Price at the pump takes a bite from profits of mobile service firms

Rising fuel prices are putting the brakes on mobile businesses.

Owners of businesses that travel to their customers often cite lower operational costs as one of the primary benefits of founding a company on wheels. But Jason Dias, owner of Pit Stop Mobile Tire Shop, says his monthly fuel expenditures are the equivalent of leasing a small shop space due to the rising cost of gasoline.

Pit Stop Mobile Tire Shop has two trucks on the road, and Dias is building a third. Each truck logs well over 100 miles per day trips to Tire Rack's West Coast distribution center at Tahoe Reno Industrial Center to pick up customer orders average 70 miles round-trip.

"It is a wash," Dias says of the money he saves by not having a lease. "These are not Honda Civics."

Owners of mobile businesses tire service outfits or automobile and motorcycle repair firms, for instance typically start mobile businesses as a way to avoid paying rent on shop space, or to target a busy customer base that may not have time or desire to wait for services at a shop.

Dias, for instance, started Pit Stop Mobile Tire Shop in late 2009 with a $100,000 initial investment for a truck, computerized tire balancing equipment, licensing, insurance and graphics for the vehicle. The last, he says, is crucial in making a strong first impression with new clients.

"Because you don't have a brick-and-mortar building, that truck represents the first impression the person gets," he says.

A former Storey County Sheriff, Dias handled fleet management for the sheriff's department and often had trouble getting new tires for vehicles, which sparked the idea of a mobile tire shop. He's used his fleet experience to solicit several large businesses in the Truckee Meadows and now counts Charter Communications, DirecTV, United Construction and Belfor Property Restoration among his fleet clientele.

Fleet volume helped Pit Stop Mobile Tire Shop grow from one to three employees in less than a year. Dias says fleet clients prefer to use his company because there is no downtime for the vehicle and employees aren't being paid to sit in a tire shop lobby.

Other owners of mobile businesses look to create a cadre of customers who want low-cost service prices.

Steve Paylor founded the Flying Scotsman Mobile Auto Repair and Service about 18 months ago because he was tired of working at high-priced shops.

Celia Barnett, co-owner of Poor Boy Mobile Motorcycle Mechanic with technician Jason Nickle, started a mobile motorcycle repair business both from personal interest in motorcycles as well as dismay at dealership shop fees that run as high as $85 an hour.

Barnett and Nickle purchased a used Snap-On Tools truck in late 2009 for about $15,000 and outfitted it with a motorcycle hoist, compressor, and hundreds of small hand tools.

The fully outfitted mobile shop does about 40 percent of its business on location. Many bike owners prefer to avoid the $25 mobile fee by bringing their motorcycles to the owners, who work on just about anything with a piston, from Harley-Davidson and Ducati street bikes to two-and four-stroke dirt bikes, snowmobiles to jet skis.

Barnett says Poor Boy's business has grown significantly since its inception including a rise of about 60 percent through the first quarter of 2011 compared to the first three months of last year. Much of the company's business is repeat customers and customer referrals.

One of the biggest challenges facing owners of mobile businesses is learning how to successfully grow the business without over-committing limited resources. Dias of Pit Stop Mobile Tire Shop says that if one employee works 40 to 50 hours per week, that workload should increase to 80 hours per week on a regular basis before bringing on additional help.

Dias is cautious about adding new service vehicles and the employees to staff them. It takes between 24 to 36 months for one truck to be profitable, Dias says.

Barnett also says there is a fine line between needing additional help to perform service work and over-committing to clients.

"At what point do you bring on additional help but still make it so you can survive?" she says. "You don't want to take on so many job that you can't have decent turnaround times and do a decent job."

Paylor of the Flying Scotsman says he didn't even form a business plan when he purchased a truck for his business; rather, he just wanted to wrench on cars and make some money. But business is booming, and he's considering putting an additional truck on the road.

"I thought I could just jump in and do what I do, and I was gravely mistaken," Paylor says. "There is so much more to running a business. You have to think about where you want to be in a few years time.

"Right now I am at the stage where I have to consider getting more trucks on the road or scale back. The biggest thing that concerns me is getting someone to work that I can trust and that will care about doing what I do as much as I do."

Another challenge is dispatching, Dias says and with fuel nearing the $4 a gallon mark, running smart routes is even more crucial than ever.

"That is really a constant battle for mobile businesses, efficiently dispatching trucks in a cost-effective manner," Dias says.