Becoming A Snap-On dealer

[Fast LT1]

Well obviously i'm a huge tool fan. But tonight i was over at my buddy's house (who is a Snap-On dealer) and he had another dealer come over to pick up some boxes and we all got to bull shitting, and come to find out, one of the other dealers in our city, is about to retire. I've always been very successful in sales and i'm a very personable person, something that my snap on dealer and my matco dealer both seem to struggle with. Well long story short these two were making it obvious that i'd make a decent tool dealer. They seem to both make pretty good money, my dealer makes $1200 a week and the other dealer was making around $2000 plus. I probably won't see that anytime soon turning wrenches.

I have $31,000 to start this up, so thats not a problem.

So are there anything i should take to heart or know about before i decide to venture into this?

What are the goods and bads of this business?

 

[Skin]

Re: Becomming A Snap-On dealer

just my 2 cents, go on a few ride alongs with the dealer who is going to retire, see his customers and what his business is like. A vast majority of success in the tool truck business is the route; certainly the other half is personality and customer service skills, however you cant make money if your customers dont have any.

Also be fully aware you're going into a business with a very high rate of failure and a fluctuating, not wholly dependable, income, regardless of brand. Basically i wouldnt burn any bridges at your current place of employment.

 

[MTNFRAMER]

Re: Becomming A Snap-On dealer

I agree with skin ride along and get a feel. The great thing is you have a trade so if this falls thru you got someting to fall back on.

 

[FiendFX]

Re: Becomming A Snap-On dealer

Economy is bad right now. No one has money.

 

[Redex]

Re: Becomming A Snap-On dealer

Would 31K even be close to what you need to start up a franchise?

 

[MattPersman]

if you cant make that kind of money turning wrenches around your area then tool sales will be tough as well. your top guys in the area should make that turning wrenches no problem

 

[chadster1]

Well obviously i'm a huge tool fan. But tonight i was over at my buddy's house (who is a Snap-On dealer) and he had another dealer come over to pick up some boxes and we all got to bull shitting, and come to find out, one of the other dealers in our city, is about to retire. I've always been very successful in sales and i'm a very personable person, something that my snap on dealer and my matco dealer both seem to struggle with. Well long story short these two were making it obvious that i'd make a decent tool dealer. They seem to both make pretty good money, my dealer makes $1200 a week and the other dealer was making around $2000 plus. I probably won't see that anytime soon turning wrenches.

I have $31,000 to start this up, so thats not a problem.

So are there anything i should take to heart or know about before i decide to venture into this?

What are the goods and bads of this business?

First, with the exception of the advice about riding along with the retiring dealer. Ignore just about all of the advice that will be posted in this thread. There are a lot of people here who think a good tool dealer is one who discounts everything and let's people slide on their weekly payments when they want to. Follow their advice and you won't last very long.

Selling tools is the easy part. Collecting payments and managing your cash flow is what can make or break you. I am sure you realize that this is not a 9-5, m-f endeavor.

My advice, contact the retiring dealer and ride along with him and try and get a feel for his route. Snap-on will probably also require you to ride along with a couple of other dealers as part of the recruitment process. I would recommend riding along with dealers that you are not familiar with so you can get some additional insight to the business from people you do not know. With the cash you have on hand, you will have no problem getting started. Back when I started, they required a $15k down payment on the loans plus another $2k or so down for the lease on the truck. Snap-on will help you figure out a budget that will give you an idea of how much you need to do in paid sales to make it.

www.snaponfranchise.com

Good luck.

 

[chadster1]

Re: Becomming A Snap-On dealer

Economy is bad right now. No one has money.

Seems to me that the OP has managed to accumulate $31k so that pretty much proves your statement false. Also, my business is up 15% this year over last year so people around here seem to have some money.

 

[Fast LT1]

Re: Becomming A Snap-On dealer

Would 31K even be close to what you need to start up a franchise?

My dealer said he had to pay about $17,000. So 31 should be more than enough.

 

[bowtie3]

I would do some major research about SO and the mobile tool industry in general. Then I would keep my 31K planted firmly in my pocket. I know Chad will say all those people lost there house due to being lazy or poor businessmen or bad salesmen but sure does seem symptomatic of that industry. Seen lots of good people in my area lose pretty much everything they own trying this deal. Sure one or two have been "successful" but even they don't live any better than their better customers and have alot more responsibility and aggravation. Goggle why the SBA wont loan on SO franchises anymore.

 

[FLRover]

Why not start a independent truck? Far larger margins while offering lower prices to customers. Seems like in a bad economy trying to sell a $40 wrench is harder than a similar quality wrench for $25. I know Gearwrench around here has caught on like wildfire in the shops.

 

[FLRover]

Our independent sells Gearwrench, Ingersollrand, Klien and a few others. He seems to be doing better than the starving SO driver. Matco also seems to be doing well also, but I doubt Matco will give you the margins the other tools do.

