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Old 11-25-2003, 10:30 AM
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Auto Performance Business Venture Plan Opinions(long read)

Hey guys and gals,

I just wanted to get you guys input on a business venture I am planning to try out. I know there are alot of you out there who have tryed or lived in the performance automotive business. So I am sure you have loads of useful advice. Dont be gentle, I want the cold hard facts!

I am planning on starting an local and online performance parts dealership. I have access to a cheap store front display in a local business, and also have a 30x40 shop behind my house for storage and work area. I have alot of ideas, so let me know what you think will or will not work.

First the online store: Plan is to open a full service web site and also an ebay store along with normal ebay auctions as well. I will obviously go through all the necessart steps to get the site on all the major search engines.

Products: At first I plan on trying to get set up to sell the cheap dressup parts you see floating around the net and swap meets. In my opinion, there is more money selling parts that are cheaper with the same quality as the name brand stuff. Case and point is the aluminum valve covers you see selling on ebay. $50 for the off brand and $70 for name brand of the same piece. I am also talking with Edelbrock and Holley to get setup to sell their entire line for those who demand the best. Problem is that for a small dealer, you can not make much money on this stuff just selling it(more later)
After I get my S-10 on the track and have a proven EFI turbo system, I would like to move on to selling parts along this line. Something I see a huge demand for is fabricated turbo systems that are bolt on compatible. I have some ideas I am not going to elaborate on for helping fill this demand. As for the EFI, once I get my S-10 tuned, I will probably move on to a mass produced ECU that I can market along with a complete line of EFI components.
At the point when I can get all of these part lines setup, I will also start offering late model and universal supercharger kits. Right now I am talking to Powerdyne about this to see what it will take.

Services: The idea is to eventually get to the point where I can sell and install bolt on performance parts and become a one stop shop of sorts. I dont think that a shop can make it on just selling parts, so the service of installation will be essential for success.
This brings me to the next idea of being a one stop. I am thinking that a portable chassis dyno could be a real money maker after the initial expense is overcome. Once I get the busines built to the point I have a good reputation, we could do performance upgrades and include dyno runs in the pricing to tune and prove performance with the service. Another thought is that there would be huge profits to be made with a portable dyno at area tracks on major event weekends.

I realize that non of this will happen overnight, and I see myself having to keep my current job and work weekends for at least a year just to get the online business up and running and do what parts installation I can work in. I also have my brother on board who is a college student and willing to help for the next two years while getting things up and running. If I do the store front display, I will obviously have to hire someone to take parts orders and give out information about setting up installation with me on weekends. I will also add that I live in fairly small, but economically strong and growing town. I am 100 mile drive or less from the DFW metroplex, so it seems very reasonable that if I could get the business off the ground and get a name established, there would be a huge amount of business available in that area. And of course, I am sure if I could offer good pricing I am sure I could count on some of you guys.

Of course, the reason I am planning on doing this on the side and using what I have available to me now is to see if it will work without losing everything I have over a failed business attempt. If after a year I see there is just not enough money to be made to sustain a business, I would sell the products I have and move on. If it looks like it will work and I have been able to make enough money to justify the expense of going all out then I will.

Let me know what you guys think......


Later,

Chris

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Old 11-25-2003, 03:35 PM
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Probably how Summit and Jeg's got started man, go for it!! Can't say your the first to dream this dream but nothing stopping you but YOU!


Todd


Rat Rods Rule!
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Old 11-25-2003, 04:12 PM
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Thanks, I kindof feel the same way. I consider myself to be of above average ability and anyone who knows me will tell you I am a get it done type person so I have confidence that if it can be done, I can do it. It seems that there will never be a right time and I will never just have enough money to do it without some help. Kindof like kids I suppose. Got the first one of them here and it turned out okay

Of course that brings a whole other topic.....family. It will certainly suffer for a while with the time involved for a business startup. Got to make sure the wife is on board for real before I make a decision.

Chris
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Old 11-26-2003, 06:28 AM
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Good Luck!

A bolt on turbo set up for S-10s will sell like hotcakes, I can just about guarantee it. I see dropped S-10s with big wheels and wide tires all the time, people love to hop them up and customize 'em.

Have you checked with anyone about a govt. loan. A brother of a friend of mine started a landscaping business and got a $30,000 loan from the govt. with low interest. Maybe something you can use.


But, keep in mind the saying goes it takes five years for a business to turn a profit after expenses.

Have fun and I wish you luck.
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Old 11-26-2003, 07:49 AM
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Yeah, I have heard about the small business loans. Right now, I am not planning on taking out any large loans. Since I have an available floor space in an existing automotive business and I have a shop at my house for storage and any work that might need to be done, I should be able to start up without any loans other than to get the product lines started. Of course $30,000 is not much product when it comes down to it......especially when you start talking superchargers and nitrous kits.

