Business Plan Thoughts?

[Stashio 1]

Hi guys, a bit of background about me. I'm late 30's, have always enjoyed fixing up cars and am looking to turn my hobby into a business. I am under no illusions it will be hard work without a guarantee of success so the goal is to start off part-time, keeping my full time job, keeping costs low, while I see how things go. I do want to be an above board trader from the start though, offering cars with a warranty for peace of mind, etc.

There's a loads of great threads on here with the nuts and bolts of starting out, etc. so I have a good idea of what's required (I've ran a few IT contracting LTD's so know what's required on the accounts side of things). BUT I wanted to run my business plan by you guys and get your thoughts if you don't mind. Constructive feedback welcome.

In general I want to offer modern classics (90's era) coupes and convertibles. I think having a niche is a good plan and will let me focus on a few core models at first (MR2, MX5, MG, etc.). I'm looking to find fundamentally good cars that need work to bring up to scratch. So something with good history, low/average miles/owners but has body/mechanical/presentation issues (no write offs) then fix any issues, full service, MOT, valet, polish, etc. full prep prior to sale. The goal being restore them back to their former glory on a sensible budget, build a good reputation and learn the ropes. Not chasing profit yet but working towards being able to jack in my soul destroying IT job eventually if it works out.

As I'm starting out the goal will be to learn rather than take any big risks so I'm thinking get something worth a bit fixed up but relatively cheap to buy when they need sorting out - MK1 MX5 being a good example. Eventually I'd like to restore/update older classics, sort out bigger bodywork jobs, improve drivetrain/handling/.etc - I'm thinking MGB V8 conversations would be popular and a good earner (a big process I'm reading up on at the moment).

I have a double garage at home with a pit and some storage around the side of the house. It's presentable so initially to keep costs low I plan on starting out from home (but as a trader as I mentioned). If things work out I'll upgrade but the goal is keep costs down in the early stages so it doesn't make sense to rent somewhere bigger at the moment.

What do you reckon?

Cheers,

Matt

[New year revolutions...... 197]

just do it 

 

[Kes 7]

Great idea. Something I fancied for years myself... Just can't imagine how you can make profit with this business model unfortunately. Especially doung it part time.

 

 

[Row 71]

You will spend more time fixing than selling but if that's what you want to do that's fine, but my aim is to do less fixing and more selling.

[Paul C 75]

I've always been into classics and it sounds like a fun idea. However, renovating/restoring classic cars is a bit of a rabbit's warren. Little things can take months and months due to parts non-availability, or people selling secondhand parts "take the piss" with prices because they know its rare etc. IMHO only really on the upper-end stuff do you have a chance of making decent money. Also....not sure I'd buy ANY 90s MG.....they stopped the Midget and MGB/MGC in 1979-80, there's the MGF but then we're into MG Montegos and other stuff in the 90s...

[SouthernTrader 20]

You’ll have fun (and stress) doing that part time and might even make a decent side income but as a full time business I’d say no.

Your time will be swallowed trying to find, fix and retail these cars. Also realistically how many are available at any one time and via what source? Could you for example source 10-15 a month that you’d need when the business is full time?
 

While you might take the best part of a month, sourcing, fixing and prepping a couple of 90s Mercs, you could have bought and sold 10 “retail ready” modern cars.

Don’t let me put you off btw, if you want to try it go for it, you may find down the line you could stock modern Mercs and other newer cars but have a few nice 90s classics too to keep that side of your passion going.

Anyway, good luck

[Stashio 1]

You might be right @Paul C maybe my 90's nostalgia needs to stop at the MG  

I guess the main thing I'm concerned about is starting off on the right foot and not loosing my shirt if it doesn't work out. Start small and build into something bigger.

Ultimately I see the MX5's, etc. as a cheap-ish straight forward way of starting out, cut my teeth, learn the ropes and build a rep. Then move on to a more profitable models/ideas (MGB v8 conversions perhaps) once the business is up and running. After that who knows...

Thanks for the comments guys - keep them coming I really appreciate the input!

[Paul C 75]

If you can weld and fix carburettors (not at the same time!!!), there will always be something for you.

[Casper 272]

Welcome to the forum good luck with your new business .. 

[Kes 7]

39 minutes ago, Paul C said:

If you can weld and fix carburettors (not at the same time!!!), there will always be something for you.

Totally agree- weldng skils is a must fixing that type of stuff. Mr2 mx5 supras e30 944 and other desirable 90's classics are mostly fuel injected anyway so forget carbs. 

 

[awc1000 93]

sounds good and a real advantage if you can spanner, weld, and paint, in the short term though it sounds like you will be time poor, sadly you can't buy your time, i would advise to start by buying cars that need little or no work, with you working full time you will probably only find an extra 20 odd hours a week to prep cars, once you have sold your first car without so much effort for a profit you will soon loose interest in the heavier prep cars anyway, then if things work out to the point where you do the cars full time you can then justify the heavier prep cars as you will at this point be looking to fill 60 hours a week instead of 20.

regards your post you mention that you are not bothered about a profit to start with, forget that, now't wrong with earn as you learn, there's nothing more motivating than seeing a profit, good luck.

