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Mechanic needs business advice

Discussion in 'General Business Forum' started by Graham Severn, Aug 11, 2018.

  1. Graham Severn

    Graham Severn UKBF Newcomer Free Member

    2 1
    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 By: Graham Severn Member since: Aug 11, 2018
    #1
  2. Socio South West

    Socio South West UKBF Enthusiast Free Member

    748 184
    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 By: Socio South West Member since: Mar 24, 2013
    #2
  3. Gecko001

    Gecko001 UKBF Enthusiast Free Member

    2,770 436
    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 By: Gecko001 Member since: Apr 21, 2011
    #3
  4. Clinton

    Clinton UKBF Big Shot Full Member

    3,500 1,159
    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
    Posted: Aug 12, 2018 By: Clinton Member since: Jan 17, 2010
    #4
  5. Mr D

    Mr D UKBF Legend Free Member

    10,042 1,053
    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 By: Mr D Member since: Feb 12, 2017
    #5
  6. JEREMY HAWKE

    JEREMY HAWKE UKBF Legend Full Member

    3,473 1,116
    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 By: JEREMY HAWKE Member since: Mar 4, 2008
    #6
  7. 5leeper

    5leeper UKBF Newcomer Free Member

    6 0
    Hi Graham,
    If i was you i would go it alone 100%
    I am a bit of a car nut and own a few Range Rovers.
    With the amount of issues you get with them you are sure to keep busy.
    The amount of air suspension, trans fail safe, timing chain, gearbox rebuild, engine rebuilds, turbos etc etc that are discussed on various FB sites is crackers...but then with engines like the TDV6, people who want the look, cannot always effort to keep them maintained. How many do you see for sale on ebay? when looking for another is did a lot of checking with vehicle smart ( my friend developed it) and sports have terrible issue with rotten rear brake lines....anyway i digress

    So i have a 4.4 and SC. there is an indi by me whos charges are not high...(but still a pretty penny ) but he always gets my cars. Why, because hes someone i class as a Range Rover geek.....he certainly knows his stuff and the main difference between him and the dealers is that his owns his business. Its a lot more personal when its your own business, the office door is never closed. Not saying there are not other mechanics who are not the same but when you do find one, hes usually a keeper.

    As a mechanic he does do other cars, but hes mainly well known for Range Rovers.
    Diagnosing issues and moreover honesty is so important.
    I never let my wife or any of the kids take there car to a garage until ive spoken to them. fortunately i know more than enough to be able to tell when they are getting fleeced which to be honest is the biggest issue for none car people.

    I was getting restricted performance pop up on the dash of the SC, so just popped into Land Rover for a quick chat to them be told that the supercharger is on its way out!?????£££££. so i went home check the 2 wires for the aux pump and seen they has been wired incorrectly. This was a recall at LR. New pump ( as it had been spinning backwards) fitted and all sorted. no other issues.
    I know other mechanics who do lots of jobs on the side and have been for years but are not willing to take it to the next step.
    If your honest and good at what you do then its good start.
    Social media platforms and many of the web forums are a good place to start.

    I understand that funding is needed. so with your LR knowledge can you not advertise parts? something to can ordering and ship out after putting a mark up on it. Discounts for forum members. Offer technical advise etc. try to merge both together
    You can still work where you are and start this on the side.

    Lots of details but i started what im doing while working for a large automotive manufacture. what i go into was something a bit different. it started with £20 here £30 there ( month), lots of advise about what i know, backed up with the items sold. in the meantime i did a lot of research, organised behind the scenes. suppliers, products, contacts all written down in a note book. Then moved it all on to the computer, took a while to get used to excel and ppt etc but got there eventually. And with an average £75 a day ( minus costs) it adds up to a tidy sum. And knowing i can double the amount i do as a minimum is something im happy with ( and currently working on)
    But you know what......its not even the main part of the business, just a side bit that complements the main business. if i closed that side down it would be much of a worry but as i can see its potential its going to be developed further.
    Like me, you will only make money when you make/fix something....(add value)
    when your asleep you make nothing. The idea of the above is that while your resting, customers are still shopping, not just in this country but others. you take orders, get it in and send it out.
    Then in the daytime you do your usual work.
    When the pot grows you can then look to get a small unit of your own and then look to develop it on your own.

