Olds64

Hello. As some of you know, I've been in Afghanistan since Dec. 2012. I'm almost done with my deployment. I will return at the end of Jan. 2014. As the thread title says, I've been considering starting a small business. I wanted to ask everyone's advice.

I've considered buying an older (80s or 90s) Mustang or Camaro to paint, fix up and flip. I've been browsing Craigslist, Auto Trader and other sites and most of the nicer Mustangs and Camaros I see are only selling for about $10,000 or less. It doesn't seem like I could sustain a business doing this type of auto restoration.

I've never done a frame off restoration, and I know the amount of money I put into my 71 98 I would never get back. Is auto restoration a viable business? For it to be profitable does one have to exclusively restore 69 Camaros and 57 Bel Airs?

The good thing is that when I get home I will be 100% debt free. My wife and I plan to pay off our house and her car with the money I've made this year. I've thought perhaps I should use that money to start a small business instead (if I could convince my wife). I know there are VA backed small business loans available.

What are your thoughts? I recall that another person on our forum posted a similar thread recently. I know I encouraged him to start a small business. I'm sort of tired working for "the man." Thanks for your input.

kitfoxdave

Get yourself debt free. It makes it a LOT easier to do other things in your life! A lot of successful small business folks work a regular job while getting their business together and ready for launch. Then after they have experience with their own business and made a reputation, the "side jobs" become the main job.

Best of luck!

Collecting what people owe you is the worst part!

Killian_Mörder

What you intend to do would succeed, if you didn't just do that. You'd have to earn steady money with repair work or with something less related like refrigeration service or electrical installation.
The profit you make through restoration depends much on what you buy for restoration and how much you have to pay for it. The advantage of being overseas is that you can get lucky and bring back a rust-free or lightly rusted vehicle from those places. Maybe, less likely from Afghanistan, with the exception of some Soviet-era relic. However, from U.S. bases in Turkey, you can scout around for old American cars there, if you take leave within Asia, assuming you don't have a wife and kids yet

garys 68

Too many people doing it out of there garage around here. Only those with deep pockets wanting something to their specifications are willing to pay enough. And they're going to stick with established shops. Overhead costs, liability, materials, and space required makes it expensive too.
Not trying to discourage you, but that is a reality around here. I looked at doing something similar.
I found another profession with a much smaller skilled pool that had low expenses associated with it and I could charge $100/hr.
You might look at it from more of a business plan perspective rather than trying to make money from something you like to do.

Olds442redberet

I am attempting the same thing here in Alabama. Even with my military retirement check, it's tough. I am finding that when I sink money into a car I usually lose money, but if I turn around and sell the car quickly, as is, or part the car out, I do much much better.

My brother has actually established a reputation and is doing major builds, but he kept his well paying daytime job and hired a decent mechanic/welder who does a majority of his work for him. He built his reputation at the track, racing and winning at local and regional events. This helped exposure helped him out alot.

Start up is difficult. Tools are expensive. Heavy duty tools required for a real shop are even more expensive. Even buying used tools, is costing me a small fortune. The shop space in decent areas is also expensive. I haven't checked on insurance cost just yet. But it is on my "must do" list". I am researching business licences now.

Professur

I started a small business years back when my reputation brought in a customer that my boss refused (they were in the process of killing our company and adding new custom ran contrary to that). I started a side business to take care of them (since there wasn't any conflict or competing anymore) and it was then that I discovered that even though i was amongst the top 10% in my field and loved my work .... I was a lousy boss. Starting your own business is far more than just doing your work .... there's managing schedules, invoicing, accounting, ordering, and even after work customer support and all manner of other crap that was done behind the scenes at the office while I was out on the road making my reputation. And having all that to do can really sour you on a work you love. If you watch Fast and Loud .. that's exactly what they've got going ... one guy that loves the management side ... and one guy who's the real heart of the business ... doing the work, building the cars and making their reputation. Neither one is any good at what the other does .... but the two of them together are not only successful .. but happy. Fortunately, I've got a boss now that loves the management side, and understands where I need to be ...

rootney

From what I see, it's a tough business and resto alone is tough to make money in. There's one shop that's been in business since the '80s. He does very high end big dollar restorations and has built up a name with clients in southern CT that have lot's of disposable cash.
The second guy does very nice work, but depends on collision repair to stay afloat.
The third guy now works at Autozone.

