Rent shop space, buy, build at the house or none of the above?

[Hardline]

A little back ground. I'm 39 years old. I own a small onsite equipment repair business. I am the only employee. I have a decently rigged out service truck. I do alot of wont starts, hydraulic leaks, hydraulic hoses, cylinder rebuilds, water pumps, alternators, starters, PM services and such. Probably 80% of my business is forklifts and skid steers. I currently have more work than I can do and have been that way for about 2 years. I have been in the equipment business since the early 90s and have been full time on my own for 4 years.

I currently live in the city limits which restricts me on what I can build at my house for a workshop. I have the equivalant of a 2 car garage at my moms house about 6 miles away that I use right now if I need to build a cylinder in the rain or what ever. But have no lifting devices or ways to move things around. It is in the back yard and have to drive across her grass to get to the shop. It was originally built for the building and maintaining of dirt track racing cars when I was growing up.

I also have an antique tractor that would be nice to be able to get inside a workshop to work on and be able to do things after it gets dark. I have been thinking of buying a place in the country and build a workshop on my property. But several people that I have talked to about this have told me they would not want customers to be able to pick up and drop off equipment at the house. They said that you could never get fully away from work. I can see that being somewhat of a problem on occasion but find that it would be super conveinent to be able to be out in the shop working and then just walk inside to eat dinner with the family and then go back to work. Or if I needed to help with the kids homework or something.

The thought of spending 500 bucks a month renting a space from a local industrial park kills me. The thought of renting it for 5 or 10 years then moving out and not having anything to show for that it not something that sounds feasable to me. What would yall recommend doing at this point in my career? Thanks for any opinions

 

[forestroad]

Commercial property can be a good investment in the long run but the additional monthly payment can be tough to handle during slow periods. I wouldn't consider this option unless you are planning on expansion, adding a couple of employees for example.

I would go with the Home/Shop in the country for all the positives you noted, in addition you get the long term investment advantage as well.
As far as negatives you can always put up a gate and be make it very clear to your customers regarding shop hours of operation.

 

[John C.]

Your home shop will get soaked for insurance but will also have many tax advantages. I rented shop space for years but it also had other advantages that made it worthwhile. It was close to home and I liked that. If I wanted to work late, I didn't have any neighbors that would complain. Since it wasn't at my house I could tell people I couldn't get to the item right away and they couldn't come and look over all the things they might have a notion to walk off with after visiting. I have a home shop now but don't do any repair work in it.

If you only have to pay $500 a month and the building suits your business, I would think that is pretty cheap. The going rate around here when times were good used to be a dollar a square foot for warehouse space. I don't know anymore what it is going for. Rent is also a direct expense against profit for tax purposes. For business purposes it is probably the cheapest way to go.

Good Luck!

 

[Iron@Dirt]

I did tractor repair and a little machine work on site and under my carport, part time. Built a shop in the back yard and went full time 17 years ago. Funny how farm profits slowed about 6 years ago and machine work picked up. Now we do mostly machine work. Wife quit her job about 5 years ago and helps in the shop and deliveries. It has been realy good working in the back yard most of the time, still do a few small jobs on the road but get paid to travel. Cant imagine how much time I wasted on the road for free going to work at the dealer before I quit. Now I am knocking 62 and would consider selling the buisiness but it is in the back yard, would have to sell the house and all which wouldnt be bad except it would be harder. If you build, maybe put the shop adjacent, where you could sell separetly later. The years go by quicker than you can imagine. Just my 2 cents.

 

[thepumpguysc]

I say, if your ON YOUR OWN and making a LIVING after 4 yrs..its time to build!
IF you can do "almost" everything in the "field" from your truck, then you wouldnt have to invest much in the way of "set-up"..
The biggest investment that I can see is a concrete floor. The buildings are cheap enough. The power companys will defer payments over a period of time.
HELL I JUST TALKED MYSELF into it!! lol..

 

[jeff112]

If you could find a building that once was used for a type of repair that would meet your needs, may work out better than going new,you would need to first check with your city or town codes and zoning people,it can get expensive if you need to meet the start up requirements of a new shop, check out every angle,don't make any decisions without putting all costs on paper first, then you can look at the expense of new,existing,or renting,compared to your monthly income and make a decision.good luck.

