Starting an Automotive base business, Pros? Cons? Am I Crazy Options

[Jaiden]

So I have been contemplating dropping my current career (more on that later) and starting fresh with my own Auto Based business.

I know the Automotive world is tough but I was looking for some insite. There is no suicide smiley is there!! Ha!
I would like it to be a design/ manufacturing/ Testing Business but would start out as a retailer/ installer/ Business.


What do you guys think!

Let the Crazyness begin!

[bondo]

I'd love to do that, but with my current debt situation, I'd have no hope. Gotta have positive money to start a bidness, not negative. (IMG:http://www.914world.com/bbs2/html/emoticons/smile.gif)

What I may do is start something in my spare time to help payoff said debt, then expand upon it if it works out.

Sorry, that's all I've got since I haven't done what you want to do, I just want to. (IMG:http://www.914world.com/bbs2/html/emoticons/smile.gif)

[Dave_Darling]

Yes, you are crazy. Then again, back in the mid-90s, two guys named Tom and Wayne were equally crazy. They had picked up a bunch of parts for their own cars, and had "ins" at various parts supply houses, and decided to start selling Porsche parts as a business. They based it out of Tom's garage for a while, then moved into an office in a nearby industrial area. Yeah, I mean Pelican.

Of course, for every business that survives ~10 years, there are dozens that don't make it. If you can find some way to be unique, and offer something that nobody else does (and that people actually do need!), your chances are much better.

--DD

[Brett W]

Start in your garage and develop from there. You need to deal with clientle that has money and will spend it. Lookers and tire kickers won't do you any good. Having parts in inventory will force you to have high overhead. A friend of mine was doing Honda Acura work out of his garage as a side job. At one point when he was making 7-10K a month in extra income. He didn't stock a bunch of parts, but he got enough breaks on parts because he was moving volumn. He could call a supplier up and ask for the discount and get it because of how much business he could bring.

You can do it but you have to want it. You will be your own worst boss or you will be really hungry.

Imports are a good business to be in right now. Nissan looks to be a good emerging market as well as the EVO/Subaru crowd. BMW owners have money and will spend it as will VW owners but you better be ready to understand the electronics and cars.

[Mark Henry]

It sucks...

Get a haircut and get a real job (IMG:http://www.914world.com/bbs2/html/emoticons/smile.gif)

[ppickerell]

QUOTE (Dave_Darling @ Oct 20 2005, 08:16 AM)

Yes, you are crazy. Then again, back in the mid-90s, two guys named Tom and Wayne were equally crazy. They had picked up a bunch of parts for their own cars, and had "ins" at various parts supply houses, and decided to start selling Porsche parts as a business. They based it out of Tom's garage for a while, then moved into an office in a nearby industrial area. Yeah, I mean Pelican. Of course, for every business that survives ~10 years, there are dozens that don't make it. If you can find some way to be unique, and offer something that nobody else does (and that people actually do need!), your chances are much better. --DD

So Dave, how successful would you say the PP guys are?

[jsteele22]

There's a reason for the popular saying :"Don't quit your day job." Obviously, some people succeed, but many more fail. The trick is how to know ahead of time which category you're in. A few questions to (brutally) ask yourself :

1) If nobody is around to tell you what to do, do you still organize your work, balance priorities, and get tasks completed and on time ? If you are your own boss, you are also your own employee !

2) Do you have a spouse, kids, pets, friends, who might fairly expect to see you from time to time ? If you do actually make a go of the business, I think you'll find it takes way, way more time than is reasonable to expect of anyone.

3) How much cash/assets do have laying around. Even most successful entrepreneurs don't make any money at first. The more financial stress you are under, the more likely depression, loneliness, frustration, etc. are to set in and affect your business. Number one cause of divorce is money, so "they" say.


4) How good are you at giving bleak, pessimistic warnings to strangers ? Starting up your own business without proper preparation and realistic goals can greatly enhance your prowess in this area. DAMHIKT

[Matt Monson]

I have started a retail business (action sports/outdoor industry), as well as my own shop business, and to pull it off one thing you have to sacrifice is sleep. In the beginning of any business, unless you have backers or a big chunk of capital, you have to do every job in the company. And even if you have backers, you still have a ridiculous load on your shoulders.

On the first one, I was the GM for Airwalk's Outlet Division. I built their chain of stores from none to 6 in less than a year. I had a multimillion $$$ company and an established corporate infrastructure behind me, and I still worked 100 hour weeks. And I did that for close to a year without a single vacation. 3-4 days off a month was the norm. By the end, I was glad it was over.

On the shop business, it was more out of neccesity than anything else. When Airwalk went bankrupt and I was laid off, I turned my hobby of working on Subarus into a parts and service business out of my garage. It started with taking a spare car I had and doing a JDM WRX conversion on it. In the process, I acquired a number of parts that were sellable on their own. And the sale of the car paid the bills for a few months. By then I had found a job, and I was pretty burned out (and stressed out) and something I had loved at first became something I didn't want to do at all. I kept selling parts, but didn't pick up a wrench for at least 6 months.

