Starting my own business

[FstStig]

Hey Guys,

Just sort of looking at whats involved at this present time. But me and my dad have for sometime now been looking at opening up an automotive spare parts shop close by as the nearest one to us is about 20odd mins away and I know this would benefit a lot of people in the surrounding. What I would I like to hear is from people who.

• Have opened up their own shop
• How did you go about getting a loan to fund it
• Is there any government funding help
• Any courses that should be or needed to be taken
• Anything else I should know?

I already have my own ABN so that is not an issue and there is currently a shop in a prime position available for lease at the moment.

Thanks

Black_Stig

[Dum*P*ster]

I don't own a shop, but my best tip would be.. A+ Customer service, make the customer feel welcomed,..(if a customer askes for an item, be enthusiastic! Not, .ok... *sigh*.) if ya catch me
I personally don't like going to the shops the staff are lazy and like yep.. uh-huh .. like every super-cheap shop I go to lmao.

[HarmlessMuffinMan]

Sounds awesome dude, will be good for your community. Just make sure your ABN is the business name you are using, if not, then it has to be like "Business Name" Trading As "ABN name", and you can't use a personal ABN if you are going to have employees. However if your Dad doesn't actually "Work" there, then there isn't too much drama other then insurance... I guess what I'm trying to say is, make sure your ABN isn't a personal one :P

Right! Funding. With a bank you will have to draw out a full business plan, and also supply project income for the first year. These documents are available from each major Banks website, however if you run into your local branch, and ask them, they can be supplied for you. Alot of market research will have to go into it, and if you know someone in the industry who can help you with the income part, its going to be your benefit. I would recommend approaching the NAB first, as all through the GFC they were still hanging out business loans where the other banks pretty much shut up shop. They also have good rates for business banking and such (And they don't suck dick like the other banks).

Courses, your local tafe or private college should offer a small business course after hours, just google that crap and you should get heaps of hits. This will teach you mainly about bank balancing, TAX entitlements, OH&S, and pretty much everything to do with small business including advertising. This is good mainly because it can teach you do your own accounting, and teach you interesting stuff you can claim on tax (Such as Internet connection, phone, rent etc)

Government funding! Good news on this one. There is a Program called NEIS which basicly funds new business development. They will help you with your business plan, and getting of the ground. Also, regardless of what you earn in the first year, they pay you New Start Allowance (And its a constant payment, i.e. what you declare doesn't affect how much you get). Approach your Job Search Provider and talk to them about it. They will have someone who can get you into NEIS. If you don't have a JSP, just approch one of them and ask about it, they will be willing to help you (I would recommend Job Link Plus). The NEIS program will also put you through a similar corse as the one described above, and you will have a saftey net, who look over your business and you can discuss stuff with them.

Anything else? Give it a go! And give it a damn good go, you can always declare bankruptcy! Remember with advertising to tap into Social networking... Join a local buy and sell facebook group and post up interesting parts or sales, you will be supprised how many people will do business with you because you saved them from looking around. Make sure you use twitter as well, a great medium. Facebook Page, Website, all these things are important and will HELP your business. Also you might look at setting up a price book online, many parts places don't have this, and it will benefit your business.

Lastly, be cheap but not too cheap. There is a fine line between staying competitive, and making a decent profit. Most people buy core things from a parts specialist.. Such as Air Filters, Oil Filters, Oil, and other such things. These items are the "Core" sales of your business, but need to be cheaper then the major outlets, and other local parts specialists (Unless you aren't making enough profit). However your other parts can be more "Reasonably" priced. If I walk into a parts store, and pick up an oil filter for $5, I'm ####ing stoked. In fact when I go back and get steering rack boots at $25 a pop, I don't even care that I can get em off the net for $18 for two. Customer Loyalty is a FANTASTIC thing to be capitalised on; its just getting them to be loyal thats the hard part

I hope this helps mate. Just starting up my own business again after moving from QLD! Wish you all the best mate! Its hard at first, but well worth it if you can survive!

