Finally fed up with corporate stoogery, need advice.

fordwheelinman

fordwheelinman

Well-Known Member
Joined
Feb 11, 2009
Location
Randolph County
My current employer is on thin ice after screwing me over on a shift change before, and seeming like they are going to do it again. For reference I'm on 12hr nights working a 2-2-3 schedule, and I want to move to daytime so I can have more time to spend with my boys while they still want to spend it with me.

With that said, I want to start my own business. I'd like to rehab old cars/trucks/equipment and sell them at affordable prices, not current inflated market prices. If I can make at $1500-$2500 per unit, and average 5 units a month, the low end of the scale is more than I make now. Also, I can be with my boys, stack work hours on their school days, and free up hours when they are home, give them a job if they want when they are old enough, and teach them a valuable skill along the way. I'd also do some small jobs in between to keep the lights on and bills paid.

I have 2 main questions for those who have started similar their own businesses:

1) Who did you use to start your LLC, and do you use a service as your registered agent, or keep that in house? I've thought about using a service to start out to have one thing off my plate while starting up, then moving in house.

2) My thought is to buy a rough 3/4 or 1 ton truck to use as a service truck and car hauler, then slowly upgrade as business allows. I see this as keeping debt and overhead low, until income can support better things, is this a correct way of thinking?

I've never started a business before, and no one close to me has either, so I have ALL the questions. I want to keep initial debt and overhead as low as possible to see if it's even viable for me in my area. I know I'd have to build/rent a shop before long, as there's only so much I can do in the driveway, and only so many times I can borrow family members garages, which is gonna be a HUGE cost, so anything I can do to keep the rest low is going to be key. Any advice that you have would be appreciated and if this gets off the ground, I'll host some open shop days for anyone that wants to hang out, or needs a lift to wrench, to try and repay the kindness.
 
DSM Turbos said:
Make sure you look into the requirements to have a dealers license with buying and selling that many.

The paperwork to start and llc is easy, you can do it yourself without a ton of work

If you are owning a business, not charging market rates is not the best choice imo.
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I've spent time researching the dealers license, need to schedule the required class. Also need the LLC.

The reasoning behind my pricing strategy is simple, I want to be known as an honest guy, not some fancy chrome clad truck driving suit wearing schister. I'd rather work a little harder, sell more cars for less, then sit around with stagnant inventory waiting on a bigger payday.
 
I'll be glad to share a bunch of thoughts later.
Couple quick hitters.
Starting an LLC is easy and cheap. Dont pay anyone to do that. If you live in NC you home address can be your registered agent. I use a registered agent for my NC contractors license but its because I don't have a physical location in NC.

You need to rethink your entire pricing strategy. Each transaction is a potential for loss. Be it more work than anticipated, vehicle catches on fire and burns up or ...you get scammed screwed by a buyer.

Given the choice between selling 1 vehicle for 10k or 5 for 2k each...even if it takes 5x as long to sell the 1 - you do that every time. Honest men know and value their worth and charge appropriately.
 
Learn how to detail.
Most people don't know / give a shit about how well a vehicle works mechanically.
But they will absolutely point out cosmetic defects and absolutely assume a vehicle is a POS based on appearance alone.

A good looking car with shitty bones will make more money than the other way around.



Also, I'd look into buy here - pay here type of business. Lots of money to be made if you know how to repo your shit.
 
Ron said:
I'll be glad to share a bunch of thoughts later.
Couple quick hitters.
Starting an LLC is easy and cheap. Dont pay anyone to do that. If you live in NC you home address can be your registered agent. I use a registered agent for my NC contractors license but its because I don't have a physical location in NC.

You need to rethink your entire pricing strategy. Each transaction is a potential for loss. Be it more work than anticipated, vehicle catches on fire and burns up or ...you get scammed screwed by a buyer.

Given the choice between selling 1 vehicle for 10k or 5 for 2k each...even if it takes 5x as long to sell the 1 - you do that every time. Honest men know and value their worth and charge appropriately.
Click to expand...

