SaphCos4x4_Dan

iTrader: (2)

right guys,
me and a guy ive known a long time and worked with are thinking about buying a garage/mot centre...
its basically 40k so 20k each..
both me and him have been in the trade 15 years each
hes got his own unit and small customer base at the moment
i can finance the other 20k if he can

anyway the place ive been looking at looks good and all the fixtures and fittings are included in the sale (i reckon about 30k worth of stuff)

hes an old boy whos built up a loyal customer base over the last 30 years, hes now 68 years old and wants to retire...

basically i can get the finance off my family for my half, im just waiting for him now... ive looked over this guys books and they balance, i mean they break even... im absolutely convinces hes siphoning cash out the business without a papertrail and its obvious by the books... he's just bought himself a brand new yacht ffs..

so i can buy the customer base as a good will basis, and all the fixtures and fittings inside the building are included, no finance

rent is 12k a year

looked through his diary and hes doing a legitimate 45 mot's a week @£54

i will be the majority and he's the minority..

what do you guys think???

can supply more details if necessary

richard youll

I did what you want to do 8 years ago my only regret is I wish I didn't have a business partner, any info just ask

Mr RS500

iTrader: (6)

Partnerships dont oftern work

1 works harder than the other etc etc

I would go it alone or not at all

saph4be

Sounds like a good bussiness but echo the partner thing I would avoid it if you could!

gingeRS

as long as you guys are really tight then i would say it 'could' be a wise investment.

if hes skimming cash and he hasn't mentioned it to you how close are you, unless you work for HMRC of course, that could go very bad if he continues being shady in any business you are both involved in

zetecbeast

Good point.

If the guy is not upfront with you about how much he's making, do you trust him to suddenly start being honest?

I would advise you to get a good solicitor who is used to this kind of transaction. You need every 't crossing and i dotting' for a venture like that.
Could be the best £1k ish you ever spent.

good luck

james kiely

iTrader: (5)

my advice after a expieriencing personally and friends of mine is partenerships very rarely work .if you can do the work yourself do it that way and get a sleeping partner to put up the other 20k if you cant get it .agree a return with your sleeping partner on his/her investment and you control your own business affairs .best of luck what ever you decide mate

SaphCos4x4_Dan

iTrader: (2)

Cheers guys.. Just to clarify its the guy who's selling the business who I'm sure is doing the "cash sales", not my business partner

If I had the money to do it alone I would, but I'm borrowing at lot as it is. Also I think having someone else pushing me to do better al the time would be a good thing if you know what I mean?

richard youll

You'll do good the only issue I have with my partner ship is the one works harder than the other, bear in mind I was his apprentice then ne'er as damn it best mate have been there for him through deaths of family friends , weddings etc etc we are very tight but when it comes to issues with each other it is incredibly hard to bring up talk about and deal with because of being so close, I sometimes think it would be easier being a partnership with a stranger!

matsgarage

I would agree 100% with what other people have said, being in a partnership could be tricky. I debated it before setting up myself, the only benefit I could think of was having a shoulder to cry on if it went tits up!!!
Be brave, get a proper business plan, go to the banks and borrow the money.
If you get busy enough for another mechanic, employ one and pay him £10 an hour, don't split your profits 50/50 with a partner
I had a few sleepless nights at the beginning, but it seems to have worked out for me. By the way, I dream of doing 45 MOT's a week. Easy money!!

1.9 xr2 on 40's

sounds cheap to me but if you went alone you would get all the profits, there wont be much left with 2 of you, maybe worth a deal where someone works there taking a wage no matter what and then 50 50 on profit as an mot tester will be 10 p/h minimum so if you got qualified and get a chick in the office you are ready to work and can then look into extra people if there work is therein repairs

is there a minimum of an hour per mot?if there is hes already got over a 40 hr week in his books, so sounds like it coudl be beig enough for 2 testers minimum (are there wage issue for people working there? someone on 40k or anything? and you are taking them on too?)

LHD220Turbo

iTrader: (4)

just to echo what everyone else has said, IF you can borrow from banks the other 20k then i would do it rather than have a partner.

worst case you can employ someone if its gets mega busy

get a business plan drawn up and approach the banks, they will offer advice etc with it too which is a bonus

SaphCos4x4_Dan

iTrader: (2)

cheers guys, im an mot tester/mechanic myself and so is my possible business partner. the idea was to basically make the staff redundant and do the work ourselves, maybe keep one of them on

i hear what your saying about having a partner, and someone has offered to loan me the rest of the money, which leaves me in the pridicament of now im in a position to soley own the business but ive already started the ball rolling with my mate...

