We all know how the automotive industry in this country has been suffering, but a lot of it is due to bad business practices over the years, and to people deciding to buy import cars instead, but if you read my articles you know I shamelessly promote the buy American idea.
Since my preference in the automotive industry is the classic car segment, I know that there are a lot of other people who love them too so I use my knowledge to help people who love classic American cars.
As a shop owner here in Salt Lake City who is in the process of trying to buy a building for his shop, I have discovered that the banks aren’t loaning to businesses at this time, so I have had to seek out investors to get this done, and it has been a long road to this point.
With a business plan that I created I got 85% of the money for our shop, but the last 15% has been a nightmare to get done. If the old saying persistence pays off is true this should happen soon, the investors have asked for a study on the industry in my city.
I had one of the local colleges help me with this part of the process. The investors were looking for some numbers on the industry here in Salt Lake City, they wanted to know how much work comes from the local area, and how much comes form other areas in the country. Their worry was that Salt Lake isn’t a big enough city to support another restoration shop, our research indicates that there are two types on shops here in Salt Lake City, the first type of shop does both collision and restoration.
We discovered that the shops the do both are doing about 50% of each type of work, and the restoration work has been carrying their shops through the last 6 months or so, as the collision work has been slowing down, my shop doesn’t fall in to this category.
For the shops that do both collision and restoration work, our study indicates that they are getting about 85% of their work from the local area, and about 15% from other cities and states, this indicates a strong local presence for the restoration industry.
The other type of shop, or the ones that specialize in only custom work, or restoration work the numbers seem to change a bit, so let’s dive in to that head first, the shops that specialize like my shop does are pulling a much less figure from the local area.
These shops seem to pull about 40% of their work from the local area here in Utah, and about 60% from other states, which is still a good amount of work coming form the local area, but we depend much more on out of state business.
In almost all of the cases that we looked at, their business was slowing down, but a few of them said that it had stayed about the same, these were the ones who had been in business for a long time, the ones that have a good customer base already built.
The turn down in the economy is affecting some of these business, but they have enough work that they aren’t firing, or laying people off of their jobs, the shops in the know can always garner enough work to keep their shop moving, and their employees working.
Most shop generate their business off of the car shows, as they build winning cars to put in the shows, they will build more and more business, this is how it has always been in this industry, the bigger majority of your work will come from your past performance.
The car restoration industry will never go away, there will always be people who love the classic and antique cars, and that means that there will always be a need for restoration shops, although it may become harder for new shops to get the business.
If your considering opening a restoration shop make sure that your business plan is well done, and that you have spent a lot of time studying the area where you want to build your shop, make sure that you weigh all of the factors in before you dive in.
My personal opinion of this industry is that the shops seem to have good relationships with each other, and they aren’t trying to cut each other down, the competition as most people know it doesn’t really exist, we don’t bad mouth each others shops to get work.
We all do the work and try to get cars in the shows, and the magazines, in doing this we all seem to work together to better our industry, none of us want to see it fade away, and the more we can work together the better all of our shops will do in the end.