Business opportunity,,do I? dont I?

Pilkie

Pilkie

Active Member
Hi guys and gals.

I need your honest thoughts and opinions!!!

For quite a while now I have had a hankering to get into the service,repair,restoration of classic cars in some way.
Ive always said to myself that when I win the lotto I will just do it and see what happens.
Dean the guy who painted my TR6 and my P6V8,has always wanted to move more into classics and do less on the moderns for insurance and motor dealers.
We both know each others desires,and both know each others work,and we seem to get on well.
He currently has on his to do list a 1960's Alfa giulietta and a Lancia fulvia ex sprint car,Stag,VW Splittie bus,and another couple he is waiting for replies from after pricing them up.
Now as these will need stripping down before bodywork and paint,and possibly new trim parts fitted,his current unit would not really be safe enough,"possible but space is tight" to store the parts while welding,grinding etc is going on.
The 5/6 car unit right next door to his is now available,and is perfect for having 2 cars in to strip, store parts and new parts safe,then wheel them next door for bodywork and paint before coming back for reassembly,in effect a small production line.
Now the opportunity is for me to go in partnership with him,basically with me stripping and reassembling,him doing body and paint.
He cannot afford to take the risk of expanding and rent the 2nd unit and do it all by himself,therefore the logical thing was he came to see me to gently suss me out.
He,we would keep the modern car body repairs going,for insurance and local motor dealers,albiet a bit less as basic bread and butter work for a while.
We would also be able to offer some basic classic car mechanical repairs and servicing.
I am in the fortunate position of not being married,no kids,low home overheads,and a nice lump sum in compensation from my broken wrist,and some savings I can use to live on for about a year.
As I am currently a delivery driver,I can no doubt be certain of getting back into that trade if things dont work out.
Back in the mid 80's I quit my job,moved to a new area with my mum who was also doing the same, and started up as a mobile mechanic,and that I enjoyed for about 4 yrs.
I have run 24hr petrol stations for Jet and Texaco,can do accounts,stock control,hire,fire,train,work ungodly hours.

THE BIG question is,do I quit my job and go for it??
I will have to have a chat to my boss,let him know whats what and either ask about a leave of absence or return to work if it doesnt work out.

Please feel free to say,ask,suggest ANYTHING you want to,as all opinions are very welcome!!

I dont think I will get much sleep tonight,as my head is a tornado of thoughts! :? :?
 
A few thoughts.

Personally I'd never go into partnership with anybody. If you can find a way that you can work together that's fine, I shared premises and overheads with two other blokes for 10 years, and it worked very well, (even though it can still give lots of problems if it's the wrong people) but it wasn't a partnership.

And I'd say that now it's a totally different world, anything that goes wrong, or even "not right" everybody wants to sue your ass.

Plus it's a bad time to start up now, what with the recession, and the fact that everybody wants a piece of you, it doesn't take long to fall behind. A few quiet days and you're soon working for nothing.

All that said if you can walk away at short notice, and if that becomes the case, you can get back into work, then why not.

I've worked for myself fo 30 years, and although I wouldn't want to start now, I couldn't work for someone else either. Like you I'm lucky to be able to ride out the lean times.
 
Pilkie said:
I am in the fortunate position of not being married,no kids,low home overheads,and a nice lump sum in compensation from my broken wrist,and some savings I can use to live on for about a year.
As I am currently a delivery driver,I can no doubt be certain of getting back into that trade if things dont work out.
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Dave

I have to say in your position I'd be giving it serious consideration and obviously you are. Nothing ventured, nothing gained as they say. I think there will always be work for the classic car restorer, and enough to make a living from so I'd go for it. Just my opinion, they're are others here who have tried or actually do this for a living who will be able to put the reality check in place for you (Harvey got there just before me :LOL: )

The bonus of working for yourself, or in partnership, plus doing something you love doing is strong motivation and as you've said, if it doesn't work out you should be able to get back into employment fairly easily.

Lots to think about. Good luck!

Dave
 
Probably would take the opportunity Dave, if you can take a bit of a chance. Just ensure that there seems to be enough 'bread & butter' work to enable the business to pay its overheads.

One very important matter as has been identified is that of liability & also your personal risk if things go bang. I would suggest operating through a Limited Company then your personal assets are isolated from the business', assuming you always act 'in good faith'. It costs a little bit more but well worth the extra protection.
 
For me in your shoes I'd like to do something like that but from family experience you need to make sure the company is limited and that you have a legally binding agreement drawn up so both of you have a record of responsibilities and who owns what etc.

Good luck with it if you go ahead though!
 
Mmmm. Short answer is NO! The long answer is very long indeed, so just a few ideas here - give me a ring for a longer chat.

