Not logged inAmerican Welding Society Forum
Forum AWS Website Help Search Login
Up Topic Welding Industry / General Welding Discussion / Questions for you experienced shop owners
- - By Cumminsguy71 (*****) Date 09-15-2012 16:45
It's getting to the point(as mentioned elsewhere) where I am looking at a shop. I've got some work in the shop to do and more now that I have the plans for the bridge. The problem is, as many of you 'perienced feller's have found out is that it's hard for me to be in the shop building while I'm running around looking at other jobs. It can take days to build a simple railing cause I'm in the office trying to bid/work up other stuff or out running around looking at stuff but there is no need in explaining, you that have been thru it already know.

My question, enough babble. I've found a shop, not far from the house in the next county over. I found a building, it's around a 40x80 or 50x80 with a half arse built office and the rest is open floor with one large door in the back. Lot is about 1/2 - 3/4 acre with a run down chain link fence. It is off a main road going into town. When I say town, you can be thru downtown in about 2 minutes and heading back out. The total population in this county is around 12,000 men, woman and children.

I called the guy on it, asked what it was per month and he said $800. I asked if that included utilities or anything and he said no. He told me it was all about the location. I do most of my work out of my county anyhow, have had one drive up customer to fix a mower deck, it's gonna take a lot of mower decks to come up with $1000 a month for rent, utilities, overhead. As some of you in the same type of area that I am in already know, everybody is a welder and I just charge to much for something they are already good at. There is a piece of land about 5 minutes from the house, 5 acres, great location but don't know if I could get 1 acre turned commercial, would buy whole lot just use 1 for shop, business. Seems better than renting from a guy, a better place for my money at least.

So what do you guys think about the $800 rent? Considering the size of the county? This road it is on is a state highway, runs clean out to I-40. It's a shade bit farther to Nashville but I would have a yard big enough to have steel delivered now instead of driving to get it like I do now. Actually have tossed around the idea of selling steel in the area, not many places a guy could buy steel around there and has space to put up a covered barn for steel.

What should I look out for as far as contract, loops, traps and things I'm sure shady owners will try and pull? This is a big step and want to make sure I don't get screwed over. Still would much rather put a shop on my land but it's a miserable piece of dirt and on the very edge of the "city" so the potential for somebody crying is still there which means I could get rolling and they could shut it down, not to mention I still could not get a truck in here for deliveries.

Thoughts, opinions, much appreciated!!

Shawn
Parent - - By Superflux (****) Date 09-15-2012 20:52
cumminsguy,

#1! Is the Electrical up to code AND wired in for the Amp load a welding shop will demand?
Is the rest of the infrastructure up to par? Roof not gonna leak on your equipment. Toilet aint gonna backup on you. Ya know that little stuff.
I know $800 sounds like a lot, and it IS. But relatively speaking, that isn't too bad. Time to ramp up your negotiating skills... How long has the place been vacant? Nudge him into the fact of the old cash in (his) hand (for say $500/month) is better than it sitting idle for who knows how much longer. Now if he is shrewd, he's gonna come back with the old he has "X" number of other (probably nonexistent if it has been empty any length of time) interested parties, blah, blah.
I guess it comes down to:
A) Be a good tire kicker and act like it is not really what you want but at the right price, you're willing to sacrifice. Which BTW is a fact!
B) "There is this and that wrong with it" as you point here and yonder, and you're gonna have to put out hundreds if not thousands to correct these short comings... and repaint that gawd awful front.
C) Most important! Be 100% willing to walk away. As in have no emotion drive your decision. He may change his mind after mulling it over. Business is business.
D) If some other lessor comes out of the wood work and snatches it up... Kay sirah, sirah.. it wasn't meant to be, and all them other Karmic one liners.

On the other hand, taking a raw piece of land and getting a shop built up and running is a MONUMENTAL undertaking and can take months without unlimited cash resources.
My advice... start buying mass quantities of lotto tickets......
Sorry for the snide comment.
I just wish the best for you Bro.

