business decision question...please help.

[coincarwash.ca]

I am starting to de detailing at my SS wash.
I purchased all the best detailing supplies, post cards, business cards, website and detailing trailer.
I found someone to run it for me and I was thinking of giving him 45% of the money generated. I would keep 45% and 10% I would use for supplies and advertising of the detail business. I will finance the whole operation and all he has to do is detail cars and grow the business. He will not be an owner but will get 45% of the sales and do all of the detailing. I thought about hiring someone, but I don't want to have to babysit them.

I am looking for a better solution or some general comments.
Do you think my numbers will work?

 

[Bubbles Galore]

IMO, the 45% seems high and the 10% seems low. I would look into that aspect first. Do you not have time to do it yourself? No interest?

Just curious.

 

[coincarwash.ca]

I don't want to do it myself. I run two washes and I only like to work about 25 hours a week. I might do the odd detail job, but I don't want to be tied to a schedule. I love the freedom of working when I want. The guy I have is willing to work his tail off...I figure the harder he works the more we both get in return. I don't mind giving him 45% if I don't have to deal with too much.

 

[Gabriel]

My humble experience with deals like this is: You give the guy a good percentage of the buisness, he learns what percentage profit there is in the business, what you are making, gets greedy and leaves to put in his own shop down the street. I personally think it is better that he have no idea about cost of product, percentages, or anything about the business side of your shop. Hire him by the hour at a good wage so that he will not want to leave for a new job and better pay. He may work for years and be extremely happy. If he knows what you are making he will be dissatisfied quickly. Give a man a fish and he will have a meal--give him the knowledge and equipment and he will become your competition.

 

[Waxman]

My own personal philosophy is to hire detail technicians and run the business myself. I also detail cars as well as run the carwash and detail shop. However, as my business has expanded I do less detailing myself. This is the natural progression I planned for. I have done oodles of detail jobs since 1985 and feel fine about waxing less cars myself though I do keep a hand in the detail operations and car cleaning specifically.

If you run every aspect of the detail shop as you do the carwash end, you keep the profits. In my opinion, you should, since you take all the financial risk. That, to me, is how basic business works. He who takes the risks reaps any rewards.

 

[dclark3344]

I would get a non compete agreement and a confidentiality agreement signed by him. I would let him know that he would be sued if he ever tried to do this on his own either directly or indirectly and all the trade secrets must not be shared either. I would then send him to a detailing school.

 

[Waxman]

another thought; a team of one isn't enough to create any decent revenue or satisfy any real peak demand in any 'real' detail shop. a crew of 2 or 3 or 4 is better for processing cars through a retail detail shop/carwash setting.

detailing combined with a carwash has serious revenue generating potential if done well and not half-way. add express aftercare and you can satisfy even more customers, demographically.

i cross-train all employees so they can detail cars, maintain the lot, clean the carwash, assist customers, receive chemical orders for carwash and detail shop, process customers' payments, book appointments, and even assist in repairs at the carwash.

 

[MEP001]

Are you planning for the detailing guy to look after the car wash too? Having someone at the wash for extended hours will benefit the wash as much or more than the income he will generate detailing, if his duties include helping customers with problems or change.

 

[ted mcmeekin]

You are funding, taking the investment risk, using your hard assets, taking liabilty risk, paying utilities, etc.--you should take at least 45% and without giving all details be sure he knows there are many expenses in running a business--it is not about taking the sales and stuffing them in your pocket. When your property tax, water rate etc goes up be sure he knows your cut just shrank.

Ted

Ted

 

[Bubbles Galore]

I'm personally going to offer an express detail option at my site. I am there every weekend anyway, why not make some extra cash and offer some more services. If I were in your shoes, I would rather have an employee than a "partner".

Just my .02

 

[coincarwash.ca]

I'm personally going to offer an express detail option at my site. I am there every weekend anyway, why not make some extra cash and offer some more services. If I were in your shoes, I would rather have an employee than a "partner".

Just my .02

I thought about having an employee, but I don't want to have to hustle to get extra detail jobs. The person I have in mind is in no financial shape to open up shop down the street. I am very happy with my car wash return on investment and the detail side is totally bonus for me. If we start detailing $2000 worth of cars a week and I split it 60-40 for example, I just made an extra $1200 before expences.....he walks away with $800.00...If I were to pay him $15 hr and he worked 40 hrs , he would be at $600.00.....For me it's worth the extra $200 to have a person that has an incentive to earn more and market the detailing company for both our benefits.
Now if the business takes off and we need more employees it may come back to bite me in the ass. If the numbers double, he will be over paid, but very happy. I may put a clause that states he only gets 25% of the jobs he does not detail...I have to work on the numbers.
Any comments or ideas?

 

[Bubbles Galore]

That sounds like the best direction to take. I wouldn't want to see you get into the position where you are overpaying your guy by giving him a specific percentage.

 

[bigleo48]

OK...after reading all the posts and doing this myself, here's my 2 cents worth.

First, I have all employees sign confidentiality & non-compete documents.

Second, I believe this will not work well as it has to be managed. "Wanting to work your butt off" and "not having the means to rent a shop" tells me this is a low level person and managing is a higher level skill.

Third, 10% for tools, supplies, equipment, insurance, etc...that's too low.

Finally, what I'm hearing is "I don't want to do anything...just collect the money"...that's my satirical signature. Man if it was only that easy.

So to do this right, you need the right space, personnel (more than 1), training, tools and management to make it work. Without these and a hands on approach, I don't believe it will work (well anyway).

BigLeo

 

[Waxman]

great response bigleo!

 

[rph9168]

I agree with Bigleo except that even if you get a signed non-complete and/or confidentiality agreement they usually aren't worth the paper they are written on. Even if you did try to enforce it I doubt it would be worth the time, effort and money. The only thing it does is maybe put some thought in the mind of the guy that he might have a problem if he starts his own shop or goes to work for a competitor.

If you want to go percentages I would probably say 35% for the detailer. Remember you have to supply the tools, supplies and utilities. I would also check with my insurance agent on exactly what coverage I have and if I might need more. In addition, you probably need to check to see if you need to withhold taxes and pay for unemployment insurance or workman's comp. In most states if you supply the location, tools and supplies they are considered employees and withholdings must be made which means you will also have to pay your portion of their Social Security as well.

What seems like a simple business arrangement might not be that way.

 

[pitzerwm]

In regards to a non-compete that you make anyone sign. Read up what your state will allow. In WA, it usually can not be longer than 6 months and can only include your immediate market area. Anything more than this will be thrown out and you could get sued if you cause them to lose a potential job.

 

[bigleo48]

After reading it again, it sounds harsh and it was not meant to be. I know what it takes and it just doesn't come that easy. It may prove me wrong if coincarwash proceeds and that would be great, but it's unlikely in the long term.

One last comment on this "Hard working, but no means" person. It is my experience that people are where they are for a reason. Many times I have known people in poor to bad situations and wondered "they seem like such nice people...how did they get where they are?" After getting to know them better I discovered why. I know I'm generalizing, but I'm still waiting for someone to prove me wrong.

BigLeo

 

[Bubbles Galore]

I agree ^...

 

[pitzerwm]

Everyone is exactly where they want to be. Most think that is where they deserve to be.