My main reason for using a registered agent service, is organizational. I'm not sure I could figure out and keep track of all the paperwork required WHILE trying to get the business going. I'm a shop guy, not a office guy.

All sales would be cash or cash/trade. No financing, no warranty. Wanna make payments, put cash in my hand, and when it's paid off, you can leave with it, not a day before.

(Numbers are for example only)
If I buy a truck for $2500, put $2250 of parts into it, $250 for a detail, I'm all in at $5k. If I can sell it at $7500 in a week, the $2500 is my labor wage, and I can take that $5k and start all over again. If I have that same truck, all in at $5k, and sell it for $10k, but it takes 2 months, I've got to find enough small jobs for 2 months to pay the bills, or live off credit cards, and have to wait even longer for the next purchase. I'd hate to miss a good buy because I haven't sold a vehicle.

Maybe I'm missing something because I'm way out of my depth, but 5 cars in a month at $2k, versus 1 at $10k, seems to make more logical sense to me for steady cash flow.
 
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fordwheelinman said:
My main reason for using a registered agent service, is organizational. I'm not sure I could figure out and keep track of all the paperwork required WHILE trying to get the business going. I'm a shop guy, not a office guy.

All sales would be cash or cash/trade. No financing, no warranty. Wanna make payments, put cash in my hand, and when it's paid off, you can leave with it, not a day before.

(Numbers are for example only)
If I buy a truck for $2500, put $2250 of parts into it, $250 for a detail, I'm all in at $5k. If I can sell it at $7500 in a week, the $2500 is my labor wage, and I can take that $5k and start all over again. If I have that same truck, all in at $5k, and sell it for $10k, but it takes 2 months, I've got to find enough small jobs for 2 months to pay the bills, or live off credit cards, and have to wait even longer for the next purchase. I'd hate to miss a good buy because I haven't sold a vehicle.

Maybe I'm missing something because I'm way out of my depth, but 5 cars in a month at $2k, versus 1 at $10, seems to make more logical sense to me.
Click to expand...
This isn't a repeatable success strategy. Home runs and base hits are great but your gonna swing and miss a lot. Offering repair and service simple up keep keeps many lots going. Unless you have capital to buy multiples at auction or privately the cards and dice are gonna win by averages. You need a sustainable nitxh for a better over all batting average.

I cannot agree wholeheartedly with @shawn on the numbers but his logic isn't wrong. I've lived it myself. The thinking is regular job has all this time tied up so the money cannot be made on personal. The correct thinking is I'm making more on my small business(actually doing so and established) and I need more time to grow. Making 15 percent of your income on a weekend or week day looks great until you burn through a small backlog and you spend three weeks straight looking for customers and work.
 
fordwheelinman said:
My main reason for using a registered agent service, is organizational. I'm not sure I could figure out and keep track of all the paperwork required WHILE trying to get the business going. I'm a shop guy, not a office guy.

All sales would be cash or cash/trade. No financing, no warranty. Wanna make payments, put cash in my hand, and when it's paid off, you can leave with it, not a day before.

(Numbers are for example only)
If I buy a truck for $2500, put $2250 of parts into it, $250 for a detail, I'm all in at $5k. If I can sell it at $7500 in a week, the $2500 is my labor wage, and I can take that $5k and start all over again. If I have that same truck, all in at $5k, and sell it for $10k, but it takes 2 months, I've got to find enough small jobs for 2 months to pay the bills, or live off credit cards, and have to wait even longer for the next purchase. I'd hate to miss a good buy because I haven't sold a vehicle.

Maybe I'm missing something because I'm way out of my depth, but 5 cars in a month at $2k, versus 1 at $10, seems to make more logical sense to me.
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I've worked for 'the man' my whole life, so I have ZERO experience in being self employed. I think what Ron might be trying to point out is that selling 5 cars takes a lot of time (meeting with potential buyers, letting them drive the car, getting title work notorized, dealing with them possibly bringing it back 2 weeks later because something went wrong, etc). Selling one car at 5x more profit takes only 1/5 the work to sell. Maybe I am off on my thinking.