(Also a hint with dealing with the banks, don't prove to them that you can pay back the loan, prove to them that you can pay back the loan AND live quite a good life style... i.e.: lie cautiously... Remember the person going over your paper work will be someone in the bank who deals with people in your industry)

[FstStig]

That is some great advise mate, thanks heaps. It will benefit people of about 6 - 7 suburbs (Nords Wharf, Cams Wharf, Catherine Hill Bay, Swansea, Caves Beach, Black Smiths, Little Pelican) I'm all about Customer Service and love being in the Automotive industry currently working in a Automotive Workshop as a TA at the moment. I would be doing surveying before the shop opened to find out the Majority or cars that people currently have around the areas and find out what they would like to see in the shop then work out an average of what would sell the most and stock. I have heard of the NEIS program but haven't really read into it to much, I currently still have Job Center behind me with my current work and they are nothing but great people to have behind me. I always give everything i do 150% and never half ask, always push myself to do things I never thought I could do, so doing this would be a good step. I would probably only have maybe 1 other person employed if I needed it.

[EDGE3]

The NEIS is run through Centerlink well it was when I used it to start my own business,it helped me with the first 12 months of income support.But there is another government funding that will give you the total amount that you need for the business I think its called Govenrment grants for new businesses or existing ones,but there is a small fee you need to pay to register and let them know everything that your business involves but it might be worth while to look into it.Other thing is that you need to know everything about the parts business because you dont want anyone coming into your store and ask for something and then you dont have a clue what they are talking about.The automotive parts business is also a 7 days a week business these days so be prepared to work your butt off.And you can use the ABN you already have if its in your name,you just need to change the type off business its going to be.If I think off anything else I will let you know,but most of all is best off luck and go for it.

[FstStig]

Thanks for the info EDGE3, Which Business do you currently have setup? I'm fairly clued up with my Automotive parts and tools having stripped down cars and motors it all helps I know Burson's aren't open 7 days a week so I found out last weekend. However because I would be an independent I would be right in thinking I can choose to open on weekends or not? I think I may go with the government funding to help get me off the ground first, then go for a loan. As I would see this being an easier option to show the bank what profits I can make, rather then an estimate.

[EDGE3]

If you can get the governments grant you dont ever have to pay it back they give it to you no matter how much it costs as long as they can see that its going to be a successful business.The business that I had was a lawnmower shop which I sold a while ago,which involved the sale of mowing gear and parts and repairs,but now a work at a brewery at Warnervale.

[Jonno]

give shit loads of advice and do good deals.

and if customers come in regulary ask them about their cars how their going
make conversation

[FstStig]

I think I'm going to do it, it sounds like a lot of fun and very rewarding. I can see it being a great benefit to the local community as it would save people so much trouble having to travel to 20mins to the nearest Spare Parts shop. Just got to find out who this shop is being leased through.

[Calaber]

Black Stig

I wish you success with your venture, but your competion is something you need to consider very seriously. I know there is a Peps autoparts at Gateshead (and Supercheap or is it Burson's at North Belmont?) to the north, and Autobarn and Supercheap at Lakehaven in the south. I assume you will set up around Swansea as the other locations you list are too small and remote to really achieve anything. Do you think you can compete with the larger, established stores, even though they are some distance away? What would you offer that they don't, that would entice customers to travel the extra distance to your location? (Customer service is a good start but it won't beat low prices).

[FstStig]

All there is at Gateshead is Repco, Bursons and Supercheap, lakehaven have autobarn and supercheap. There is nothing in between these areas. I would be stocking the same things the above shops have so like Tools, Filters, Spark plugs, leads, Oils, Coolants, Additives etc, Also things like O-Rings, seals, gaskets in a kit or one their own which are hard to get. I would also offer to the choice of genuine or aftermarket. I would also offer performance parts. I would make my prices competitive but also give the customer advice, also give them the right part the first time. I would also be open a bit later for people coming home from work as this area is starting to become very busy during the work week. I would make it so its more of an entice for people from Belmont to travel.

[Dum*P*ster]

give shit loads of advice and do good deals.

and if customers come in regulary ask them about their cars how their going
make conversation

This one is a good one for customer service
Sometimes its always to good to have a new set of ears to tell about ones car

EDIT* Would you (if possible) make a website for us to buy online as-well? I would imagine it could help you get more people to buy you're items, also advert you're business on ebay too!

