A Conversation About Relocation
It can be daunting for any business owner to contemplate moving to a new location. From researching a new location to financial implications to how it affects your team and customers, there are many important aspects of a move that need to be considered.
We purchased our original 4,000 sq ft building with John’s Motor Service and started JAR Performance Automotive in November 2016 with a 5-year plan to pay off our loans and open an additional location. After the first couple of years, along with the closing of several other local small shops, we found that the needs of our community were exceeding what we could handle at our current location.
One of our biggest challenges in the original location was a single lift per technician. This was very inefficient, regularly requiring us to reassemble vehicles and move them to the parking lot while waiting for approvals or parts, just to have to tear them back apart later.
We explored several options beginning in 2018 and in early spring of 2022, our Realtor notified me of a large building (over 15,000 sq. feet) on Main Street that was going to be listed in the next few weeks. It’s about 6 blocks from the original location. One of the big advantages that sparked our interest in this property is that it is in the downtown Main Street district, similar to our original location. We have a lot of customers who drop off vehicles when they go to work, so being near downtown is very advantageous. We did not want to lose that convenience when looking for properties.
At first, I wasn’t interested because the building holds our local NAPA parts store, and as a Gold Certified NAPA AutoCare Center I was concerned it would be a conflict of interest. However, we have always maintained a relationship with an attorney, so he was able to help with the purchase. He set up a new Property Holdings Company for the new property, and also helped with Lease Agreements for the two existing tenants (the NAPA store and another short-term tenant which we allowed 6 months to move out).
Once the new location was locked and the contract was signed, we had to begin demolition. There were multiple walls, carpeting and a second-floor mezzanine that all needed to be removed to open up the building for shop space.
Our original location was 4,000 square feet total, with 13 parking spaces and a 20×70 privacy-fenced area. We had four lifts and one small alignment rack (short rack for cars only). With the new location we have over 10,500 square feet of space with over 2,200 sq ft for the customer area, front offices, break room/training rooms, parts office and other amenities. We now have 10 lifts, a dedicated lube/tire service center and a new state-of-the-art full-size alignment rack. It also has the incredibly unique opportunity of having our primary parts supplier located within the same building, greatly reducing our need for inventory on hand.
We also have room inside for 12-15 cars in addition to the ones on lifts in case they need to be kept indoors due to inclement weather etc.
I did most of the construction/renovations myself, so the biggest challenge for me was putting control in my teams’ hands and “letting go” or trusting them enough to run things in my absence as I am working on the new building.
DRIVE was a huge help in getting my front office team trained (who all started new in July and August last year after our previous service advisor decided to be a stay-at-home mom) so I could come and go as necessary to complete projects at the new building.
The most positive impact with the new location is the increase in efficiency that is taking our shop to the next level through more timely repairs and the ability for the technicians to increase their billed hours.
As I look at year over-year-performance of our business, I am incredibly proud of where we have come. When we first bought the 4,000 sq.ft shop it was turning $250k in annual sales. We closed out 2022 at over $1.1M in that small shop, and as of June 1st, 2023 we are already over $550k and seeing steady increases across the board.
The learning curve in the new space was steeper than I expected, so it actually took the first couple of months to really see an increase in efficiency. After the first couple of months, we’ve seen a steady increase in sales and efficiency, and we are filling our schedule up about 1 to 1-1/2 weeks in advance now instead of being 2-3 weeks out. Due to this, we are able to better serve our customers’ needs and we don’t get as many cancellations due to waiting so long for service. We have not had success adding additional personnel yet but using our same team we’ve experienced almost 52% in sales increase as of last week over our 2022 weekly average in sales.
DRIVE motivated me to have a plan and stick with it, but one of the biggest obstacles I overcame was hiring a shop manager before I began the renovations. This was a huge step for me, because with such a small, tight-knit group I had always managed everything on my own. Looking back, I am confident that I could not have performed the renovations and spent the time on the new building if I had not taken the plunge of bringing in a Shop Manager. Now, in this larger facility that is paying dividends as well because I can lean on him for a lot of the administrative stuff like invoices, vendor statements, and dispatching the day-to-day operations.
Our business plan includes an expansion every 5 years. I plan to open shops in several of the adjacent communities over the next 20 years.
Any business owner thinking of relocating needs to have a thorough, detailed plan. There is so much that goes into a move, considering renovations, new equipment installation, electrical, plumbing etc. Detailed budgeting, planning and scheduling is critical, and even then, unforeseen obstacles can arise during the process. Allocate at least 10% over every estimate if renovations are being performed. As they say “plan for the worst, and hope for the best!”
I also recommend having a good banker in your corner, do your diligent research up-front before you get locked into contracts, and get multiple estimates from different contractors in every category to help keep costs under control.