Business advice?

4v6 · 19-06-08, 11:38 AM

Been doing some more research as im quite keen to start a small service and repair shop catering for mostly older Audis.

About 2 years ago i went through all the Business Link stuff, did the business plan had a few meets with an advisor etc, but the one stumbling block for me is startup capital.

Id already figured that getting suitable premises would be perhaps the hardest part and so it was to be, but then the advisor and his financial expert basically stated that id have to take out a loan of some kind to finance the venture.
I was figuring on about 15K, mostly to cover unit rent for one year, business rates and power, phones etc.
15K is one heck of a lot of money when your pockets are used to being empty so the plan got abandoned.
Theres no way i could allow get myself into such a level of debt ( ive never had any!), dont have a credit card etc, the idea of that wouldnt allow me to sleep.
Its the "what if it all goes wrong" part thats my biggest bugbear. I truly hate the idea of owing money that i may not be able to pay back- along with all the problems that entails.

Any advice gratefully accepted.

Coxy · 19-06-08, 11:41 AM

How much space do you need?

4v6 · 19-06-08, 11:47 AM

Good question.

Its one ive considered long and hard as the more you have the higher the cost...darn.

Figured initially on something like 1000 square feet minimum as you need room for a vehicle on the ground and one on a hoist, plus youd need storage for parts etc.

I was renting a similar sized unit with a friend a while back which would have done fine for initial startup but things didnt work out so i quit it.
Shame, was about the right size with an upstairs storage too.

Coxy · 19-06-08, 11:50 AM

Hmmmmmmmmmmmm, I could make space!

darreno'd' · 19-06-08, 02:40 PM

First thing i would advise is, decide where you want to be in five years and set your sights there and not so much on your outlay now. Trying to save too much in the short term can cripple you a bit further down the road. Its a damn site easier to tighten your belt now than have to move an established business in a couple of years. Have you considered looking for something way larger than you think you need at present ? this may seem barmy but if you can let (if you purchase) or sub let, if you rent the additional space, your space may well cost you a lot less. Specialising is not a bad idea either, a good player in a niche market will always win, if you offer something that cannot be easily obtained elsewhere, your competition is reduced dramatically. On a personal note, it's been twelve years for me and i would really struggle to have a "proper" job now. Good luck with your decision, keep us informed of your services, and wait for the phone to ring.

joe90 · 19-06-08, 02:44 PM

Dont know what it's like for you down there, but up here in leeds the local council have lots of small modern units for rent very cheaply and are for small buisness start up. Could be worth a phone call to your local authority to see if they have a similar sceme in place.

4v6 · 19-06-08, 03:24 PM

Thanks for the great advice so far fellas, its very much appreciated.

Interesting statement Darren regarding the space issue- i hadnt thought of it in that way or the 5 years down the road part either, as ive never been one for plans as some bugger always mucks them up.

Have no worries about specialising as such, but id tend to try and restrict myslef to the older Audis of say 1975 to 1990 as you start to run into some serious engine management stuff after then.
However, thats not a problem really as ive done the courses at Lucas international, got all the books etc and im pretty well versed with it.
No, for me the decision (if it comes) to work on the older models is out of pure passion for the styles, engines, era etc- not interested in A4's and so on, plus you need to invest in expensive equipment to deal with the newer electrical systems (can bus etc).
Wish to stay far from that!

Joe, thanks for pointing that out matey, yes there are some council owned units about a mile from me but the cost is astronomical, 7k for the smallest iirc with a 5 year lease.....if it was a 12 month at a time lease id be happier as im not tied to it in the event of things going pear shaped- you can never tell.

Coxy- please, tell me more sir!

Coxy · 19-06-08, 03:45 PM

Quote:

Originally Posted by 4v6

Coxy- please, tell me more sir!

I have a big unit, that has space and could be developed (ramps, etc).

Only problem is I'm currently having a dilemma as I rent the unit.

Option 1. Buy the unit and do what I want with it (Landlord has agreed to sell)

Option 2. Buy somewhere else

Option 3. Stay renting this place and line my landlords pockets some more (he does drive a new RS4!). If I stay I won't develop (as in mezzanine flooring/extra storage/ramps etc) as I'll get nothing extra for it when I do leave.

If I stay, then I'd personally want to use part of the space for working on cars.
At the moment, I use it to store cars, Audi parts and valeting gear anyway so I don't need to get any permission to do any different as it's within the scope of what I do at the moment. (in a fashion!)
The unit itself is 2400 sq ft, but is about 40ft high so extra space upwards is not an issue.

TheTwelveQuidKid · 19-06-08, 06:56 PM

Quote:

Originally Posted by 4v6

Theres no way i could allow get myself into such a level of debt ( ive never had any!), dont have a credit card etc, the idea of that wouldnt allow me to sleep.

Most of the richest people made their money by using someone elses money to make more.

Worst case scenario (and one which many business advisors believe is unethical to mention) is bankruptsy. In many cases, this isn't as bad as it sounds. If you're a homeowner, or have other valuable assets, bankruptsy may not be such a good option. But for anyone else, all it means is that you can't obtain credit for the duration of the bankruptsy. Many debtors are discharged from bankruptsy after a year these days. And once someone is declared bankupt, the slate is wiped clean.

