Geo

You're getting good advice. Take it. I run a part-time specialty parts business. Essentially we have no competitors in our specialty segment. We are making money, but not enough. You see, with success comes the need for more inventory. I haven't had to put money into the business for a while, but I'm about to again. I've taken only a small amount out, and that's with sales that have exceeded our expectations.

Something to consider about going into a shop. As folks have said, the margins are thin. What they haven't told you is why. The reason is, there is a lot of competition (more than you think) and people are generally less inclined to pay for labor than you think. Truthfully, you will probably make more money working for someone else in a similar business for some time.

But, it can be done successfully. People do it every day. One of the keys is what Matt told you. Customer service. Lots of people can open shops and even find customers. The only path to long-term success is customer service. People shop on price. They return on quality and service. You must always give good service and value to the customer, even if you have to lose money doing it (but, you'd better not have to do that too often).

Geo

Well, I started my business with two friends. I always wanted to have my own business, but I realized I would need a partner for a variety of reasons. This goes against conventional wisdom, but I know my strengths and weaknesses, and I know I need partners, at least to get started. The other difference is I am not investing the farm in this business. I've invested a fair bit more money than I intended, but it's still small enough that if everything goes to hell in a hand basket, we can still be friends, at least from my end.

Peckster

Who's going to do the work? Do you have professional skills in all those areas?

emilysgranny

Ask your local chamber of commerce , small business association ,or even some people at your local county college for help. It is not a case of your ability ,rather it a score of all the other things you might not be aware of that will do you in. Not just tools ,building and related expense , but also bookeeeping ,banking , collection, loans, insurance and on and on and on..Be prepared to spend your nights and weekends finishing up, not just 40 hrs and go home.Be prepared to worry alot, how are you going to pay the bills when it gets slow. On average 2out of 5 business fail in 1 yr ,3 out of 5 in 2 yrs ,4 out of 5 in 5 yrs. Still if you are determined to do it ,good luck.

Legoland951

I had several profitable businesses going from small motorcycle shop, moved up bigger to auto repairs, to used car dealer/mech shop, etc. Believe me, DO NOT HAVE A BUSINESS PARTNER. In the beginning, it works out well, then things change along the way. IT DOESN'T MATTER WHAT YOU DO AS LONG AS YOU LIKE IT provided there is money in the field. If you can see yourself doing this for the next 20 to 30 years, its right. I know a baker making 250k a year to stock broker making 1 mil+ a year. The common denominator is, they love what they do and will persist through adversity. Start small, learn your real life lessons and you will learn somethings you don't want to know, move your way up. Make very sure what each person's function is before you start. You are the boss, or one of the other guys is the boss/owner and the other 2 can profit share and be silent partners at most (and make sure they can't quit taking their part of the business whenever they are pissed at you).

Matt H

I dont think I can stress it enough, customer service is the only way to have a long term successful business. Whoever said to have a plan is right. I am thinking about moving from my CUSHY 40 hr a week job back to a store (80 hrs a week at least if you want to be good) for one reason, this is an opportunity to run it just like I would if I owned it. I would be the only one of my stores in town.

Lego is right about the bottom, people have to know their place. Jobs change over time but everyone has their own job. Emilysgranny is WAY right about time. Business owners are, for the most part, attached to that like glue. It is not for people who want to work 8-5 M-F, you just wont be successful. The time comes when you can step away from it but even my shop owner buddy (who no longer runs the store or the shop) is there at least 50 hrs per week. His average employee has been there about 7 years, if not he would be there all day every day.

In George's case, he made it work with friends but I think they all knew their limitations. It may not work 2 years from now, who knows. George, do you think you will ever do it full time and race on the side?
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Travis - sflraver

I have almost NO experience in running a business but I started Rennbay. It runs smooth as glass, but there are a few rules that I live by.

GET AN ACCOUNTANT and push all your receipts and bills, tax etc... to him. Thats what hes there for.

If you ship stuff, SHIP THE SAME DAY AS ITS ORDERED.

If one of your customers needs help, spend as much time (money) as needed to get the product working right and keep it as FIRST PRIORITY (just behind shipping)

Quick replies. If someone emails you, get back within an hour. If they are going to call you and you have to go somewhere, forward the business line to your cell phone. No one likes a message machine.

Dont hire anyone if you dont have to. If there is no work one week it doesnt cost you that extra pay check. When its time to hire someone you will know.

