When it comes to shop size, is bigger better? That depends. Bigger hopefully means more revenue. After all, you have more bays for more repairs. But all those bays—and the larger staff of techs it takes to use them—can come with a fair amount of bullshit.
So if you’re contemplating a new shop or an expansion of your current facility, what should you do? It depends on your current situation and your business goals. We’ll look at the pros and cons of each to give you some perspective on your decision.
Small shops: limited potential, limited headaches. The downside to a smaller shop is pretty clear: you can only get so many vehicles in and out every day. That limits your revenue, but it also limits your overhead, like utility and maintenance costs. It’s much easier for small shops to manage electricity bills and cleaning costs. Fewer bays also means fewer techs, which lowers your payroll and training. Smaller shops are also more environmentally friendly. You use fewer resources than a larger shop, so you reduce your overall environmental impact.
The bottom line: if you’re constrained by space or don’t have the budget to expand, you can still make plenty of money because of lower costs and fewer worries. And a smaller footprint doesn’t mean you have to limit expanding your business. Using smaller lifts could make it possible to fit an entirely new bay in your existing space—providing more revenue without increasing utility or maintenance costs.
Big shops: a big decision with big possibilities. On the flip side of a smaller footprint, there’s the attractive possibility of having the largest shop possible for the most revenue possible. But just because you build it doesn’t necessarily mean they will come. Before you look to expand, make sure you think about what a bigger shop needs:
- Demand. At some point your shop is too big for the business that rolls through its bays. If you’re currently turning customers away on a regular basis, then you could probably support a larger shop. But you may not need to build out. If you have even a little available space on your floor, you could use smaller lifts to expand capabilities and avoid a building permit.
- People. Not just people in general, but people on your payroll. You probably wear many hats at your shop. By pushing the boundaries of your physical space, there are probably too many hats for you to wear. That means you’ll need to hire. It also means that your role will change as a manager. If you still have the opportunity to get your hands dirty today, that might change tomorrow. And if you’re already acting as a manager, what happens when you add more techs? Will you be able to manage your current crew and the new hires? Or will you need to hire managers for those new techs, too? New people always change the dynamic of a business—often for the better. But it’s still something you should think about long and hard before making a decision.
- Goals. If business is booming and you can’t handle any more in your current space, you have to expand…right? Not so fast. There are obvious costs when it comes to increasing your footprint, and they can add up quickly. There’s another way to increase revenue than expansion, though: specializing. Could you increase profits by specializing in higher-cost repairs or in more premium vehicles? Maybe. And that wouldn’t require nearly as much investment as a bigger footprint. Just something to think about.