What do I need to know about opening up a Hotrod Business??

I am strongly considering opening up a Hotrod/Classic Car restoration business. I understand how hard the work is. I essentially have a small business now doing 1 car at a time in my parents garage. Needless to say I really enjoy doing it, plus I hate bosses and I never want to work for anyone. I understand that the cost will be a lot and I am fevereshly saving every dime right now. Just how hard is it to start that kind of business? What kind of market am I trying to appeal to? Just everything about it pretty much... What do I need to know and learn and understand before doing it. I know there are plenty of people on this board that do it so I'd like to hear everything you've got to say. How much money will I make/can I make. ect.

THANK YOU VERY MUCH!

These are questions that you need to answer;

1) Why should I buy from YOU?

2) What have you built? Can I see it?

3) Why would I want to spend $100,000+ on a car from you? What makes you qualified?

4) What skills do you have?

5) Who's painting the car?

6) Who's doing the actual work?

7) Where is the shop?

8) Where is the equipmment? (go check out a car dealership service department for necessary equipment)

9) Who's doing the interiors?

10) What training have you had?

11) Do you have business experience?

12) Where are you getting the money? Most shops don't get paid until the car is done. Can you put out $75,000 in parts on a car and not worry about getting paid?

You may not like working for others, but this is how you gain experience. Even Chip Foose has work for others to learn the business before starting out on his own.

Go to college and get a business degree and a marketing degree wouldn't hurt either.

Well done Swifs...you really have to ask yourself these questions do you have enough money to cover the overhead?...this type of work doesnt generate steady cash flow.
when theres enough demad for your work, than that may tell you how good you really are. but remember, even the best painters, or mechanics, or welders etc. etc. cant make a business work if you dont know how to operate & manage it...so you need to know or learn to know how to do it..or be able to pay someone to manage your books...better off to know how to do it yourself. it doesnt matter if your a hot rod builder or a toilet cleaner...profit/ loss applys in both worlds.

Do you already have a good Customer Base? How many cars have you built? You have to get your name out there, and you have to decide if are willing to be broke for a couple years while you get established!

I'm definetly willing to be broke for a while. One question though, after I'm done being broke can I make atleast 50,000 dollars a year? Because that is honestly the lowest amount of money I want to work for after about 5-7 years of being in the business. I'd be very happy with 50,000 a year. Is that realistic? I understand "the sky is the limit" but coming back to reality is that do-able?

Anything is doable and 50,000 can be accomplished but it all depends on how much work you get, your advertising and how good of work you get first. Go to a local college and take business classes. That is what I plan to do after I get my diploma in auto body and my associates degree in auto tech. I am going to do those two things first, then get my business classes done, etc take a few art classes (for the hell of it). Get ASE certified if you can because a lot of people like to see master techs and it gives the customer more confidence that you will get the job done and done right.

Oh.... Also you should start out small. Do one thing at a time. I know I don't have a business here or nothing but still.... Like start out doing something like painting or air brush work, then move up to welding and painting, then engine building, tire changing and oil and then move up as time and money allows. That is my goal to start with powder coating and go from there and eventually one day run my own full out rod and/or custom bike shop doing everything from a frame up build to paint and maybe upholstery and my own machine stuff with lathes, CNC, etc. A lot of people will tell you that most likely that won't happen and there is not much of a chance to do something like building FULL hot rods and that you will only be able to do just like engine building and paint and that's about it but I say screw that, just stick with what you wan't to do and you can accomplish anything.... At least that is how I look at it and will stick to it.

Every customer that comes through your door will be your boss. So, you can't avoid working for someone else. Only difference is you don't work for the same boss all the time.

I can tell you how I started and you can take from it what (if anything) you find useful. I stated out working at night and weekends (After hours from my day job). Probably what you are doing now I assume. I built the business and got a solid repeat customer base. I did that for nearly 10 years, maybe a little longer than was nes., but I tended to be conservative raising 2 kids. I bought equipment that I knew I could pay for with my day job if the bus. slowed down. By the time I made the jump to full time self employment I was making more in my part time business than I was my day job. And I could no long keep up with the schedule of the part time job. I was working 100 hrs. + per week for 2-3 years toward the end. Theres no way I would do that now, (Problee' would kill an old geezer like me now) but at the time I did it to get the business off the ground. We mortgaged the house for equipment a couple times. We didn't try to get too big too fast. I still operate that way. I stay small, keep overhead to a minimum and never over extend myself. Always treat customers with respect, even when they don't return it (Which is very seldom). Don't get greedy with prices and do the best job you can. All comon sence stuff, but stuff people forget sometimes when theres deadlines to meet, and bills to pay. Oh yea, that's another one. Pay your bills on time and keep the business solvent enough so you can. Oddly enough sometimes people don't pay when they should, sometimes people go bankrupt, sometimes their checks bounce, and you still have to pay your bills.