The closest to a gig like that I personally dealt with;
The shop was perfect as could be expected and I managed to grind him down to a 3 month cash on the barrel agreement instead of the 1 year lease that is typical for commercial space. Darn good thing too. I had an excellent first 2 months, then I shattered my right foot in 5 places and that Really kinda put the cramp on my whole business plan.
Hope this helps stimulate your thoughts.
Parent - By Cumminsguy71 (*****) Date 09-15-2012 22:22
Thanks John! Don't worry about the snide comment, got a laugh out of me!!! Yeah, I asked him about the service and he said, uh, it's....uhm, 3 phase. Just seemed a bit sketchy at first. The last time I was thru there was about two or three months ago, same thing, empty. There are a bunch of places about the same size for sale in that same area, all with montly payments less than what he is asking for on a rental. Now, either he has a mortgage on it and he's paying out $500-600/month and he's just making a profit or he owns it outright and is.....well, never mind. Good info though, guess it's time to break out the shrewed business man and go down there and kick the tires as you say. The place is full of trash at the moment, don't know if he's storing stuff or what but it's full of junk. Hope he don't expect me to move all that out or pay to move it out.
Parent - By Sberry (***) Date 09-15-2012 21:04 Edited 09-15-2012 21:11
Rent own can be a funny thing. I have seen more than a couple outfits go from rental to own to bust, seems when you build things always come up and its out of your pocket then. I recently looked at a building for giggles, can be bought for way less than 10 cents on the dollar but there is a glut of industrial mfg buildings on the market now and people want out from under them. The owner of this one was trying to get out, he was willing to rent and the price was so right that even at a great price the money to come up with each month/year made renting a no brainer.

It was always ingrained in me to buy and some of this pertains to residential, but at one point (I am sure numbers change with market) but iyou couldn'tnt pay for it in 20 made sense to rent considering investment in upkeep, taxes etc.  Sometimes there is an equity factor but with business it is a balance sheet and you are trying to take home whats left, may be more important than some future sale. Not every accountant is an economist either, many guys that have decent business sense also have sense about numbers too, your mileage may vary.