[Stashio 1]

Nice one thanks again guys I just got the LTD setup so will no doubt be picking your brains again soon.

[justina3 518]

26 minutes ago, Stashio said:

Nice one thanks again guys I just got the LTD setup so will no doubt be picking your brains again soon.

Whats your thinking behind opening a Limited Company ? over a soul trader 

[Stashio 1]

I've had a few LTD's when I was an IT contractor so it's more familiar to me but ultimately it's about security - should something go wrong the liability is on the company and not me personally. Obviously the plan is for nothing to go wrong but as they say 'plan for the worst and hope for the best'.

I'd be interested to know why people wouldn't go LTD, are you a sole trader?

Edited June 10, 2020 by Stashio

[justina3 518]

1 minute ago, Stashio said:

I've had a few LTD's when I was an IT contractor so it's more familiar to me but ultimately it's about security - should something go wrong the liability is on the company and not me personally. Obviously the plan is for nothing to go wrong but as they say 'plan for the worst and hope for the best'.

I was only being curious its your path to walk, i think the days of hiding behind a ltd company for protection has lone gone, any major financial implications these days are mostly covered by a personal guarantee from a director (apart from the recent bounce back loans before some smart ass fires that at me) if anything the accounting requirements and director legislation are a dead weight to a small business over a sole trader set up.

[CCC 31]

The big problem will be finding enough stock to do this cost effectively in volume I’d guess.

in reality there’s more profit opportunity on slightly rarer stuff where fixing costs might be higher but sales prices higher too (eg nice BMW 6’s/2002’s).

If you can weld  and spray then MX5 mk1 might be a gold mine but I don’t think there is the demand there used to be.

ULEZ and recession might mean a surplus of sellers over buyers in the long term too.

 

[Bmx Bandits 52]

Welcome, I wish you luck, you’ve obviously got your head screwed on; your a good age and even a basic knowledge of running a business is a bonus.

You should go for it especially if it’s something you enjoy!! My only reservation is that I do think that finding a good reliable source of suitable 90’s stock that you can turn for a profit will be quite a task.

As you like to tinker/repair cars I’d be tempted to also look out for some later mainstream cars in local papers/gumtree etc that need clutches/gearboxes/engines owned by proper people that have been quoted big bills by garages/main dealers to repair and end up just selling the car as it’s uneconomical for them to have repaired. It could be worth putting in adverts in local papers/online to say you buy non runners. You could repair and sell them in between your 90’s projects. It would get you more experience dealing with the general public, help build your business, insulate you from any quiet periods as I’m sure the 90’s market could be quite cyclical and most importantly do something that you enjoy. 

 

So best of luck and let us know how you get on!! 

[Stashio 1]

Cheers @CCC & @Bmx Bandits I agree with you both, it's going to be tricky to find the right balance at least at first. 

Keeping an eye out for decent non-runners is a good shout too, especially between projects as you say. Out of interest is there anywhere specific you'd recommend? I usually just keep my search to ebay for things like that. I'm not on facebook but a mate says the marketplace on that is pretty good if you're willing to wade through the crap so I'll give that a go at some point.

 

 

[justina3 518]

1 hour ago, Stashio said:

Cheers @CCC & @Bmx Bandits I agree with you both, it's going to be tricky to find the right balance at least at first. 

Keeping an eye out for decent non-runners is a good shout too, especially between projects as you say. Out of interest is there anywhere specific you'd recommend? I usually just keep my search to ebay for things like that. I'm not on facebook but a mate says the marketplace on that is pretty good if you're willing to wade through the crap so I'll give that a go at some point.

 

 

Not sure of your area but local auctions mainstream and small indi ones often have non runners in there which used to go for pennies but these days they command more of a price ticket but still could be worth a look.

[S & J Trading 3]

On 6/10/2020 at 3:38 PM, Stashio said:

I've had a few LTD's when I was an IT contractor so it's more familiar to me but ultimately it's about security - should something go wrong the liability is on the company and not me personally. Obviously the plan is for nothing to go wrong but as they say 'plan for the worst and hope for the best'.

I'd be interested to know why people wouldn't go LTD, are you a sole trader?

Hi Stashio, we've just set up a partnership as opposed to a LTD on the advice of our accountant, the days of limited liability have gone, someone within the company still has to be responsible for dept. The fact you have a workshop and a bit of storage is good start. If you handy with the spanners great, just take on stuff with minor jobs to be done or you end up bogged down, and when you have calculated the amount of time youve put in you wont have made much.  Good luck, theres some good fun and a living to be had!

