Need advice/info from those who make a living in garage
- Thread starter katit
- Start date
As a matter of fact I did that. I bought few cars completely shot (1 Jeep and one Mitsu 3000) and sold them for profit after fixing up.
I have good running RX7 which is my "fun car" but I can sell it for loss, not profit because there is so much in this car
I'm working on cars right now to finance RX7 replacement. I want 996 and they getting cheap now...
I can't give up on my 540 and I won't because I love that car and at 185k everything works and there is no single leak. Car is perfect. I average about $2k in parts yearly in it(tires included).
I think I got a good idea. I can rent cheap shop space, get LLC and insurance and take some of the cars home... So I don't have to spend whole time at the shop.
But most likely I will just stop doing what I'm doing and will get project car.
What about barter? If I tell people to buy me specific tool for specific service? That wouldn't be a business.
I have good running RX7 which is my "fun car" but I can sell it for loss, not profit because there is so much in this car
I'm working on cars right now to finance RX7 replacement. I want 996 and they getting cheap now...I can't give up on my 540 and I won't because I love that car and at 185k everything works and there is no single leak. Car is perfect. I average about $2k in parts yearly in it(tires included).
I think I got a good idea. I can rent cheap shop space, get LLC and insurance and take some of the cars home... So I don't have to spend whole time at the shop.
But most likely I will just stop doing what I'm doing and will get project car.
What about barter? If I tell people to buy me specific tool for specific service? That wouldn't be a business.
What a great thread. The advice and knowledge is fantastic, but the original poster (katit) doesn't seem to be taking it to heart.
Katit, I have *many* friends that work out of their garages on a referel basis only. They don't advertise their services, and they do not have LLCs or special insurance coverages, and they've dodged the lawsuit/liability bullet for years.
However, at the VERY least and for your family, you should set up a simple LLC and get a tax ID number. It'll allow you to track your income and expenses, keeping them seperate from your familys accounts, and provide some positive tax benefits. You can also work with dealerships/warehouses to get your parts costs down.
It sounds like you have grandious ideas of having this big shop, but only want to work in it on occasion. That sounds like complete overkill based on your responses here.
IMHO, start small, LLC yourself and insure your LLC, and work at your own pace. If it doesn't work out, you aren't in too deep or with too many financial obligations. Re-read this entire thread a few times... It's VERY insightful. I'm in the process of starting my own service (engineering) LLC to capture my costs/expenses, and give m greater visibility to my own tax situation so I dont get a suprise like I did this month.
Katit, I have *many* friends that work out of their garages on a referel basis only. They don't advertise their services, and they do not have LLCs or special insurance coverages, and they've dodged the lawsuit/liability bullet for years.
However, at the VERY least and for your family, you should set up a simple LLC and get a tax ID number. It'll allow you to track your income and expenses, keeping them seperate from your familys accounts, and provide some positive tax benefits. You can also work with dealerships/warehouses to get your parts costs down.
It sounds like you have grandious ideas of having this big shop, but only want to work in it on occasion. That sounds like complete overkill based on your responses here.
IMHO, start small, LLC yourself and insure your LLC, and work at your own pace. If it doesn't work out, you aren't in too deep or with too many financial obligations. Re-read this entire thread a few times... It's VERY insightful. I'm in the process of starting my own service (engineering) LLC to capture my costs/expenses, and give m greater visibility to my own tax situation so I dont get a suprise like I did this month.
Unless you are sharing a large shop with several people, you will not find cheap shop space that is zoned commercial. My 3200 sq ft shop would rent for $1800-$2000 per month. Property taxes alone are $400/month. Before I bought the shop, I rented 2 others in residentially zoned areas. 1800sq ft for $200/month and a 2200 sq ft for $600/month. The 1800 sq ft was in a questionable area of town and neither place was feasible to heat well so it is difficult to work there in the winter.
The other issue is if you are working on some of the cars at home, your home garage still becomes a business location, so you have all the same problems as before. If you really stop to think about what you are risking for what you are gaining it should be clear that you either cannot do it, or you need to completely jump into it and set everything up properly as a business.
You are still exposed to all the liability if you barter. They could pay you with Cheerios and if you accept them it would still be business activity.
If I DO decide to open shop as my main income - it will be shop I will manage and occasionally work in. Starting shop to wrench there myself full time is short sighted. I will not be able to make as much as I do now.
It's not like I don't want to work. I will work no matter what but that will be different type of work. Now I don't care about how much I make working on cars because I have main income. If I start shop it will be very different
krooser
Well-known member
Put the $$$ in your pocket and keep yur mouth shut. If you start getting too fancy you'll make life miserable for yourself.
It's a "hobby" for you and your friends help out with a little $$$...
It's a "hobby" for you and your friends help out with a little $$$...
