Scott Molitor started MoFab as a fabricator working nights out of a storage unit in Denver. By 2017 he had bought the equipment of the speed shop where he used to work, hired most of its staff and moved everyone under the MoFab name. Todd Earsley of My Shop Assist first met Scott in 2012 at Pikes Peak International Raceway, and in this 2018 episode he asked him how the deal came together.
At the time of the recording, MoFab was a Colorado performance shop south of Denver with four lifts, an alignment rack, a dyno cell and a full-time tuner. Scott built the parts, his wife ran the books, and he was still learning how to manage a crew that had more than doubled overnight.
This article covers how Scott grew the shop on his own money, how he structured an asset-only purchase of another business, what went wrong in the first months, and what he learned about running a front counter and keeping techs productive.
From the alignment shop to the fab bench
Scott grew up in Ham Lake, Minnesota, fixing dirt bikes because the family couldn't afford new ones, and moved to Denver in 1997. Around 2002 he enrolled in a two-year automotive program at Denver Automotive and Diesel College, working construction by day and going to class at night.
Finding a shop job was hard. Two Denver shops turned down his offers to sweep floors for free. A new speed shop run by a father and his sons, Nick and Adam, wanted an ASE-certified tech so customers would take them seriously. Scott landed at an alignment and repair shop, where an exhaust tube bender taught him to MIG weld. In 2005 the speed shop hired him as fabricator and lead tech. He registered the MoFab name in 2008 and did fab jobs in his home garage.
Growing MoFab without debt
In 2010 Scott went to work for his dad's new construction business and rented a storage unit for MoFab at night. He told his dad up front that he would leave once MoFab got busy. It took less than six months. He had roommates to cover the mortgage, his wife did the invoices and answered phones while she finished college, and he used a Google Voice number so he could switch the business line off after hours.
He never paid for advertising. Work came by word of mouth, Facebook and Instagram, where he posted a photo, said a little about the job and let people call.
MoFab then shared a building in Centennial with a powder coater for about three years. The work fit together, but one front door for two businesses confused customers, and Scott advised saving longer for your own space. His first helper, an Army veteran named Eric, worked unpaid for about eight months. Around 2013 MoFab moved to a 3,400-square-foot Denver shop. After a stretch working alone, Scott took on Casey, a young guy who kept asking for a job, and Casey stayed for years.
Everything was paid from cash flow, with low credit card limits. That was the lesson that stuck.
You really need to have 20, 30 grand on tap at any given time, even when I was only two guys, just to float between some of these jobs.
How the acquisition came together
By 2016 Nick, the tuner at Scott's old shop, wanted out of the family business. Scott's lease was ending, so the two planned to go out on their own. Scott applied for a loan for a dyno, the first time he had let a lender look at his books. His landlord wouldn't allow a dyno, and no other space worked out.
Then Bill, the owner of the old shop, asked whether Scott wanted to buy his equipment. He suggested Scott move into his building. Scott said he would come only if MoFab was the only name on the door. Over lunch he made it clear he wanted the equipment and nothing else. He had built his own name, customer list and reviews, and he didn't want to become the manager of someone else's shop.
Bill warned him that walking away from a long-standing name and client base could hurt. Scott stuck with an asset-only deal. In the end Bill handed over the customer list and website anyway, since they were worth little to him without the business.
The process took close to a year. Scott hired a CPA to review the books and attorneys to write the offer and counter offer. He worried about inheriting debt or a customer dispute from the old company, so he wanted it all on paper. He said a deal like this can't be done on a handshake, even between friends, and the legal and accounting costs surprised him.
Two things made the price work. The building was leased, and if Bill had owned it, Scott said he could never have afforded the deal. He also put a value of several thousand dollars on moving into a shop that was already set up, because rebuilding it from scratch would have meant months without income.
The first months under one name
Scott reinterviewed every employee, kept Nick, Adam and the front desk tech Cody, and brought Casey with him. On June 1, 2017, in the new shop in Parker, he told the crew he had drained his savings and couldn't pay them until money came in.
The purchase agreement required the old shop to finish its long-term projects before Scott took over. One car remained, and he gave them one lift for two months, nights and weekends only.
The harder part was the old company's customers. People who had put down deposits, such as $325 for a tune, months earlier showed up expecting MoFab to honor them. Scott had not received the old company's bank account or books. Some of those customers attacked him online. He gave anyone who called 30 days to bring the car in, and the last of the complaints cleared up about two or three months after the purchase. He shut down the old website and Facebook page quickly, posted a merger announcement on the MoFab page for a few months, kept the old phone number and dropped the old email.
From working owner to manager
Scott expected to keep working in the back with the team. Instead somebody had to answer the phones, pay the bills and make decisions. He admitted he was not a good manager.
My talents lie more in producing than they do in delegating.
He moved Cody into the back as a tech and hired a customer, a former service writer, to run the front. Todd shared a rule of thumb from other shops. Plan on one front person for every two or three techs to schedule, order parts and answer calls. That person's wages have to come from the techs, so they need to bill three or four extra hours a day to cover the cost.
Interruptions were the next problem. Scott clocked in and out all day as the front desk pulled him away. Todd pointed to research that skilled work takes about 15 minutes to restart after a break, so three focused hours can produce twice as much as three hours split into four pieces. The shop started using a push-to-talk radio app on their phones so the front could ask questions without walking to the back.
Scott admitted he had been running on gut since the move. He checked hires with his wife and his CPA. A new tech who bills a set number of hours a week pays for himself. Todd's homework was to run employee efficiency reports, starting with Scott's own time.
Looking five years out, Scott wanted a newer dyno with linked rollers for late-model cars. The bigger goal was to own the ground the shop sat on, for leverage on future capital and something to sell to his crew or pass on.
Key takeaways
- Keep $20,000 to $30,000 of credit or cash available to float parts on big jobs, even in a two-person shop.
- An asset-only purchase let Scott keep his own brand and avoid the old company's debts. Pay for a CPA and attorneys and put everything in writing.
- Expect the seller's unhappy customers to find you. Decide in advance how you will handle old deposits.
- Plan on one front person for every two or three techs, and know how many extra billed hours it takes to pay for that role.
- Cut interruptions for skilled techs. Restarting a weld or a tune costs real time.
- Check the numbers before a hire. Gut feel is not enough once you have a crew.
Running a growing fab shop with My Shop Assist
Scott's questions after the merger were the ones every growing shop hits. How efficient is each tech? Is the owner billing or answering questions? Can the shop afford another hire? My Shop Assist tracks time on every job and task, so the efficiency report Todd assigned comes straight from the clock. Parts and purchase orders sit on each job, progress billing helps collect on long builds before the parts money runs out, and jobs export to QuickBooks for whoever keeps the books. Read more about how MSA works for custom fabrication and machine shops.
If your shop is growing past the point where gut feel works, start a free 30-day trial and see where the hours go.