You know that I know Colin Gould quite well, and I've seen how his business works at close hand. The main problems all revolve around the customers. There are an awful lot of Pilkie's out there who think that, because a car is old, it therefore should be cheap to fix. They therefore instruct you to get started. When you've got the vehicle stripped and you can see what really needs doing, they come back in for a chat. The first thing that happens is that you give them the bill for work to date and they immediately go pale and then have a hissy fit. If you're really lucky they pay some of the bill. Then they go away to "think about it" and you don't hear from them for weeks. If you're really unlucky they then authorise the next bit of work. Much the same sort of thing then happens again. Net effect, the vehicle (or its parts) spend many, many months more than they need have done cluttering up your space, with relatively little chargeable work happening. That's the good outcome. The bad outcome is that you finish something, present them with the bill and then they tell you they simply don't have that sort of money (or walk away without telling you!). To get any money out of them you then have to give them a massive discount.

So there are a couple of golden rules. First up assess the value of the vehicle after the work is completed. If it is less than the possible cost of the work, go to a lot of trouble to discover how well heeled they really are. There are surprisingly few people out there who can genuinly afford to have a classic repaired professionally even if the work doesn't turn out to be much greater than originally anticipated (and, trust me, it always does!).

There's a lot more soberering stories where that advice came from.

As it stands, you are sorted. You stand a good chance of being able to put a fair bit of dosh away to fund your dotage - pensions are a mirrage for people of our age - they aint going to deliver what you think they're going to!

If I were you, I would explore with Dean how you could grow the business more slowly, with you keeping your current job but working part time to do as you described for Dean. Perhaps even try to negotiate your current work down to a 4 day week to give it a bit more headroom. Do not take on the extra unit just yet awhile. This is a false deadline. IF the idea has real legs, there will be another unit later. In the meantime use a rented lock up to store all the dismantled and new parts and only get them out when there is real work to be done (see above). It isn't a coincidence that most classic car restorers operate out of farmyards or in low rent addresses (like Faringdon for instance).

So right now, buy an old van to run everything about in and rent a lock up for storage. I can give you some contacts for the latter if required. Then form a company with you and Dean as the directors. The company to then pay you and Dean on the basis of the hours you each put in at an agreed hourly rate. If there is money in the kitty after, then I can give you a few accounting tips as to how to distribute it (a couple of executive loans in the proportion of previous input hours from the company to the directors, subsequently written off - very tax efficient!).

And as stated above - no win no fee has a lot to answer for. I'll tell you how to finish up £2k out of pocket without even getting to court and through absolutely no fault of your own if you like!

On no account be under any illusion that this is likely to make more money for you than driving!

Hope that helps

Chris
 
Chris has just given some very sound advice IMO, when a business venture becomes available it is so easy to see it through rose coloured glasses because you want it to work, and then there's the what if scenario. I personaly think its easyer to work for yourself than with a partner as this only works with 100% agreement of both parties and trust, unfortunately in the real world this very rarely happens regardless of how well you think you know the other person/s involved. Then you have the public, they will make you or break you. In your heart I know you would love to just jump in and do it, but you really need to use your head here and make sure that you have as little as possible to lose, then if you feel its right, do it. The scare mongers will always say its not a good time to start a business regardless of what's happening in the world.

So Dave I think your sleepless nights will continue till you make the right decision and you will know when you have. I wish you all the luck in the world getting there.
 
Very scary stuff, I have worked for myself for the last 22 years, were I to balance it out against working for a corporate or SME I would be better off working for them However it's not all about income sometimes it's a lifestyle choice (synonym for poorly paid).
If you really want to be succesful and make money at it you either need to be extremely selective of your customers or and grow the business to more than you and your fellow director /partners labour input.
I would not go the partnership route but would form a limited company and keep my eye steadily on ways and means of growing the business.
The current business climate is not good and I would be very wary of the risks in loosing your current steady income but like all business it's nothing ventured nothing gained, this is not a decission that you can make half heartedly......

Graeme
 
Thanks for all your input so far,gives me something to sleep or not sleep on tonight.
There is also the possibility that we could effectively be independant,but work together on projects.
He is getting classic owners asking about basic repairs and servicing,1 or 2 of which I am already doing at home on the weekends if I have the time and am not to knackered.
There are a lot of things to consider and talk about!!
As 2 independants we probably wont have to register for VAT,but as one,turnover may go over the threshhold!
I am making a list if things to check out on the legal side.
Having been self employed before I am aware of the way customers can be,and certain ways that can be dealt with.

CHRIS!!
""There are an awful lot of Pilkie's out there who think that, because a car is old, it therefore should be cheap to fix.""
PLEASE REPHRASE!!!!

I dont for one minute think that at all!! :x
And am surprised you think I do!! :x
Maybe you meant to say people!
I will pay what it costs to get my cars fixed if I cant do it myself!!
However as I am fully capable of,and have the facilities to do many things for myself,I am fortunate that it doesnt cost me as much as a classic owner who either does not know how or cannot,and has to pay the going rate to get a job done!!
There are also some classic repairers out there that see unwary,unsuspecting classic owners as an easy target to ramp up the bill!!!
If I can earn what I earn now,maybe even a little less then I will be happy,as it will take time to earn more and build a good customer base,hopefully via word of mouth and selective advertising.
Anyway its time for bed,as I have to try and get some sleep before clocking in at 0700am tomorrow.
 
harveyp6 said:
Personally I'd never go into partnership with anybody.
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Damn right.