    There is a lot more detail in this as im sure you are aware, some of it has been mentioned above.

    I was not born into business, no idea what it took to run one. i hear small business's closing down at a rapid rate. all the stress etc etc. if it were that easy a lot more people would be doing it.
    Having the responsibility is eminence but so is the satisfaction. Yes there will be sleepless nights but the potential is there.
    For every area of a business there is someone who can help, unfortunately there are some riiiight numptys but if you have your head screwed on you should be able to work them out

    web site
    Some company quoted 20K to develop the web site. ended up getting it all done + more for 5k
    ( don't forget GDPR) dont spend £££ implementing it. mine was around £800

    I thought of the business name, mulled it over for a few months (checked it was available as a web address etc) then got it for £25 and registered at companies house.....2 years before i needed it and i did not get a .co.uk but a .com
    15 years later that decision was spot on!
    insurance
    Another wanted to bolt on the traders policy even though i do not drive customer cars " but sir its a standard part within the industry" .... so looked and found someone a got a tailored policy saving ££££

    Small business rate relief. not sure how its worked out now as i do not qualify but saved over £3k a year when applied for.

    Accountant
    Very reasonable and work for and by himself. has great advise and now a good friend

    VAT (if you ever need to)
    As he doesn't not do it above but found someone local, again cost is not extortionate.

    There is a huge amount that you can in terms of health and safety,organisation and advertising but without huge costs.

    Getting in with someone else for me id a no no
    (unless you have the money to potentially loose it without you landing on your ar$e)

    So go it alone....
     
    Posted: Aug 15, 2018 By: 5leeper Member since: Aug 9, 2018
    #7
  8. The Byre

    The Byre UKBF Ace Free Member

    7,564 2,943
    This!

    1. All your eggs will be in the Range Rover basket and the word 'basket' is a good one here. As nice as they are to drive when they are new, from an engineering PoV, the word basket springs almost immediately to mind! I sometimes wonder if JLR even have any QC.

    "Buy a Range Rover! We've checked them out and most of them work properly!"

    2. Please read and then reread all that @Clinton wrote.

    3. If you want to fix these dreadful cars, by all means go for it, but you don't need to de-trouser any heavy money to do so. All you need is a decent workshop with a suitable lift and tools and start marketing your services.

    4. Buying into a small business that depends on the other party keeping their side of the bargain - and doing so using a second mortgage on your house - is just a great way to lose your house. This forum gets a busted-partnership-leading- to-personal-ruin posting at least once a day!
     
    Posted: Aug 15, 2018 By: The Byre Member since: Aug 13, 2013
    #8
  9. Graham Severn

    Graham Severn UKBF Newcomer Free Member

    2 1
    this is why Im asking for advise, all of you have very good points and are completely impartial. I am looking into this with my eyes wide open if its not viable for me to make money and pay the business loan off i wont do it, and i understand if it maybe up to the boss if its not viable to him. i will not risk my home if Im not sure it will work i also understand me knowing it will work doesn't mean it will but you have to have some sort of risk to do well in business or everyone would be doing it.

    as far as setting up on my own goes ive thought about this and to get the amount of tools i have at my disposal now along with advertising set up costs etc i think 100k would go pretty quick (getting a business loan for start up i believe is more difficult?) and i would have to set up in direct competition with my boss who has been very good to me, he also has a great reputation and customer base which would take a long time to get for my self. maybe 10 to 15 years by then electric vehicles will be taking over and i strongly believe 50% of backstreet/independents will be gone, i think with an investment from me for training etc we can be part or the 50% that can survive.

    alot to think about
     
    Posted: Aug 16, 2018 By: Graham Severn Member since: Aug 11, 2018
    #9