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I am considering adding 5 lifts and one tech to what would become a used car recon center, thus opening up four bays and two lifts in my main shop to put two techs in. The owner wants some figures on ROI, and rightly so. Normally, this is the kind of stuff I enjoy working up, but right now I am feeling dumber than a rock.

So, how would you go about producing an ROI figure, projected payoff time frame etc?

BTW, hows everybodies businessthru the second quarter?

First of all, are you going to build a recon center from scratch, or add 5 lifts to already existing shop space?

Second, 5 lifts for one technician is an extremely inefficient use of resources. Do you intend to have more than 1 recon tech?

Last, to even begin doing an ROI analysis, you will first have to ascertain what your total cost of capital expenditures will be. Once that is established, you can work from projected sales and cost of sales to establish a profitability and timeframe proforma.

There are also other peripheral items to consider.

Email me with your numbers and I'll be happy to help you with it.

[This message has been edited by MBailey (edited 08-01-2002).]

[This message has been edited by MBailey (edited 08-01-2002).]

I will be putting two flat raters and an hourly tech into an existing bldg.

That bldg, 4700 sq ft will also have two detailers in it. Rent for this bldg is set at $2000.

Our labor rate to used cars is at $75 hr. with the used car frh techs at 22.50 each and the hrly tech at 10.

Cost to put lifts and oil etc into the blg is right at 20k.

Flyboy,

What amount of FRH do you anticipate the 2 flat rate technicians to produce weekly? What has been your average effective labor rate for used car work over the past 12 months?

Ok, FRH per week avg to 62.5 with their ELR at 74.33 avg for the last 12 months.