As for the bolt on kits, I have a little bit bigger plans than just the S-10. It is something that will take alot of time and money to develop, and I would not be able to do it until the business is up and rolling.

Thanks for the input,

Chris
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Old 11-26-2003, 08:41 PM
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I like your style. You ask a bunch of questions and then answer them. Which means you have an idea of what might work; you are just asking for some input to reinforce your thinking! Nowadays every one can give you price. But, service has gone by the wayside. I do absolutely great on ebay and internet sales. But only because I got the stuff for free or super cheap. When I was part time in the shop I could come up with freebies to sell easily. Now at full time it's harder to come across the great deals to sell parts for profit when the part store is the only bread winner. I started as a full service shop but grew tired of daily repairs and changed the business to deal with parts and a specialization in antique and high-performance vehicles.
I've gotten quite a name around my area not from the cheap prices but from a "Hey, I can really trust this guy and he does great work" kind of thing. What have I got going on lately? 1.Selling some older Chevy items 2.Two oil changes 3.Starting a teardown of a 67 Pontiac slated for a full restoration 4. Two used cars for sale 5. Possible fix up on late 60's VW. That just shows you what I have in store for the rest of the year. I'm working about 75 hours a week but having a ton of fun, so who cares...
I wish I could wake up every day and sell blowers and 57 Chevy fenders and 67 Chevelle window cranks...but can't...My advice...get started by doing what ever you can. daily repairs....paint jobs....engines...then when you get really busy....RAISE YOUR PRICES...at the same time-move in the direction you want to then! Good luck....also put in my order for the turbo S-10 package.....
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Old 11-26-2003, 09:46 PM
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Thanks for the input flea. It is good to here there are still small shops out there making a living. I guess my main concern is transitioning from a guarateed 50k a year job that I dont have to work that hard at to a job where I work my butt off to get by. I really think I could build a business that would support my family and I comfortably, but I just dont know how long it would take. I am thinking about trying to start making some turbo kit parts and see what I can sell them for along with the dressup and misc. parts. I will have to get to the point I am covered up on weekends and on the phone all day long before I am comfortable quiting my job to be an independent business owner.

My ultimate goal is to get setup to do custom EFI turbo, supercharger, and nitrous kits and sell parts as a constant when the other is slow. I think if I can get my S-10 lined out and start spending alot of time at the track getting noticed, it would help. I know a local engine builder who has had several cars in racers magizines and can sell several engines on a race weekend when he has time to go.

I know it will be alot of work, but like you said, it would really be alot of fun. Of course I also hear when you make your passion your living, you grow to hate what you once loved......

Chris
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Old 11-27-2003, 02:10 AM
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I will not comment on the ideas that you have because I am not familiar with the type of business that you are proposing.I can however tell you my experience and note a few things that I have learned.

I am currently operating a start-up business with my brother.We purchase automobiles in lots at auction and then repair them or have them repaired.We then resell them at auction for profit.
This is not my first business.Previously, I worked as a building contractor.This was a successful business that earned a very good profit.Because of stress and physical reasons, I decided to complete my obligations and sell out.Our start-up was just a part-time thing that I was doing during the down times.Now it is full-time.We still have a way to go before I could consider it successful.

When I started the contracting business, I gave up a good job as a Project Manager for a large construction company.This also meant giving up the security of the job and the benefits.I am a good carpenter and a good Project Manager.These qualities combined are what made the business successful.What I did not count on was the stress and the number of hours that I would have to put into this.I finally realized that the stress outweighed the benefits of owning your own business.You would think that I would have gone back to work for another company, but after being your own Boss, it is difficult to go back.Instead, I decided to focus my efforts on the new business.I recently turned down a job that pays more than I have ever earned.This was difficult since my current financial situation is anything but stable.I think that if I give up now, then I will always wonder what could have been.There will be more jobs in the future, should I need one.

Now for a few things that I have learned:

Be wary about becoming partners with someone.I am partners with my brother and occasionally we do not see eye to eye.Since we are brothers we can work things out to both of our benefit.I could not imagine being partners with someone that I do not have a close bond with.I strongly believe that money can turn your best friend into your worst enemy.

Never let a loan officer talk you into putting your personal possessions up for collateral.Especially your house and even if you have become a success.
Should you do this and your business fail, then you stand to lose far too much ...

Always maintain a very good health insurance plan.I lost my entire savings to medical bills because I did not follow this rule.I injured my hip and found out to late that my business insurance only covered my employees for injuries.
A better agent could have pointed this out to me when I purchased the plan.Don't get cheap here!

When the stress kicks in, REMEMBER that your family loves you and it isn't their fault.You decided to go into business for yourself.Don't take it out on them!

