Expenses for going legit....

[Nick Chapman]

Joe, I know you and others will be happy to know that I am now planning on making my detailing a legit part-time business.

Now, what am I going to be looking at cost wise? I know it's going to be different from state to state. But I'm just trying to get a rough estimate on my expenses(insurance, business licence, etc...)

Also, going with a small cargo van(like a Astro) or should I go ahead and step it up to a full size van? I don't want to deal with a truck/trailer package because of the hassle of hooking it up every time I need it, plus toll fee's(Texes has a few toll roads). I like the idea of the smaller Astro van, but I don't want to run out of room either.


Any input is appreciated.

Nick

[Mort Corey]

Re: Expenses for going legit....

I'm not Joe (but I did stay in a Holiday Inn last night), but in my area of SoCal a solo operator is looking at about $1800 a year for liability insurance a $50 a year for a city business license. The vehicle will probably have to be insured under a commercial auto policy too.

Good luck with your endeavor.

Mort

[Nick Chapman]

Re: Expenses for going legit....

I'm not Joe (but I did stay in a Holiday Inn last night), but in my area of SoCal a solo operator is looking at about $1800 a year for liability insurance a $50 a year for a city business license. The vehicle will probably have to be insured under a commercial auto policy too.

Good luck with your endeavor.

Mort

Yeah, I got the auto insurance quote of $1500 per year, plus the $1800 per year for he liability ins....thats a lot of cars!

[BlueZero]

Re: Expenses for going legit....

Yeah, I got the auto insurance quote of $1500 per year, plus the $1800 per year for he liability ins....thats a lot of cars!

Wow, especially for part time. I saw in another thread you charge $200-$250 for a full detail. At $225 that is 15 cars just for those expenses. In two more months I will have a house and 2.5 stall garage and I wanted to do some part time detailing also. The two other places in town charge $150 for a full detail. Ouch, that would mean I would have to do 22 cars just to pay for insurance. Makes doing it not so legit look all that more attractive. Good luck with your venture.

[Mort Corey]

Re: Expenses for going legit....

Ouch, that would mean I would have to do 22 cars just to pay for insurance.

Then, being mobile, there's gas (not cheap either) and vehicle wear and tear, self employment taxes, etc. I'd guess that if you charged $50 and hour you'd be lucky to net twenty after all is said and done.....maybe less after taxes. Most of the guys in my area last about six months before going on to something else.......not really enough time to get a good client base established to become profitable.

Mort

[johnyB]

Re: Expenses for going legit....

If you break it down like i charge 225 for a in and out, ya your gona have to do alot of cars that take alot of hours, but remember how much can u make for a shampoo or say a wash how many can u do an hour, of course it will take time to fill your day with customers but if your worried about tht you might want to try to do fleet type work, take for instance I did the ins on these metal recycling trucks i charged them per truck about 25 bucks this is wipe the dash vacuum windows real basic once a month they have about 26 trucks i could do them in about a half hour each, it takes me about 3 days to do now thts about 650 in 3 days, If you can get 10 contracts with tht sorta work your looking at 6500 a month. But ya tht would be full time doh hehehe......Goodluck

[R Evolution1]

Re: Expenses for going legit....

Makes doing it not so legit look all that more attractive. Good luck with your venture.

, bootleg Detailers, I like it.

[Superior Shine]

Re: Expenses for going legit....

Now you have done it!!! My 2007 expenses (excludung payroll) was $54,000!!!!!

This year I went on a leaner and meaner budget but you gotta pay if you want to play.

Good luck to you.

[HagFan]

Re: Expenses for going legit....

Everyone except SuperiorShine is overlooking Schedule C. All of these are deductible business expenses. Even the self employment tax will be reduced by what you already pay in to SS if you are a W-2 wage earner. If the van is used fully for business it's pretty much completely deductible. You just have to have enough revenue to deduct these expenses from.

Talk to a CPA. He'll probably suggest that you incorporate, pay yourself a salary, charge you and your wife for detailing your own cars, etc.

You're going to have to deduct that PC for all the forum advice too.

[Spotty]

Re: Expenses for going legit....

