Hear What Jeff Learned Along the Way.
It can be daunting for any business owner contemplating moving to a new location. There are so many important aspects of a move that need to be considered. From researching a new location to financial implications to how it affects your team and customers.
Jeff Reitz, owner of JAR Automotive in McPherson, Kansas made the move to a bigger shop. It was a goal of his for years. Going from a business of 4,000 square feet to well over 10,000 square feet is a huge undertaking. Jeff knew in the end it would be worth it but getting there needed planning. Plus, the resources to get it done.
For anyone thinking about a new business location, Jeff discusses each step to finally moving to his new, bigger and more efficient shop.
How long were you at your original location?
Jeff – We purchased the 4,000 sq ft building with Johns Motor Service and started JAR Performance Automotive in November 2016, so approximately 7 years ago.
When did you start thinking you needed a bigger shop/new location?
We started the shop with a 5-year plan to pay off our loans and open an additional location. After the first couple of years, along with the closing of several other local small shops, we found that the needs of our community were exceeding what we could handle at our current location.
In making that decision, what came into play to make that final push to move?
We actually have had customers telling us for years that we needed more room as we always have a full parking lot, and our schedule is typically full 2-3 weeks out. One of our biggest challenges in the original location is one lift per technician which was very inefficient, causing us to reassemble vehicles and move them to the parking lot regularly when waiting for approvals or parts etc., just to tear them back apart later.
How long did it take to find the new location?
We explored several options in 2018 and 2019 including trying to find a way to build on our current location or purchase an empty lot across the street for parking, but knew we needed to pay things down before it was feasible. In 2020, we began actively searching for properties and exploring options to build new. In late 2021 we found a property with excellent potential but there were some environmental concerns that held us up on that project and the amount it would take to convert it was higher than where we wanted to be, due to the sheer size of the facility & grounds.
In early spring 2022, our Realtor contacted me and informed me of a large building on Main Street that was going to be listed in the next few weeks. At first, I wasn’t interested because the building holds our local NAPA parts store, and as a Gold Certified NAPA AutoCare center I was concerned it would be a conflict of interest. However, the building is large (over 15,000 sq feet).
Did you find it yourself or did you use a broker?
We used a local Realtor who we have worked with for several years. She actually helped us sell our house and find our new home in 2020 and then she began looking for commercial properties for us.
Was a lawyer involved and if so, how?
We have always maintained a relationship with an attorney. He was able to help with the purchase as we set up a new Property Holdings Company for the new property, and also helped with Lease Agreements as we have two existing tenants (the NAPA store and another short-term tenant which we allowed 6 months to move out).
Once you had the new location locked and had signed the contract, what was the first thing you did?
Began demolition. There were multiple walls, carpet, a second-floor mezzanine that all needed to be removed to open up the space for shop space,
Compare the space between your original location and your new location? Square footage, number of bays, parking for customers.
Our original location was 4,000 square feet total, with 13 parking spaces and a 20×70 privacy fenced area. We had four lifts and one small alignment rack (short rack for cars only).
With the new location we have over 10,500 square feet of space with over 2,200 sq ft for the customer area, front offices, break room/training rooms, parts office etc. We now have 10 lifts, a dedicated lube/tire service center and a new state-of-the-art full-size alignment rack. It also has the incredibly unique opportunity of having our primary parts supplier located within the same building, greatly reducing our need for inventory on hand.
Parking is still limited as we don’t have much more outside parking space then what we had at the original shop. But as I mentioned above, our original location was filled with vehicles that were ‘in process’ due to having only one lift per technician. With our new location’s size, it enables us to keep the vehicles indoors until finished, reducing the amount of outdoor parking required.
We also have room inside for 12-15 cars in addition to the ones on lifts in case they need to be kept indoors due to inclement weather etc.
Did you design the new space yourself?
I have an equipment specialist who is providing most of the equipment and assisted me with the design. Then Rotary also provided a CAD drawing of my floor plan.
Thus far, has the design of the new shop been working out?
The first thing I did when considering the purchase of this property was to draw out the dimensions of the building, including every room and wall so I could design the layout and make sure it was feasible for our needs. It changed a little bit throughout the process but everything I originally imagined and have now put into place, is great.
What was the biggest hurdle?
As with any new (large) business venture, there are always unforeseen issues that need to be resolved. One of the biggest ones was finding out that there are still six in-ground lifts from the 1940’s that remain in the shop area. Removing these was an additional task I had not prepared for and required putting a whole new floor in the back section of the shop area.