Work from your home if you can until you outgrow the space you have. One mortgage is enough.

Rely on as few other people besides your self for your products as you can.

Travis - sflraver

Oh ya, one more thing. I CAN live off rennbay but it would be tight. Dont expect to be able to start a business and have it support you for at least the first few years.

Geo

It's a dream to do it full-time. One partner would love to do it, but it would have to be gravy because he has a great job with Southwest Airlines and isn't likely to give it up for much risk. Count him out full-time. Another partner has 20 years in at his company and while he would like to do something else, he has a solid future. Me, my future is good, but I've only been at my company a short time. I have a real desire to do this, and since we can't have kids, my goals are dramatically different than they were two years ago. My current career (controller for an oilfield services company) is based around having a family. Since (pending a miracle) we won't have one, my outlook on my career has changed.

The key to our business is our goals are modest, yet we have not lost sight of the possibilities.

Our first goal is to make a little money to help pay for our racing. Most of the parts we are developing, we have done so either in the past through a need we had, or to fill an unfulfilled need we have now.

However, we know that many people have made a good living starting out with less to offer than we have. We're also getting ready to expand into the Honduh and Spec Miata markets. The next major goal would be to have a shop to work on and store our race cars and have a retail walk-in shop. The last goal is to do this full-time and race all over the country. It's not an easy business to be in. One partner and I can do it because we have no kids and probably won't. If you aren't enjoying life you're doing something wrong. At this stage in my life I want to enjoy life more than I want to enjoy money.

Lastly, so many businesses today have a mission statement and almost all of them are total BS. Our mission is to get your money. All your money. But (and this is the critical part), we want to make you happy as hell to give it to us. That is a real mission statement and hard to accomplish.

Geo

Amen. I'm a controller of an oilfield services company, and while I do prepare the books, I have my CPA look them over and prepare the tax forms. A good accountant can make the difference between surviving and dying. If you can, find out what local CPAs have experience in similar businesses.

Devia

I figured this, when I started my computer company: You have to make sure you have enough capital to keep the company and you running for two years, minimum.

I think there is much Sage advice here.

- Julie

Matt H

George- you are right about the kids. My wife and I cant have any either but it gives us a lot of time with our animals and the cars. It also frees up a tremendous amount of capital. Once my student loans are paid off (6.2 years to go!!!) we will have the extra capital we need to do EVERYTHING that we want.

I dont know that a retail store front does a whole lot of good with the work you guys do. I would figure that a presence on lists like these and a real trackside presence would be a better angle. Do you guys have an enclosed trailer you could sell out of at the track? Maybe you could convince your wife to handle that while you guys were racing. If you get the suspension ready for the 944 series I would be happy to trade time. I would be happy to volunteer some time either way. Let me know if there is something I can do up here, you guys probably have the houston area covered. Come to think of it PM me, I think I just had an idea.
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Geo

Yep. I'd sell all my cars if we could have kids, but it doesn't work that way. So, we'll make the best of what is available to us.

Yeah, we wouldn't do much with a retail front, but that would open access to some product lines that are generally only open to those with some sort of retail front. Most likely we'd end up in an industrial park. That would give us work space and a small office (all we'd need).

We don't have an enclosed trailer.... yet. We will. My wife has already offered to sell our stuff at the track. We should have a good mix of stuff for the ARRC (IT national championships). We will have a 944 suspension that will include spherical bearing cassettes, front double adjustable coilovers, and rear double adjustable dampers (coilovers actually, but I cannot use them as coilovers in IT). We'll do some swaybars as well. This will only happen as I get around to building them for my car. We'll have a good and functional CAI as well. I owe my machinist some dimensions and rough drawings. All of the CAIs and adapters I've seen for the 944 are poorly designed IMHO.

JimV8

Cowboy, having your own business can be very rewarding, it can also be very lonely. Start small, ( low demands on money) find a niche, but don't ignore bread and butter income potential. I could write a book on this. i'm in year 8 and finally getting somewhere

Legoland951

George, I like your mission statement. I would just add "having fun" while making all the money I can. An wise man once said this while I was helping my parents run their motel: There is a reason why that person walked through your front door. It is your responsibility to make him/her happy and make sure everything in his pocket goes into your cash drawer, or as much of it as you can get while making him/her happy.