Overheads are the biggest problem.

In Sydney, rental (or mortgage) of a workshop premises is prohibitive, not to mention all of the on-costs like rates, licences, water, electricity, waste etc. Because you're a business, you are considered a cash cow by most government entities, even car rego for business is more expensive than for private use, for no good reason. Insurance is another killer.

The cost of equipment has skyrocketed, decent scanners cost $$$, plus they have ongoing subscription fees. These days it is not possible to service & repair cars without one.

Compare the automotive trade to that of a plumber or electrician. They have the ability to charge out similar labour rates, but they can work out of a van or ute, which costs a lot less than a $5000 per month workshop.

If you have to employ people, superannuation & workers comp insurance kills you. Many mechanics want $1000 to $1200 in the hand, without realising they don't turnover this much, by the time tax, super & workers comp are added.

To cut a long story short, if you're thinking of opening a workshop, look closely at the business plan, then put it in the bin & go fishing, you will be better off financially.

Dr Terry.

Edited by user Thursday, 10 February 2011 10:53:20 PM(UTC)  | Reason: Not specified