A plan to grow my bisiness, looking for advice

[vp1980]

I run a small partnership business with me and 2 more partners. We have been running for just over a year and we are doing ok. I now want to plan ahead to grow the business and we were looking for some advice.
What we do.

Just now we have 2 main parts of the business.

(1) We buy in salvage cars from salvage car auctions and break them for parts and sell the parts through our eBay shop.

(2) We buy in car ecu’s and re-program them to run with customers cars who have broken ecu’s.

We rent a unit just now which has got limited space and no yard space so I feel like it is now holding the business back from growing any more than it has done.

This is the plan we have to let the business grow.

(1) We would like to apply for a salvage license so we can buy the cars in cheaper as category B cars but we can’t do that in the unit we have just now.

(2) We are looking to buy cars directly from the insurance companies as this would cut out the middle man being the car salvage auctions. If anyone has any advice on how I would go about contacting the insurance companies? Would you know what we would need in place before they would consider selling cars directly to us? Even if it was just category C and category D cars like we buy from the auctions just now.

(3) As the unit we are in just now is no good for a salvage licence we would like to go to a bank to see about a business loan to build our own unit with land for a yard set up correctly to help us with an application for a salvage licence. Again any advice anyone may have on this would be a help.

(4) If we managed to get our own unit with land and a salvage licence to make money from scrapping the cars as well as the selling the parts like we are just now. I feel that that would be a good way of my business to move on from where it is just now. As far as I know scrap car merchant make good money even without selling most of the parts on the cars first like we would do.

(5) If we managed to get that far with making money from programming ecu’s, braking cars and selling the parts and making good money from the scrap metal there would then be lots of other ways the business could grow. We could go further in to car programming work than we are just now, car servicing, M.O.T’s etc.

Please let me know what you guys think, good or bad. I know that it won’t be easy to move the business on to where I want it to be so any advice on the points I have made above would be helpful.

Thanks in advance.

 

[tycoonist]

Do you have a Business Plan.

 

[vp1980]

We dont have a full business plan in place yet as we am trying to work out the best way to go before I make up a full business plan.

Thanks

 

[SamStones]

If you are currently breaking cars and selling the parts I presume you are registered with the environmental health(?) department as an "end of life" center and you have done the necessary college courses and qualifications to deal with the hazardous waste you produce? If not, you need to get this sorted before they catch up with you!

Getting a business loan to buy land and build to your specification is going to be extremely hard at the moment. Even with the best business plan in the world they're goin to want some serious investment from your side - probably about half of the total cost.

My advice would be: Start getting your business plan down on paper, as you work through it you will find some questions answer themselves and more questions get created. Make sure you know what your break even point is (it's amazing how many people don't know what this means let alone what it is!) continue as you are doing currently and grow the business slowly, you're still only 12 months in so you're sure to have a lot to learn...

Good luck! And let us know how you get on!

 

[vp1980]

Hi Sam,

We are breaking cars for parts but not to the scale you may think. We remove parts from the car to make a 100% mark up on it. After that the car gets sent to a salvage yard so they can end the cars life so we are not dealing with any of the harmful hazardous waste.

The problem I have is I want to deal with hazardous waste as I know if we can remove all the parts and also make more money from scrap metal the 100% mark up could be 250%- 300% per car. That's why I put the post up looking for advice to what I need to do to get everything in place.

As for our breakeven point we are doing ok. We are paying a full wage to each partner plus all the bills and Vat. I also have a bank account sitting with the correct money for tax as our book keeper is letting me know how much we need to have put away. On top of that we are saving money for a deposit towards a bank loan. I thought a bank would have gave a 75% loan if I had a good business plan, good books and 25% of the money needed. If they were only willing to give 50% that would be a bit of a kick in the teeth as it will hold us back as we have to save more.

Again any advice you may have or if anyone else can help me out with my first post I would appreciate it. I feel with the correct advice from more experienced business people I could really make my business grow. You are correct in saying that I have a lot to learn, that's why I am asking for help on here.

 

[Billmccallum]

Start here http://www.netregs.gov.uk/netregs/63480.aspx

and here http://www.environment-agency.gov.uk/business/regulation/31887.aspx

You need to discuss your plans with your local council they might have identified appropriate sites for this type of business and will be responsible for planning permission for change of use (if it's needed).

 

[SamStones]

Hi Sam,

We are breaking cars for parts but not to the scale you may think. We remove parts from the car to make a 100% mark up on it. After that the car gets sent to a salvage yard so they can end the cars life so we are not dealing with any of the harmful hazardous waste.

Are you 100% SURE about this? As the business next door to me was doing exactly the same thing as you until the Environment Agency got wind of it and they were faced with either spending thousands to get the right certificates, permits and equipment or closing up shop. They have decided to close up as the costs made it prohibitively expensive. The guy seems very clued up on this, so I'm sure he wouldn't be closing down if there was some way around it?

The problem I have is I want to deal with hazardous waste as I know if we can remove all the parts and also make more money from scrap metal the 100% mark up could be 250%- 300% per car. That’s why I put the post up looking for advice to what I need to do to get everything in place.

Those mark ups seem very low compared to what my neighbor was doing, so maybe you're not taking it to the extreme he was?

As for our breakeven point we are doing ok. We are paying a full wage to each partner plus all the bills and Vat. I also have a bank account sitting with the correct money for tax as our book keeper is letting me know how much we need to have put away.

That's certainly a good way to do things. If you're on top of the figures and fully understand them then great, a lot of people don't do it... they just see the turnover and think "hey, I'm selling thousands every week, lets buy a new car / go on holiday / expand etc"

On top of that we are saving money for a deposit towards a bank loan. I thought a bank would have gave a 75% loan if I had a good business plan, good books and 25% of the money needed. If they were only willing to give 50% that would be a bit of a kick in the teeth as it will hold us back as we have to save more.

My figures are only educated guesses from what I've read online and in the press recently. You would have to approach your bank for actual figures but they used to want a few years accounts (and that was in the "good" times)

Again any advice you may have or if anyone else can help me out with my first post I would appreciate it. I feel with the correct advice from more experienced business people I could really make my business grow. You are correct in saying that I have a lot to learn, that’s why I am asking for help on here.

Everyone has a lot to learn, if a day goes by where I don't learn something I'm dissappointed! It sounds like you know what you're doing, but please do check out the environment agency thing I mentioned earlier. I'm no expert on it, but I've seen the rise and fall of the company next door in such a short space of time, going to employing 6 people and then closing the doors all over legislation!

Best of luck with it!