But people kept approaching me to build them engines and do swaps for them. I had found a unique niche. Everyone and their mother sells speed parts for USDM WRX's, and does installs of turbos, suspension, etc. But around here, there is noone doing JDM or USDM swaps on older cars or building high HP NA motors. I am still doing it, but only accept 1-2 jobs a month. Having a 9-5 (ironically in a Porsche shop, but without a wrench in my hand) leaves me not so much energy to work on customer cars. I really don't know that I would want to suffer the burden of building my little side business into my bread and butter. I know many people who have burned out on something they loved by making it their vocation...

[Dave_Darling]

QUOTE (ppickerell @ Oct 20 2005, 12:28 PM)

So Dave, how successful would you say the PP guys are?

I'd say reasonably so. They spent several years living off of other incomes, though... (I think Tom lived off of savings, and Wayne was doing e-business software stuff or some such.) Now I think they're actually making a living from Pelican, as well as owning the company. And the company has survived 10 years (almost!) and has grown many times. Of course, there have been layoffs as well. (IMG:http://www.914world.com/bbs2/html/emoticons/sad.gif)

If you can make a go of it, and it's something you love--and don't get burned out on--it's a very good thing. If you burn out, or go under, then it's not so great.

--DD

[lapuwali]

Sometimes, the worst enemy of a small businessman is themselves. There's a small shop I know of, that's been around for 30 years, has a gigantic parts inventory and provides services for cars no longer made (indeed, the newest cars were discontinued 10 years ago). The cars are generally popular. The one guy running the place works 6 days a week, doing most of the service work himself, answers the phone, etc. The shop is located in the heart of Silicon Valley.

However, he only has an ad in the Yellow Pages. I only found out about him via a referral from another shop that didn't have a part I needed. Zero web presence. He doesn't advertise in any other way. The shop is buried in an industrial area.

Yet, he complained to me he's barely making ends meet, and can't afford to hire any help. He bitches that all of the parts business is going to "mail-order businesses" (and, I know, to Internet businesses with online catalogs and people to answer the phone). He can't understand why people don't "buy local", and clearly thinks they're being selfish.

I didn't point out to him that his customers don't owe him a living, and that if people can't even find his business, they're certainly not going to buy from him. It's amazing he's been in business this long, really, and it must have been pretty hard for a long while. It's honorable, I suppose, but rather stupid, and he's clearly very bitter over the whole thing.

Story No. 2 is a powder coating shop I've tried to do business with. I took a set of steel wheels to be blasted and powder coated. In June. I've called at least a dozen times, left messages, no reply. I've stopped by the shop as many times as my schedule permits, and he's never there. The shop help know nothing about the order. The one time I did happen to show up when he was there, he apologized and said he'd lost the order slip, so he couldn't call me. I guess his answering machine is broken, too...They're cheap wheels, I'm not upset about them, but that such a poorly run business survives is somehow irritating. Oh, and the lost order slip episode happened 8 weeks ago, and I still haven't been called or caught him at the shop.

So, in my experience, it's not really that hard to run a bad business, and you might even keep it running for years and years. Running a good business, however, requires you to be smarter than either of these guys.

Decide if you want to run a business all by yourself (hard to do, and very hard to make real money doing), in which case expect to have a lot of automation handy. If you want employees, you need someone reliable to do things like answer the phone, keep track of work or orders, etc.

I'd strongly advocate a web-based parts business. This can be done solo and part-time, but you'd better know (or be prepared to learn) something about web stuff yourself. Running a service business in a big metro area is doable, though the cars you can work on are getting older and older. Newer cars are becoming impossible for independent shops to work on. If you restrict yourself to something like tires and wheels or stereos or something relatively generic like that, you're also on a good track. However, IMHO, running a service business solo is a great way to make yourself completely crazy (or piss off your customers) in short order, so plan on hiring people.

My positive small auto biz story: there's a place not far from me that has a one-stall shop near a zillion other independent repair/autobody places. All he does is exhaust work, but it's complete, including total fabrication of headers down to just installing a muffler or cat. Two lifts, some cutting tools, a couple of welders, and tubing stock. One guy, and he's turning away business. He's inexpensive and does excellent work (but generally only using mild steel). My back-of-the-envelope calculations suggest he does $300K/year in revenue. I'll bet he keeps as much as half of that for himself. Zero advertising, other than the sign in front of the shop. The secret: he's a reliable craftsman that manages to turn 100% of his work around in a day.

[JB 914]

QUOTE (Jaiden @ Oct 20 2005, 08:59 AM)

So I have been contemplating dropping my current career (more on that later) and starting fresh with my own Auto Based business. I know the Automotive world is tough but I was looking for some insite. There is no suicide smiley is there!! Ha! I would like it to be a design/ manufacturing/ Testing Business but would start out as a retailer/ installer/ Business. What do you guys think! Let the Crazyness begin!

write up a business plan. figure out how long it will take you to be profitable and how much $$ you will need to survive until then.

