don't sell at that price, but they do make a logical bump up for most customers.
How long a shop can operate with no new equipment coming in is simple. Don't act as a warehouse for the suppliers (it saves them money and costs you money). Order what you have to when you need it. SWAT as much as you can to clear old inventory. Inventory that sits is costing you money. You will definitely need to carry some inventory, stock the best sellers.
This is not an easy task to do Dereck and I'll caution you right now about it. If you have a family, you need to think about the family first. A Family needs stability which is what you have right now. If your family can live with the constant struggle in the first year or two and you are prepared to take a major hit in income, then reapproach the idea. If you have an investor that is backing you, is the investor prepared in the event of failure? I know how dedicated and hard working you are, but inorder to survive as an indipendent you need to kick it up another couple of notches. At your age now, look at your income, if it is fine and you are ahead of the game that's great.
One thing that I never considered was that once I started my own store, I was tied to it. I had to rely on me and no-one else. There was little time off or holidays or going out with the boys. There is even fewer times to work on ones own car. The issues that most of us face at work when we work for someone else is following their rules and regulations. While it is great to be your own boss and dress as you see fit, open and close when you want, your employer has the upper hand. If he wants to lay the smack down on you, he can in the blink of an eye. If you are prepared to do this, make sure that you leave on a good note, for if you do not make it, will you be wanting to go back to them and if so are they going to have room for you there or would you have to move somewhere else.
I have had my own store for 8 years now and a second one for 1.5 years. For me it is time for a change, I am and have actively been seeking employment with the RCMP, why, because we want to start a family and need the stability that a job like that can offer. While I may have good months here, the bad months are there as well. I do not want to consider starting a family while the Canadian car audio market is at the point that it is right now. Weigh all of your options very carefully dude, if you need some more info don't hesitate to ask.
Opening orders were on the average of $10000.00. Displays had to be purchased. Location is hella important. If nobody knows the new store name and can put your face to it, they are not going to go looing for it. If once you are established for 4 years or so and have built a name for yourself, that is when you should consider moving. Access to the business is important, nobody likes a crowded parking lot or having to make illegal turns to get into it. Dealer work for us accounts for less than 2% of our business (the dealers here are a scared and behind the times bunch). Video as well is not even a significant portion of our business. Our population is a fraction of what your is however.
In retrospect when I had the opportunity I should have set up camp in Kelowna where I came from, I would have been way further ahead. Population is a must if you are going to survive. While you may consider that he has no good lines, these lines that he has are a must these days. Consider that most of the cd player market is below $300.00. With that mix of lines you have quite a selection to offer. Throw Eclipse into the mix and well, they just don't sell at that price, but they do make a logical bump up for most customers.
How long a shop can operate with no new equipment coming in is simple. Don't act as a warehouse for the suppliers (it saves them money and costs you money). Order what you have to when you need it. SWAT as much as you can to clear old inventory. Inventory that sits is costing you money. You will definitely need to carry some inventory, stock the best sellers.
This is not an easy task to do Dereck and I'll caution you right now about it. If you have a family, you need to think about the family first. A Family needs stability which is what you have right now. If your family can live with the constant struggle in the first year or two and you are prepared to take a major hit in income, then reapproach the idea. If you have an investor that is backing you, is the investor prepared in the event of failure? I know how dedicated and hard working you are, but inorder to survive as an indipendent you need to kick it up another couple of notches. At your age now, look at your income, if it is fine and you are ahead of the game that's great.
One thing that I never considered was that once I started my own store, I was tied to it. I had to rely on me and no-one else. There was little time off or holidays or going out with the boys. There is even fewer times to work on ones own car. The issues that most of us face at work when we work for someone else is following their rules and regulations. While it is great to be your own boss and dress as you see fit, open and close when you want, your employer has the upper hand. If he wants to lay the smack down on you, he can in the blink of an eye. If you are prepared to do this, make sure that you leave on a good note, for if you do not make it, will you be wanting to go back to them and if so are they going to have room for you there or would you have to move somewhere else.
I have had my own store for 8 years now and a second one for 1.5 years. For me it is time for a change, I am and have actively been seeking employment with the RCMP, why, because we want to start a family and need the stability that a job like that can offer. While I may have good months here, the bad months are there as well. I do not want to consider starting a family while the Canadian car audio market is at the point that it is right now. Weigh all of your options very carefully dude, if you need some more info don't hesitate to ask.
09-09-2004, 01:13 PM
#3
Guest
Posts: n/a
Well - while I have never owned a shop I have considered it on and off for the last 15 years and was ready to sign the line 3 times.
These are going to be random observations and thoughts here, some based on what you said, some based on what I have seen working at a couple of independents, and some of what I learned taking business so many years ago so bear with me.
First - you have lots of population to work with and that market can easily support one if not more than one custom independent. You seem to get your share of good work, make sure those who had the work done know WHO did it and not merely WHERE it was done and you can take it with you.