Flipping fixer-upper cars seems like a cool business. I hope if works out for you. X2 on the detailing being important though. Either learn how to do it, or find someone reliable who can do that part for you.
 
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LLC registration and paperwork is almost zero effort, and that's coming from someone who hates both government and paperwork. Took like a half our or so to get everything registered and paid for online for mine last year. Took less than 5 minutes to do my "annual report" last week, which is basically just reverifying your business info. And of course a ~$200 check every time.

Regarding selling, I think all parties are being way to theoretical. Dream of high volume, or dream of high profit, but the reality is you need to get as much as possible for each vehicle while selling it as quickly as possible. If you know the market, it's easy to price things. If you're in a hurry, price it just below the cheapest equivalent on FB/CL and it'll sell in no time. If you want to keep stuff moving, aim for just below midrange of the market, and if you want to maximize your profit, make sure its super sharp with great pictures, and ask whatever the hell you want, knowing its not gonna sell fast and you have to find the right person who wants that exact thing.
 
WARRIORWELDING said:
This isn't a repeatable success strategy. Home runs and base hits are great but your gonna swing and miss a lot. Offering repair and service simple up keep keeps many lots going. Unless you have capital to buy multiples at auction or privately the cards and dice are gonna win by averages. You need a sustainable nitxh for a better over all batting average.

I cannot agree wholeheartedly with @shawn on the numbers but his logic isn't wrong. I've lived it myself. The thinking is regular job has all this time tied up so the money cannot be made on personal. The correct thinking is I'm making more on my small business(actually doing so and established) and I need more time to grow. Making 15 percent of your income on a weekend or week day looks great until you burn through a small backlog and you spend three weeks straight looking for customers and work.
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Once I have a shop that I'm working out of instead of the driveway, I fully intend on brakes, exhaust, tires, services, and some diagnostic work to fill up time between the "sellers" being in the shop. I don't intend to put all my eggs in the "flipping" basket.

I also fully intend to make a go of it WHILE working my normal job. I'm gonna get my fret wet before i jump off the pier. The side gig will have its own account, and it will have to get up to an amount I'm comfortable with before taking the dive so I can provide while ramping up. I can also take an unpaid leave of absence from my job, after going through the request process, to have a fall back if it work out for me.
drkelly said:
I've worked for 'the man' my whole life, so I have ZERO experience in being self employed. I think what Ron might be trying to point out is that selling 5 cars takes a lot of time (meeting with potential buyers, letting them drive the car, getting title work notorized, dealing with them possibly bringing it back 2 weeks later because something went wrong, etc). Selling one car at 5x more profit takes only 1/5 the work to sell. Maybe I am off on my thinking.

Flipping fixer-upper cars seems like a cool business. I hope if works out for you. X2 on the detailing being important though. Either learn how to do it, or find someone reliable who can do that part for you.
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I've got the notary figured out. That will be handled in house, and then it's their responsibility to take it to the dmv.

No iffy tierods, ball joints or bushings will leave my shop. If I wouldn't trust it to take my wife to the mountains or beach, I wouldn't expect a customer to either. There will be no warranty expressed or implied, but if there is something that happens, ill take a look at it, and may help the out a little unless it looks like they took it through a field or been doing burnouts.
jeepinmatt said:
LLC registration and paperwork is almost zero effort, and that's coming from someone who hates both government and paperwork. Took like a half our or so to get everything registered and paid for online for mine last year. Took less than 5 minutes to do my "annual report" last week, which is basically just reverifying your business info. And of course a ~$200 check every time.