 

[18nascar18]

If I read your bio I would have thought that someone wrote it about me! I am 40 yrs. old and started the business when I was 26 doing exactly the the same thing. I had a small shed that my service truck would not fit in but was good enough to do personal work and small jobs in. In 2004 I bought a new service truck and wanted to keep it inside and thought about getting one of those car ports! Well, my number one customer(a commercial masonry co.) was slow at the time and wanted to keep his guys working so he offered to build me a shop at his cost for the masonry. I ended up with a really nice 50X70 split faced block shop. 25x50 is a man-cave that is great for Christmas and Thanksgiving. Anyway, the shop ended up costing over $100,000.00 which I anticipated but I did it right and built it the way I wanted one. You would not need to spend near that amount to have something that would suffice, but where I'm located I can recoup all my cost in property value. I didn't think I would like my work so close to home but, I was wrong. I still do all my mobile service and as you know some days parts and other factors don't always fall in line to fill the day, but now I always have a piece of equipment to work on at the shop to fill the unforseen voids. My revenue has gone up in the winter due to having a place to work when the jobsite is shut down due to weather. I think I may also be becoming a little more insistant that some jobs I used to do in the field should be done in the shop, this is job takes its toll on the body and the shop gives some relief to some projects. The shop job works just like the field job, when you're done you're done! Just like when you're in the field and you have more to go do but you don't have it in you, just shut the door and don't over promise! If you can't tell I suggest building. It did cost more than I wanted originally but I was able to absorb it, please don't put yourself in a financial jam to do it. I never have regetted mine, even though I have a lot of other business regrets. It's really good to hear of someone else similar to me, around here there may be one or two others. Its nice to be one of the few people in the world that loves their job! I have attached the only pic I could find on short notice of the shop in the background. Good luck and enjoy giving people quality work at a fair price! Rob

 

[RTSmith]

I agree with the move out in the country and build a shop. I would structure it so there were two driveways, one for shop, one for house. Keep it so you can walk back and forth, but also lay it out that when the gate to the shop is closed, it is obvious you are closed. You can work on work after hours- but make it so it is your choice, not somebody elses who just showed up...

 

[Hendrik]

There is a saying that 'rent money is dead money'.
You really need to do the figures for the various options, to make any sort of decision.
Have you built up a cash reserve to use as a deposit, has the real estate cycle bottomed out, will your missus be happy in a new location?
Considering what your interest rate is you'd be mad not to invest in real estate, as long as it is within the budget.
Will spending money on your equipment make you more money? Are you turning away work because your current set up can't handle it?
If you have a good customer base and your equipment is able to handle their needs, then I don't see a reason to spend money in that area.
Having had a kick in the guts from the neighbours and council about what I can and can't do on my property. I would advise that you look carefully in the regulations regarding operating a business from any potential property. The way it works here is that you can't apply to run a business from a property zoned for residential living until you own it and buying a property without knowing you can use it for what you want is a waste of money. It is a catch 22. However if the property you are looking at is zoned rural (or your equivalent) then you should have a pretty good chance of being able to run a equipment repair business there. As long as you can show that it would not seriously affect the neighbours the local authority 'should' be encouraging small business. However it would be an idea to have a look for suitable properties and then approach the local planning agency to get an idea if they would be willing to support you setting up a business.
I haven't voted in the poll because I really don't have enough info about your situation, sure buying property is always a good thing but if it causes you trouble in the future you have to be prepared for that.

 

[adam21584]

I am looking at doing something similar, I would look for a place that already has a shop on it if possible. Let the previous owner absorb some of the initial cost of building. One thing I kick myself for is not paying enough attention to ceiling height. I am looking at ways to raise the roof or rebuild something to gain more room. Look at the building and picture all the equipment you plan on having in there and add some extra room for expansion and you should be set for a while,Also check building codes to see if you could add on in the future. Good luck and let us know what you find

 

[18nascar18]

Adam21584 is right about the height, mine has 12' doors and most of the time is fine but 14' would occasionally be nice!

 

[absoluteequipme]

wow lots of us in this age group ! I'm also 39 , finally made the jump to my own full time about a year ago. Dont know why i waited soooo long now that i look back. In my area , building is definately cost prohibitive.... Chicago area has its down falls there, but if I was able , I agree . relocate and build , but most definately define the space as seperate from home boundaries. Good luck in the endeavors.

 

[caterpillarmech]

I am right there with you guys. Will be 36 this year. Cudos to you guys for going on your own. I like the protection of where I am at. I still do a few jobs on the side and want/need a shop. I am going to start with a prefab. Prices look fair for being turn key. You may look in to Mueller kits or another local metal company. You can get the floor poured and just bolt it togather. Shouldn't take long with you and a buddy.