 

[chadster1]

Goggle why the SBA wont loan on SO franchises anymore.

.....and then ask Snap-on or your banker about an SBA loan. Snap-on franchises are just about always financed thru Snap-on credit but they recently announced that they have gotten on the SBA approved franchise list.

 

[GTO]

This is slowly turning into a SO(Chadster1) vs. the SO Haters thread.
I for one thinks it's a great idea that the OP wants to take over a route.
You have to take chances in life,if it's something you're is intrested in doing. JMHO

Good luck Fast LT1

 

[kiatech]

Still waiting for chadster to say something about mentioning his name so he gets a bonus.

 

[chadster1]

Still waiting for chadster to say something about mentioning his name so he gets a bonus.

Still waiting for you to sign up.

 

[joedodge]

My dealer does good around here. Although she's a corporate truck not a franchise ao its a lil differwnt but she does well and is outstanding to deal with. Good luck and dont let no onw skip pay or push to much.

 

[GeorgiaHybrid]

I know a LOT of dealers (have even met Chadster a few times) and can tell you that the ones that go out of business do so because they are NOT businessmen. The sucessful ones understand that all of that money coming in is business money that needs to be spent paying your tool bill and business expense BEFORE you get paid.

Running a business, any business, requires an attension to detail unstanding how a business works, the taxes involved, insurance requirements and finances. Failure to do so and you are out of money in a hurry. My tool guy was a software developer before he bought a Snap-on franchise. He has a good head on his shoulders and is very sucessful due to paying attention to the basics.

I have seen two drivers go out (former techs) and start a route where both failed. One was taking WAY too much out of the business (he thought all of that money was his....) and the other thought he could put in a 4 hour day and make a go of it. Just because you know tools does not mean you will make it selling them.

If you buy a route, have a good attitude, pay attention to your business, give good cutomer service with a smile and are consistant on your route (every week or at the agreed to times), you can make a good living selling Snap-on tools.

No, I'm not a dealer nor do I work for Snap-on (I buy a bunch of their tools however....) but I do know a bunch of very sucessful drivers that I have met over the past 3 years at the national convention. They are VERY happy and doing well despite the economic times we live in.

 

[TinKnocker]

putting that much money up isn't worth $1200-2000 a week to me. is there a pension or insurance involved?

 

[jhelrey]

I'd start an independent truck and get into a lot of the brands. I would also buy discounted Snap On tools through Ebay that are new and sell them for more, etc.

 

[Davefr]

I would also buy discounted Snap On tools through Ebay that are new and sell them for more, etc.

What Ebay are you talking about? The one I visit almost never has new SO tools for big discounts from MSRP. (often higher then MSRP!!)

If you could buy new SO tools for let's say 80% and sell them for 90% do you think you'd be in business very long. Franchised SO dealers work on about 30-40% profit margins and often don't make it.

 

[LSU]

I run two different small business. One involves real estate and the other is business consulting. I have about 9 full time employees working for me at and I’ve been doing it for about 29+ years.

I love tools but do not feel qualified to go into a SO truck franchise.

Here are my questions you should be asking and some other comments:


1. Being self-employed requires a whole lot of discipline. You like vacations and holidays? These don’t come often if you’re working for yourself.

2. If you buy into the franchise you’ll be dealing with SO directly. SO is a publically traded company. The franchise deals are written by SO’s very smart lawyers and SO is favored in the agreements. I’m not saying SO is a bad company but it got to be successful by making and following a business model.

3. No question SO makes fine tools but SO also has some serious requirements for its franchisees. Look at the Snap-On agreement which is available on line. The last time I looked this document was a couple of hundred pages long. Print it out, get a yellow highlighter and analyze it yourself before you sign it.

4. After you’ve read it thoroughly, hire a lawyer and a CPA to help you analyze the document and review with you your business plan/model and find out if what you think will work.

5. You have $31K to put up? If you’re planning on rolling all of this into the franchise, what is your plan for the 3 month emergency money you need to have put aside to cover the living expenses until the money starts to hopefully roll in.

6. Your friends that are telling you what they make – it might be tough to ask them these questions but this is what I’d want to know:

a. How long you’ve been in business?

b. What was your net income for the last 3 years? (Get them to define “Net” – my definition of Net is what I gross before my personal income taxes are paid. Ask them if they’ll let you see their tax returns.

c. Ask them what is their anticipated growth over the next 3 years?

d. What type of health insurance do they have? (What does it cost?)

e. What type of disability insurance do they have and what does that cost? (this is in case you fall off the truck and can’t work).