[tonza]

Can't really offer much more advice then what has been previously stated.
But i can wish you and your old man the best of luck. Good to see someone with some initiative really giving something a go.
Good luck mate, let us know how it goes

[FstStig]

Yes a website is a must and is something I should be able to do by myself, as for online shopping it would be on the list of things, but would be a project within it's self. Thanks for all the good luck guys, I will be speaking to my Job Center adviser next week about it all

[vkberlina]

Have you looked into possibly doing a francise type setup with one of the independent parts suppliers, give group buying power on stock. Get a job at repco or supercheap for a bit to see what parts move also.

Contact fair trading for a busniess startup pack, has loads of info

Scott

[FstStig]

Have thought about doing a franchise setup, but from what I have read they take a lot of money from you just for using their Name etc. Will check up the fair trading website for the start up pack Thanks heaps everyone, keep all the info and ideas coming

[DAKSTER]

NEIS can help you out with just about everything, from making a business plan to putting you through a Business Management course, mentoring you from whoa to go. They will pay you the dole for a year while you try to make a go of it, which wont be affected by whatever income you can earn. They are the very first people to approach, its a one stop shop.

The biggest issue I see here is the way you want to do business. I agree, customer service and the right advice can set you apart from the other guys, provided of course that your product pricing is not excessively higher than the other guys.

Your stated objective is to give people the right advice, and the right part, the first time. Your stated staff requirements are you, your dad, and maybe one other at a later date.

"I'm fairly clued up with my Automotive parts and tools having stripped down cars and motors it all helps" is not going to cut it in this regard.

You need some real expertise. Before jumping into this too hard, think carefully about how much combined expertise you and your dad actually have. If you are sure you know enough to answer every question that everyone asks you, and give the right answer, then by all means have a go..

Most good parts shops have several people, all from different backgrounds and preferences.. holden/ford/ricer drag/street etc. Many are qualified mechanics with specialist knowledge. Between them, they can answer most questions. Can you?

Not having a go at you but if I want advice on the best kind of rings to fit in a hot LS7 then I will ask someone in a speed shop who probably has a drag car he runs on weekends.. if I want a stock oil filter for the same LS7 i will just go to supercheap because I already know what I want. If you want to serve both markets, you are going to need a lot of knowledge, and also have some good contacts in the industry to source parts at the right price.

Competing with the chains is never going to be possible, they buy in bulk and you will never buy stuff for the same price they do. You either join a chain, or you have a specialist shop with real expertise, and try to balance the pricing/sales ratio at a level that doesn't send you broke.

Without lots of real expertise, and a high profile in your market (a successful drag car for instance), you're just another small business that won't survive against the biggies.

[Adds_05]

(Customer service is a good start but it won't beat low prices).

Thats exactly right, people dont give a shit these days if the person behind the counter has a big smile and can tell them how to fit an item,just as long as they can get it for cheap than get home and look it up on the net how to fit/fix what ever they are doing.
just make sure you really have a good hard look around and see if its what is needed.if it is in swansea,you might be alright there.
another thing,
"I would make my prices competitive but also give the customer advice",
do you know for sure your prices can be competitive? the bigger stores can usually get stuff cheaper from suppliers than smaller shops can and alot of people will drive for 15-20 minutes if they can tell everyone they got their stuff cheaper elsewhere.
lastly,be very careful offering advice, advising on one brand of oil over another might be ok but dont go telling people exactly how to change it because if they #### it up,they'll be coming after you because you were they one that told them how to do it.
with that,good luck with it all,i hope it works out for you.

[sporty custom]

are you on drug or wot ppl want the best gear at the sheapeast price wanna chat thay go pub or

[DAKSTER]

are you on drug or wot ppl want the best gear at the sheapeast price wanna chat thay go pub or

can i have some of whatever you're on please?

[DevilDRake]

One main thing you really need to remember, stock control. Yes it's good to have something that no-one else has, but one thing is people will think you wont have it so wont ask, and another thing is you'll be stuck with it = Wasted money.

