NS Dev
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 posted on 4/4/09 at 08:34 AM |
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Taking the plunge!
Looks like I "might" be setting up in business............
(hence the questions on dis. board and swa cable...........needed for unit! )
me and my brother have been talking about setting up full time in the retro cars restoration and projecting business for a while, and I think
we've about hit the point where we want to make a go of it.
I am fed up with working for numpties (not in my near management, but higher up we are now run by a cripplingly beurocratic setup) and if we
don't do it now, then we never will.
Found a great unit, 4 miles from home, really secure, great owner, and 2200sq ft at £2 a sq ft pa.
To be honest, the cost of rent was the biggest issue stopping us setting up and now we've found that things are looking do-able.
Just got to persuade somebody to lend us a stack of cash now
Retro RWD is the way forward...........automotive fabrication, car restoration, sheetmetal work, engine conversion
retro car restoration and tuning
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DarrenW
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| posted on 4/4/09 at 08:43 AM |
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Sounds good Nat. Im in a similar predicament right now but thinking of a different business.
Ive been thinking for far too tlong and there are always hundreds more reasons why you shouldnt do it. However - you sometimes have to go with your
heart. As long as you dont get tied into long leases you should be fine. Its the overheads and cash flow that seems to cripple most businesses. Ive
been told that cash flow is almost more important than profit.
Go for it. You have the skills and can probs offer way more that vehicle restoration. There must also be loads of grasstrackers etc that you can
assist with, or agencies for selling bits that people require.
I bet its daunting but defo worth it imho.
Best of luck
Darren.
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NS Dev
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| posted on 4/4/09 at 08:59 AM |
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The plan is indeed to do a lot more, but we need a fairly concise and precise definition of "what we do" to fulfil a basic business plan
etc.
I certainly will be undertaking stainless exhaust manifolds for example, but probably only "one off" type stuff, no plans for churning out
cheap stuff! Just done some turbo manifolds for someone that seemed reasonably profitable, whereas the "£300 4-2-1 race jobbie" will be
one I direct elsewhere as I see no way of making one for that money and turning a profit!
Retro RWD is the way forward...........automotive fabrication, car restoration, sheetmetal work, engine conversion
retro car restoration and tuning
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Guinness
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| posted on 4/4/09 at 09:20 AM |
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Good luck Nat
I started my own construction business last year, working part time / evenings / weekends. Got so busy recently that I had to give up full time
employment and go self employed.
We are just about to hand over our first 2 major buildings this weekend.
We have enquiries for a number of additional projects for the rest of the summer.
I don't think it's too important to say what specific tasks you will undertake or work you won't do. This is limiting your
potential workload, and you obviously have a wide range of skills (and anything you can't do in house you can sub-contract out).
What I think is more important is to focus on your customer management, communication and contractual agreements.
Keep the customer happy, informed and do what they want. Keep them appraised of progress at all times, be proactive in this respect.
But agree what work is required, payment terms, staged payments, the proceedure to follow if you discover more work is required once you have started
the job.
Cheers and good luck.
Mike
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NS Dev
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| posted on 4/4/09 at 09:27 AM |
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quote:
Originally posted by Guinness
Good luck Nat
I started my own construction business last year, working part time / evenings / weekends. Got so busy recently that I had to give up full time
employment and go self employed.
We are just about to hand over our first 2 major buildings this weekend.
We have enquiries for a number of additional projects for the rest of the summer.
I don't think it's too important to say what specific tasks you will undertake or work you won't do. This is limiting your
potential workload, and you obviously have a wide range of skills (and anything you can't do in house you can sub-contract out).
What I think is more important is to focus on your customer management, communication and contractual agreements.
Keep the customer happy, informed and do what they want. Keep them appraised of progress at all times, be proactive in this respect.
But agree what work is required, payment terms, staged payments, the proceedure to follow if you discover more work is required once you have started
the job.
Cheers and good luck.
Mike
Cheers for the advice. To be honest my brother is the better of the two of us when it comes to business sense, though both of us are quite good at the
face to face customer dealings.
The payment terms etc will be apretty critical part in the initial phases, though less so with us than yourself, as a lot of our initial work will be
based on us buying a project vehicle, restoring it and then selling it on, fairly low value, low input projects to begin with. he's already
making a reaonable go of it, which is largely what has prompted me to dive in as well.
