Potential New Trader

[SteveG 0]

Hi

been reading this forum for a wee while and bought the guide. A bit about me..

46 live near Glasgow, work in Mergers & Acquisitions and have made good money..Travelling a lot and working really long hours. I have a passion for cars and have a nice personal fleet, active in a couple of owner club circles, Porsche and Focus RS.

My car sales experience was for 4 years whilst I was at Uni. My uncle was GM in  a Ford franchise and I used to work weekends in sales, prep etc and then over the summer months off uni and he gave me good work experience in sales as I essentially covered for the married sales guys who were taking time off for holidays. The money was decent as a kid and I got a buzz out of selling and seeing folk drive off happy.

Im now in the position where given my M&A experience I am about to take up 3 Non exec director roles that calls on 5 days a month of my time but pay really, really  well. My father recently died and I'm at a point of inflection in life. Spoke to my uncle who is now retired and he says if you want to go for it do it right.....

There are a couple of units available nearby c3000 sq feet for circa £1400 per month and I'd like to specialise in cars that I know well. Fiesta St, focus st/rs, Porsche (have owned quite a few). I'm not afraid to take a risk and have c£300k available to start up, fit out and buy stock. I have in my head a target of 15 cars a month and having sold recently a couple of focus st / rs I know what you need to do mechanically to get them prepped.

My thoughts are for staffing me, a nephew who is a car nut and just graduated from uni, he's great at digital media and has got himself trained up in car detailing. My uncle is recently semi retired and is a qualified mech and auto electrician. He does a couple of homers a week to keep his hand in and would be happy to do mech prep as he enjoys working on fast fords. My son would like to join when he leaves school in 18 months. He does not fancy university ad would like to work in the industry

I would not be making any major drawings out of the business as would be living off my non exec fees, keen to do this to create an enterprise that offers well prepped cars cosmetically and mechanically and build a reputation as a specialist in fast ford, hot hatches and a few porsches. I don't think I will have a problem selling its buying where the skill will be and active in owners club may give some advantage but probably will find this part the most challenging

My first question is am I mad to even contemplate this?? I I know the stock can hang around for a wee while but I will have zero debt to anybody so not scared and another income source, I'd like to offer finance also so would need to get approved, how long has it taken anybody as a start up to get to  a position where they are offering finance?

Thanks for taking the time to read and all advice welcome

[Dave2302 387]

12 minutes ago, tradex said:

Sounds like all your ducks are in a row, why not give it a go. 

 

I agree, sounds like you won't have any of the common problems to worry about

Good luck with it

[Mark101 536]

53 minutes ago, SteveG said:

Hi

been reading this forum for a wee while and bought the guide. A bit about me..

46 live near Glasgow, work in Mergers & Acquisitions and have made good money..Travelling a lot and working really long hours. I have a passion for cars and have a nice personal fleet, active in a couple of owner club circles, Porsche and Focus RS.

My car sales experience was for 4 years whilst I was at Uni. My uncle was GM in  a Ford franchise and I used to work weekends in sales, prep etc and then over the summer months off uni and he gave me good work experience in sales as I essentially covered for the married sales guys who were taking time off for holidays. The money was decent as a kid and I got a buzz out of selling and seeing folk drive off happy.

Im now in the position where given my M&A experience I am about to take up 3 Non exec director roles that calls on 5 days a month of my time but pay really, really  well. My father recently died and I'm at a point of inflection in life. Spoke to my uncle who is now retired and he says if you want to go for it do it right.....

There are a couple of units available nearby c3000 sq feet for circa £1400 per month and I'd like to specialise in cars that I know well. Fiesta St, focus st/rs, Porsche (have owned quite a few). I'm not afraid to take a risk and have c£300k available to start up, fit out and buy stock. I have in my head a target of 15 cars a month and having sold recently a couple of focus st / rs I know what you need to do mechanically to get them prepped.