Sorry if this sounds like an advert for going bankrupt - but IF a financial institution lends money to you, they bear some of the responsibility for making sure the business has a decent chance of success. If it fails, they lose too.

mjs4x4 · 19-06-08, 07:16 PM

Just an observation here - but if you are basing a business on servicing the needs of older Audis - where is the market?

Granted, there are a few nutcases like me with old Audi's and (unlike me) some of them will actually use them.

However, we live in a world where a six or seven year old car is worth 'peanuts', and, credit crunch or not, 2 million + new cars a year come onto our roads and there is a steady stream of older cars to the breakers yard.

It's a small market. Furthermore it's a market populated by 'enthusiasts' who can/will often tackle jobs themselves.

Not wishing to sound negative - just realistic. Assessing space requirements / overhead costs etc is essential - but key to it all is realistically estimating just how much work could you get and therefore what turnover you might achieve.

Mike

19-06-08, 02:40 PM	#5
darreno'd' Mr Sixty Thousand!! Classic Audi Club Member Join Date: Jul 2007 Location: berkshire Posts: 1,729	First thing i would advise is, decide where you want to be in five years and set your sights there and not so much on your outlay now. Trying to save too much in the short term can cripple you a bit further down the road. Its a damn site easier to tighten your belt now than have to move an established business in a couple of years. Have you considered looking for something way larger than you think you need at present ? this may seem barmy but if you can let (if you purchase) or sub let, if you rent the additional space, your space may well cost you a lot less. Specialising is not a bad idea either, a good player in a niche market will always win, if you offer something that cannot be easily obtained elsewhere, your competition is reduced dramatically. On a personal note, it's been twelve years for me and i would really struggle to have a "proper" job now. Good luck with your decision, keep us informed of your services, and wait for the phone to ring. __________________ http://www.oesems.co.uk/

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19-06-08, 11:41 AM	#2
Coxy 4 Ring Mafia Classic Audi Club Member Join Date: Jul 2007 Location: on the side of a hill in Shropshire! Posts: 28,215	How much space do you need?

19-06-08, 11:47 AM	#3
4v6 Ex Member Classic Audi Club Member Join Date: Dec 2007 Posts: 5,565	Good question. Its one ive considered long and hard as the more you have the higher the cost...darn. Figured initially on something like 1000 square feet minimum as you need room for a vehicle on the ground and one on a hoist, plus youd need storage for parts etc. I was renting a similar sized unit with a friend a while back which would have done fine for initial startup but things didnt work out so i quit it. Shame, was about the right size with an upstairs storage too.

19-06-08, 11:50 AM	#4
Coxy 4 Ring Mafia Classic Audi Club Member Join Date: Jul 2007 Location: on the side of a hill in Shropshire! Posts: 28,215	Hmmmmmmmmmmmm, I could make space!

19-06-08, 02:44 PM	#6
joe90 Grown up member Join Date: May 2008 Location: Leeds Posts: 450	Dont know what it's like for you down there, but up here in leeds the local council have lots of small modern units for rent very cheaply and are for small buisness start up. Could be worth a phone call to your local authority to see if they have a similar sceme in place.

19-06-08, 03:24 PM	#7
4v6 Ex Member Classic Audi Club Member Join Date: Dec 2007 Posts: 5,565	Thanks for the great advice so far fellas, its very much appreciated. Interesting statement Darren regarding the space issue- i hadnt thought of it in that way or the 5 years down the road part either, as ive never been one for plans as some bugger always mucks them up. Have no worries about specialising as such, but id tend to try and restrict myslef to the older Audis of say 1975 to 1990 as you start to run into some serious engine management stuff after then. However, thats not a problem really as ive done the courses at Lucas international, got all the books etc and im pretty well versed with it. No, for me the decision (if it comes) to work on the older models is out of pure passion for the styles, engines, era etc- not interested in A4's and so on, plus you need to invest in expensive equipment to deal with the newer electrical systems (can bus etc). Wish to stay far from that! Joe, thanks for pointing that out matey, yes there are some council owned units about a mile from me but the cost is astronomical, 7k for the smallest iirc with a 5 year lease.....if it was a 12 month at a time lease id be happier as im not tied to it in the event of things going pear shaped- you can never tell. Coxy- please, tell me more sir!

19-06-08, 07:16 PM	#10
mjs4x4 Grown up member Join Date: Apr 2008 Posts: 46	Just an observation here - but if you are basing a business on servicing the needs of older Audis - where is the market? Granted, there are a few nutcases like me with old Audi's and (unlike me) some of them will actually use them. However, we live in a world where a six or seven year old car is worth 'peanuts', and, credit crunch or not, 2 million + new cars a year come onto our roads and there is a steady stream of older cars to the breakers yard. It's a small market. Furthermore it's a market populated by 'enthusiasts' who can/will often tackle jobs themselves. Not wishing to sound negative - just realistic. Assessing space requirements / overhead costs etc is essential - but key to it all is realistically estimating just how much work could you get and therefore what turnover you might achieve. Mike