Then you need to think about these questions/issues:

f. Will your company be an LLC (Limited Liability Company) or an “S corp” on your taxes? (this make a difference on your personal taxes).

g. Who is going to do your bookkeeping and taxes?

h. Who is going to maintain your inventory?

i. What about family commitments? (You got a wife and kids? – you’ve got to factor them into the equation).

j. What about liability insurance on the truck? Cost?

k. If you’re starting the business – how long can you go w/o a paycheck? You’ve got a mortgage, car note, school tuition, business loan?

You need to plan for not making money right out of the box. If you put up the $31K to SO for tools, what are you going to live off of?
l. What are your plans for retirement? You’re going to set up a 401K plan or an IRA? (ask the old guys on the board how many of them wished they’d started saving for their retirement when they were younger).

m. The Snap-On dealer who posted earlier had some good comments – (I take it he’s successful at this type of business). Do you understand how “tool credit works”? Do you really want to be trying to collect from guys who you’re personally lending money to so they can buy the tools you’re selling? Do you want to be having to “repo” tools and boxes from guys? You’ve got the stomach for that?

n. By purchasing the franchise are you putting your other assets (for example your house) at risk if this fails?

o. How much money are you going to have to personally obligate yourself for to buy into this business? Are you going to be able to sleep carrying that much debt?

p. What’s your exit plan? What if you buy it and you hate it? How do you get out of it?

q. Exactly how much money do you plan to make with this? Is it practical?

These are some things I’m thinking about as I type. The list could go on and on.

I’m sure you’ve thought of many of these items but I’d suggest you review my list and come up with some questions of your own.

I’d also suggest you PM the Snap-On dealer who replied to your original post. He might be able to help you also.

Being your own boss is a hard job. Sometimes I think I work harder for myself than I would for others.

 

[Creditor]

I run two different small business. One involves real estate and the other is business consulting. I have about 9 full time employees working for me at and I’ve been doing it for about 29+ years.

I love tools but do not feel qualified to go into a SO truck franchise.

Here are my questions you should be asking and some other comments:


1. Being self-employed requires a whole lot of discipline. You like vacations and holidays? These don’t come often if you’re working for yourself.

2. If you buy into the franchise you’ll be dealing with SO directly. SO is a publically traded company. The franchise deals are written by SO’s very smart lawyers and SO is favored in the agreements. I’m not saying SO is a bad company but it got to be successful by making and following a business model.

3. No question SO makes fine tools but SO also has some serious requirements for its franchisees. Look at the Snap-On agreement which is available on line. The last time I looked this document was a couple of hundred pages long. Print it out, get a yellow highlighter and analyze it yourself before you sign it.

4. After you’ve read it thoroughly, hire a lawyer and a CPA to help you analyze the document and review with you your business plan/model and find out if what you think will work.

5. You have $31K to put up? If you’re planning on rolling all of this into the franchise, what is your plan for the 3 month emergency money you need to have put aside to cover the living expenses until the money starts to hopefully roll in.

6. Your friends that are telling you what they make – it might be tough to ask them these questions but this is what I’d want to know:

a. How long you’ve been in business?

b. What was your net income for the last 3 years? (Get them to define “Net” – my definition of Net is what I gross before my personal income taxes are paid. Ask them if they’ll let you see their tax returns.

c. Ask them what is their anticipated growth over the next 3 years?

d. What type of health insurance do they have? (What does it cost?)

e. What type of disability insurance do they have and what does that cost? (this is in case you fall off the truck and can’t work).

Then you need to think about these questions/issues:

f. Will your company be an LLC (Limited Liability Company) or an “S corp” on your taxes? (this make a difference on your personal taxes).

g. Who is going to do your bookkeeping and taxes?

h. Who is going to maintain your inventory?

i. What about family commitments? (You got a wife and kids? – you’ve got to factor them into the equation).

j. What about liability insurance on the truck? Cost?

k. If you’re starting the business – how long can you go w/o a paycheck? You’ve got a mortgage, car note, school tuition, business loan?

You need to plan for not making money right out of the box. If you put up the $31K to SO for tools, what are you going to live off of?
l. What are your plans for retirement? You’re going to set up a 401K plan or an IRA? (ask the old guys on the board how many of them wished they’d started saving for their retirement when they were younger).

m. The Snap-On dealer who posted earlier had some good comments – (I take it he’s successful at this type of business). Do you understand how “tool credit works”? Do you really want to be trying to collect from guys who you’re personally lending money to so they can buy the tools you’re selling? Do you want to be having to “repo” tools and boxes from guys? You’ve got the stomach for that?

n. By purchasing the franchise are you putting your other assets (for example your house) at risk if this fails?

o. How much money are you going to have to personally obligate yourself for to buy into this business? Are you going to be able to sleep carrying that much debt?

p. What’s your exit plan? What if you buy it and you hate it? How do you get out of it?

q. Exactly how much money do you plan to make with this? Is it practical?

