Starting a Garage Based Business
Starting a business in the garage is not a new concept by any means. Further down in this blog there are pictures dating all the way back to 1903 that shows businesses such as Harley-Davidson, Disney, Apple and Hewlett-Packard who all had meager beginnings in a garage. In fact, my own grandfather supported 11 children with a welding shop that was in his garage located in Fulton Indiana. Garage-based businesses have been around for many years, but in more recent years people are turning more and more to simple beginnings to help give them a competitive edge during the startup stage. Starting a business in your garage can be very exciting and can also be a lot of fun! I have personally started two businesses from my garage and found it to be a freeing experience because I didn’t have a lot of overhead to worry about. Starting a garage-based business allows a person to focus primarily on their product and not worry so much about how they’re going to pay the bills. Okay….. That’s the good part! There are several things to take into consideration when starting a garage-based business and I hope to cover a few key points in this blog.
1. Location Location Location!
The location of your physical home is very important in relation to the type of business that you start in your garage. Keep in mind that you are living in a residential area with a different set of rules and regulations than industrial parks. You also should take into consideration how you receive raw materials if you’re manufacturing a product and also how the product leaves your garage when it is finished/sold. If you live in a rural area you are less apt to run into problems with neighbors. Obviously if you live in a gated community, it would be very difficult to start a light manufacturing business from your garage. There are also zoning issues to take into consideration. Contact your local zoning commission to find out what types of businesses are permitted in your area.
2. Be Considerate.
Keep in mind that just because you’re excited about your business doesn’t mean that your neighbors are going to share your enthusiasm. The best rule of thumb is to stay as transparent as possible to the other people in your neighborhood. In both of my garage-based businesses I never worked with the garage door open. By doing this, my neighbors had no idea what was going on in my garage and the noise I made producing my product was not disturbing to them. I simply installed a window air conditioner to keep the temperature tolerable in the summer. You should also consider picking up your raw materials from your supplier if at all possible versus having them delivered to your home. On the same token, you should consider taking your finished product to UPS, FedEx, etc. instead of having them drive to your home. The less business traffic you have coming to and from your garage, the less trouble you’re going to have with your neighbors.
3. Is There Enough Space.
Dealing with small spaces has always been a welcome challenge for me, but I realize that many people do not share my interest in organizing small spaces. Before starting any garage-based business, take into consideration how much space you are truly going to need. There may be an opportunity for raw materials and inventory to spill over into other parts of your home such as your basement, but I encourage you to try to keep your business space and your home space separate. Many times when it becomes impossible to manage the space in your garage, it is a good indicator that it’s time to move out into a bigger space. Think about the processes that it takes to produce your product from beginning to end and try to envision that process in your garage. A good way to do this is to completely empty your garage of anything that is not necessary and place the equipment that you already have where you want it to go. Then fill in the gaps with things that you do not have such as tables for assembly areas, staging areas, etc. by drawing them on the floor with sidewalk chalk. This should give you a really good idea of the use of your space and can be easily moved around by erasing the chalk and starting over. Also look at the space above you in your garage. I built a loft in my garage using basic building materials that has really allowed the main floor space to become functional. Also look into hanging cabinets for the walls. It’s amazing how many things can fit into cabinets that will help free up your main work area. I found my cabinets at Salvation Army. They are the metal overhead cabinets that hang over many desks in offices. Plus, I got them really cheap!
4. Technology Is Your Friend!
Producing a product in a garage can be a huge challenge in itself, but keeping a handle on the office functions can be even a bigger challenge! Luckily, with the technologies available today, it is completely feasible to not only run a company from your garage, but look much bigger to the world than you actually are. I remember once when I was trying to license a product that I invented to large lawn and garden companies, I hired a message service to answer all of my phone calls. They gave me an 800 number that I put on my business cards and I wrote a script that anyone who answered my number would use. When someone would call my 800 number, they would get a live person who would ask how they could direct the call. When the person asked for me, they would say” hold please” and then they would call my cell phone number. They would then patch the person through to me and it was completely transparent to the caller that they had just gone through an answering service. In their minds they had spoken to my receptionist who had transferred the call to my office. There are several options to choose from for live answering services and they all have different packages to accommodate even the smallest company.
