How Much Does It Cost To Run A Vintage Car Restoration Shop Monthly?
Vintage Car Restoration Running Costs
Running a Vintage Car Restoration business requires substantial working capital, with estimated monthly operating expenses (OpEx) and Cost of Goods Sold (COGS) totaling around $126,000 in the first year (2026) This high cost is driven primarily by specialized labor and rare parts sourcing Your fixed overhead, including the $15,000 monthly workshop rent, is $23,000 before payroll Labor costs are the largest single expense, averaging $71,458 per month for the starting team of 75 Full-Time Equivalents (FTEs) The business is projected to hit break-even quickly, within 2 months (February 2026), but you must maintain a strong cash position, as the minimum cash required is $876,000 by June 2026 This guide breaks down the seven core running costs you must manage to sustain profitability
7 Operational Expenses to Run Vintage Car Restoration
#
Operating Expense
Expense Category
Description
Min Monthly Amount
Max Monthly Amount
1
Workshop Rent
Fixed
The largest fixed cost is the workshop facility, budgeted at $15,000 per month.
$15,000
$15,000
2
Specialized Labor
Payroll
Payroll covers 75 FTEs including Master Technicians and the Lead Restorer.
$71,458
$71,458
3
Parts and Materials
COGS
COGS averages $21,668 monthly, driven by Rare Parts Sourcing and Engine Parts Kits.
$21,668
$21,668
4
Utilities
Overhead
Monthly utilities for the workshop and office are budgeted at $2,500, accounting for high energy usage.
$2,500
$2,500
5
Insurance
Fixed
Insurance costs $1,800 monthly, covering liability for high-value client vehicles and worker's compensation.
$1,800
$1,800
6
Client Acquisition
Variable/Marketing
Variable marketing and client hospitality costs average $10,292 per month, essential for securing high-net-worth clients.
$10,292
$10,292
7
Admin/Software
Overhead
Administrative overhead, including Accounting/Legal ($1,200) and Software Subscriptions ($700), totals $2,200 monthly, ensuring complience and efficient project management.
$2,200
$2,200
Total
All Operating Expenses
$124,918
$124,918
What is the total monthly running budget needed to operate Vintage Car Restoration sustainably?
The required monthly running budget for Vintage Car Restoration, before accounting for payroll, is $44,668, but sustainable operation demands a cash reserve of $876,000 to cover inevitable project delays.
Baseline Monthly Burn
Fixed overhead costs are set at $23,000 per month.
Average Cost of Goods Sold (COGS) averages $21,668 monthly.
The combined minimum operational spend is $44,668.
Payroll must be added to this figure for true operating expense.
Essential Cash Cushion
You need a cash buffer of $876,000.
This reserve covers unexpected delays in specialized work.
If onboarding takes 14+ days, churn risk rises.
Reviewing milestones is key; see What Is The Most Important Indicator Of Success For Vintage Car Restoration?
Which cost categories represent the largest recurring expenses and how do they scale with revenue?
For Vintage Car Restoration, materials (COGS) at 105% of revenue are the primary cost driver, overshadowing the $71,458 monthly labor baseline, while variable overhead like Client Hospitality (30%) will grow directly with project volume. Understanding this cost structure is key to profitable scaling, which you can explore further by reading about What Is The Most Important Indicator Of Success For Vintage Car Restoration?
Labor vs. Materials Dominance
Monthly labor expense sits at $71,458.
Materials cost (COGS) is ~105% of total revenue.
This means every project loses 5% before fixed overhead hits.
Labor scales somewhat with project complexity, not just volume.
Variable Overhead Growth
Client Hospitality is a variable cost at 30% of revenue.
Marketing expense scales at 20% of revenue.
If project volume doubles, these two line items also double.
You must manage this variable OpEx to improve contribution margin.
How much working capital is required to bridge the gap between project completion and client payment?
You need to know exactly how much cash sits idle waiting for client sign-off on these high-end restorations; this is the core working capital challenge. Before diving into the specifics of project milestones, it's helpful to review the foundational planning required, such as understanding What Are The Key Steps To Write A Business Plan For Vintage Car Restoration?. For the Vintage Car Restoration operation, the minimum cash requirement to sustain operations while waiting for final project payouts is estimated at $876,000.
Bridging the Payment Gap
Cash needs cover payroll and parts inventory during the payment cycle.
The full payback period for this initial cash injection is projected at 19 months.
This figure represents the necessary float to cover costs incurred before the final milestone payment clears.
If project completion timelines slip, this required capital increases defintely.
Setup Costs vs. Operational Float
Initial setup requires $500,000+ for specialized equipment.
Working capital covers variable costs during the 19-month lag time.
Focus on securing financing for CapEx first, then funding the operational float.
This float ensures you can pay master technicians reliably before the big check arrives.
You must separate the upfront investment in the workshop from the cash needed to run the business while waiting for client payments. The $500,000+ needed for initial setup—tools, specialized lifts, and facility modifications—is a capital expenditure (CapEx), not working capital. That CapEx must be funded separately from the operational float.
If restoration project volume drops, what is the minimum revenue required to cover fixed costs and essential payroll?
