Leasing A Shop

CatAlii

I think we will be signing a month-to-month lease on an industrial shop on Monday. It is just under 1100 sq. feet which is mostly shop space with a small adjoining office and bathroom. The office has a window looking out into the parking lot, an entrance from the outside as well as an entrance from the shop and an entrance to the bathroom. The shop has a huge roll-up door so that we can back the truck in and unload lumber or slabs of granite right onto the shop floor.

In the past couple of years about 99% of our clients have asked us to build custom cabinets/vanities for their kitchens or baths and we usually fabricate our own granite/marble/tops as well so a larger shop with more convenient access has been a long time coming. We waste a lot of time cutting the granite or wood in one spot and then doing the final fabrication in another spot, having to break down and set up different equipment as we go because the spot we work in is so small. It will be much more efficient to have everything set up permanently in one area.

And in the near-term we'd like to be able to display some cabinet doors and other products for clients to look at - the larger office/shop space will make that doable.

The shop is in an industrial park on a busy street - our particular unit is the one closest to the street/driveway and has great visibility. The other tenants we noticed were a landscaping company and a smog test & repair station.

Seems like a win-win (especially when you consider all the room we will have in our garage at home now!) but taking on the extra overhead is a bit nerve-wracking. Our financials and the number of cabinet orders show that we're doing the right thing but it's still hard to imagine coughing up that extra rent payment each month. Any words of wisdom from other folks who have shops?

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Cathy

Michalak Construction / MCC on Facebook / MCC on Twitter / MCC on Google+

Mike Finley

1100 sq feet is pretty small for combining the two things you are talking about doing.

CatAlii

It wouldn't be considered large enough for a full-fledged cabinet company but we're actually a small GC who does mostly remodeling and additions and just happen to personally build the cabinets most of the time. Compared to the spot we've been working in now it will feel like a football field. Plus...the going rate around here for industrial space is around $1.20/sq ft for anything under 4000 sq. ft and we don't want to spend much more.

I'm glad you said that though because my husband was hemming and hawing about going with this spot or a 600 sq. ft spot. I don't want him to have buyer's remorse about taking the larger spot. The 600 sq. ft spot just didn't seem large enough to be worth the savings - plus the access was terrible.

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Cathy

Michalak Construction / MCC on Facebook / MCC on Twitter / MCC on Google+

Mike Finley

I know what you're thinking, it's a huge step up from what you are dealing with now. Month to month is a huge advantage for you. You basically can try it out for awhile, dip your foot in the overhead and see how it goes.

Month to month means you've got a nice safety net under you if you have to get out because business won't support it or if you want to get out because business is making it too small.

Carport King

If you are a smaller company I cannot believe you can build your product cheaper than a manufacture of cabinets or doing the granite work.

Have you truly run the numbers on this. With business the way it is now manufactures are begging for more business and there pricing seems to be coming down.

Would you be better on marketing your company and doing installations then manufacture your own products.

I also agree with Mike that you will find you will need more room than you think. Good Luck

CatAlii

We don't build all of our own cabinets - some clients go with built-to-order from our suppliers but for the clients who want the type of cabinet that we do make we have yet to find anyone else who builds that particular type at all, much less for a lower price. The client does end up paying us much more than if they had gone with a cabinet or vanity from one of our suppliers but that is their choice - they want what they want and are willing to pay us more for what they get.

We'll also be able to use the spot for equipment storage. I'm really done with scaffolding, hoists, saws and other tools in our garage. It'll be pretty easy to see how the additional overhead affects our bottom line within a few months and we can back out of the month-to-month lease with 30 days notice.

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Cathy

Michalak Construction / MCC on Facebook / MCC on Twitter / MCC on Google+

Susan Betz

When we got our shop, all the tools went to the shop -- ALL of them. Even tools with my name (literally) on them. I didn't even have a screwdriver at the house when I needed one.

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Fences of Distinction, Ocala, FL
http://www.fencesofdistinction.com

bozuzu

I agree with Carport King on this one, as a small operation typically finish work jobs like granite counters and cabinets are much cheaper when ordered through suppliers. You make your money on ordering, delivery, and installation.
However, an 1100 square foot shop does seem like a little piece of heaven, a convenient place to keep all of your tools, vehicles, trailers, equipment, computer, and maybe even a small kitchen. For me trying to do something on site that I'm not equipped to do on site can be very frustrating. I say long term even if it's break even financially, it's worth it for the quality of work/life upgrade.