Force yourself to look at your business as a job.If you don't go to work then how is anything going to get done.This is an easy trap to fall into.It can sneak up on anyone that doesn't answer to a Boss.

I could probably go on and on, but I think you get the point.There is a downside to being a business owner.

With all that said, I feel like you know what to expect and you are prepared for it.You have obviously put a lot of thought into this.The fact that you are asking questions is a very good sign.You seem to have the right attitude.I think that if you are going to do it, then do it now.Your family is young and kids only get more expensive as they grow older.They also expect a lot more financial stability as they get older.My son had a difficult time making the transition from me earning a respectable income to the budget that we currently get by on.

I know that most of this is somewhat negative so, on a positive note: Nothing beats being your own Boss or the satisfaction of owning your own business!

I wish you the best of luck,

Dennis
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Old 11-27-2003, 08:39 AM
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Dennis, Thanks for the insight. This is the kind of information I am looking for. I realize that there are alot of pit falls and I appreciate you pointing a few out.

I too have concidered offering a partnership of sorts to my brother. For now, I plan on letting him help me with installations and then maybe do some things on his own in my shop when I am gone or have to work at my real job. Being a college student, he is willing to work cheap, but I think by offering him a percentage of the business he can generate it would be more motivating. He is also working on his Physics Engineering Degree in which he is learning microprocessor and circuit design along with all the thermodynamics and mechanical engineering type courses. You can see where this knowledge would fit in a business building EFI turbo systems. I would say there would not be a better fit. If I could get the business off the ground in the next three years and offer him something on graduation I am sure he would do it. I should also mention, he has the same passion for high performance cars as I do.

Thanks again,

Chris
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Old 11-27-2003, 06:33 PM
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Had a very wise uncle that owned his own airconditioning business for residential and commercial contracts.
The best advice he ever gave was "If you bit off more than you can chew, keep chewing".

Once you sign up for your business license and get some paperwork done, you will be suprised at the real cost of the parts. Check you competition, give quality product and great service. The last is most important, you want the folks coming back, try to make each person feel appreciated. Look at some of the company reviews on the board, the best always have good service.

You'll find it will take a lot of your time up, I think you have the right idea. Make it happen, make it work and don't give up. Get your self a business plan, PaloAltoSoftware makes a really good product for this.

Dutch
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Old 11-27-2003, 07:40 PM
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I won`t say anything on the buisness end, I`m not a buisness man, but I do encourage you to go for it and be successful. Just be weary of one thing, TAXES. My brother started a carpentry buisness years ago, he was rolling in the buisness and rolling in the dough, since he had 15 years on his own experience and he`s a master at the trade, when taxes came around, he was stunned at how much he owed, and ended up oweing them after the fact with interest and penalties, so just saying, anything you make, hold a majority of it back on taxes, cause there gonna take more than you think they will.
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Old 11-27-2003, 08:36 PM
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I say go for it to. Sounds like you really know what your doing and could be a good buisness man. It might take awhile to get it started but i bet yah can do it
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Old 11-28-2003, 10:11 PM
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Quote:
Originally posted by DoubleVision
I won`t say anything on the buisness end, I`m not a buisness man, but I do encourage you to go for it and be successful. Just be weary of one thing, TAXES. My brother started a carpentry buisness years ago, he was rolling in the buisness and rolling in the dough, since he had 15 years on his own experience and he`s a master at the trade, when taxes came around, he was stunned at how much he owed, and ended up oweing them after the fact with interest and penalties, so just saying, anything you make, hold a majority of it back on taxes, cause there gonna take more than you think they will.

Yep, they can catch up with you in a hurry. The good thing is that I can write off the S-10 stuff in the future, along with tow rig, trailer and any parts associated with the business since alot of my advertising and sales would involve race weekends.

Thanks,

Chris

Quote:
Originally posted by Meka
I say go for it to. Sounds like you really know what your doing and could be a good buisness man. It might take awhile to get it started but i bet yah can do it

Thanks, I appreciate the encouragment.

Chris
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Old 11-30-2003, 12:21 AM
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Can never have enough turbo-related businesses out there, especially in the kit department. What turbo manufacturers are you contacting for support? Good luck with your venture!
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Old 11-30-2003, 09:25 AM
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Quote:
Originally posted by bad_turbo
Can never have enough turbo-related businesses out there, especially in the kit department. What turbo manufacturers are you contacting for support? Good luck with your venture!
It will be some time before I am ready to start the turbo stuff. It is very, very expensive to try to stock turbo parts. You can have 3-5K in one turbo from turbonetics for example. I will probably try to get away from them, though, and get tied into Garrett. Their new turbos are so much cheaper, but I am afraid they will require alot of volume. Like I said, it will be a while........

Chris
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