Regarding selling, I think all parties are being way to theoretical. Dream of high volume, or dream of high profit, but the reality is you need to get as much as possible for each vehicle while selling it as quickly as possible. If you know the market, it's easy to price things. If you're in a hurry, price it just below the cheapest equivalent on FB/CL and it'll sell in no time. If you want to keep stuff moving, aim for just below midrange of the market, and if you want to maximize your profit, make sure its super sharp with great pictures, and ask whatever the hell you want, knowing its not gonna sell fast and you have to find the right person who wants that exact thing.
Click to expand...
I'd like to find out who you went through for all your LLC stuff, I'll message you later on that.

Let me make a distinction real quick that may clear something up. If there's one thing I learned from all my years in the automotive industry, whether at the dealer, junkyard, or retail parts, everyone wants a deal. I plan to list in the bottom half of the market, be willing to haggle, but have a bottom dollar profit margin I will not go below. I'm not giving a max profit, just a comfortable range for me. I'll admit that $1500 profit is less than I make in 2 weeks at my normal job, but thats why it's the bottom of the range. That's where the other odd jobs come into play. I've put WAY more thought into this than I've let on. I've been building this plan for years, not just overnight.
 
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Honestly do it on the side for a while as you have stated. Unfortunately with dealers licensing and such you won’t be able to hide anything. It’s gonna be all black and white and taxed. I do think the idea is killer, honestly seems like you’re opening a shop and buying work. Just gotta remember to pay yourself for the repair and make profit off the investment. So many vehicles out here to be had cheap that need a trans or etc. but also so many scummy people who lie too much about conditions.
 
I'll give my 2cents for what it's worth (it's def not the norm but you kinda sound like you have my similar morals/ethics about work/money/sales/income/life).
I've been full time self-employed for almost 5yrs now. Started doing side work for many many years before that and went out on my own. I was buying/flipping Jeeps a bunch and slowly worked my way up to fab work and now full blown LS swap shop...I do on average 5 LS swaps a year along with normal Jeep suspension builds and random fab work.
I had an LLC once but got rid of it cause well, for me I choose to keep my tax paperwork simple...very simple. I just file a sch1040 and that's that...no receipts no paperwork...no deductions and all the other mumble jumble. Sure I miss out on some benefits but it simplifies my taxes for me. So now I'm just a "backyard business" according to the state of NC which is a legal thing btw. You can even Register a Backyard Business in NC which allows 1 employee(maybe 2) even which I plan to do so I can get interns who have an interest in learning fab/welding.
I built a 3bay shop with a spare room for CNC room and storage so 4 bays technically and that gives me all the room I need to do what I need to do. You mention having a "low overhead"...this is the best and ONLY way to have low overhead is build you a shop at home and work from home if possible. I'm on .67 acre and it's plenty big enough to have tow trucks come in and car trailers and such.
I legitimately thought about renting a "store front" shop...commercial, in the "public eye" and presence type of normal deal but golly, that was just rediculous...double mortgage, double power and water, full insurance and not to mention state and county officials in your business all the time...and means I'd have to charge like every other fab shop out there so I said nope, I'll stay at my home shop where I can offer people quality work at very quality prices (especially LS swaps) and keeps my overhead very very low and my customers very happy.
I don't do any advertising other than post some things on facebook here and there, sometimes on here, otherwise it's word of mouth. Do quality work and treat people right and your work and rep will speak for itself. I even had a customer ship me his Jeep from Connecticut for an LS swap and ship it back once done all from "word of mouth on Jeep LS swap forums"...I'm nowhere near the best or anything but honesty in business goes a long way...I've learned a lot myself and many people here on this board will tell you I've come a long way lol.
You don't seem to be wanting to do this to "get rich" type of deal and I commend that very much!!! I could make way better money working at fab/custom car shops but I don't do what I do just for the money...I get paid to do what I love and am passionate about and that is more than I can ask for and the best is I wake up and do it all from comfort of my home. So going into business for the gains of family time and trying to offer vehicles/services at a modest affordable price is very awesome to me and do it brother...life is more than just a paycheck and a 401k (haha not many share my view but it's just me). Be blessed in your adventures and hope all goes well
 
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