Then double or triple the estimate.

BTDT two times starting two companies on my own. It is always harder than you think and will generally take you longer and more $$.

Whatever you do focus on your 'niche' and build your business from there. you cannot be all things to all people.

Good luck (IMG:http://www.914world.com/bbs2/html/emoticons/beerchug.gif)

[Root_Werks]

Been running a shop out of my garage for 5 years now. Part time after work and weekends. Sucks a lot of family time. I have gotten burned out a couple of times and tossed in the towel only to come back later a little older, but not much wiser. (IMG:http://www.914world.com/bbs2/html/emoticons/biggrin.gif)

[TINCAN914]

Find a demand and fill it if you can.
look in every aspect of business there are dozens of companies offering the same or similar products. There are two variables if you ask me, price and service. In most cases people are willing to pay more for a superior product or service. Offer quality at a fair price and you will succeed in most cases.. Go for it if it makes you happy... Life is far to short. If your single all the more reason to do it now...

[MecGen]

Hey

Ive' been paid to turn wrenches more then half my life.
On my 10th year to the day (Sept 1) I sold my Garage (retail side).
Are you thinking of a "General" or "Specific" type shop?

What do you need to know ? (IMG:http://www.914world.com/bbs2/html/emoticons/chowtime.gif)

Later

(IMG:http://www.914world.com/bbs2/html/emoticons/beerchug.gif)

[Jake Raby]

I started in a 75 year old Chicken House....

Now I have almost 10,000 square feet of bad ass shop space....

where you work doesn't make the product- the work does!

The main thing you HAVE to do is PUT OUT!!!! Don't plan on having a single weekend off for at least 3 years and don't plan on spending any money on anything for yourself for an equal or longer amount of time.... You have to put it all back in, or making it won't be happening.

I ate PB&J sandwiches 3 meals a day for weeks at a time and drove a 1962 VW Bus with no back window for 3 solid years just to sink everything back into the biz I created..

If you are afraid of work and are not a seriously dedicated soul just work for someone else....

I can't work for anyone else..... I have never had a "Job"..... I built my first engine for a customer when I was 13 and I don't see anyway in the world that I could work a 40 hour week and do it any other way...

[andys]

Well, there certainly are some interesting views expressed here regarding start up's. I particularly like jsteele22's *be brutally honest with yourself* post. What I have noticed over the years, is that the successful business owners all seem to share an ingregient that separates them from the un-successful one's. Unfortunately, it can't be bottled.

To add to some already fine pieces of advice, I would suggest you remain somewhat flexible in direction, and be opportunistic. I can site examples where friends' started businesses with a plan, and ended up doing something quite unlike what they started. One of them started a consulting firm in industrial automation systems with a very focussed plan. He changed directions within a year when facility planning, consolidation, and moving opportunities started comming at him. After only the first quarter of his second year, he has already surpassed his annual earnings projections. Another started a small machine shop, and found opportunity in buying and selling modular office furniture. You just never know, so keep a keen eye on what's going on around you.

I co-own a dental products business (in addition to my "day job"), which manufactures, sells, and distributes world wide. To do that, work full time, and have a family life, is an excercise in time management and takes an incredible amount of discipline. It's not easy, and is definately not for everyone.

Be brutally honest.......

Andy

[Jaiden]

Thanks for all the Advice guys!!

Let me give you a little back story.

I'm currently a systems engineer for a company that produces ultra-sonic Laser Sonar equiptmet for the metrology sector of Semiconductor. I have been doing Micro-Electronics and Semiconductor Design, Manufacture, Implementation, Installation, and Service for the Past 10 Years.

To be honest I think starting my own business will actually be a break for me. I currently travel 50% of my time 2 weeks to a Month at a time all over the world (Mostly Asia recently). My wife can deal with me not being around much but she would really like to keep me in the country (so would I) and Since on the road I pull 80 hour work weeks I think I can handle the late nights and weekends.
The money is good though.

For the business end I have gained an abundance of experience with some of the highest Tech stuff on the Planet and I would be using that as my niche. I will be taking these technologies and integrating them into the Automotive industry.

I have a plan set up forcast for the next 10 years and my profitability shows up in the second year so I might want to dillute some of the expected income to give a more realistic time frame.

I would love to give you guys allot more info on my plans but I don't want to let the cat out of the bag, but some of my ideas run around lean manufacturing techniques and a manufacturing method that "should" be able to deliver "Parts on demand".

Another part of the plan is to develope lower cost alternatives to some of the increadible electronics available for my current industry. Who really needs to measure thickness to the Angstrom anyway!?!?!?

Keep the advice coming because I have a schedule of the 1st of January to have the complete business plan finished to start polling investors and Banks!

I'll say this I may be in for a unsermountable amount of work but it is SOOOO exciting!!!