 

 

[justina3 518]

1 hour ago, S & J Trading said:

Hi Stashio, we've just set up a partnership as opposed to a LTD on the advice of our accountant, the days of limited liability have gone, someone within the company still has to be responsible for dept. The fact you have a workshop and a bit of storage is good start. If you handy with the spanners great, just take on stuff with minor jobs to be done or you end up bogged down, and when you have calculated the amount of time youve put in you wont have made much.  Good luck, theres some good fun and a living to be had!

 

 

Someone from inside the company would only be liable if they signed to be so other than that the protection of the limited company viel in most cases stand, and for partnerships my thinking is its far easier to allocate shares via a ltd than draw up a very long drawn partnership agreement which is almost always picked apart by solicitors when it all goes south.

anyway almost put myself to sleep then....op have you bought any cars yet 

[trade vet 702]

2 hours ago, S & J Trading said:

Hi Stashio, we've just set up a partnership as opposed to a LTD on the advice of our accountant, the days of limited liability have gone, someone within the company still has to be responsible for dept. The fact you have a workshop and a bit of storage is good start. If you handy with the spanners great, just take on stuff with minor jobs to be done or you end up bogged down, and when you have calculated the amount of time youve put in you wont have made much.  Good luck, theres some good fun and a living to be had!

 

 

Pardon me but I am doubtful you have had good advice,he does not sound to me like a chartered accountant.

[have a word with the wife 299]

On 6/10/2020 at 9:43 AM, Stashio said:

Hi guys, a bit of background about me. I'm late 30's, have always enjoyed fixing up cars and am looking to turn my hobby into a business. I am under no illusions it will be hard work without a guarantee of success so the goal is to start off part-time, keeping my full time job, keeping costs low, while I see how things go. I do want to be an above board trader from the start though, offering cars with a warranty for peace of mind, etc.

There's a loads of great threads on here with the nuts and bolts of starting out, etc. so I have a good idea of what's required (I've ran a few IT contracting LTD's so know what's required on the accounts side of things). BUT I wanted to run my business plan by you guys and get your thoughts if you don't mind. Constructive feedback welcome.

In general I want to offer modern classics (90's era) coupes and convertibles. I think having a niche is a good plan and will let me focus on a few core models at first (MR2, MX5, MG, etc.). I'm looking to find fundamentally good cars that need work to bring up to scratch. So something with good history, low/average miles/owners but has body/mechanical/presentation issues (no write offs) then fix any issues, full service, MOT, valet, polish, etc. full prep prior to sale. The goal being restore them back to their former glory on a sensible budget, build a good reputation and learn the ropes. Not chasing profit yet but working towards being able to jack in my soul destroying IT job eventually if it works out.

As I'm starting out the goal will be to learn rather than take any big risks so I'm thinking get something worth a bit fixed up but relatively cheap to buy when they need sorting out - MK1 MX5 being a good example. Eventually I'd like to restore/update older classics, sort out bigger bodywork jobs, improve drivetrain/handling/.etc - I'm thinking MGB V8 conversations would be popular and a good earner (a big process I'm reading up on at the moment).

I have a double garage at home with a pit and some storage around the side of the house. It's presentable so initially to keep costs low I plan on starting out from home (but as a trader as I mentioned). If things work out I'll upgrade but the goal is keep costs down in the early stages so it doesn't make sense to rent somewhere bigger at the moment.

What do you reckon?

Cheers,

Matt

Neighbours ?

Who would provide the warranty ?

I have got in my head a mx5 with rotted out  sills, smokey valve stem oil seals and a slipping clutch at £500 ? And hoping to get  £2495 ?Am l wrong ?

[Stashio 1]

Neighbors aren't an issue but regardless I get your point and it's a temporary measure until things hopefully take off. We're semi-rural, detached house so not really bothering anyone.

Warranty-wise I've been reading 'the how to be a car dealer' issue which seems very helpful. An example price they gave was an uninsured 6 month warranty for around £100 which seems reasonable (obviously I'd do my own checks).

I know what you're saying with the MX5 example, I read the head in the sky posts on here of dreamers that aren't going to make it. I'm in a different boat working full time as well but yeah initially I won't be making much and little I do make I'll be reinvesting and building. Funding is an issue right now so to be honest I'm starting small because I have to and I'll be working my way up slower than I'd like. But I'm trying to do it in the right way from the start and build up a good rep as I go. I'm not shy about hard work I just want to make sure I'm going into this with my eyes open.

Thanks genuinely though, I understand what you're saying.

[BHM 994]

On 6/10/2020 at 9:43 AM, Stashio said:

will let me focus on a few core models at first (MR2, MX5, MG, etc.).

You’ll definitely need a welding machine & plenty of sheet steel.

I’d suggest for this market, invest in a college course in how to deal with the general public, specifically on dealing with time wasting, dreaming, middle-aged dickheads. However if you like answering gormless emails every night this is probably a good market to be in.

Good luck in whatever you do, you must have the patience of a saint.