Messenger Motorworks is looking for a partner.
About the Shop
Messenger Motorworks is a modern automotive restyler and custom shop. We specialize in a range of popular vehicle modifications with a focus on service, value, and quality. Our customer base is both consumer and business, the latter including dealerships, body shops, and repair facilities.
The company’s strength, of course, is in our small but capable staff. With over 30 years of combined automotive experience, the crew understands how to get jobs done. More importantly, we know how to treat people – with respect, honesty, and integrity.
Messenger Motorworks Ltd was founded by Joe Messenger in late 2020 and purchased the assets and goodwill from Auto Trim and Sign, a local staple for more than 30 years. Since then, we have worked to establish a larger presence in the area while building a reputation for being responsive, friendly, and easy to work with.
Spray-On Bed Liners
Remote Start & Alarm Systems
Graphics and Lettering
Paint Protection Film
Often overlooked as a quality in this industry, we feel how we treat our customers is the cornerstone of why people choose us.
Doing what we say we will do when we say we’ll do it is crucial in earning the trust and confidence of our customers for the long-term.
Utilizing modern technology and home-brewed processes, we stay on top of our schedule and jobs to ensure on-time delivery.
Nothing is worth doing unless you do it well. We strive to ensure our installations are of good caliber and stand by our work.
Progress We’ve Made
Since the takeover in March of 2021, the image and reputation of the shop has seen a significant makeover. More importantly, we’ve grown. How?
- Tripled the number of dealers that trust us with their inventory.
- Quadrupled the number of salespeople utilizing us for their aftermarket needs.
- Developed an online dealer portal for salespeople to see pricing and book.
- Reconfigured the shop space to double the number vehicles that fit.
- Completely digitized customer management, communication, and invoicing.
- Overhauled or replaced equipment and reworked several work processes.
- Increased our Google performance tenfold.
- Optimized supply chain and enforced a strict JIT ordering methodology.
Higher Potential Sales
Online Dealer Portal
Cut Waste Potential
Planning for the Future
Our plans are many, and our hopes are high. We still feel there is more to do regarding the workspace, making our offerings better, and growing our contacts in the local industry. The highlights below encompass a wide range of goals to become better, faster, stronger.
Continue Expanding Our Reach
Despite the growth in the number of dealers and salespeople connections, there is still more to have. There are still dealers we have yet to break into, and there is the potential to double our number of partnered contacts.
Based on feedback from both consumers and dealers, there are opportunities we are missing due to lack of equipment and staff. Some of these services are lift/lowering kits, wheels and tires, vehicle wraps, and ceramic coatings.
Further Optimize Workspace
There is much we could do to make our space cleaner, more organized, and more efficient to ensure the quality of our work. Things like better lighting, selling or trashing obsolete stock, and moving equipment could offer dividends.
We believe there is still a lot of room for awareness to grow in the local area. Participation in the culture has always been a goal for Messenger Motorworks, through attending car meets, sponsoring local events, and pounding the pavement.
In short – it is positive. We have a much larger (and growing) network of dealers than ever before and a developing reputation for reliability. The new vehicle market in 2022 was flat – worse than flat – due to a lack of inventory and rising inflation slowing down purchasing habits. Still, we had a $425k year, which tops any prior year by Messenger Motorworks or the previous entity that ran this facility, by a long shot.
2022 Actual Gross:
$425,000 Revenue – $131,400 Cost of Goods = $293,600, or 69% Gross Profit
We are very dependent on vehicle sales. Primarily new vehicle sales due to dealer-added value like bed liners, accessories, tint, and remote start; though used sales do bolster us especially with tint and remote start systems often being the first thing people have done to their new-to-them vehicles. The question is, do we think 2023 and beyond are going to be stronger years than ’22?
Yes. According to most analysts, the sales hardships should ease some in 2023 as inventory levels rise, higher interest rates become normalized in the minds of buyers, and inflation levels out. New vehicle prices are expected to level out as markups disappear and used car values are expected to drop as much as 20%, enabling more potential buyers to make deals.
