Dec
Senior Member
Following on from a previous thread I am exploring the feasibility of an idea and how it might work and am interested in member’s views.
The basic idea is that a group of Mercedes owners form a club, purchase a suitable property, fit it out and run it as a garage for there own benefit on an non-profit basis. The garage would be fully equipped to specialize in Mercedes cars and staffed with technicians trained with Mercedes cars.
The purpose of the club is to provide members with reasonable maintenance costs, peace of mind and complete reliability so that each member can have total confidence that the will be treated honestly and fairly, and not exposed to the profit driven mentality of some dealers.
The fundamental difference between the club garage and a commercial garage is that a commercial is there to service a car for profit, the club garage would be there to service a car at a cost that is sufficient to cover all the day to day running costs of the garage.
The garage would be run in a businesslike manner with regard to health & safety, insurance, taxes etc, the only difference would be the absence of profit and the attitude of the garage towards the member, the part owner of the garage.
All the figures below are fictitious the are there to help demonstrate the idea rather than to cost it.
As the purchase cost and the location of the property are irrelevant at the moment, let us assume that it will cost £1,500,000 to purchase the garage property and the remaining £500,000 is used to fit out and equip the garage.
Initial set up cost - Membership Fee £1,000.
2,000 Mercedes owners’ form a “club”; each member pays a one off membership fee of £1,000
2,000 members x £1,000 = £2,000,000
This money fund the initial set up cost.
£1,500,000 to purchase a suitable property for use as a garage, Circa 4,000sq feet.
£500,000 to fit out the garage with all the tools and equipment needed and pay other set up cost like legal and insurance fees.
Purchase10 clean reliable 10 year old Mercedes cars for the use of each member when the are having their cars serviced or repair.
Purchase a stock of commonly used replacement parts.
Establish a contingency fund of £25,000 to cover any (expected) unexpected costs.
Annual running costs. - £50 per hour labor charge.
The hourly labor charge funds the entire annual running costs of the garage.
Employs 1 Experienced manager to coordinate the day to day running of the garage. = £60,000 per annum
Employs 4 Mercedes trained mechanics, all top class technicians @ £35,000 X 4 = £140,000 per annum.
Employ 1 Apprentice mechanic. = £15,000 per annum
Employ 1 Parts assistant. = £15,000 per annum
Employ 1 general assistant. = £15,000 per annum
National Insurance for employees = £45,000 per annum
Pay utility bills, insurance, maintenance and other costs incurred in the day to day running of the garage. = £10,000 per annum.
The above running costs total £300,000 per annum or £5,769 per week.
If the average labor usage of the garage by each member amounts to 3 hours per year @ £50 per hour = £150
That is, £150 X 2,000 members = £300,000 or £5,769 per week.
That is approximately 40 members using the garage for 3 hours per week.
4 mechanics, (plus an apprentice) should be able to deal with 8 cars per day, that’s 2 cars @ 3 hours, to each of the 4 mechanics, the remaining 2 hours of the day are lost through annual holidays, sick leave and slack days. (Where there is insufficient work to keep all the mechanics busy)
How it might work.
It would require like-minded Mercedes owners to act collectively to bring it about. A minimum of 2,000 members would need to be recruited first before the garage is set up, these members, the collective owners, would then decide and then agree how the garage is to be run, its location, and how the annual running costs are funded.
Each member would have equal ownership rights and equal say, by way of a vote, in major policy decisions relating to all of the running and financial aspects of the club. I’m not sure exactly what the status of the club would be, I presume it would take the form of a limited company, it would be trading as a business and so subject to VAT and all the other legal obligations that goes with running a business.
To protect the interests of all the members, the whole thing would have to be tied up legally, involving Solicitor and Accountancy firms, and with proper insurance in place A voluntary elected committee would need to exist, be in regular contact and meet at regular intervals to coordinate and oversee the running of the club and resolve complaints and issues beyond the scope of the manager.
Trust and confidence.
The reputation of the garage would be of paramount importance. It would be vital that this reputation is preserved so that the trust and the confidence of all the members is maintained and that any disputes, that will arise, are resolved swiftly, fairly and completely, without this integrity the club would disintegrate.
Advantages.
A “customer” base of 2,000 members would exist before the garage is started. In theory it could be fully operational and fully trading, effectively a “going concern” from the first day of trading.
Solvent and independent of bank loans.
The Non-profit nature of the club would eliminate the possibility of a rip-off.
Member would have direct contact with a technician where it is beneficial in resolving a particular fault or problem.
Courtesy car available to all members while their car is serviced/repaired.
Where there is insufficient work to keep all the mechanics busy during slack days and where members usage of the garage is less than the 3 hours previously anticipated above, then this spare capacity could be utilized by servicing Non-MB cars for non-members, i.e. cars belonging to friends/relatives of members and/or general passing trade. The members themselves are the best word of mouth advert for the club in this regard.
If the garage income in a year is greater than the total running costs of the garage for that year, then the surplus could be divided and returned to each member or used to improve the facilities or fund new/replacement tools or equipment.
The £1,000 membership fee (Initial set up cost.) should be seen as an investment, returning an annual dividend in the form of lower maintenance costs, better service and peace of mind. The membership fee is never lost; it is tied up in a share of the property and equipment of the garage and can be retrieved, if for example a member, who wished to leave the club, sells his/her share on to a new “replacement” member.
I am interested in the reaction of forum members to the idea and whether the might join such a venture if it were local to them. This is aimed at those with Mercedes cars over 3 years of age that are out of warranty.