These are some things I’m thinking about as I type. The list could go on and on.

I’m sure you’ve thought of many of these items but I’d suggest you review my list and come up with some questions of your own.

I’d also suggest you PM the Snap-On dealer who replied to your original post. He might be able to help you also.

Being your own boss is a hard job. Sometimes I think I work harder for myself than I would for others.

Lots of good advice in this post.

 

[blown94conv]

I think LSU gave you the best advice in this thread.

 

[bowtie3]

.....and then ask Snap-on or your banker about an SBA loan. Snap-on franchises are just about always financed thru Snap-on credit but they recently announced that they have gotten on the SBA approved franchise list.

I'm sure SO does finance most of them that just gives them that much more control over their franchisee.

So obviously they did want to be on the list. What did they change to be approved?

 

[In2Trux]

Chad has got some good advice there.. I was a Snap On dealer here in North Bay, Ont and had to shut my dealership down. Our little city couldn't support 2 dealers in the mid 90's.

But I did learn a few things along the way.

Don't finance your hole start up costs. your 31k will help you. (My over head was WAY too high)
Don't be forced into doing something you feel you DON'T need to do. (my regional manage wasn't looking after MY best interests)

 

[jlmccuan]

My son is a Franchise Developer for Snap On, which is a corporate job. Have a good sit down meeting with your region's Developer and they will lay out a business plan, budget, etc. David, my son, is very direct with potential dealers. You will want to know how much credit the route you are taking over has, how much is finance by Snap On Credit, weekly new sales, potential for further route development. It's a career not a job and you have to know what the time commitments, financial rewards, and incentives. There is insurance available for drivers and other perks, some you pay for, some you pay part of. If you'd like to talk to someone not associated with what could be a weak route, I'm sure my son would chat with you, although he would not have access to many of their records. If you like you can email me at [email protected]

 

[vssjim]

Just remember you are running a small biz. and that is something you can't just go home after work and not take care of stuff like most employee's do, and as listed above you are the last person to get paid.

 

[Milwookie]

In case anyone does a search and finds this post again, here's what SnapOn says about franchise costs:

Out-of-pocket start up expenses for a standard franchise:
Range from $30,346 to $47,801 when using Snap-on franchise financing
Includes $9,585 to $15,084 working capital

Estimated total initial investment range:
Overall low-end: $159,742
Overall high-end: $316,254

Snap-on Credit has financing programs available that may meet your initial investment needs. A complete listing of start-up expenses can be found in item 7 of the franchise disclosure document (FDD).

 

[kctyphoon]

I would just look for another job.. Who wants to chase people for money all day long..

 

[CutterFarms]

In construction when you finish a job more time than not the people will tell you to give them a invoice and that they will drop a check in the mail. Even when you specify payment due upon completion of work. Being your own boss is definitely way more work than punching a clock for someone else, but from my experience that's the way to get ahead. If you have that kind of money to invest, I'd venture to say you are good with money. If I wasn't self employed and took the chances that I have I would not be where I'm at today. If your willing to put forth the effort it's not so hard to make alot of money as it is to hold onto it. There is alot of good advice on here, good luck on whatever you decide.

 

[anndel]

Good luck man, you'll do fine. Just be careful about those customers that don't pay you, repossessions, etc. Since you won't be working for someone, you'll be buying the products from SO out of your pocket then selling them to customers at or near MSRP. Folks that skip payments could mean one less bottle of beer in your hands or one less steak on your table. Good Luck!

 

[Jarhead0408]

Zombiiiiiiiiiiieee......

 

[ssdave]

Best of luck, and good to see someone with some initiative and thought of working for themselves. I know this is an old thread, what did you decide to do?

Don't listen to the naysayers, except to recognize some of the pitfalls that await, and use the forewarning to avoid them. Some people only recognize their own limitations, and project those limitations onto everyone else, and their advice reflects that. You're much better off to want to try something, take initiative, and try to succeed than to decide you will take the least risk, least reward approach to life.

 

[toolman9w]

Did you do well?

 

[kctyphoon]

Fixed that for ya.
.
.
.
.
.

Friggin auto spell.. ty

Sent from my XT1096 using Tapatalk

 

[ChevyEFI]

I would just look for another job.. Who wants to change people for money all day long..

plastic surgeon

Friggin auto spell.. ty

 

[BDT/NWMN]

plastic surgeon

Think I am getting confused... Plastic Surgeon, Body Shop, SnapOn Tools..

If a GJ Member hauled His old wreck to the Body Shop for a makeover, Would the Plastic Surgeon use SnapOn Tools to make her look 30 years younger?

 

[sberry]

Why would I step on to a truck to get something I could get for 1/2 at any time from a store?

 

[blown94conv]

I've seen people do well, and some not. In every type of business, in all walks of life. Just depends on what you put into it.