I built because my business is here, also did most of it a while ago and could do it myself at raw cost. Wasnt concerned with selling in the future, it helped a bit putting me ahead of competitors, the timing was right, it reduced some manpower demands, allowed me to run equipment way past its original service life.
Parent - - By strother (***) Date 09-15-2012 21:12
Shawn , the only advice I can give you is don't count on walk ins to pay for anything. I think walk ins actually cost me $$$. The only reason I even fool with lawn mower decks is I figure it is good public relations and since that is CASH work it puts a little money in my pocket.  As far as trying to be everywhere at once I just put a sign on the door explaining that just because I'm not there doesn't mean I've taken the day off , here is my cell#.  I take one day a week to do office work and I do it at home .
Parent - - By Sberry (***) Date 09-15-2012 21:41 Edited 09-15-2012 21:48
I will include a couple pics for giggles. I have a storage building in last pic to keep the shop a shop. Another thing, with building, I know you have extensive experience in auto truck repair, this is something not to be overlooked. I know you want to be in welding biz and I agree with the previous statement about walk in work, I actually do more side jobs on cars than welding. I cherrypick customers and don't have to leave the place to do brake job or wheel brg and can smooth out the use of my men on occasion.
Parent - By Cumminsguy71 (*****) Date 09-15-2012 22:14
Nice place! I've also kept in mind the auto repair thing but around here auto repair is worse than welding. Everybody and their brother is a welder but everybody and their brother, sister, cousin, Uncle is a mechanic!!! :lol: There is a lake, resevoir about 45 minutes down the road though so it's possible there could be some boat repair things going on there at the shop as the aluminum and exotic stuff is still hard to get repaired for the most part. Everybody has a tombstone in their barn but not everybody has a Tig machine and the skill to use it! There are different things I'm thinking about that I might be able to do but just in the planning phase right now. Really want to get into a shop, get the heck away from the house.
Parent - - By Cumminsguy71 (*****) Date 09-15-2012 22:09
I've got a friend that does that same thing, sign on the door, "In the Field, call ***-***-****". I look at getting stuff done while I'm selling more stuff I guess is where I'm at or getting real close to. All of the stuff for the bridge I can be working on while a hand works on the not so critical handrail. Been checking prices around the area with the rental building and I can buy a building for less than what the guy wants in rent. Kinda gives me the impression that he's off his nut. I guess I need to set aside a day or two just for office stuff. I get started on it and next thing you know it's noon and your saying, where the heck did the day go!!
Parent - - By strother (***) Date 09-15-2012 22:29
Its not easy running a rig and a shop but I don't think I could do one with out the other. It is tempting to hire a full time guy for the shop but that math only works on paper.
In real life I make more money by myself with an occasional day laborer or sub contractor .
Parent - - By Cumminsguy71 (*****) Date 09-15-2012 22:55
Yeah, once you throw in taxes and things it gets a bit harry that's for sure. Running a guy on an hourly rig job I think is where you could see some gains. Worked a guy on a job, charged my hourly rate for me, my hourly rate for him, two machines, two welders and a helper almost $150.00/hour. That worked pretty good!! I've tried to hire temps, Rent a drunk I believe somebody on here called them. I can't ever find anybody worth a hoot, lazy, don't want to work, don't show up, take directions like I'm telling them how to build a nuclear sub. Got a job Monday pulling fence of all things and need a guy, contractor don't have anybody available so I'm scrambling trying to find somebody. Need a good corn fed country boy that knows what a good days work is, probably end up doing it myself though!!!
Parent - - By Smooth Operator (***) Date 09-16-2012 00:57
Cummins, Rented a shop for first 6 years of business, was on a main road intersection and boy was that a pain in the arse!!!!!!:eek::eek::eek:(people constantly stopping for directions, salesman always stopping in , trucks constantly turning around in lot!!!) My father said to me after about 2 years "Bob your gonna have to get out and make some contacts w/ contractors, big steel fabricators, trucking co.s ,etc. because NOBODY is gonna just walk in and give you a $1,000.00 job!!!:red::red:(big time thinker):grin::grin::grin::grin:  Anyway if you need a place to do that bridge job sounds like you found a starting place. NEGOTIATE a good rental rate , NEGOTIATE a term of rental time ( about 25% longer than that bridge job would be about right) be honest, upfront about your starting business, and your future landlord MIGHT even be pullin' for you to succeed!!!(REMEMBER THAT GIFT OF GAB):cool::cool: I rented space from a big fabricator and actually would get work they couldn't do.(aluminum & stainless) :cool::cool: Now labor is a TOUGH nut to crack "everybody wants a paycheck, not everybody wants a job" you have to find guys with a good work ethic and some skills (easier said than done) Interview alot, hire only one at a time, when that works out,start the process again as needed:roll::roll:DON'T BE AFRAID TO SEND GUYS THAT YOU WERE WRONG ABOUT KICKIN' ROCKS!!!!!!:yell::yell: As far as steel sales, if there are no/few warehouses around, you could develop another GOOD revenue stream and maybe something your wife could handle (as in answering the phone and quoting steel !!!!):smile::smile: You don't really have to stock alot, just have a big warehouse that you have a first name basis with one of the inside salesman!!!!!:cool::cool: Ain't easy but you knew that already, and being a Marine your used to overcoming obstacles/problems:smile::smile::smile: From PITTSBURGH HOME OF DEM' STIILERS'  still got a brokin' leg but made it to the shop for a job that needs to be done this weekend and boy was it fun just to be in my shop chewin' on my guys arse's a (all in good fun) gonna do it again tomorrow, I can't wait!!!!!:wink::wink::wink::wink:
Parent - - By Sberry (***) Date 09-16-2012 02:10
I have tried a lot of stuff, finally have a "helper" kind of a shadow and to lay off some chores or tasks and is right there when I need him. Took me a while to come around to this but it works. My SIL calls him my shadow, ha
Parent - - By Cumminsguy71 (*****) Date 09-16-2012 13:46
Thanks to everybody for the replies and excellent information!! Lot's of stuff to think over. Got the brigde, got a large fancy gate(maybe two) and several handrails plus I will FINALLY be getting paid in the next few days on lot's of big jobs! Get to call somebody tomorrow and be Mr. Bill Collector, think I'm going to take the hard arse approach. I went out of my way to get this thing to them quick and now it is past due. Multi million dollar company and they owe $275?? What the heck??? :mad::mad: I got a bill from Red-D-Arc on Thursday, it said "Due Upon Receipt", I sent the check on Friday. I bet the industry was shaking!!! :lol::lol:

Thanks again, Think I'll call the rental dude tomorrow and set up a time to meet, look at the building. I like the idea of making a contract for the length of the bridge job!! Just in case it slows again!! Think I'll try and stay a few months in advance on the shop if I go that direction, at least that will keep the shop payment ahead of the 30 day plus contractors!!!

