Looking for Advice & Guidance

[YaranCars 4]

Good Morning everyone, 

I have been reading this forum for over a year and I have learnt so much from everyone who contributes. I wanted some advice from people who are more experienced than myself.  I have been trading from home for over a year and have been getting good sales and very good reviews. I am based in west London and I buy ex-lease cars that have full maintenance history that range in price from £6k - £13k retail.

I am thinking of investing more into this business and renting a showroom close to where I live. This showroom has the capacity to hold 14 cars and the asking rent is for around £3k/ month. I have managed to source around £100k that from several people who can invest into this business.

I am excited for this venture but I want some words of advice from any of the members here. Is it a good time to be going into this sector? is the investment enough? will I be able to be profitable with £3k/month rent for 14 car showroom?

Thank you,

Faz

[trade vet 703]

Hi Faz

Does 3 grand per month include business rates.You need to bare in mind that because you can now sell ex lease stuff there are no guarantees that you will be  be able to replicate it from the proposed showroom.Every pitch is different and I have had 7.As it happens I have retailed ex lease stuff for a long time in the North East but when we took a nice pitch in London which was very cheap,we found we could not sell ex lease stuff.The punters there wanted very low mileage small automatics so if you go ahead with this showroom be prepared to change your business plan. Good Luck.

[Casper 272]

Welcome to to the forum Faz if your making a wage in these times my thoughts are do you really want to include other investors in your business with a lot more overheads with rent etc 

keep doing what your doing from home on a 1 man basis would be my advice especially in these troubled times 

good luck whatever you decide . 

[Row 71]

3 hours ago, YaranCars said:

Good Morning everyone, 

I have been reading this forum for over a year and I have learnt so much from everyone who contributes. I wanted some advice from people who are more experienced than myself.  I have been trading from home for over a year and have been getting good sales and very good reviews. I am based in west London and I buy ex-lease cars that have full maintenance history that range in price from £6k - £13k retail.

I am thinking of investing more into this business and renting a showroom close to where I live. This showroom has the capacity to hold 14 cars and the asking rent is for around £3k/ month. I have managed to source around £100k that from several people who can invest into this business.

I am excited for this venture but I want some words of advice from any of the members here. Is it a good time to be going into this sector? is the investment enough? will I be able to be profitable with £3k/month rent for 14 car showroom?

Thank you,

Faz

If you want to do it then do it, because if you wait for a good time it will never come.

[YaranCars 4]

4 hours ago, trade vet said:

Hi Faz

Does 3 grand per month include business rates.You need to bare in mind that because you can now sell ex lease stuff there are no guarantees that you will be  be able to replicate it from the proposed showroom.Every pitch is different and I have had 7.As it happens I have retailed ex lease stuff for a long time in the North East but when we took a nice pitch in London which was very cheap,we found we could not sell ex lease stuff.The punters there wanted very low mileage small automatics so if you go ahead with this showroom be prepared to change your business plan. Good Luck.

Thank you for the solid advice, yes the 3k includes rent and rates. seeing as you have experienced the london market would you say that 3k rent for a 14 car showroom is good for park royal area? 

I will take onboard what you said about changing the type of vehicles.

 

Thank you

3 hours ago, Casper said:

Welcome to to the forum Faz if your making a wage in these times my thoughts are do you really want to include other investors in your business with a lot more overheads with rent etc 

keep doing what your doing from home on a 1 man basis would be my advice especially in these troubled times 

good luck whatever you decide . 

Thank you for the warm welcome. That is what is dividing me. Either I stay put and continue as I am or take a risk and hopefully grow. I wanted to see whether the rent and the number of vehicles seem like a good combination.

2 hours ago, Row said:

If you want to do it then do it, because if you wait for a good time it will never come.

True, but I wanted to see whether I can have some input maybe learn something from the amount of experience on this forum

[David Horgan 564]

Hi 

100k of other peoples money would be my concern 

£3,000 a month for just the rent needs to be thought of as nearly double that , 

More advertising 

More costs of prep 

VAT element if your not already 

More petrol costs 

Then repayment of costs of the money people invested .