It is always too easy to blame someone else if things go wrong. Take your own responsibility and you will have a better chance of success. (Yes I do know this from experience)

Treat your customers well and you will do well.

Best of luck with your decision, but if you're going to do it, do it now. Don't wait until the time is right, that never works.

Richard
 
Lots has been covered already which I agree with :D

I was born into the trade as most will know and have been working for myself for many a year now.

I think your set up is great right now Pilkie. You can dabble at home without commercial overheads and enjoy any profit that comes your way. Turn it into a job and you run the danger of losing your hobby :(

I've struggled for years to stop work, which I need to do to get by, to make my own classics presentable and reliable. You have the best of both right now IMO

It's a cut throat sector which takes many years to build up a good reputation for in my experience :wink:
 
Personally I'd never go into partnership with anybody.
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I'll third that; there's always one partner who thinks the other partner isn't pulling their weight ( even when they are! ) and in the worst-case scenarios there's one partner "tickling the till" or constantly having to tidy up the others mistakes

Out on your own as a startup under your own roof, making your own decisions ( and making your own mistakes ) then getting some employees on board when you are getting the volume of business to justify it, is the way ahead
Partnerships almost *never* work; chat to a business lawyer or accountant that's been around a while and they will know enough 1st hand horror stories to make you think twice about that

Good luck with your new enterprise! I was in the car trade for years; it's cut-throat and as tough as business as there is, I'm well glad to be out of it now, even though my income is only a fraction of what it once was I don't have to deal with the ups-and-downs and uncertainties; all very stressful

GW
 
I started my computer business with a partner, that lasted about 2 weeks ! Haven't spoken to him since.
I then decided to do it myself, got a shop, and off I went. I lasted about 3 years, that was 3 years of pain, stress and worry. Unlike you I had a wife, 3 kids and a mortgage to support, luckily the wife was working because my business never made a penny.

I soon realised that I'm an engineer, not a businessman, I had loads of very happy customers, partly because I did a great job and fixed all their problems, and partly because I always found it very difficult to charge them, so everybody got a bargain :oops:

I accepted my failings, and went to work for one of my suppliers. I let them worry about where the money is coming from, and I just get on doing what I do best.

Over the past 3-4 years (before I was ill) I've been in a similar situation to you, I've been offered to go into partnership with a friend in roughly the same situation. As tempting as it is, it's a much easier decision for me, there's no way I could make the same money doing that as I do in IT, which means the wife and kids would suffer. What I could do though was to do odd Saturdays up there, stripping cars down, or re-assembling cars post restoration. It helped him out and I was under no pressure.

Maybe you should consider a similar setup, effectively billing the guy for your time. As Chris suggests, what about reducing your driving days, and help your mate out. See how it goes.
 
Hi Pilkie,
I just want to add to what several of the others have said. My late father was a bank manager in the 50's -60's and his advice even to his own family was never go into partnership as it seldom works. My advice would be to go it alone.
I wish you well if you do decide to set up in business.

Regards,

Hector
 
chrisyork said:
Mmmm. Short answer is NO!
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Got to agree with Chris I'm afraid Pilkie. It's a lot of work, and it isn't a guaranteed wage. I'd be keeping the cars for a hobby, and keep with the day job. :)

Not to mention that I couldn't do 7 hours a day, 5 days a week in the cold working on old cars... :oops:
 
I'm with Grim, at the moment you have a steady income, why not stay as you are. Working for yourself is not as easy as it seems. You already said about long hours, these will eat into your time for your cars and some things you are free to do now, shows etc. I was made redundant went on my own as work was tight but with no name out their I'm going back to cards in. Things are tough on the jobs front. My advice stay where you are, see if you can work 4 days and do the garage work the rest. Certainly wouldn't give up a steady job at this time. You will know what's right, it's just doing it.
 
This all seems very negative. I appreciate that there are a lot of failed business ventures out there, but there are a lot of successful ones as well. I would guess that it depends on how much of your time and effort you are willing to put into it to make it work. Remember you will never be rich working for someone else, and according to the present classic car mags, there is more money in the classic trade than ever before at the moment!

I would love to have a go at this, but my problem would be that I am too fussy. My work would probably cost a fortune as I take so long getting things just so. Not a good approach for a business! Also, As was earlier stated, this is my hobby. Would I enjoy working on somebody elses car as much? I doubt it.
 
What would you do for a hobby if you were working on cars all the time ?
I did it "sort-of" many years ago and when you've got customers hassling you and jobs going wrong, it loses it's appeal.
There may be money in the classic-car business but I expect it's in the top end of the market , not on cheapish classics like P6's (with the greatest respect)
 
I have no real business experience to offer, so found some quotes that might help?

"Thinking is easy, acting is difficult, and to put one's thoughts into action is the most difficult thing in the world." — Johann Wolfgang von Goethe
"Their comes a moment when you have to stop revving up the car and shove it into gear." — David Mahoney

Despite the potential pitfalls, if you have a good exit plan and can get back to your old job if things don't pan out, is their much risk?
 
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