Shawn
Parent - By DaveBoyer (*****) Date 09-17-2012 22:06
Shawn, PM sent about metal spinner.
Parent - - By DaveBoyer (*****) Date 09-18-2012 02:46
Be sure to find out what the taxes are on a building before You buy. My closest town has genrally high taxes, but the assessed values are all over the place. My cousin was looking into a building, the price was right, but the taxes were unreasonable with slim chance of getting a fair assessmant, as the town is broke. He is renting in another town.
Parent - By Cumminsguy71 (*****) Date 09-18-2012 02:58
I've been all over the town and county website checking out things. First on my list contact owner of property to set up a meeting and look at the place. In the meantime I'll get ahold of the county clerk and get the low down on property taxes, business taxes in the county. Like I said, total population in the county is 12,000. The County next to them has a grand total poplulation of 941!! It's one of those things they are doing what they can to draw in business but not expecting I'll make much of a splash, a one man band with the possibility of hiring a guy or two!! Still looking hard at one of the buildings for sale. On a good size lot so expanding the shop is a non issue, large office with kitchen, offices, more than I'd need but if you hire a guy or two it would be nice to have a break room right!

Gonna have to see how things play out. It would be nice to get all of this stuff into a real shop so my little mustang can have it's parking space back in the home shop!
Parent - - By welderbrent (*****) Date 09-17-2012 23:26
Interesting.  So...Who deleted my post?  Shawn, did you really think my advice was that bad?  :lol: 

Who knows with me.  I distinctly remember responding to this thread.  But, you got some pretty good advice from others here.  I'm going to have to read through and see if I want to add anything else. 

For my area, the $800 would be pretty good for that size facility.  I would definitely rent for a while and see what happens.  Since I sold my commercial property we have been renting for the past 6 months.  Best move I made recently (except that we lost about $50,000 selling in this economy).  We are paying about 1/2 to rent compared to what we used to pay ourselves for the shop space, so the shop expenses went way down it just doesn't go into our pocket anymore.  Someone else gets income from us.  We are thinking of moving the shop to our home.  But we own 10 acres on the edge of town.  Plenty of room for a shop there.  Already have a couple of buildings I can use until I could add a bigger one. 

When you have been in the same area for over 35 years, and over 16 under our management, you don't have to worry much about location.  Same customers are going to keep calling.  I am still wanting to go mainly inspections work but would keep some of my special customers especially the work that would not be a conflict of interest locally. 

I agree with the comment about not counting on walkins, BUT, we get alot of walkins.  Yes, they do eat up some of your time.  But I have felt it was good PR in the community.  Make sure you set a minimum.  Stick to it...LOL, like I do, still LOL.  Don't worry about it if they walk away.  If their job wasn't worth $30 to them, it sure wasn't worth it to you. 

Good Luck. 

Have a Great Day,  Brent
Parent - By Cumminsguy71 (*****) Date 09-18-2012 00:49
Don't know what happened to your post Brent. Your right though, lots of good advise on here. As soon as I get some free time I'll go talk to him about it. Found a shop twice as big as the rental shop on 8 acres for $105k!! Really thinking about that one!!
- - By Dualie (***) Date 09-18-2012 06:44
I wouldn't look past a nice farm shop personally.   I know several people that have made millions in old farm shops and the back of orchards.
Parent - - By Sberry (***) Date 09-18-2012 16:17 Edited 09-18-2012 16:25
Just in general, I have seen a few startups, a bud comes to mind.  A body man. As soon as he can scrape it together he is starting a shop and trying to ram it full of body guys, then its try to keep them busy. In reality he should be looking high and low for the right helper, i wouldn't care if he could weld or not, keep the place swept up, give a hand, run errands when I am busy and have scale work in front of me.. I have a guy I know since HS, the right speed for this, can lay off chores etc. I have seen company owners mowing the lawn while the trades guys are working, azz back wards. I like the semi retired types, etc, some deal where making payroll isn't demanding, you can "tip" vs being real formal especially at start up, nothing beats having a hand around just when needed, sometimes ride along etc, keep eye on things, field a few routine calls if you are unable. Another thing I would work on is message system, call forward or even answering service so nothing goes to machine. One service near me is super pro, you really never realize you are calling somewhere other than the office, they learn your biz, relay msgs.

