starting up

[pblockley26]

HI all, I'm Pete and on the NEA programme and was wondering would a low credit score of 338 prevent me from getting the loan? Also with me in the start-up stage I think as I'm now working on the final cash flow forecast with me adviser, my second question is once I have set up shop is there any thing I need to keep a eye on except the finance side? The business I'm hoping to start once funding is obtained is a motorcycle parts shop about 20 minutes from a common race track. then all being well and trading exceptionally well thinking of becoming a motorcycle dealers too.

any feed back is better then none.

 

[Alan]

The parts business is a very difficult business to be in as you have to have a massive range of stock that may take a very long time to sell.

Think about finding stock from other dealers that have gone out of business where you can buy stock at less than trade price.

I would recommend an attached business, e.g. servicing or tyres, or even bike recovery, that get regular repeat business (and can use up some of your parts stock) from the start.

Make sure you budget for a good stock control system that integrates to your website as well as your point of sale devices, whilst you won't easily sell a lot online, if you hold stock of very specialist parts (e.g. gear box components etc) then you will get online sales.

Hope that helps

 

[pblockley26]

I would recommend an attached business, e.g. servicing or tyres, or even bike recovery, that get regular repeat business (and can use up some of your parts stock) from the start.

Thanks for the reply, I have also been thinking of being a scooter courier (deliveries) to cover the "out of season" period tyre fitting is a good idea but I'm on a very tight budget (£1,000 loan) and gone over that to get the business set up. I have the tools for most servicing of motorcycles but the shop not really big enough for servicing as adviser told me to start small and work up the industry ladder i.e parts, servicing, dealers and so on. I have a website which I can use with an online shop also be trading on e-bay i have been thinking of also renting a garage for used motorcycle storage until I can obtain a larger shop with workshop facilities.

 

[Alan]

Think back to my biking days, tyres and chains where the big outlays on an ongoing basis. I do think your advisor is wrong, you will struggle to make money out of parts alone (I have been there with parts for sailing boats, not exactly the same thing).

If your capital is low, I can't see how you can have the stock levels to make the business viable. How many oil filters? How many light bulbs types? How many brake pads & discs? How many ..... I don't know the motorbike trade except as a user, but I would guess that the shops I used to use would have £200,000 of parts in the racks.

 

[pblockley26]

the reason my advisor has said to start small is just in case the business grows rapidly and I wouldn't be able to keep up with it and then end up with a business in a mess this way I can add things gradually to boost the performance whilst being able to monitor its progress.

Also I would add the first 6 months of trading will be test trading with regular reviews so I could incorporate servicing of motorcycles so it picks up the "slack" from the parts side

 

[Chris Ashdown]

Sorry to say I agree that you cannot start on such a small capital amount and the chances of getting a substantial loan or overdraft over say£5-10,000 are remote especially for such slow moving stock items

To make it worse race circuits are for high spec bikes that have a relitivly short life before being upgraded and top of the range prices along with a large number of makes and types

Most spares type startups specialise in a very small niche, they will not stock say ford cars, they will not stock say Focus car parts, they may stock Ford clutches or vintage spark plugs

 

[pblockley26]

I will only be stocking a few main stream motorcycle parts but focusing on Chinese imported makes like lexmoto pulse etc and I was thinking more of track day users not racers

 

[Chris Ashdown]

I suggest you drive around all the motor bike shops in a radius of say 20 miles from where you live and look at the size of the company, how much is invested in the showroom and repair side, then look at your own plans and see how they compair

Even things like servicing you will need to be able to prove your knowledge of the bikes so not a simple start up operation, you will also need to open accounts with factors to be able to get the spare parts on the same or next day

While I admire your go ahead attitude, I do think you may need tospend more time on the plan and how you will get sales in competition with the larger established original suppliers of the bikes

Wish you well

 

[businessfunding]

HI all, I'm Pete and on the NEA programme and was wondering would a low credit score of 338 prevent me from getting the loan? Also with me in the start-up stage I think as I'm now working on the final cash flow forecast with me adviser, my second question is once I have set up shop is there any thing I need to keep a eye on except the finance side? The business I'm hoping to start once funding is obtained is a motorcycle parts shop about 20 minutes from a common race track. then all being well and trading exceptionally well thinking of becoming a motorcycle dealers too.

any feed back is better then none.

In answer to your first question, the loan is not credit scored as such, but they will look closely at your ability to service debt. I also advise you to be up front about defaults etc as they take a dim view of non-disclosure

Your mentor should be giving you input on things to look out for; cashflow is, of course, everything - but it is also important not to get carried away with the technical aspects of your business at the expense of legal & financial.

I too am interested in how you can start this fairly capital intensive business, but hopefully your cashflow projections will clarify this.

Best of luck!

 

[pblockley26]

I have got most suppliers I'm interested in sorted with accounts how ever I have spent a good 5 years doing the planning stage and keeping an eye on the market throughout this time most motorcycle parts retailers in my area mainly stocks part for the higher cc bikes very few stock 125 to 50cc parts unless its for Vespa and lambretas and virtually nothing for other bike / scooters even Chinese imported most the Chinese imported parts are currently being sold online and with lexmoto and pulse nearly matching the famous Japanese imports in new registrations the market for the Chinese imports parts and motorcycles is also increasing. Once my funding has been obtained i have six months test trading while still on benefits so I could in theory/ practically use the time to test the waters also I'm working with princes trust as well. Most of my suppliers are ones that I have been given the contact details from my competitors