There is shipping software available such as Ship Works to help you print labels and also Endicia to purchase postage online. In one of my garage businesses, if someone purchased my product on my website, PayPal would receive the money and then send the shipping information over to my Ship Works software that was running on my laptop which was sitting on my workbench in my garage. Ship Works would then create a shipping label and an invoice which would print on my label printer and my laser printer sitting under the bench. At a specific time in the day, I would tear the shipping labels from the printer and match the invoices with them as I filled the orders. This entire system took up less space than a small coffee table and was extremely efficient. I lived pretty close to UPS at the time, so I would fill my car with the product that was ready to ship and drop it off that evening.
5. Know When It’s Time to Go.
Starting and running a business from your garage is a great exercise that forces you to be efficient in ways that you would not normally need to be if you had a great deal of space to work with. I personally believe that if you can learn to do with less, you will know what to do with more later on down the road. Even though running a business from your garage can be somewhat endearing, knowing when it’s time to go is very important. Setting a sales goal from the very beginning is import, but taking care of the customer is always the most important thing. If you are not able to produce enough product in your garage to reach your sales goal and if it begins to effect the quality of your service, then it’s past time to find a new home. It’s not a bad thing…. All birds leave the nest eventually! Have a plan from the very beginning for business growth so that when it happens you’re actually ready for it. I would suggest looking into incubator space that you can move your business into before you ever start in your garage. That way you will have a plan that will allow you to continue to grow and serve your customers well into the future.
6. Build the Right Team.
Building the right team of people is always essential to the success of a business, whether it’s in the garage or in a 20 story building. All of the successful garage-based businesses below became great businesses because the founders recognized the importance of support from a good team. The Indiana Small Business Development Center is there to support people in all aspects of business. The resources that the ISBDC offers are essential to the formation, growth and success of small business. We offer a variety of resources through one-on-one business counseling, professional development workshops and the resources that we have developed with other business professionals in your area.
The 1903 Harley-Davidson garage factory.
In 1901, 21-year-old William S. Harley drew up plans to create a small engine to power a bicycle.
Over the next two years, Harley and his childhood friend, Arthur Davidson, built their motor-bicycle out of their friend’s 10 by 15-foot wooden shed in Milwaukee, Wisconsin. It was the equivalent of a garage because they didn’t have cars.
They officially founded Harley-Davidson in 1903 and today it’s the most well-known motorcycle brand in the world.
The garage of Walt Disney, his first “film studio” 1923.
About 45 minutes down the road from Disneyland Park in Anaheim, CA, there’s a house in Los Angeles where The Walt Disney Company got its start.
In 1923, the house belonged to Walt Disney’s uncle, Robert Disney. Walt and his brother Roy moved in with their uncle and set up “The First Disney Studio” in the one-car garage out back. There they started filming the Alice Comedies which was part of the original Alice’s Wonderland.
Today, Disney is the highest-grossing media conglomerate in the world.
Steve Jobs posing in 1996 in front of his parent’s garage where he and Steve Wozniak founded Apple in 1976.
In 1976, Steve Jobs and Steve Wozniak, ages 21 and 26 respectively, started Apple Computers by selling 50 units of Wozniak’s Apple I Computer at $500 apiece to a local retailer. Jobs took the purchase order to a parts distributor and ordered the parts. “The Steves” and their small team hand-built 50 computers in 30 days from a garage in Cupertino, CA.
Today, Apple is the most valuable technology company in the world.
Bill Hewlett and Dave Packard at the HP garage at 367-369 Addison Avenue in Palo Alto.
In 1939, Bill Hewlett and Dave Packard founded HP in Packard’s garage with an initial investment of $538.
Their first product was an audio oscillator and one of their first customers was Walt Disney, who purchased eight oscillators to develop the sound system for the movie Fantasia.
The HP Garage in Palo Alto is known as the birthplace of Silicon Valley and HP is now one of the largest companies in the world.