As one of our contractors at work put it the other day, if you can make it work now, then in the future when finances are hopefully a tad more stable,
it should be a lot easier......and that goes for the construction industry more than most at the moment! Good luck with your handovers!
Retro RWD is the way forward...........automotive fabrication, car restoration, sheetmetal work, engine conversion
retro car restoration and tuning
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MikeR
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| posted on 4/4/09 at 09:42 AM |
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Never did get round to having that chat with you....
Always remember two conversations from uni about business.
(I don't think either apply but i'll say it for everyone else)
If you think now is a good time because the gov. are throwing lots of grants around think again. The reason gov. throw grants around is to persuade
you to invest your money. Thats all they want. They don't care if you're successful. In a recession people stop spending money. If you
invest in a business you'll rent somewhere, buy some stufff, hire some stuff and generally .... spend LOTS of money. If you succeed you'll
spend more money. If you fail .... you've already spent money so who cares, the insolvency people can now make some money! What ever happens
your money is now in the economy helping fuel it.
Secondly cash flow is far more important than profit. For example. Which is better? I can make something for a 50,000 pounds in a year and sell it for
a 1,000,000 but get paid in 10 years time or make something for 500 pounds in a week, sell it the next week for 950 and get paid on the day. Who can
wait 10 years for the money? What if the company goes bust in the mean time?
Do your cash flow weekly to begin with and then monthly when established. Never leave your books for a few weeks cause you can't be bothered -
that's when you get in trouble.
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MikeR
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| posted on 4/4/09 at 09:45 AM |
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Oh and make sure you've got a portfolio and decent web site to show people. At the moment you're unknown to most of the world (ok thats a
lie but some of the people you'll be dealing with have never heard of you). Word of mouth and examples of work speak volumes.
Also state from the start how you want to be contacted ..... (i'm thinking of lots of kit companies that have email addresses and don't
reply - annoying customers).
oh and good luck  Might be at mallory tomorrow, if so i'll call / pop round.
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NS Dev
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| posted on 4/4/09 at 09:51 AM |
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yep, all good stuff.
Nope not even considered any government related crap, though I will be doing everything in my legal power to avoid paying them more than I absolutely
have to!
as for website, yep, all in hand.
My bro's current one is www.xjag.co.uk, try typing "jaguar XJ40 specialist" into Google..................
he's doing ok with that but we want a much bigger operation!
Retro RWD is the way forward...........automotive fabrication, car restoration, sheetmetal work, engine conversion
retro car restoration and tuning
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MikeR
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| posted on 4/4/09 at 11:10 AM |
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Oh, not sure if this is possible - but rent your personal tools to yourself. Don't have them as assets in the business. If the worst thing
happens - you don't want the bailiffs taking your tools.
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Rek
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| posted on 4/4/09 at 02:45 PM |
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Going it alone is great, succeed or fail there's nothing to regret.. My theory on big Companies is that being a worker is much the same as being
an oarsman on a galley. You can row hard or soft and not really effect the speed of the boat. you can not row at all and get away with it 'till
the drummer notices you. But you can be damn sure that when the guy's upstairs crash into a rock and the boat sinks you will drown and they will
not...
(these thoughts are post a sunny lunchtime drink in a pub garden)
dont forget recoverable taxes on first year stuff like computers etc...
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iank
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| posted on 4/4/09 at 03:19 PM |
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Firstly good luck with the business - I'm sure you'll give it a good go. Even if it doesn't work out having tried can get you taken
more seriously if you decide to re-enter the rat-race.
But a note of warning. Be careful, or at least aware of the possible pitfalls of going to business with family.
Make sure you're both in agreement about decision making/money/roles and responsibilities etc. before you start - and get it all down on paper.
A lot of small business startups fail due to no real fault of the owners (beyond over-enthusiasm), just a fact of life, but too many families get
wrecked in the fallout.
--
Never argue with an idiot. They drag you down to their level, then beat you with experience.
Anonymous
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Jasper
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| posted on 4/4/09 at 03:29 PM |
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Get yourself down to you local Business Link, loads of free help and advice, start-up course, money management courses, etc, etc...