May well be a clear case of working extra to pay other people . work your figures out very well , be honest with yourself , if your going to work harder the rewards should be higher for you . 

[trade vet 703]

It is a long time since we operated down there.3 grand per month for rent and rates sounds very cheap to me.Have you checked the cost of good insurance cover because despite having 20 years no claims with Aviva,they and a few others refused to give us a quote.
14 cars is a nice size ,however you only want short term loans from your investors otherwise they will want to be involved.

[justina3 518]

To many chiefs not enough indians and nothing spoils a friendship like money.

[SouthernTrader 20]

I’d never take investment from someone else wanting to take a piece of my profit while I did all the leg work or partner with someone - personal preference but I like to answer to me alone and know all my profits are mine (and the tax and VAT man unfortunately)

If you want to expand can’t you take a bounce back loan or get capital yourself? 

[It's me 615]

if it all goes tits will these investors break your legs?

if not and your busines plan is sound go for it

[petrol head 46]

I think you have already had some good advice but would add the following:

- As well as rent you have business rates, employee costs, marketing, maintenance of the site, insurance, licencing, theft, vandalism........

- I ran a very successful business in London back in the 90's, we had a niche Franchise, tiny showroom you could fit 4 cars in. We had 6 parking spaces close to the showroom and the rest of the stock I kept miles away in a cheap space. Customers would call from the adverts before they came to see the car, so we could move it to the showroom or take the car, as we usually did to them. I knew, sounds arrogant I know, exactly what the market was and only stocked petrol and Auto SUV's and MPV's, I would buy others, but move them on in the trade for a profit, with the premise being the trade account will always cover my salary and associated costs. 

- Managing, recruiting employees will eat your time like you won't believe and getting others to share your values is key.

Keep us posted. 

[YaranCars 4]

Hello,

 

Just wanted to start off by saying thank you to everyone who commented you have all been very generous with your time and advice. 

 

17 hours ago, SouthernTrader said:

I’d never take investment from someone else wanting to take a piece of my profit while I did all the leg work or partner with someone - personal preference but I like to answer to me alone and know all my profits are mine (and the tax and VAT man unfortunately)

If you want to expand can’t you take a bounce back loan or get capital yourself? 

I have got a bounce back loan but it is not enough to cover the costs of expanding and I have no access to capital from any other source. 

 

14 hours ago, Thestalker said:

if it all goes tits will these investors break your legs?

if not and your busines plan is sound go for it

No they won't they understand that it is a risk and they are confident in the business model. 

 

1 hour ago, petrol head said:

I think you have already had some good advice but would add the following:

- As well as rent you have business rates, employee costs, marketing, maintenance of the site, insurance, licencing, theft, vandalism........

- I ran a very successful business in London back in the 90's, we had a niche Franchise, tiny showroom you could fit 4 cars in. We had 6 parking spaces close to the showroom and the rest of the stock I kept miles away in a cheap space. Customers would call from the adverts before they came to see the car, so we could move it to the showroom or take the car, as we usually did to them. I knew, sounds arrogant I know, exactly what the market was and only stocked petrol and Auto SUV's and MPV's, I would buy others, but move them on in the trade for a profit, with the premise being the trade account will always cover my salary and associated costs. 

- Managing, recruiting employees will eat your time like you won't believe and getting others to share your values is key.

Keep us posted. 

Yes that is also something that I can do, there is a cheap parking lot not too far away where I can add additional cars if need be. Yes I agree with the stock type that is required in London, although sourcing them is never easy. 

With regards to the employees I have a couple already ready to start with me who have has prior experience in the field. 

18 hours ago, David Horgan said:

Hi 

100k of other peoples money would be my concern 

£3,000 a month for just the rent needs to be thought of as nearly double that , 

More advertising 

More costs of prep 

VAT element if your not already 

More petrol costs 

Then repayment of costs of the money people invested .

May well be a clear case of working extra to pay other people . work your figures out very well , be honest with yourself , if your going to work harder the rewards should be higher for you . 

That is why I wanted to ask everyone on here, I had the same thoughts cross my mind. So I thought I wanted to share my thoughts and see whether the figures and the basic indicators look good for me to take the step forward or stay as I am.

