Mechanic needs business advice

Discussion in 'General Business Forum' started by Graham Severn, Aug 11, 2018 at 9:36 PM.

  1. Graham Severn

    Graham Severn UKBF Newcomer Free Member

    1 0
    Hello I am an automotive technician with 15 years main dealer experience 10 of those Land rover, I left to work for an independent specialist and really enjoy working there. I have spoken to the owner several times about buying it in the future or buying a percentage which i really want to do as I feel we can move the business on a lot with the right investment. The problem is I dont have savings only equity in my home, I need to find a way to get some sort of finance could it be secured against the equity or will equity have to be released? and of course even when thats sorted i have a million other questions as ive stated Im a mechanic not a business man but everybody has to start somewhere right? i believe Im good at what i do and people love coming to our garage we can do 99% of what the main dealer can do for less money and less waiting time. any help would be greatly appreciated, let me know if you own a Range Rover
     
    Posted: Aug 11, 2018 at 9:36 PM By: Graham Severn Member since: Aug 11, 2018
    #1
  2. Socio South West

    Socio South West UKBF Enthusiast Free Member

    717 177
    You say you are 'a mechanic, not a business man'

    Your responsibilities multiply greatly if you become the business principal - financial, taxation, Health and Safety, Insurance, advertising, marketing..... the list goes on. There is a lot that an employee doesn't see.

    Borrowing money against equity in your home is great in theory..... but you must understand that you could well lose your home as a result if the business gets into debt: It's one of those things that is very easily said, but the implications don't come home to roost until the bailiffs are knocking on the door to evict you.

    From what you say you have a secure job at present, and are happy doing it. Ambition is good..... but if you go for it, don't look back and regret trying. Just make sure you have the possible consequences clear in your mind first.
     
    Posted: Aug 12, 2018 at 5:20 PM By: Socio South West Member since: Mar 24, 2013
    #2
  3. Gecko001

    Gecko001 UKBF Enthusiast Free Member

    2,570 401
    The owner might see it as an easy way to get investment into his business, but it will be money that has strings that he/she will not want. As has been said there is always a risk that someone will lose their home, if things go wrong. Even if that someone will not be the owner, most owners will probably not want to risk it.
     
    Posted: Aug 12, 2018 at 6:29 PM By: Gecko001 Member since: Apr 21, 2011
    #3
  4. Clinton

    Clinton UKBF Big Shot Free Member

    3,260 1,066
    There's a big jump from being a mechanic to owning part (or all) of a business. And even folk who are highly experienced in business would be foolish to consider negotiating for, conducting due diligence on and acquiring a business (or part of one) ...as those are specialist skills.

    Expertise in buying businesses doesn't come cheap. Expect to pay several thousand pounds for someone to assist you, answer your questions, protect your interests, guide you on raising finance and advise you through a transaction. And after paying £5K or more the advice you may get is that this is not a good investment!

    If the advice is that it is a good investment, expect to pay several thousand more for lawyers to draft various agreements including a Sale & Purchase Agreement and a Shareholders Agreement (and, possibly, other agreements that may be required depending on the sources and nature of financing)!

    Most small businesses are worth nothing, zilch, zero.

    How much net profit is this one making? If it's something silly like just £20K or £30K ... ask him to give you the business for free as the business itself is worthless on the open market. But bear in mind that even if you're getting it for free you should pay for specialist advice before taking it over!
     
    Last edited: Aug 12, 2018 at 8:59 PM
    Posted: Aug 12, 2018 at 8:51 PM By: Clinton Member since: Jan 17, 2010
    #4
  5. Mr D

    Mr D UKBF Legend Free Member

    8,219 838
    Just remember whether buying all the business or buying part. The owner is not your representative and isn't paid to look out for your interests. Expect them to look out for their own interests.

    And any legal documents get your own legal advice on, don't trust someone working for the other side in a deal to advise you.

    As a consumer you have protection when buying things. Bit like protecting a child.
    In business to business dealings including buying into a business you are treated like an adult - you don't get the same protections and are expected to do your own homework before you sign.

    Saying that, business is an annoying, painful, stressful, wonderful, interesting, potentially high reward thing. Some people find it much better than working a job.
     
    Posted: Aug 12, 2018 at 9:33 PM By: Mr D Member since: Feb 12, 2017
    #5
  6. JEREMY HAWKE

    JEREMY HAWKE UKBF Legend Full Member

    3,287 1,064
    Many garages are not making much of a profit anymore. You would already be aware that a lot are closing down.
    Your average garage that is owned by one person probably provides a good enough income for the owner but in reality is not a business for investment.

    Knowing what I know now If I was a good mechanic I would want to stay a good mechanic and not a struggling businessperson

    A mechanic will always have work A struggling businessperson will always have sleepless nights
     
    Posted: Aug 13, 2018 at 6:45 AM By: JEREMY HAWKE Member since: Mar 4, 2008
    #6