Then register yourself with the FSB, again loads of great support, plus free forever business banking with the Co-Op and lots of other stuff
too....
I can personally vouch for the cash flow thing, last shop we had took lots of money but cost even more to run, new shop we have now we have less
turnover but the cash flow is MUCH better as the expenses are so much less.
Try to avoid any dealings were you have to rely on customers paying you on invoice as you can so easily get shafted, always try to get money up front,
especially when starting out in a new business.
Oh yes, and pay out for a good local bookkeeper, they will always save you more than they cost.
[Edited on 4/4/09 by Jasper]
If you're not living life on the edge you're taking up too much room.
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NS Dev
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| posted on 4/4/09 at 08:28 PM |
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cheers for the tips folks, will keep everybody up to date with things.
Quite amused me earlier, I'm in the lucky position of having a very insignificant mortgage, and have been thinking about using an additional
loan on the mortgage to provide some start up capital (it really won't stretch things far at all, I know it usually wouldn't be wise but
my mortgage is barely more than my council tax at the moment! )
However, rang my mortgage company this morning and bizarrely, although they will lend me extra money to just spend on any old junk, they won't
lend if I say its for starting a business!!
I will be calling back with a different reason next time, just wanted to be honest and see where it got me on the first call
Retro RWD is the way forward...........automotive fabrication, car restoration, sheetmetal work, engine conversion
retro car restoration and tuning
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owelly
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| posted on 4/4/09 at 08:57 PM |
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And don't forget to pay yourselves a small wage to avoid silly tax, and plough the rest into the business and then claim everything on directors
expenses........
you'll end up paying around 20% tax....
Good luck.
http://www.ppcmag.co.uk
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Simon
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| posted on 4/4/09 at 10:00 PM |
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Or take you personal tax allowance as your salary and pay the rest as a divi on account
If it's good enough for P Green Esq!
For cash flow, you'll want to have a quick turnover/easy to make thing that no-one else has thought of, or you can make quickly. Bespoke becomes
expensive, so at least get a deposit and ensure clients know at what stages you'll be charging them - ie 25% for work to begin, 50% at a tba
stage and the balance on completion.
Good luck with it
ATB
Simon
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NS Dev
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| posted on 5/4/09 at 09:13 AM |
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Simon, could you enlighten me (the ignorant) on the tax thing there, re. allowance and then dividend?
Its just that's what a garage owning neighbour of mine said, and I don't have a clue on that subject.
Does one need to be a ltd company to do that (I assume so) and does one not pay corporation tax on the dividends?
Retro RWD is the way forward...........automotive fabrication, car restoration, sheetmetal work, engine conversion
retro car restoration and tuning
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MikeR
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| posted on 5/4/09 at 06:37 PM |
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Now a friend doesn't do this, i've just heard of it ok (hint hint)
When you park in a car park, keep the ticket. You where obviously visiting a client and therefore the ticket is an expense the company will repay
you.
So spend all day in Leicester shopping - claim back the parking ticket. It means You don't have to earn 16 pounds to pay a 10 pound ticket. (i
made up 16 pounds but the company may have to pay tax, national insurance, then you get taxed and pay national insurance etc so i may not be far off)
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Guinness
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| posted on 5/4/09 at 06:38 PM |
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Nat, find yourself an accountant.
The received advice is to pay yourself 1/12 of the annual personal tax free allowance per month, so for 2009-2010 it is £6,475/12= £539.58 a month in
wages and you don't pay any tax on that.
Then you take shareholders dividends from the distributable profit of the company. This can be any amount, but up to £24k a year it's
effectively tax free, so you get another £2k a month.
The only slight problem is that you have to be making this much profit, and if you don't you might end up having to pay it back.
Google directors dividends.
Mike
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froggy
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| posted on 5/4/09 at 07:23 PM |
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would you be able to do run of the mill garage work too?? a lot of my commercial customers are taking up to 5 months to pay me and the mot side of the
business is what keeps the cash flowing to keep all the overheads covered
[IMG]http://i144.photobucket.com/albums/r187/froggy_0[IMG]
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Schrodinger
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| posted on 5/4/09 at 08:57 PM |
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I would suggest that you form a Limited Company and then whatever else you do DO NOT use your house as security on any borrowing. Don't forget
that as a partnership you will both be liable fully for any future debts of the venture should it fail not 50/50, the creditors will go after the most
likely one at the time to be able to pay up not both of you. I know this sounds all doom and gloom but it is now that you can get these things wrong.