George

Carshinebob

I often joke that if I could go back and start again I'd find a job selling greeting cards. It would be alot easier. I started in 1978 painting cars on the side. Nights and weekends. Since then it has expanded to the business I have today. I learned almost everything the hard way. Having the drive to stick with it and being able to come up with creative solutions has helped me over the years. Nowdays I would suggest a well thought out business plan. Get some help with that. experianced business people can look at your plan and shoot it full of holes if you've never done a plan before. If you ever get up to Michigan I'd be happy to sit down and talk with you and give you a tour of our shop. I still enjoy what I do for a living however it's a lot more work then most people know. ~BOB

oldcutlass

I am in the same boat, just a bit older. I too am trying to figure a way to make a living without having to work for someone else. I quit my job back in March and have been tinkering on other peoples cars on and off for extra cash. If I wanted to, I can probably stay busy providing this service to other Hotrodders for quite sometime as these are people that own hotrods or older cars and have limited mechanical expertise and can't afford todays shop labor rates. Basically its like being a car buddy for $25-35/hr and work a their location.

501Paratrooper

I thought about starting a small business that I could run part time and looked into the VA too.
The VA really doesn't do loans. It seems that they will assist you with training to make your business successful (Boots to Business). They kinda refer you to the SBA which will refer you to a non profit based grant based loan but you will need capital equal to what amount you will be asking for. In the end I'll have to put my idea on hold for a bit. Good luck with your plan I hope it works out.

I say go for it start small restoring parts maybe, I know there is a member here that specializes in 66-67 dashes, I bought control arms off a guy that seems to make a living off doing those and I bet Sparky's Carbs works out his garage.

Stay safe and Godspeed back from Asscrackistan.

2blu442

I like the idea of finding a niche like Ron has. I was just reading a post where someone suggested fabricating GOOD spoilers for our cars. I've often thought about a small casting/plating business. Not a ton of demand, but things like side scoops on 1965 442's that just cannot be found. If one had the ability to make small runs on casting pot metal pieces or brass and having them chrome plated...

I'd also encourage you to get debt free, then you'll have more freedom. If I were you I'd get some kind of regular paycheck to cover the bills, then start your business on the side. As your small business grows you can make the decision when to go at it full time.

Five to ten years ago I could have made a decent living buying parts cars and selling pieces off them. But that source has been drying up. If you do something like parts or project cars stick with what you know. I've purchased a couple dead cars that weren't Oldsmobiles that turned into a waste of my time.

Be safe and come home soon! Then good luck on whatever you decide to try!


John

marxjunk

if i where gonna start all over...id be a 5.0 mustang..or any mustang wrecking yard..and maybe CJ Jeeps...i know a guy in eastern Mo and people travel from 5 states to buy parts from him

you can buy them cheap and bust them and they will part down to dirt..if youre reasonable on parts you will sell everything..2 guys here do it and they cant keep up with it..they are both self made millionaires.

get a dealers liscense and a dismanteling liscense and go to the city tow auctions in youre area and join copart..buy a 3 car trailer and let it fly..

redoldsman

For any startup business you need to put together a business plan. It should include what you are going to have for startup costs (space, tools, air compressor, paint booth) and then what your cost of goods sold (in this case the cars you would buy) and what you will sell them for. For most start ups you are not going to make a profit for 1 -2 years. If you are doing work for other people, you have to be able to show something you have done whether it is a customer's car, one you have sold or your own car. I think often times we have difficulty separating our passion from the reality of what could be a viable business. I think the best thing is to find a regular paying job and do this as a sideline. There are many successful businesses that started like this and then became a full time occupation. Unfortunately most of us don't have a profession that we enjoy as much as we do our old car hobby. Good luck in what you decide to do.

joe_padavano

You would be correct.