I agree with Rob - major lines and anchor lines will take $10k to open up. Minor lines are more like $3-5k and if you double dip a distributor you can often get multiple lines at combined dollars.
If I opened a shop I would want to have a good 100k around. Even moving into a place set up to do business. You'll need it to buy stuff and secure credit. Consider a buying group or selling your soul to TransCanada - it works well for a lot of shops.
Location is nice but not a necessity - people will seek out audio, especially car audio. Moving into a recently vacated audio location helps.
Access is more important. If it's a PITA to get too or you can only get there from one side of the road then that kinda bites. Did the current place go down cuz they suck or cuz it's hard to get there?
I'll probably think up other stuff...
IIRC I posted something like this for someone else here within the last couple months [img]graemlins/dunno.gif[/img]
These are going to be random observations and thoughts here, some based on what you said, some based on what I have seen working at a couple of independents, and some of what I learned taking business so many years ago so bear with me.
First - you have lots of population to work with and that market can easily support one if not more than one custom independent. You seem to get your share of good work, make sure those who had the work done know WHO did it and not merely WHERE it was done and you can take it with you.
I agree with Rob - major lines and anchor lines will take $10k to open up. Minor lines are more like $3-5k and if you double dip a distributor you can often get multiple lines at combined dollars.
If I opened a shop I would want to have a good 100k around. Even moving into a place set up to do business. You'll need it to buy stuff and secure credit. Consider a buying group or selling your soul to TransCanada - it works well for a lot of shops.
Location is nice but not a necessity - people will seek out audio, especially car audio. Moving into a recently vacated audio location helps.
Access is more important. If it's a PITA to get too or you can only get there from one side of the road then that kinda bites. Did the current place go down cuz they suck or cuz it's hard to get there?
I'll probably think up other stuff...
IIRC I posted something like this for someone else here within the last couple months [img]graemlins/dunno.gif[/img]
09-09-2004, 02:48 PM
#4
Guest
Posts: n/a
I know that having lines like Clarion and Panasonic are good, but around here FS and Visions are way to low priced to compete with on JVC. And having Clarion and Panasonic together is kind of redundant. I would try and keep Clarion since it is not in any big box around here, and would look into Eclipse. I have noticed that since an ex installer from ACC is now our main sales guy, custom work on sub boxes has dropped a bit. ACC only did prefab enclosures from what I have gathered. I know that there will be long hours and lots of days involved with running a shop, but the rewards for hard work can be far greater, as it seems that I have moved as far up the pay scale I can at FS (or they are just not paying me what I believe others in larger centers are getting). I already work 7 days a week in December and January for 13 hours a day, and end up at the shop on one of my days off during the rest of the year.
09-10-2004, 07:50 PM
#6
Guest
Posts: n/a
All I can offer in the way of advice is how to make money at it. Sadly, this requires money. Being able to pay bills promptly, meet your sales growth goals and buy in quantity are the best way to increase your profit thanks to the VIR and other back-end discounts. With these in effect, you can easily compete with any of the big-box stores without any problem.
Also, you need to be able to stock up on 'deals' when they happen.
Also, you need to be able to stock up on 'deals' when they happen.
09-11-2004, 06:42 AM
#7
Guest
Posts: n/a
in one paragraph dave said all that needs to be said about how to be profitable. my advice is simple, try to sell as many exclusive brands as you can, difficult with hu's i know, but i mean amps, speakers, subs etc, dont allow yourself to be shopped and undercut, and dont ever undersut yourself. this has worked very well for me over the years. work hard and make fiscally responsible decisions, and by the sounds of it there will be no shortage of prople walking through your door, be prepared to work ALOT!!
09-11-2004, 08:41 PM
#8
2000 Watt CAFz'r
Join Date: Oct 2000
Posts: 2,357
I happen to know a brand that does offer exclusive
contracts, but we have spoke of this already
good luck better late then never.
contracts, but we have spoke of this already
good luck better late then never.
09-12-2004, 03:42 AM
#9
Guest
Posts: n/a
tHER ARE QUITE A DFEW BRANDS THAT OFFER exclusive distro from the mid level to high klevel.
09-12-2004, 08:59 AM
#10
I think it is always a good idea to get an "exclusive" brand in the store you can make profit on. No matter what lines you choose, make sure that the firm you are purchasing them from is your "partner" in profit. It does not matter how good a product is, if the company you buy it from "s" it out as soon as you get it established, or refuses to back you up when you need help with a blown sub, or "arm bends" you into purchasing more than you can afford.
With your skill and reputation you will do well in anything you choose to do -- starting a store is still a dream of mine (watching the mistakes others make is painful).
With your skill and reputation you will do well in anything you choose to do -- starting a store is still a dream of mine (watching the mistakes others make is painful).