I say keep rare selling items not-in stock, but make it so you can get them the same day or next day (same day makes people stoked, but most of the time unlikely.)

[wraith]

One main thing you really need to remember, stock control. Yes it's good to have something that no-one else has, but one thing is people will think you wont have it so wont ask, and another thing is you'll be stuck with it = Wasted money.

I say keep rare selling items not-in stock, but make it so you can get them the same day or next day (same day makes people stoked, but most of the time unlikely.)

Wish I could do that. Damn far north country town. Truck comes up Wednesday and Sunday only.

Any hoo OT:
All very good points. Maybe what you could do is do a viability survey go door knocking and let people know what your planning on doing and see how it goes. I mean honestly most people would rather go to some where like super cheap where they are almost for certain guaranteed the part they want and for the price they want.

Breaking that cycle of going into Bursons, Supercheap etc is very hard and will take some time. You would be surprised how expensive your stock can be compared to the big chains and I don't think a good smile and nice attitude will convince a customer to spend $80 on a service kit they can get for $50 at supercheap.

Franchises have pretty much killed off the local guy from what I have seen. Perhaps you can look into that? Getting the info from the franchise rather then your mate might surprise you?

[DAKSTER]

Franchises can be a good idea. You get bulk buying power, mass advertising, brand recognition... an instant clientele. Yeah you have to pay them for that.. but its probably worth it. Franchises operate on a proven business model, with a successful corporate look and identity. They provide you with all the support and training you need to become a clone of their proven model. There's a lot to be said for that.

Starting your own business sounds sexier and more fun, but in reality will be a huge risk, a crapload of hard work both setting it up and maintaining it, and will probably (even if it succeeds) be a major financial loser compared to a franchise.

Of course, doesn't matter what kind of business you set up, or how much franchise support you get if you go that way, if you haven't got the right business in the right place at the right time you are screwed anyway. You really need to research that.. doorknocking, flyers, internet polls.. anything you can think of to judge just what is needed and where it should be located. NEIS can also help you with that kind of stuff, though I am not sure they would help you with a franchise as such.

[Calaber]

Another suggestion is to see what the existing businesses don't provide. For example, is there a Rare Spares outlet in the Newcastle region? (I seem to recall there was, but can't be sure). Is there a (gasp!) rare Fords parts supplier? What is the most common type of vehicle for which aftermarket demand might exist? I'm thinking of 4WD upgrades here, such as heavy duty shocks, suspension kits, off-road equipment, etc. There is a supplier for that stuff at the other end of Lake Macquarie, around Barnsley, but that's a fair distance from Swansea so it might not be a competitor, even though it's well established.

Lots of market research needed here before you lay down your bucks. Again, good luck.

[Reaper]

1. Industry experience. Do you have it??? Retail is great but trade is what will keep your doors open during the week. If you have industry experience and the relationships with suppliers and local mechanics that goes with it you will have a big head start. Without those be prepared for a very long (and expensive) start up phase.
2. $$$. Whatever money you think you need then nearly double it. Spares is very capital intensive in money tied up in stock, plus being a start-up most suppliers will be reluctant giving you an account for (at least) the first few months. This means you will need the capital to cover stock plus all your outgoings for the first few months, while banking on very few inflows of cash. Don't count on a wage for yourself as any more than a pittance for quite a while.
3. Business plan - Have one! Make sure it covers everything from finances to your sales & marketing proposals. As a start-up, marketing and brand building will be one of your most important tasks. It will be slow and also expensive so make sure you have an adequate budget and plan.
4. Education. Do you know what all the relevant obligations and skills needed to run a successful company are? Do you have them? If not, there is no end of government assistance to help you along the way. Go check out you local library and/or book shop in the business section and read a **LOT**. Also look at things like leadership and read about successful people, particularly in business. There are no step by step guides but you pick up bits and pieces along the way which all help your judgement.

Anybody in business will tell you that it's a very long hard process. There are some great rewards to be had but the stress and very long hours, often with little or no reward are also a big part of it.

Reaper