As for auto work, as you said, everyone is a "mechanic" you face the same thing as welding but what I do is cherry pick customers, don't try to ram the place full, most of mine say treat it as your own. I bill they pay. Had one come in convinced he needed a clutch,,, needed master, fixed it, replaced radius arm bushing, change spark plugs, fiexhaustst problem, was happy to get 600$ bill vs the ramming he would have goelsewherere when he went in convinced he needed whole clutch job, etc. I don't even call them to "change a work order" I will save them a few bucks on partsdon'tnt do unecessaryry work,, but I do keep the rates up and am fussy. I don't try to get all the work I "can" I take the low hanging fruit in areas I am really good at, leave the hopeless wrecks for someone else.
Parent - By Sberry (***) Date 09-18-2012 17:07 Edited 09-18-2012 19:25
I am looking at a semi retired body man right now for the winter, I am going to round up a few undone jobs, a couple of my own, some friends of neighbors (there is a limit to this) but while I don't mind painting all that much, I am good and fast but I hate body and prep work with a passion, its too tedious for me. Almost painful to face. This is a part I want to lay off but no reason to turn some work away either. If it was steady might invest in under car scissors jack and it painting continuous in the cold winter where I had to meet schedules might score another heater for the booth.

Part of the reason I can swerve a little is it was a bit of a part of the plan when I built, there were certain processes I really knew I wanted to be able to do well if needed and I had enough of my own use to justify. Can clean cars and trucks, dry them off, de-ice, paint them, can actually paint full size trucks, did half a dozen tandem dumps for a local outfit. A couple cement trucks. I can switch gears easy without much expense. Only thing I really don't do is machine shop, I don't want the extra equipment, have neighbors and buds with the tools for the rare occasion I cant work around it. Plus I rank it up there with body work for tedium. Parts are so much easier to get these days, I save a ton of small stuff I can root thru and usually find something that can work. MyGyver doesn'tnt have anything on me.
Parent - - By Cumminsguy71 (*****) Date 09-18-2012 23:27
I've wanted to build a 40x60 on my property but I am just barely in the city. Hard to believe when the city is 5 miles away, must be the outer boundries. It's all farmland around me and thought a shop would be the way to go. Until my neighbor(a mechanic) had his at home shop shut down by the city. He ended up going to work for somebody for awhile then I believe he started renting a shop in town.

I had that happen before in a different house, shut you down and then you have no way to make money cause somebody with nothing to do called you in and now somebody else with nothing better to do from the city is watching you. I've gotten away with it in my hovel of a shop but I don't make a lot of noise(usually). The only way I think I could get away with it is by putting up an automatic gate, close the gate in the daytime anybody tries to get in won't. But the land sucks so still would not be able to get deliveries in here due to the awful piece of dirt I live on. Only other option is the 5 acres out of town, 1 mile from me. My idea is one acre zoned commercial and 4 acres zoned residential. Shop on one, new house on 4, kids walk to school, shop on main road, just have to find that box I buried with the $200,000 I'm gonna need. :lol::lol:
Parent - By Chris2626 (***) Date 09-19-2012 02:51
I deliver to a guy who has been working out of his garage at home for the last 20 years. I'd say it's about a 25x25 garage if even that. I asked him how he has done it all these years and no complaints, he just simply said he doesn't make much noise which I can't understand because of the stuff he makes. This guy does tons of iron work and build birds and different animals out of steel, actually made the AT&T ball for the Olympics all out of stainless, looked like it was round but was only raised about 4 inches. He lives in a neighborhood has a tall wooden fence all around his house so your really can't see what is going on there, does have music playing through out the day to maybe drown out the hammering noises. Makes dam good money, I guess people aren't suspicious because he is a small one man operation.
Up Topic Welding Industry / General Welding Discussion / Questions for you experienced shop owners

Powered by mwForum 2.29.2 © 1999-2013 Markus Wichitill