Dec
The basic idea is that a group of Mercedes owners form a club, purchase a suitable property, fit it out and run it as a garage for there own benefit on an non-profit basis. The garage would be fully equipped to specialize in Mercedes cars and staffed with technicians trained with Mercedes cars.
The purpose of the club is to provide members with reasonable maintenance costs, peace of mind and complete reliability so that each member can have total confidence that the will be treated honestly and fairly, and not exposed to the profit driven mentality of some dealers.
The fundamental difference between the club garage and a commercial garage is that a commercial is there to service a car for profit, the club garage would be there to service a car at a cost that is sufficient to cover all the day to day running costs of the garage.
The garage would be run in a businesslike manner with regard to health & safety, insurance, taxes etc, the only difference would be the absence of profit and the attitude of the garage towards the member, the part owner of the garage.
All the figures below are fictitious the are there to help demonstrate the idea rather than to cost it.
As the purchase cost and the location of the property are irrelevant at the moment, let us assume that it will cost £1,500,000 to purchase the garage property and the remaining £500,000 is used to fit out and equip the garage.
Initial set up cost - Membership Fee £1,000.
2,000 Mercedes owners’ form a “club”; each member pays a one off membership fee of £1,000
2,000 members x £1,000 = £2,000,000
This money fund the initial set up cost.
£1,500,000 to purchase a suitable property for use as a garage, Circa 4,000sq feet.
£500,000 to fit out the garage with all the tools and equipment needed and pay other set up cost like legal and insurance fees.
Purchase10 clean reliable 10 year old Mercedes cars for the use of each member when the are having their cars serviced or repair.
Purchase a stock of commonly used replacement parts.
Establish a contingency fund of £25,000 to cover any (expected) unexpected costs.
Annual running costs. - £50 per hour labor charge.
The hourly labor charge funds the entire annual running costs of the garage.
Employs 1 Experienced manager to coordinate the day to day running of the garage. = £60,000 per annum
Employs 4 Mercedes trained mechanics, all top class technicians @ £35,000 X 4 = £140,000 per annum.
Employ 1 Apprentice mechanic. = £15,000 per annum
Employ 1 Parts assistant. = £15,000 per annum
Employ 1 general assistant. = £15,000 per annum
National Insurance for employees = £45,000 per annum
Pay utility bills, insurance, maintenance and other costs incurred in the day to day running of the garage. = £10,000 per annum.
The above running costs total £300,000 per annum or £5,769 per week.
If the average labor usage of the garage by each member amounts to 3 hours per year @ £50 per hour = £150
That is, £150 X 2,000 members = £300,000 or £5,769 per week.
That is approximately 40 members using the garage for 3 hours per week.
4 mechanics, (plus an apprentice) should be able to deal with 8 cars per day, that’s 2 cars @ 3 hours, to each of the 4 mechanics, the remaining 2 hours of the day are lost through annual holidays, sick leave and slack days. (Where there is insufficient work to keep all the mechanics busy)
How it might work.
It would require like-minded Mercedes owners to act collectively to bring it about. A minimum of 2,000 members would need to be recruited first before the garage is set up, these members, the collective owners, would then decide and then agree how the garage is to be run, its location, and how the annual running costs are funded.
Each member would have equal ownership rights and equal say, by way of a vote, in major policy decisions relating to all of the running and financial aspects of the club. I’m not sure exactly what the status of the club would be, I presume it would take the form of a limited company, it would be trading as a business and so subject to VAT and all the other legal obligations that goes with running a business.
To protect the interests of all the members, the whole thing would have to be tied up legally, involving Solicitor and Accountancy firms, and with proper insurance in place A voluntary elected committee would need to exist, be in regular contact and meet at regular intervals to coordinate and oversee the running of the club and resolve complaints and issues beyond the scope of the manager.
Trust and confidence.
The reputation of the garage would be of paramount importance. It would be vital that this reputation is preserved so that the trust and the confidence of all the members is maintained and that any disputes, that will arise, are resolved swiftly, fairly and completely, without this integrity the club would disintegrate.
Advantages.
A “customer” base of 2,000 members would exist before the garage is started. In theory it could be fully operational and fully trading, effectively a “going concern” from the first day of trading.
Solvent and independent of bank loans.
The Non-profit nature of the club would eliminate the possibility of a rip-off.
Member would have direct contact with a technician where it is beneficial in resolving a particular fault or problem.
Courtesy car available to all members while their car is serviced/repaired.
Where there is insufficient work to keep all the mechanics busy during slack days and where members usage of the garage is less than the 3 hours previously anticipated above, then this spare capacity could be utilized by servicing Non-MB cars for non-members, i.e. cars belonging to friends/relatives of members and/or general passing trade. The members themselves are the best word of mouth advert for the club in this regard.
If the garage income in a year is greater than the total running costs of the garage for that year, then the surplus could be divided and returned to each member or used to improve the facilities or fund new/replacement tools or equipment.
The £1,000 membership fee (Initial set up cost.) should be seen as an investment, returning an annual dividend in the form of lower maintenance costs, better service and peace of mind. The membership fee is never lost; it is tied up in a share of the property and equipment of the garage and can be retrieved, if for example a member, who wished to leave the club, sells his/her share on to a new “replacement” member.
I am interested in the reaction of forum members to the idea and whether the might join such a venture if it were local to them. This is aimed at those with Mercedes cars over 3 years of age that are out of warranty.
Dec