My thoughts are for staffing me, a nephew who is a car nut and just graduated from uni, he's great at digital media and has got himself trained up in car detailing. My uncle is recently semi retired and is a qualified mech and auto electrician. He does a couple of homers a week to keep his hand in and would be happy to do mech prep as he enjoys working on fast fords. My son would like to join when he leaves school in 18 months. He does not fancy university ad would like to work in the industry

I would not be making any major drawings out of the business as would be living off my non exec fees, keen to do this to create an enterprise that offers well prepped cars cosmetically and mechanically and build a reputation as a specialist in fast ford, hot hatches and a few porsches. I don't think I will have a problem selling its buying where the skill will be and active in owners club may give some advantage but probably will find this part the most challenging

My first question is am I mad to even contemplate this?? I I know the stock can hang around for a wee while but I will have zero debt to anybody so not scared and another income source, I'd like to offer finance also so would need to get approved, how long has it taken anybody as a start up to get to  a position where they are offering finance?

Thanks for taking the time to read and all advice welcome

Nice intro Steve

Sounds like a plan to me, the only points of concern generally speaking:

Employing family/friends and sometimes starting with a nice pot can be misleading, i.e. you can get too complacent.  Take the stock out, rent, insurance et al and you will be surprised how quickly you can be come asset rich cash poor (if that makes sense) - especially when you have a landlord and staff (albeit family) asking for there monthly payments.

To answer your next question, around 4-6 weeks for FCA approval and finally, I would say it has taken me one full year to consider myself a proper motor trader (as in started at home, incorporated, built relationships, moved to a unit, increased stock levels, got FCA).  In other words, 12 months on and I have all the infrastructure in place to handle "most" situations.

I am still learning every single day and loving it (over all).

Good luck and go for it (we are a very similar age but you're older by 12 months )

[EPV 631]

Lucas, is that you? 

[trade vet 702]

Hi Steve

Noting you are in mergers and acquisitions.Why not just buy an established freehold dealership and turn it round,sub divide it etc.There are opportunities everywhere of people wanting to escape this job because they are heavily in debt and their business has hit the buffers.Motor trade premises are not that expensive to buy.

[SteveG 0]

6 minutes ago, trade vet said:

Hi Steve

Noting you are in mergers and acquisitions.Why not just buy an established freehold dealership and turn it round,sub divide it etc.There are opportunities everywhere of people wanting to escape this job because they are heavily in debt and their business has hit the buffers.Motor trade premises are not that expensive to buy.

Thanks for the advice - I had thought about using my Sipp to try and buy premises, I had not thought about buying a dealership

[justina3 518]

Don't think your mad, however this is a hard industry that is changing daily if I had my time again the car game is not where I would put my time effort and dollars. I also started off as a car nut now cars have turned me nuts.

[NOACROSS 414]

This. +1

If you don’t mind (worse way) losing a few quid then go for it. 

Hopefully you’ll more than likely have a bit of fun on the way too. 

My shout would be to get involved in a workshop and do a few cars also. 

Good luck though. We’ll look forward to your updates on your journey!

[JDM1983 28]

Welcome from another newbie 

[sparky 274]

57 minutes ago, justina3 said:

Don't think your mad, however this is a hard industry that is changing daily if I had my time again the car game is not where I would put my time effort and dollars. I also started off as a car nut now cars have turned me nuts.

This. 

Personally  if I were in the OPs position I'd be working on my golf swing.

[SteveG 0]

12 minutes ago, sparky said:

This. 

Personally  if I were in the OPs position I'd be working on my golf swing.

Thanks for the replies....I’m shite at golf! 

I have worked hard to get to this position but I’m away from home at 0430 on a Monday and back at 1030 on a Thursday evening in current role. I currently stay in a. Flat in Manchester mon - thu and work 15 hours a day so not afraid of grafting. 

My old man died of prostate cancer at 70 and that hit me really hard, I’m really lucky I have this opportunity with the non exec roles. They will pay the household living costs....

Spoke to the wife about my plans and she is all for it if that’s what I want to do. 

Any thoughts on the stock profile I’m thinking of? 

 I see some dealers in scotland who stock a few Rs, Gti etc and they seem to turn their stock in about 6 weeks. 

My thoughts are with these cars you will tend to get decent part ex and a good chance of finance commission

[lastyboy 23]

Go for it i say. Obviously with ST's and especially Porsches if it goes wrong you could be several grand in the hole but if you can afford it then why not?