If the Vintage Car Restoration volume drops, the business needs revenue equivalent to 0.27 full restoration projects just to cover the $94,458 monthly fixed and essential payroll floor. Since you can't sell a fraction of a job, you must secure at least one high-value project every four months to stay afloat based on these fixed costs.
Fixed Cost Floor Calculation
Monthly fixed and essential payroll costs stand at $94,458.
The average revenue for a Full Restoration unit is $350,000.
Here’s the quick math: $94,458 divided by $350,000 equals 0.27.
This means you need 27% of one high-value job monthly to break even on overhead.
Minimum Project Pipeline
To cover the floor, you need one project every 3.7 months.
Operationally, aim for one project start every four months, defintely.
If project acquisition takes longer than 120 days, cash flow is at risk.
The baseline monthly running cost for the vintage car restoration shop starts at approximately $126,000, driven heavily by specialized labor and materials sourcing.
Specialized labor represents the single largest recurring expense, consuming $71,458 monthly for the initial team of 75 full-time equivalents.
A substantial minimum cash buffer of $876,000 is required to manage working capital demands between project completion and client payment cycles.
Despite high operational costs, the business model projects a rapid stabilization, reaching the break-even point within the first two months of operation in February 2026.
Running Cost 1
: Workshop Rent
Facility Cost Driver
Workshop rent is your biggest fixed hurdle at $15,000 monthly. This cost directly ties to the physical footprint needed to handle several high-value restorations at once, especially accommodating specialized gear like the $150,000 paint booth system. You need space to work, not just store.
Rent Calculation Inputs
Estimating facility needs means mapping required square footage against project flow. The $15,000 rent must support simultaneous projects and the specialized footprint for the $150,000 paint booth system. You need quotes based on required capacity, not just current needs.
Square footage per simultaneous project.
Cost per square foot for industrial space.
Integration cost for major equipment.
Facility Cost Control
Since quality can't drop, optimizing rent means maximizing utilization of the space you pay for. Staggering project starts prevents paying for idle floor space. Also, review the $2,500 monthly utility budget, as the paint booth's energy draw is defintely significant.
If you plan for three simultaneous restorations, your facility cost per project is $5,000 monthly ($15,000 / 3), plus associated overhead. Misjudging required space immediately inflates your effective fixed cost per job.
Running Cost 2
: Specialized Labor
Payroll Scale Check
Payroll is your single largest operational expense, projected to hit $71,458 per month by 2026, supporting 75 full-time employees (FTEs). You must align this significant headcount growth directly with secured, fixed-price project pipelines to maintain profitability.
Labor Cost Inputs
Calculating this cost involves summing the annual salaries for all 75 FTEs and dividing by 12. Key inputs include the high-value roles, such as the Lead Restorer at $180,000 and Master Technicians at $120,000. This monthly $71,458 payroll is the baseline fixed labor commitment you must cover.
FTE Count: 75
Lead Restorer Salary: $180,000
Master Tech Salary: $120,000
Managing Fixed Labor
Since you offer fixed-price restorations, labor scheduling is critical; idle time on a $180k employee erodes margin fast. Avoid hiring ahead of confirmed project starts, defintely wait until the client signs off on the final scope. Cross-train staff where possible to maximize utilization across different phases like bodywork and paint prep.
Tie new hires to confirmed contracts.
Use contractors for predictable seasonal peaks.
Track technician utilization rates closely.
Margin Protection
Your fixed-price model shifts all efficiency risk onto your operational team. If the 75 technicians cannot complete the work within the budgeted hours due to unforeseen complexity, that extra payroll cost is absorbed directly, not passed to the client. Labor efficiency is profit protection.
Running Cost 3
: Parts and Materials
Parts Cost Snapshot
Your Cost of Goods Sold (COGS) for parts averages $21,668 monthly in 2026, driven primarily by specialized components. This cost is heavily weighted by Rare Parts Sourcing, which consumes half of your total revenue.
Where Material Dollars Go
This $21,668 COGS covers specialized components needed for concours-level restoration. The biggest input is Rare Parts Sourcing, which is 50% of revenue, meaning material cost scales directly with sales volume. Engine rebuilds also carry a high internal material cost, as Engine Parts Kits account for 60% of that specific revenue stream. You'll defintely need strong vendor contracts early on.
Managing Sourcing Risk
Managing this high material spend requires tight control over sourcing timelines and supplier relationships. Since rare parts are 50% of revenue, locking in favorable pricing tiers or securing exclusive supplier agreements is critical. Avoid stocking obsolete inventory unnecessarily; focus on just-in-time delivery for high-cost items.
Lock in supplier pricing for kits.
Track lead times for rare parts.
Verify material costs before project lock-in.
Fixed Price Vulnerability
Because you promise fixed pricing, any volatility in rare part costs directly hits your margin, not the client's bill. If sourcing costs rise unexpectedly, your $21,668 average will erode the projected contribution margin rapidly. Track supplier lead times weekly.