Given the availability and price of these cars in good to excellent condition, there is virtually no market for a restoration shop that specializes in them, especially if you plan to make money at it. It is ALWAYS less expensive to buy a car already done than to restore one, and that's when you do the work yourself and don't draw a salary. Paying a professional shop to do the work makes no financial sense whatsoever.

Our chapter recently toured the world-renowned White Post Restorations shop. They charge a very reasonable $85/hour for labor, yet all their restos are six figures. They aren't getting obscenely wealthy at this, and their business ebbs and flows. It's now picking up, after several very lean years. I'll also point out that they have a well-earned reputation, which is why people use them. Can't say the same for a brand new shop.

Despite this, people bring cars to them for emotional reasons, not fiscal ones. We saw a Lincoln Continental Mk II that they've been working on for over a year now, and the body shell is just now out of the paint shop. The owner wants to win Pebble Beach, and will be spending about $400K on a car that will be worth $70K when it's done. High-end work like this, with customers who have more money than brains, is the only way to make money at that business.

Napoleon Solo

Like Proffessur sez, there is a lot more going on behind the scenes than the work itself. I am fortunate that my wife is my business partner and is the master of all things 'office' while I handle all affairs regarding shop and quoting.
If I was faced with a choice like yours I'd choose debt free without even blinking. First off, debt free likely makes borrowing easy. The bases are all covered and a fair amount of your income from 'the man' ( I was there too) is available. Startup costs are always higher than you expect and tools too, as mentioned above. The reality of business ownership is that it is far from easy BUT - 6 years on, I can never go back to working for someone else. The benefits far outweigh the risks.
Start slowly, put together a business plan, research research research and PAY OFF YER HOUSE!
Get home safely.

Kennybill

I would stay in till "retirement" taking business classes/auto body/welding. When you retire, go for it. Jmo, Ken

navvet

First things first...Keep your head down until your return. Be safe!!

pogo69

If you start a business and your the one doing the work and you start making some good bucks and become busy with more work you can expect to kiss off most of your free time

gearheads78

Dang ......your too cheap. Make sure to stay on your side of town

Sampson

[QUOTE=joe_padavano;615826]You would be correct.

Given the availability and price of these cars in good to excellent condition, there is virtually no market for a restoration shop that specializes in them, especially if you plan to make money at it. It is ALWAYS less expensive to buy a car already done than to restore one, and that's when you do the work yourself and don't draw a salary. Paying a professional shop to do the work makes no financial sense .

X2 to Joes comments above. I am doing all the work myself on my car except paint and body work and the body was in very good condition and did not need a lot of rust repair. I will have more in paint and parts than I will be able to sell the car for when done. How would I ever be able to recoup the hundreds of hours of labor I have in it? One local restoration shop here just recently switched over to collision work. Not trying to be a Debbie Downer. Just do your research and start out small. I would look for a niche. Visit some local shops and ask what services they have a hard time finding good people to do the work. Good luck in your quest and thank you for your service!

gearheads78

The high end resotoration shop I worked for 1989-91 switched over to collision because they just could not keep enough cash flow going. Average jobs were 15K for body and paint only 25 years ago and still not enough money in it.

oldcutlass

Ha ha Richard, it's more fun than anything else bud.

Killian_Mörder

There is a saying that goes, "Nobody ever got rich through hard work. Only through commerce"

oldstata

I say be debt free, start on the side like others have stated. Sometimes when you turn a hobby into a full time job you have a 50/50 chance of hating what you do.

Kennybill

It's nice having the pension every month, just saying. Ken

Olds442redberet

I been looking for a building to move into and let me tell you, they're not cheap. For what I plan on doing I need a small space, power, and a phone line with internet connectivity. A decent, but not great area is roughly $1600-$2600 per month. I have found some cheap locations, but they are in the bad parts of town, places I wouldn't want to leave a car out on the street during the day, let alone overnight.
Now if you can put up a metal building on your own lot, maybe behind your home, it's a little cheaper in the long run, but still costly. And you will need to ensure you can operate a business from your home if you go this route.
And how are you going to keep food on the table for the first year or so, as you develope your reputation.
It can be done. But there is a lot to plan for.
Thank God I stayed in long enough to get a retirement check. So I am not as concerned about the first year as I would be if I didn't have an income. Overhead plus negative income from a business could bankrupt someone real quick.
You still have to pay the bills, even if the business is slow.