Another option, if available in your area, would be to look into a business liability policy, instead of a garage keepers policy. Depends on what services you plan to do Mine covers me for work at customers location or at my home. It even covers equipment and product if stolen while it in in my truck. It does not cover me to drive the customers car, painting with a sparyer, or paintless dent repair. $500,000.00 coverage for $250 yr.

[Shaun Carollo]

Re: Expenses for going legit....

Just bought my biz insurance today. I've never had insurance before being a new company and young. I purchased a $500,000 general liability (per occurance,) $1,000,000 Aggregate (Max of 2 $500,000 claims per year,) $50,000 GKLL (Garage Keepers limited liability) My equipment is also insured for $10,000. The policy set me back $670 in southeast Michigan. I also purchased a commercial auto for only $1,400. I'm 20 y/o with one 5 over ticket almost 2.5 years ago. That's insuring a $31,000 truck with $500 deductibles all around.

The key is shopping around. I talked to 5 different companies all asking for the same coverage and this particular independant agency came in at $700 cheaper for the same coverage as everyone else. That's 30%. Do your homework and make sure you're covered.

Shaun

[BlueZero]

Re: Expenses for going legit....

I went to my insurance company today to get a rough price. He couldnt find the code in his computer so he pulled out another detailers policy. The other detailer had a mobile business that did work for at least two dealerships in the area. He paid $550 a year for a few million in coverage, and equipment. My agent said for doing part time work out of my garage it would be about $200-$300 a year for $500,000 coverage. I know it isnt a firm price but I was just looking for a general number for now.

Wish you the best of luck n737nc! Keep us informed as to how its going.

[mirrorfinishman]

Re: Expenses for going legit....

Nick,

You might want to consider checking in with your local Small Business Administration office. They can offer you plenty of good information about starting a business.

http://www.sba.gov/tx/dallas/

[kpagel]

Re: Expenses for going legit....

Makes doing it not so legit look all that more attractive. Good luck with your venture.

Until you screw up someone's vehicle and get stuck having to pay for the repairs, or someone slips and falls on your wash water and sues you for tens of thousands or even hundreds of thousands of dollars.

[kpagel]

Re: Expenses for going legit....

Oh yeah, just to add to what everyone else was saying... theres been plenty of discussion on insurance, etc. but another thing to keep in mind is equipment adds up QUICK! I'm trying to start on a legitamate, full-time mobile operation. Before starting all of this I already had plenty of chemicals to keep me going for a while, plus pads, buffers (PC and rotary), vacuum, pressure washer, etc. However, I've since had to buy the following...

*Trailer- $2500. I know the OP wants a van, but that costs money too.
*Generator- $1200. I bought a Honda eu3000is used. I could have gotten something really crappy and cheap, but I didn't want to buy a $500 generator and then have it **** out in 3-6 months and then replace it later. I bought the best now, that way I don't have to replace/upgrade later on.
*Extractor- $1180. Again, could have gotten something a bit cheaper and saved a couple hundred, but I got a reliable, highly recommended model.
*Water reclaim- $2200. Haven't bought it yet, but its my next purchase. This is a BIGGIE! If you want to actually be "legit" you better be reclaiming the waste water you put down. A $2200 reclaim unit is much better than getting hit with a multi-thousand dollar fine for EPA violations.

Remember, I "saved" thousands in chemicals and other equipment because I already owned them from when I was simply an enthusiast doing this for myself. There are also other things you need, but I think I'm covering some of the big ones. I'm finding out the hard way that it isn't easy and it isn't cheap to be a truly mobile 100% legit operation. I've spent thousands out of my pocket and I'm also thousands in debt. I'm lucky enough to have a father who trusts and respects my goals enough to loan me the money, so my loans are interest free. This has saved me a lot of headaches.

On more than one occasion I've started looking at everything and thought, "Is this really worth it?" Its going to be hard at first, and I'm going to be doing a lot of work to simply pay off my loans and recouping my expenses, but eventually I will be making money on my own and I will be my own boss. Its not going to make me a millionaire, but this is what I love to do and I have nobody to answer to. That makes it worth it for me.

Good luck!