...sigh

tee-rex

You need to get a good accountant to evaluate the business paying money for goodwill of customers is all very well but there is no guarantee they will stay.
Seems a little strange if he has an average of 45 tests a week and only wants £40k for everything.
I used to know a guy who bought a similar business to what you are looking at testing about 15 cars a week + repairs paid £35k for the lot, first problem was vosa would not give the station a licence until the bay and entrance had been radically updated which was another £25k. Had numerous other problems with planning, noise,, and parking ect, he had no legal advise or anybody to scrutinise the books objectively he is doing ok now but it came at a hefty lump added onto his mortgage.
Not saying its not a good deal but be very careful get a good accountant and solicitor if it all stacks up give it a go.

SaphCos4x4_Dan

iTrader: (2)

thanks for that mate, as far as im aware if a garage is trading as an mot station and is sold, as long as there is no lenght of time where its closed down then theres no need for vosa to inspect it again... if i remember rightly its called "grandad rights"???

someone else might be able to clarify this for me though?

cossie col

Why are you asking everyone, you need to sit down with your business partner and address all of the points made above, ie about one working harder than the other, how many hours you put in, holidays how many days each, cash if you are going to take any then equal split etc, get it sorted now as bet he will be thinking the same. If you can't aproach h about this then you don't want to be a partner with him and its a bit late to find out when you have bought in. Sort it out now

tee-rex

I think you will find mate that it will be a new authorisation if the business changes hands and the bay will be assessed as a new application, also one of you will have to do an mot managers course.
I know a lot of people have said go it alone but also consider holidays, illness or any other unforeseen reasons you may need time away from work a business partner is invaluable then for the good of your investment, get the right partner and it's a lot easier.

SaphCos4x4_Dan

iTrader: (2)

im asking everyone because this is a discussion forum

thought i'd try and get some other peoples opinions on the matter, positive or negative...

SaphCos4x4_Dan

iTrader: (2)

thats the flip side of the coin i was looking for, hadnt thought of that

i also didnt bank on it being assessed again, i will look into that further thanks mate

markk

iTrader: (2)

There is something not right about that deal, if you have a business that is either making loads of money, or is making loads of cash, then you would not be selling it for peanuts.

with ref to the partnership, avoid it at all costs, remember, there are no friends in business, cut him out and go for it yourself if you so wish.

Would you really want to own your own motor trade business in this day and age? I certainly would not.
What are the advantages? what is the long term? where do you want to take the company?

There are no grandfather rights in the MOT system anymore, you will have to re-apply. Though there are some dispensatons.

Being your own boss sounds great, but the trade off's can be hard hard work.
think about the hours you are going to have to put in, 40/50/60/70 hours a week for how long?
Working on cars for the rest of your life? is that what you want, no paid holidays, no sick pay, can you afford to run it if you injure yourself?

Not trying to put a damper on it, but pound on pound return, the motor trade is a poor place for your money.

SaphCos4x4_Dan

iTrader: (2)

ive been in the trade 15 years markk, dont know how to do anything else. ive got a young family and want something to build for the future

and im never going to be rich working for someone else

j6kyt

I agree paul my mate had the same problem and they parted company on bad terms, i will eventually have my own garage but it will be my garage and no one elses just need to save more money.

markk

iTrader: (2)

Your never going to be rich working in the motortrade pal.

Good luck though with whatever you choose.

botters

iTrader: (2)

very sound advice that, i opened my business with a partner two years ago, we get on great and have only ever had very minor fallouts

as for the hours yes we both do a minimum of 60 hours a week and for very little money but to be fair we started the business with no capitol at all and borrowed nothing from the bank though i have a business overdraft if needed
so as said above dont expect to get rich as you wont and the first couple of years you wont really get a wage, if you survive at all.
but if you can live with that then you should be ok , in 2 years in a recession ive come from no money in the bank, to only taking a small wage but having over 10 grands worth of cars for sale at any one time at least 7-8 grands worth of new tools, ramps etc... and enough money in the bank to keep the garage open for a full 6 months even if not a single car came to be worked on again which isnt a bad position to be in ,in this day and age considering the amount of business shutting down every day

syd

Is the garage in Tameside by any chance?

SaphCos4x4_Dan

iTrader: (2)

i dont think so mate... although im not sure where tameside is exactly

syd

Lol east Manchester the description you gave reminded me of a place called Autofax in dukinfield

SaphCos4x4_Dan

iTrader: (2)

ahh, no mate its not that place

MATT ST

If you need information on any equipment for the garage (eg lifts,brake tester, smoke tester,gas tester, headlamp aligner) drop me a message as i work for one of the biggest garage equipment companies in the uk.

Also you need to think about the calibrations and repair of the equipment if it breaks down I can give you info on all this from my firm.

Good luck with it Matt

Stu @ M Developments

iTrader: (12)

I pretty much agree with whats already been said. its a hard, cut throat industry to be in and very hard to make serious money in it. That said, some people, myself included aren't in it for the money alone and job satisfaction and being your own boss are often worth more to my daily life than ££'s in my pocket.

I put a list on here once of the overheads of running a garage in the UK. Worth looking for. If you cant find it and are interested, let me know and I will scour my PC for it.

Congratulations mate, long may it continue to grow.