[MAP 5]

21 hours ago, trade vet said:

It’s a long time since we operated down there.3 grand per month for rent and rates sounds very cheap to me.Have you checked the cost of good insurance cover because despite having 20 years no claims with Aviva,they and a few others refused to give us a quote.
14 cars is a nice size ,however you only want short term loans from your investors otherwise they will want to be involved.

I agree with all trade vet said, and the 3k per month seems very reasonable for London. My main concern would be turning enough stock(scouring at the right price to). If you turn 50% @ an average of a £1k profit, that’s only £7k a month. Deduct your advertising, insurance, Tax, VAT, etc,  and it doesn’t leave you with much of a wage. You’d probably need to turn 75/80% to make it worthwhile, IMO. 
it’s sounds like you’re switched on and obviously have experience, so good luck to whichever way you decide to go.

[Casper 272]

15 hours ago, YaranCars said:

Just wanted to start off by saying thank you to everyone who commented you have all been very generous with your time and advice. 

Faz thank you for being so polite and well mannered its nice to see keep us all posted . 

[PhilA&S 2]

Hows it going Faz,  any updates.

[YaranCars 4]

Good Morning,

I have had a very long think about all the advice that was given to me here and thanks to you guys I gave the guy an offer if he wanted to accept £2k rent to start off with otherwise it would not be worth it. As you would expect he refused. I am continuing to trade from home and keeping a lookout for a yard around the west London area to store and sell my stock.

Every suitable commercial property that I contact refuses to work with motor trade. I do not quite know why, all they say is bas previous experiences. 

I am grateful that I have a good source of cars that have not yet caused me any hassle and I am working on getting my google reviews up and slowly growing into this sector. Although it has become a sector that is almost impossible to get into with so much red tape everywhere.

I am very humbled that you remembered my story and came back to ask about the update. 

[Mojo121 229]

19 minutes ago, YaranCars said:

Every suitable commercial property that I contact refuses to work with motor trade. I do not quite know why, all they say is bas previous experiences. 

Motor trade is the DSS of Commercial lettings. It’s associated with people leaving their tenancy overnight, having run up huge debts, leaving unpaid bills, great amounts of mess (oil, car parts, dirt, broken cars) and sometimes a raft of CCJs against the property.
 

Not to mention, test drives, pressure washers, cars parked left right and centre for “just 10 minutes mate”, along with big transporters turning up every other day tend to piss off the other tenants.

The difficulty we have finding units used to annoy me... I just see it as part of the job now. I get it... and sympathise!

[justina3 518]

1 hour ago, Mojo121 said:

Motor trade is the DSS of Commercial lettings. It’s associated with people leaving their tenancy overnight, having run up huge debts, leaving unpaid bills, great amounts of mess (oil, car parts, dirt, broken cars) and sometimes a raft of CCJs against the property.
 

Not to mention, test drives, pressure washers, cars parked left right and centre for “just 10 minutes mate”, along with big transporters turning up every other day tend to piss off the other tenants.

The difficulty we have finding units used to annoy me... I just see it as part of the job now. I get it... and sympathise!

I have to say i do think thats a thing of the past, these days its so easy to credit check background check anyone sniffing out a trouble maker is a lot easier than it used to be.

However i do agree back in the day small indi garages used to jump ship overnight it was hard work keeping up with who was there one minute and gone the next, i remember billing a garage for 3 cd players we fitted when i came to chase the invoice i was advised the company i had billed had moved a month ago the sales staff stayed but owners changed.

[It's me 615]

2 hours ago, justina3 said:

I have to say i do think thats a thing of the past, these days its so easy to credit check background check anyone sniffing out a trouble maker is a lot easier than it used to be.

However i do agree back in the day small indi garages used to jump ship overnight it was hard work keeping up with who was there one minute and gone the next, i remember billing a garage for 3 cd players we fitted when i came to chase the invoice i was advised the company i had billed had moved a month ago the sales staff stayed but owners changed.

its a major problem in my area

 

[justina3 518]

I am surprised its hardly heard of down my neck of the woods small pitches with facilities are like gold dust and demand a big premium loads of door stoppers waiting for small to medium pitches but they hardly ever come up.