[Rory RSC 596]

Good intro. 

Dont think you will be working less than the long hours you already do. It’s very tough getting started in this job. 

Being passionate about cars and enjoying what you do will stand you in good stead. 

Specialising in a particular market is a great way to do things. You can learn it inside out.

Edited March 20, 2019 by Rory RSC

[trade vet 702]

Hi Steve

I might have spotted a possible pitch/ business for you.South of Glasgow.Est 40 years,same owner,main road location and Mot station,accounts appear to be availible.Leasehold £62k,rent £62k ( 2 showrooms,workshop,big forecourt) so maybe opportunity to sub let etc. This is the sort of thing I was previously referring to but there will be others in your area if you ask around.( I would imagine you have contacts in banks and finance companies ).    Whatever you do,you will get help on here.

[Mark101 536]

33 minutes ago, Rory RSC said:

Dont think you will be working less than the long hours you already do.

enjoying what you do will stand you in good stead. 

I started my auction research at about 7am from my IPad, then drove to work, picking a customer up en route. 

Handed over the Kia Soul

Test Drove and Sold Sprinter

Back on Manheim Online

Another viewing on Fiesta

Went to Halrauds (twice) for more stereo parts

Fitted stereo to Clio (sold)

Photographed and Videoed/Uploaded Ford Focus

On to BCA Online

Sold C1 and apraised PX (cash back)

Fuelled and tested PX

Drove home

Uploaded todays winnings

Tallied Stock book etc

Finished about 9pm

Quiet day, just 14 hours.

Then I cooked dinner as Mrs wasn't hungry (but she still ate it)

Bottom line, do what you like doing and you'll never work again.

 

 

Edited March 20, 2019 by Mark101

[justina3 518]

And sometimes an abundance of cash doesnt always mean its in the bag .....Lucas

 

I got two friends doing a KILLING with there Sipp's by buying out old pubs and converting them into flats or office space, they did one last year which was amazing hats off to them, old pub now home to 3 nice size flats two small office spaces and a corner shop all fully let already the roi is crazy numbers.

 

[Mark101 536]

1 minute ago, justina3 said:

And sometimes an abundance of cash doesnt always mean its in the bag .....Lucas

 

I got two friends doing a KILLING with there Sipp's by buying out old pubs and converting them into flats or office space, they did one last year which was amazing hats off to them, old pub now home to 3 nice size flats two small office spaces and a corner shop all fully let already the roi is crazy numbers.

 

Rental income and they still own the freehold/asset - good stuff

[justina3 518]

1 minute ago, Mark101 said:

Rental income and they still own the freehold/asset - good stuff

I am not normally one to follow the grass is always greener thinking as everyone thinks car traders are all loaded, but this did make me stand back and take note, they also had zero building know how which made me do more than ponder could be next years project for me, the council bent over backwards to help them as they want these old closed down pubs re-used to serve the community so the mix of office retail and flat space seen them fly through planning, even got them zero rates whilst the project was under go. 

 

[Mark101 536]

Just now, justina3 said:

I am not normally one to follow the grass is always greener thinking as everyone thinks car traders are all loaded, but this did make me stand back and take note, they also had zero building know how which made me do more than ponder could be next years project for me, the council bent over backwards to help them as they want these old closed down pubs re-used to serve the community so the mix of office retail and flat space seen them fly through planning, even got them zero rates whilst the project was under go. 

 

I don't know why I don't do it - I suppose it is because I am impatient and selling/renting property is a long game.

I have moved 28 times and always made some money (and spent it) on each move.

Never planning to move, I buy a house, get it to my standard and cannot resist a re-valuation, then I see £££'s and can't resist selling.

[trade vet 702]

Sounds good buying,doing up and renting old pubs.We have done a lot of property but on the last one we did 4 years ago we found labourers alone were wanting £150 per day and often ‘ in their hand’.Consequently we went way over budget.

10 hours ago, Mark101 said:

I started my auction research at about 7am from my IPad, then drove to work, picking a customer up en route. 