Running Cost 4
: Utilities and Energy
Utility Budget Reality
Your baseline utility budget is $2,500 per month, but this figure is highly sensitive to the operational load from heavy machinery. This cost primarily covers the high energy demands of the Paint Booth System and the Engine Machining Equipment needed for concours-level work. Keep a close eye on usage spikes.
Cost Inputs
This $2,500 estimate must cover both the office space and the workshop floor. To validate this, you need usage estimates from the equipment manufacturers, especially the $150,000 Paint Booth System. Compare vendor quotes against historical data for similar industrial operations to set a realistic monthly baseline.
Paint booth run time hours.
Machining equipment load factor.
Office square footage usage.
Managing Energy Use
Controlling energy spend means optimizing when you run the heaviest equipment. Since labor is your biggest cost, schedule machining during off-peak utility hours if possible, even if it slightly shifts technician workflow. You should defintely audit booth ventilation settings to ensure they aren't over-spec'd for the current volume.
Schedule heavy use off-peak.
Audit booth ventilation settings.
Check for efficiency upgrades.
Utility Risk Check
If actual energy use runs 20% higher than budgeted, your monthly overhead increases by $500. This directly pressures your already tight margins, especially since fixed overhead is competing with $71,458 in monthly payroll. Don't let this utility line item push you past the $15,000 rent threshold for profitability.
Running Cost 5
: Specialized Insurance
Insurance Fixed Cost
Your specialized insurance policy costs exactly $1,800 per month. This premium secures liability coverage for the high-value client vehicles undergoing restoration, protects your specialized equipment like the paint booth, and covers worker's compensation for your skilled technicians. It's a non-negotiable fixed overhead.
Cost Drivers
This $1,800 monthly premium reflects the specialized nature of your work. Worker's compensation rates are high due to the skilled labor involved in complex, high-risk restoration tasks. You must confirm the total insured value of client cars and the $150,000 paint booth system. Here’s the quick math: insurance is a fixed cost regardless of project volume.
Calculate risk based on labor payroll exposure.
Insure all specialized equipment value.
Verify liability limits for client assets.
Managing Premiums
Do not try to cheap out on liability; one claim involving a rare vehicle destroys the business. Focus on reducing the worker's comp portion by ensuring accurate classification of your 75 FTEs. Shop quotes annually. If onboarding takes 14+ days, churn risk rises, but better underwriting defintely reduces your rate.
Bundle general liability and property coverage.
Review labor classifications yearly.
Ensure accurate valuation updates immediately.
Fixed Overhead Impact
Since this $1,800 is fixed, it must be covered by just a few high-margin projects monthly. If you only complete two restorations in a slow month, this insurance represents a significant percentage of your gross profit. It's a necessary cost of entry for handling assets valued well into the millions.
Running Cost 6
: Client Acquisition & Travel
Acquisition Cost Baseline
Client acquisition costs are high because you target high-net-worth collectors needing personalized attention. These variable costs hit 50% of revenue, projecting to $10,292 monthly in 2026. This spend funds necessary hospitality and high-end events to close deals.
Cost Breakdown
This 50% variable spend covers direct outreach to secure large restoration projects. The $10,292 average for 2026 is derived from 30% allocated to hospitality and 20% to industry events. You must track these expenses against booked milestones, not just monthly revenue realization.
Hospitality spend: 30% of project revenue.
Event attendance: 20% of project revenue.
Estimate uses 2026 projected revenue base.
Managing Outreach Spend
Since this is tied directly to securing a few major contracts, efficiency matters more than raw reduction. Avoid spending on general marketing; focus only on targeted, high-ROI interactions. If a project requires 14 days of travel, ensure the expected AOV (Average Order Value) justifies the $3,000 travel bill, defintely.
Tie event budget to confirmed client meetings.
Use digital documentation to reduce follow-up travel.
Benchmark hospitality against competitor client entertainment norms.
Focus on Deal Quality
Because acquisition is 50% of revenue, every dollar spent must drive a high-value project. If your average project size decreases, this 50% ratio becomes unsustainable quickly. You need strong qualification filters before deploying travel funds.
Running Cost 7
: Admin and Software
Fixed Admin Costs
Administrative overhead is $2,200 monthly, covering essential compliance and system management. This fixed cost supports the $71,458 monthly labor base and ensures the necessary digital documentation for every high-value project.
Admin Cost Breakdown
This $2,200 covers two main buckets: $1,200 for Accounting and Legal services needed for high-value client contracts and tax compliance. The remaining $700 funds necessary Software Subscriptions for project tracking and client provenance records.
Legal/Acct: $1,200 per month
Software: $700 per month
Needed for compliance and transparency
Managing Overhead
Since these are fixed costs, optimization focuses on efficiency, not just cutting the line item. Use standardized legal templates for client agreements to reduce billable hours spent on repetitive reviews. Negotiate annual software agreements instead of month-to-month billing.
Standardize legal paperwork.
Annualize software contracts.
Ensure software supports milestone billing.
Overhead Ratio Check
The $2,200 admin cost is small relative to $71,458 in monthly labor. Defintely track software utilization closely; unused subscriptions are pure margin drain. This cost is non-negotiable for maintaining the transparency promised to high-net-worth clients.