What has been the most difficult part of this process?
I did most of the construction/renovations myself, so the biggest challenge for me was putting control in my teams’ hands and “letting go” or trusting them enough to run things in my absence as I am working on the new building. DRIVE was a huge help in getting my front office team trained (who all started new in July and August last year after our previous S.A. decided to be a stay-at-home mom) so I could come and go as necessary to complete projects at the new building.
How far is the new location from your original location?
About 6 blocks. One of the big advantages that sparked our interest in this property is that it is in the downtown Main Street district similar to our original location. We have a lot of customers that drop off when they go to work, so being near downtown is very advantageous. We did not want to lose that when looking for properties and this one is right on Main Street.
Are your employees excited about the new place?
Yes. All of the technicians appreciate the increase in efficiency simply by having more room and multiple lifts per technician.
What was your plan to finance the move?
Our bank agreed to a 12-month interest only loan, but after closing on the property on May 20th, 2022, we opened for business on February 27th, 2023. We are still wrapping up on the financial side of things as we are utilizing the Small Business Administration 504 Loan (SBA) to reduce the up-front financial commitment.
What do you think has been the biggest impact to your business with the new location?
The most positive impact is the increase in efficiency that is taking our shop to the next level through more timely repairs and the ability for the technicians to increase their billed hours.
Do you see additional shop locations in your future?
Our business plan includes an expansion every 5 years. I plan to open shops in several of the adjacent communities over the next 20 years.
What have you learned about yourself or your business?
Although I am still capable of doing all of the renovations; demolition, building offices, hanging/mudding drywall, installing insulation and painting/flooring etc. I have realized that as I get older it’s ok to hire some of these things out (maybe I’ll try that on the next one since I did all of the renovations on this one myself) 😀
Now that you have moved into your new location, how has that affected your day-to-day management of the business?
It is a much larger facility, and my office is somewhat disconnected from the shop space. In the old shop, it was so small I could hear anything going on in the shop at all times and so I was much more hands-on. Now we have a completely separate room for the Lube/Tire/PM Department, and the rest of the shop is a large L-shaped room behind the offices. I really like the layout because it keeps the shop noise out of the customer area. This separates me from the shop work more and helps me to stay focused on working ON the business rather than IN the business (although I still have room to grow in this area).
Is the result what you thought it would be? Both for your customers and your team.
The learning curve in the new space was steeper than I expected, so it actually took the first couple of months to really see an increase in efficiency. After the first couple of months, we’ve seen a steady increase in sales and efficiency, and we are filling our schedule up about 1 to 1 ½ weeks in advance now instead of being 2-3 weeks out. Due to this, we are able to better serve our customers’ needs and we don’t get as many cancellations due to waiting so long for service. We have not had success adding additional personnel yet but using our same team we’ve experienced almost 52% in sales increase as of last week over our 2022 weekly average in sales.
What advice do you have for any business owner thinking of relocating?
Have a thorough, detailed plan. There is so much that goes into a move, both considering renovations, new equipment installation, electrical, plumbing etc. Detailed budgeting, planning and scheduling is critical, and even then, unforeseen obstacles can arise during the process. Allocate at least 10% over every estimate if renovations are being performed. As they say “plan for the worst, and hope for the best!” I also recommend having a good banker in your corner, do your diligent research up-front before you get locked into contracts, and get multiple estimates from different contractors in every category to help keep costs under control.
Have you had a moment to think about where you are now compared to when you first had the shop?
I think about this every day. As I look at year over year performance of our business, I am incredibly proud of where we have come. When we first bought the 4,000 sq.ft shop it was turning $250k in annual sales. We closed out 2022 at over $1.1M in that small shop, and as of June 1st, 2023 we are already over $550k and seeing steady increases across the board.
How has DRIVE helped you prepare for this move?
DRIVE motivated me to have a plan and stick with it, but one of the biggest obstacles I overcame was hiring a Shop Manager before I began the renovations. This was a huge step for me, because with such a small, tight-knit group I had always managed everything on my own. Looking back, I am confident that I could not have performed the renovations and spent the time on the new building if I had not taken the plunge of bringing in a Shop Manager. Now, in this larger facility that is paying dividends as well because I can lean on him for a lot of the administrative stuff like invoices, vendor statements, and dispatching the day-to-day operations.
Congratulations Jeff on your new location!
We can’t wait to see what’s next.
# # #
by Carolyn Gray