Keith
Aviemore
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NS Dev
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| posted on 7/4/09 at 07:08 AM |
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quote:
Originally posted by Guinness
Nat, find yourself an accountant.
The received advice is to pay yourself 1/12 of the annual personal tax free allowance per month, so for 2009-2010 it is £6,475/12= £539.58 a month in
wages and you don't pay any tax on that.
Then you take shareholders dividends from the distributable profit of the company. This can be any amount, but up to £24k a year it's
effectively tax free, so you get another £2k a month.
The only slight problem is that you have to be making this much profit, and if you don't you might end up having to pay it back.
Google directors dividends.
Mike
good advice, will consult with an accountant! I thought I would still pay tax on the directors dividends, but obviously I'm wrong, so it may yet
be worth going the limited company route (with all the associated headaches).......
Need to weigh up the options before we get to far in.
Retro RWD is the way forward...........automotive fabrication, car restoration, sheetmetal work, engine conversion
retro car restoration and tuning
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NS Dev
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| posted on 7/4/09 at 07:12 AM |
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quote:
Originally posted by Schrodinger
I would suggest that you form a Limited Company and then whatever else you do DO NOT use your house as security on any borrowing. Don't forget
that as a partnership you will both be liable fully for any future debts of the venture should it fail not 50/50, the creditors will go after the most
likely one at the time to be able to pay up not both of you. I know this sounds all doom and gloom but it is now that you can get these things wrong.
Prob is ltd company route adds a huge amount of workload, and our liabilities will be pretty small, and fairly easy to control.
Re. the house, the situation re. the borrowed capital is that with the extra borrowing, plus what i owe now, even if the value of my house HALVED, I
would still have substantial equity.
Retro RWD is the way forward...........automotive fabrication, car restoration, sheetmetal work, engine conversion
retro car restoration and tuning
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iank
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| posted on 7/4/09 at 08:00 AM |
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quote:
Originally posted by NS Dev
Prob is ltd company route adds a huge amount of workload, and our liabilities will be pretty small, and fairly easy to control.
Be very careful with that, if a car you've, say, been working on the brakes has a big prang due to a wheel coming off (whether your fault or
not) then you could find yourself in the position of having to pay for someone to live the rest of their life in a wheelchair if you don't have
good liability insurance.
All the IT contractors I've worked with are set up at ltd companies as the tax savings are huge. You pay iirc capital gains tax on dividends
which is a lot less than income tax (18% with the first £9600 tax free). A good accountant will save you more money than they cost.
--
Never argue with an idiot. They drag you down to their level, then beat you with experience.
Anonymous
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Jasper
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| posted on 7/4/09 at 11:25 AM |
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Being a limited company is unlikely to save you from any debit if you go bust, all suppliers these day want a personal guarantee if you've no
track record.
Try to get a personally recommendation for an accountant, and many are bloody expensive.
If you're not living life on the edge you're taking up too much room.
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MikeR
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| posted on 7/4/09 at 12:09 PM |
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I know you and your brother get on well now .... but one thing to think of, what happens when you disagree about something?
You say buy a manta, do it up over 2 weeks and make 500 quid profit, he wants a jag, do it up over 4 weeks and make between 900 and 1500 profit .....
you don't have the time / money to do both so can only do one.
who wins?
What if he decides he's found the girl of his dreams and wants to have 6 weeks off for a honeymoon and you've got a lot of work on ....
?
Partnerships are great until you have problems - its why i shy away from things like buying a 50% share in a car or engine crane or something.
Also be careful that what ever work you do will have to be up to (can't remember the term) expected quality. On your brothers web site he
mentions that serviced engines go on forever. If i bought a 100k mile jag, you serviced it and a piston exited stage left 3 months later at 103k
miles ..... The new owner would possibly be within his rights to claim you fit a new engine free of charge. Be careful what you tell people.
(i know i sound like the doom and gloom merchant - i just want you to be eyes fully wide open so it works.).
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