Handed over the Kia Soul

Test Drove and Sold Sprinter

Back on Manheim Online

Another viewing on Fiesta

Went to Halrauds (twice) for more stereo parts

Fitted stereo to Clio (sold)

Photographed and Videoed/Uploaded Ford Focus

On to BCA Online

Sold C1 and apraised PX (cash back)

Fuelled and tested PX

Drove home

Uploaded todays winnings

Tallied Stock book etc

Finished about 9pm

Quiet day, just 14 hours.

Then I cooked dinner as Mrs wasn't hungry (but she still ate it)

Bottom line, do what you like doing and you'll never work again.

 

 

That is good Mark.Newbies should take note if you want to be a good player in this job.That is the way it is on a good day.I was interested to see you do your research in the morning,I always did it after 9pm and double checked in the morning.

[SteveG 0]

10 hours ago, trade vet said:

Hi Steve

I might have spotted a possible pitch/ business for you.South of Glasgow.Est 40 years,same owner,main road location and Mot station,accounts appear to be availible.Leasehold £62k,rent £62k ( 2 showrooms,workshop,big forecourt) so maybe opportunity to sub let etc. This is the sort of thing I was previously referring to but there will be others in your area if you ask around.( I would imagine you have contacts in banks and finance companies ).    Whatever you do,you will get help on here.

Hi - had  look on Daltons last night, I know where that one is about 30 min drive from home so not too far.

I have a couple of deals completing where I am here and have to see them through for a back end bonus, probs Oct/ Nov before I can get freed up . I'm aware that to be successful in any field you need to get stuck in and try and get some competitive advantage. I have a passion for cars, always have.

My deal work is primarily in financial services business but spoke to a couple of guys who have had to get involved in (re)structuring work for automotive - their advice to me is forget about x sales per month and ruthlessly set a net profit target for the year, Return on capital employed is the key measure. The other advice I got is the buying is more important than the selling as good prep, price and customer service can help on the sales side.

Re Sipp for old pubs - great idea and they can be picked up for a bargain, holding as residential is a challenge though

[DPF 18]

Hats off to Lucas started with 200k without any cars trade experience. Where’s Lucas when we need him most. 

[Stalker 180]

Hi Steve

I regularly get flamed for being harsh on newbies. So I'm not going to be harsh this time.

The hardest part of the job is going to be sourcing good stock, do you have any plans or contacts for this?

 

 

 

[SteveG 0]

12 minutes ago, Stalker said:

Hi Steve

I regularly get flamed for being harsh on newbies. So I'm not going to be harsh this time.

The hardest part of the job is going to be sourcing good stock, do you have any plans or contacts for this?

 

 

 

Flame away mate..no probs mate

For sourcing I'm active in Porsche owners club (got a cayman r) and in the Focus RS owners clubs and forums (got a mk2 st and 3 RS). Go to monthly meets etc. That's a potential route for stock as know quite a few boys there and they tend to move from mk2 to mk3 and you see some of the younger guys move out of fiesta st to rs etc. They buy their cars somewhere and in the digital age folk will travel. Flights are cheap to Glasgow !

Looked at some of the auction prices being paid and they are quite tight!

If I can be bold and ask - for the stock profile I propose  is £100 / £150k p.a. net achievable when established?

 

[Stalker 180]

9 minutes ago, SteveG said:

Flame away mate..no probs mate

For sourcing I'm active in Porsche owners club (got a cayman r) and in the Focus RS owners clubs and forums (got a mk2 st and 3 RS). Go to monthly meets etc. That's a potential route for stock as know quite a few boys there and they tend to move from mk2 to mk3 and you see some of the younger guys move out of fiesta st to rs etc. They buy their cars somewhere and in the digital age folk will travel. Flights are cheap to Glasgow !

Looked at some of the auction prices being paid and they are quite tight!

The auctions are very tight, their fees are more than we NET per car TBH.

10 minutes ago, SteveG said:

If I can be bold and ask - for the stock profile I propose  is £100 / £150k p.a. net achievable when established?

 

Crystal ball required for that one , I think nowadays you have to be a very good player to achieve that.

If I was a little older and looking for a challenge/money making exercise, Id be trying to repatriate some desirable classics from abroad.

Never mind the modern shite, i'm talking of the 80-90s shite that now fetches mega money.