Great advice - getting sued, being bankrupt and without any assets will not make you nearly as miserable as setting up liability protection and insurance
Bottom line, If you want a "hobby" buy a project car or work for free. If you want to make money start a business. Anything in between and you are risking everything you have worked your whole life for without having any significant financial gains for doing it.
sasquach
Well-known member
This quote right here says it all if you are afraid of loosing your "assets " I would quit doing it alltogether . Legal or not you still have a chance of losing.
SportFury59
Well-known member
If it were me I'd go the project car route. Buy an old chevy, ford, BMW, etc (or preferably an old Mopar with fins) - fix er up and sell it. Make a few bucks and do it all over again. Along the way pick up a few old gas pumps, restore them and make a few bucks. This way you're still working on cars (your own), at your desired pace, and can make an extra dollar without all the legal hassle.
must8657
Banned
I am not going to pretend to know all the laws, liabilities and zoning issues being discussed here. so i guess i am more making a statement that should almost be read as a question. I have a house, cars and other assets, but i also have loans. in the end, if someone took everything and kicked us out on the street, they might get 200k (assets-loan payoffs) and that is on the high side. Now, can't you just file for bankruptcy like other business do. I know several people that have and they ended up keeping all their stuff and the only downside was bad credit. maybe i am wrong, but how many lawyers are going to waste there time going after an individual with really very little in the way of assets and more importantly cash? I think once you add the 1m insurance policy, you will end up opening yourself up to more lawsuits. Plus, if you are doing a cash business, how are you going to prove that it was me that did the work and that i did it for money? all these people that rant about insurance, where does it end? you can buy insurance for everything now? all you are doing is supplementing the poor sucker that needs it. most of us would be better taking the money we pay on insurance and putting in savings. hell, if we didn't have insurance for everything, i bet we would have less lawsuits.
jason
jason
I dont want to sound mean or rude but here are some facts you should think about. You have never worked as a prof. auto tech,? but you claim to be a bmw tech. What type of special bmw tools do you allready own? Do you have access to the bmw factory web sites. Do the scan tools you own reprogram all the modules bmw have. Opening a bmw shop and keeping a good name will end quick with out the rt tools, the rt. web sites, and a good dealer connection to help you when you get in a bind.And trust me you will get in a bind. Bmw loves to change their factory tooling to make it hard for indpendents to keep up. Their factory scan tools are one of the most expensive in the automotive field. Doing brakes and oil changes is nothing like changing a 1,500 module only to find out you cant program it and have to send it, or tow to the dealer.Then finding outr even it did not need the module. The wiring diagram you got of some web site was wrong and you missed diag. Problems like this will happen with the rt. tools. And will happen evenmore without the rt. tools. On the other hand if you turn all that kind of work away how can you consider yourself a bmw shop? I have a great rep. for fixing cars. I mostly work on Ford and Gm . I do own the factory scan tools. Have the factory web sites and connections with dealer tech when I get in a bind. I also own several other aftermarket scan tools and lap scopes. I have over 20,000 worth of scan tools and scopes. I use everyone of them. The web sites I have access to are priceless, but also $$$$$. I have to go to training classes all the time and I send many hours reading to stay up to date. You might be shocked to find out what 1 class cost to attend. They are not cheap. Finding someone else to fix the cars for you wont be cheap if he knows what he is doing. My advise to you before you open that door is go get a job part time at a bmw dealer, and see what it is really like. If you still love it at least. you will have made some good connections . then open a shop. What ever you do, I wish you the best of luck ! It wont be easy.
Well. That is all not a problem. I have manuals and all technical info for models I deal with right now and I do have GT1 scanner. Also I have many special tools. Not all but a lot. And I do have a lathe with mill to make tool if I need to.
It's all not serious for doing business but I am capable of fixing pretty much everything. I understand exactly what you talking about and yes, ideally I need to get experience in a field.
But again, this is all not a rocket science. It may not be efficient but I can figure this stuff out..
It's all not serious for doing business but I am capable of fixing pretty much everything. I understand exactly what you talking about and yes, ideally I need to get experience in a field.
But again, this is all not a rocket science. It may not be efficient but I can figure this stuff out..
Joe Reed
Well-known member
First of all, if you have $200K in net worth you aren't bankrupt by definition! If the court did allow you to file, the Bankruptcy Trustee would evaluate your property and sell it if it was determined that it could be sold and produce funds to be distributed to the creditors. That's the job of the Trustee - not the lawyers (if any) representing the creditors. Certain property is exempt, and a bankrupt debtor has a certain dollar amount of exemptions that can be applied to other property. This is assuming a Chapter 7 bankruptcy. Chapter 13 is an entirely different animal.
Also, if the business goes bankrupt, but the owner has protected himself from liability as discussed in other posts, the owner won't lose their property. The business and the owner are, in those cases, entirely different entities.