pogo69

Planning/zoning laws vary im sure you know you cant just open up shop in any residential areas...also most towns have an ordinance that prohibits you from working on cars in your own driveway,even your own car!!!!.must do mechanical work in a closed garage. I know this sounds crazy but it is to discourage peoole from working on cars as a side job and is enforced if there are complaints

Olds64

Thanks for all of the great advice gents. I think it would be wise for me to start slowly when I return home. My wife and I will pay off the house and the Flex and be debt free. After that I'll still have some money left over to play with.

I definitely need to speak with the folks at the small business office in town. I've done some research and I know in OK you CAN'T do auto restoration work in your shop behind the house. To sell cars for profit you must have a sales location with a sign, bathroom and phone line. Plus, you have to get a small business license AND a used auto sales license or auto restorers license.

I'm just taking it one day at a time now.

pogo69

Good luck with what you do...and you cant go wrong with living it "one day at a time"

Oldsguy

Thank God they require a bathroom in Oklahoma. My faith in the state has been restored.

Olds442redberet

I am retiring soon, and going through much of what you'll be going throughas soon you return. It can be done, but it requires time and patience.

I have a friend who purchased a building just to store stuff in and as soonas he bought it every Government entity in the region started calling him. Theywanted to know what his plans were, did he have a business license. They wantedto check to ensure he was in compliance with local zoning, etc. He bought the building just to store his stuff in.
And none of these folks had it in their heartsto help a future small business owner. They were strictly there to enforceordinances.

Professur

Fixed it for ya.

Killian_Mörder

Sounds like it's getting European, over there. That's basically what a city government over here does, as soon as their budgets exceed what revenue they take in. My sister tells me that they don't even let you keep a car in the backyard and limit the amount of sheds you can erect.
The chamber of commerce, here, provides free group counseling for those who wish to start their own businesses. As soon as I started mine, the mean little lady in city hall (I'm sure, deliberately) sold me the wrong permit which got me into debt against the tax department. When I filed returns, I would get letters saying that my returns were all wrong. Then, they would foot me bills in the thousands. I would get these magazines from the chamber of commerce and the chamber of crafts which weren't usefull for what I was doing and whose dues were mandatory, despite the fact that I didn't employ anybody except myself. As soon as I had my permit annuled, the bills stopped coming in. But, the debt is still there. In order to fight it, I'd have to find a competent tax lawyer which is like Russian Roulet, if you don't have any referrence to them. Other small businessmen told me similar tales. One of them was even paying too much tax and got back some 10.000 €, after having taken the tax department to court

Olds64

Those are some horrific stories!

I've thought I might install a workshop / garage / man-cave in my back yard. Then I could wrench at my hearts content and not have to worry about taking up space in the 2 car garage I have now.

oldcutlass

I would think you could do what you want on a small scale at home before setting up an actual business formally. It's not illegal until your caught.

Killian_Mörder

Yeah, it seems it's only the small fish which can't escape a fishnet

citcapp

Starting a small business requires:

Total up all of the things you need to buy, add utilities, taxes, rent, add your first years expected income x 2 x your body weight and you might be close to
what you need as a bankroll for a small business to make it past the first year. Been there done that 3 times

Olds64

Pat, I would need quite a bit of capital to start my new business since I weigh 300lbs. It's not easy being 7ft. tall!

garys 68

Cant you find something that requires less equipment, space, overhead, pays really well and is largely a cash business?

Olds64

Gary, that is definitely the way to do a business (with as little overhead as possible). I think some of the others had a good idea to focus on a specialty service (ie. carburetors, power steering gears, etc.).

We'll see what happens when I get home in Jan. I'm not even sure I would have enough space for a workshop in my back yard since I live in the suburbs. I already have an 8x10 shed in the side yard. I would have to hire a surveyor to come take measurements before paying the buidling fee to the city. Ideally I could remove the shed and just pour a bigger concrete pad in the side yard.