2023 Predicted Gross: (7% increase)
$454,700 Revenue – $139,300 Cost of Goods = $315,400, or 69% Gross Profit
2024 Predicted Gross: (12% increase)
$509,300 Revenue – $150,400 Cost of Goods = $358,900, or 70% Gross Profit
Note: these predictions are based on two things. One, the market beginning to normalize and vehicle sales climbing. Two, our steady growth in the local market, by capturing a larger percentage of available business.
What We Need to Prosper
Honesty is the best policy here. We’ve struggled to stay above water since the vehicle shortage started in late 2021. At that point, we saw a sharp decline in work from the three dealers we originally inherited. At this point we were also significantly overstaffed and had just spent too much cash making updates and repairs to the facilities and equipment.
Before we go about discussing what we need from a partner, it is important to outline what went wrong.
- There were periods of time when we were overstaffed and burning through cash with payroll. Our management inexperience and anxiety over losing good employees caused us to hold on to people far too long.
- In fall 2021, dealership work sharply declined as inventories ran dry during the chip shortage. This has continued to affect us. Note: To counter this, we went on an offensive and began targeting new dealers, and have since acquired many more partnerships, which served to keep us going at a semi-steady pace; if we would have relied on the original group, we would have run dry of work over a year ago.
- The assets and goodwill we purchased were not quite what was sold to us. Equipment was worn out, inventories were low (We were supposed to have 30 days’ worth of stock, this wasn’t the case), and the shop’s reputation with the community and many dealers was not in good standing.
- The latter point drove a need to make higher investments than originally planned, another situation that had us burning through cash.
- Mistake after mistake was made due to lack of experience, from ordering errors to slow collections of accounts receivable to errors on jobs. While all of these have been addressed, mistakes and overspending created a snowball effect that is hard for a new business to overcome.
- Inexperience regarding tax laws and processes has left us paying fees and playing catch-up.
What Messenger Motorworks needs is an investor that believes in what we can become.
We are hoping to find a partner that understands that this shop is positioned to be the leading aftermarket services provider in the Quad Cities. Someone who sees the value proposition that we have become and can imagine the path forward with us.
So, what would we do with a cash infusion?
Hit the financial reset button and make a few small equipment investments to expand offerings to fulfill frequent requests.
Clear as much high interest debt as possible.
We have two lines of credit, one installment loan, and three credit cards. Total debt: $65,100
We have an installment loan with the State of Iowa to catch up on sales tax payments. Total debt: $36,000
Purchase thrifty equipment to offer a few key services.
- A two-post lift to perform lift-kit installation and ease installation of underbody accessories.
- Tire mounting equipment and a balancer to install wheel and tire packages.
- Upgrade to a modern spray gun for the bed liner machine to avoid stoppages due to repairs on obsolete equipment.
- A quality plotter for the tint department to avoid material waste and the sanity of our tint tech.
Total proposed equipment cost: $18,000
What does Messenger Motorworks offer for such an investment?
In a world where millions are handed to tech startups that often never produce a dime before they fizzle out, it seems crazy a little company like us has such a tough time acquiring funding when we actually produce cash and have a clear path to further profitability. That is the reality of it, though.
We believe that Messenger Motorworks represents a real value proposition to an investor, where they could expect a return in 3-5 years. What we have to offer is shares. We are organized as a C-Corporation and have a proper Articles of Formation where the process is declared to add or dilute shares.
In addition, we are also consistently developing IP in several forms. We have developed a bespoke dealer portal that is unique to us but could be adapted for other uses. We have a large and growing library of custom graphics and have two talented staff members creating more. We are creating methods for managing rapidly changing inventory. We manage all of our technologies in-house with zero reliance on third party providers and that talent can be applied elsewhere.
How does Messenger Motorworks see this partnership working?
That’s up to the needs/wants/desires of the person or entity that decides to partner with us. We are willing to work with any arrangement, as there are benefits to each. We imagine two different scenarios but are open to suggestions.
- A silent investor: Someone who is happy to leave us to our devices and continue with our current (and rather tenacious) path towards efficiency and taking over the local region.
- An involved investor: Someone interested in offering mentorship or being involved in the management of the shop directly.
Messenger Motorworks is a small but ambitious aftermarket shop loaded with talented people looking for someone to believe in its mission. That mission is to become the best there is by leading with kindness and following through with quality work.