All the previous posters gave good advise. Take it slow, build a solid customer base and good reputation first. Don't spend yourself into debt buying high dollar equipment until you KNOW you can affort it. Keep it small with low overhead and run it as a part time busines for awhile. Find out when the slow times are during a given year. It's a tough life being self employeed, but after you've been at it for 20 years or so, it has it's rewards too. Wouldn't tade it for punchin' a clock anymore ..... that's for sure.

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Originally posted by MGMan75
I'm definetly willing to be broke for a while. One question though, after I'm done being broke can I make atleast 50,000 dollars a year? Because that is honestly the lowest amount of money I want to work for after about 5-7 years of being in the business. I'd be very happy with 50,000 a year. Is that realistic? I understand "the sky is the limit" but coming back to reality is that do-able?

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A good body man at a body shop can make $50,000 to $100,000 a year. A good painter can make even more. This takes training and experience. I would suggest getting into this end of the field (ever notice that Chip Foose and Boyd Coddington have no issues about jumping into the spray booth?).

You'll need to build yourself a hot rod of some type before someone will trust you to build one for them. This can cost you well over $100K. Who cares if you built a $30K car? The money is in expensive stuff (the 3 cars Foose has won the Riddler Award with were easily $500K-$1M). Can you build a car as detailed as Foose? As good as Jimmy Shine? Can you build a better car than I can make myself?

I started my business for less than $5000. In my business, I started with 15 years experience. The costs involved were for a laptop computer, collision estimating software (a monthly subscription), an office jet, cell phone, business cards, and a connection to get business from some insurance companies. I doubt that I would have had nearly the same acceptence with only 2 years experience.

I've been in business for 6 years now with no regrets. You'll have far larger overhead than I have. You'll need around $300,000 to $500,000 in equipment and a building to put it in. You'll need employees and have to set up payroll taxes for those employees. What type of regulation and licensing is necessary in your state? How will you title your cars (see Boyd Coddington's headaches).

Who is your competition? Are there any other shops in your area doing this?

I'm not trying to scare you of, but a lot of planning needs to go into starting a business. A hot rod shop is very much like a body shop. Go offer to buy a body shop owner lunch and ask him about his business. Let him know what you are looking to do so that he doesn't think you're going to open a shop near him crating more competition. I think you'll be surprised how much work is involved. A body man gets to go home at 5 PM or 6 PM, but the owner doesn't.

300,000 to 500,000 in equipment...there's no way i could get that kind of money ever....

One other thing you might want to check into is liability insurance for the products you build. Insurance and putting up with customers who want everything done for almost nothing and taking forever to pay is one of the reasons I am back to building my own, one or two at a time, and selling them as done units. If you're making money doing it in your parents garage, build your own 3 or 4 car garage and keep doing it on a part time basis until you have the bucks to go big time.

Swiftster.... I was visiting a local community college and the instructor for the auto body shop said almost what you said but also said that you can find painters all over the place (he used some terminology that I don't remember) and you can pick them out from anywhere but a body man is where it's at because not as many people are wanting to become body men, they wan't to just do the painting and designs. I think that someone that can do both though (of course) would be better off. I have heard this lecture I guess you would call it a lot already since I have asked a lot of people and yeah it kind of will bring you down a bit but if you really wan't to do it like I wan't to then it won't make you turn around and NOT do it. Don't ever say you can't do something though. 300,000-500,000 IS a TON of money!!! But think of it this way... Those expensive machines and equipment in the end will save you some pain, save you a lot of time and money. I was talking to an old lady that owns a big machine shop and she said that if I want to own a shop then I should expect to not ever have much extra change in my pocket for a few years and maybe even about 8-10 years. As long as you start small and work your way up (focus on one thing at a time) then you should be able to do it man, but remember it isn't going to run all like you see on TV with shows like Boyd, OCC, Rides, etc. (see these old geezers tought me a lot already.) :p

Im self employed.. but not in the automotive industry...let alone hot rods. I went on my own 3 1/2 years ago with 15 years of experiance behind me & loyal customers who came with me.
I already had my own tools, I paid 250.00 for getting my federal ID, ficticious name, my LLC, state tax ID etc. I did this all through a local company called the small business store, who also now does our income taxes. I also bought a 2200.00 Grand Caravan to work out of.
I had zero business background, so the Small Business store was a huge help for me there.
I have no employees( biggest expense for a business owner), no building to rent or own, so my overhead is minimal.

Cool.

I think I'll be alright I mean I'm 18 years old I live at home (and plan to do that for quite some time) so I have next to 0 expenses. Plus when I go into business it'll be me and my dad (who is an ASE Certified Technicion) doing most of the work meaning we don't have any actual employees getting started. Saves a lot right there.