Thinking about a new business

[K9Torro]

Ok old wise ones -

I am thinking about starting a new business and would like some imput from my esteemed Porsche fan's.

After using several transport / carriers to move car's around the country and getting to the point where I don't have to work much any more I am thinking about starting my own 1 man company to move car's.

I would offer door to door service instead of port to port, I would also offer to move anything, even if it does not run, if we could get it on the truck and off again I would move it, unlike most of the carriers who would not touch roller's or project cars.

I would do this in a timely manner, set pick up date and set delivery date based on distance involved in both.

What are your thoughts , would I get enough business to make it a worthwhile investment in transporter , license , insurance and bond ? Or having set all that up would I sit and watch the grass grow under my transporter ?

Also anyone with some insight into how much they have been paying the various competition would be worth knowing.

Todd

[Moses]

You need a business plan.

Calculate your start up costs and your monthly fixed and variable costs. Find out what other car carriers get for transport fees. It will become clear how many jobs you will need to break even. Then all you have to do is decide if you want to work that hard.

[K9Torro]

Thanks Mose ,

I have taken a look at what various companies charge it runs on a wide scale from $ 1.20 a mile up to a whopping $ 4.25 a mile and not a single one will move " project or rollers " that I have gotten estimates from.

Todd

[Moses]

Here's a good resource to help get you thinking about the right things;

http://www.sba.gov/starting_business/planning/basic.html

[M.D. Holloway]

Fuel and Insurence costs might make you think twice. You may want to ask folks (including the ones on this bored) what they feel are the top five most important things in a transport / carrier service. The personal touch might be imporatnt to you but may the majority would want something else. Price may be a factor but having covered transport or quick service might mean more to them.

I am a big believer in surveying the potential customer base. Find out what is going on in their heads. Whats important? What would set you apart from the other guys doing this (that falls in line with what they feel is important)?

In Six Sigma we call it building a house of quality - CTQ's (Critical to Quality)

[Moses]

Here's a page that let's you see many sample business plans. You can even get cheap software that lets you edit an existing business plan, customizing it to your needs. I'm sure there's a market for the service you are thinking about. Do your homework. Get it right.

http://www.bplans.com/sp/businessplans.cfm

A solid business plan will address all of the following issues;

1 Executive Summary Highlights
2 Objectives
3 Mission
4 Keys to Success
5 Company Summary
6 Products
7 Market Analysis Summary
8 Strategy and Implementation Summary
9 Management Summary
10 Financial Plan

[on-ramp]

A business plan is a good idea. By going through the process and doig the research, it may open your eyes to many issues you haven't thought about.

but it's only a guiding document and can be far from practicality.

[Moses]

The most important part of the business plan is determining what your cost of operation will be. You may already have an idea what rates you may be able to charge. With this information you should be able to figure out how much work needs to be done to be profitable.

I've known too many people who never bothered to make that calculation. Big problem.

Also, if your going to use a commercial lender to get started, they'll likely want to see a business plan.

[Christien]

Some good points here. Wayne, while I agree with your comment re obsolescence of a business plan the minute it leaves the printer, it can still be a very valuable exercise to go through. I made a business plan 2 years after my company started operations, and was already running successfully. (I needed one to shop the company to investors) I learned a boatload about what we're doing well, what we can improve, and potential holes someone else might find in my company, which of course were quickly filled. It forced me to look very critically and objectively and what we were doing. It also helped in that I had to create a bunch of spreadsheets for cash flow projections, and other really boring stuff, but it really lays in front of you how your company will grow with $xx investor dollars vs. $xxxx. Now I can just alter a few numbers here and there since I made them to reflect what's happened in the intervening years, and I've got new projections in a couple minutes.

But yeah, too much reading of books and not enough "out there doing it" experience will not only give you a headache but also maybe some wrong impressions. Remember that most of these are written from a generic business standpoint, typically with things like inventory and overhead. My company (financial) has no inventory - there's no markups on products or anything like that. So I had to reinterpret everything I read.

The absolute most important thing you have to have is a good bookkeeping/accounting system. You're sunk if you can't see where your money's coming from and going to. It's a ridiculously steep learning curve, but you can do it. If you're absolutely stuck, hire someone to do it for you. You (or someone on staff) need to know the financial figures inside out.

[TerryBPP]

Originally posted by Wayne at Pelican Parts


I'm a bit anti-business plan, and especially those small business startup books. I think people may spend too much time reading, and not enough time actually testing the waters. Business plans are obsolete the second that they are printed out of the printer - what you need to do is to develop a business outline, and then try things within that framework, keeping in mind that the climate and ideas will always change with time.

-Wayne

I completely agree. The reason people buy books instead of do their due dilligence is that a book is $19.95 but actually getting out their costs money.


Miami to Los Angeles

2768 miles / 6 miles per gallon x $3 per gallon = $1384

6 miles per gallon is the high side of a peterbuilt truck. Figure more like 4 mpg.

Initial truck and trailer cost = $200k, more if your want enclosed. Payments per month would be around $2000 a month.

Insurance would run you another $500 a month. Not including your liability insurance probably need $250k worth of coverage. Call it an even $1000 a month.

Also need to higher a driver at $50k a year = $4166 a month

Rent a small office with room enough to store 1 truck = $2000 a month

Misc. office expenses = $1000/ month

But you could haul up to 6 cars if they run. So...

$4 per mile x 2768 miles x 6 cars = $66,432 net

$66,432-$1384-$2000-$1000-4166-2000-1000 = $54,882 revenue per haul cross country

I would guess it would be more like $40k.

[LeeH]

Make Quickbooks your first business purchase. Then learn the software and use it. Find a good CPA and pay for a one hour brainstorming session concerning your start-up and setting up Quickbooks. We have clients that truly do not know if they're making money or not. They have to wait on us to tell them.

Yes, business plans are over rated, but simply going through the process can be an eye opener.

[cashflyer]

When I read the initial post I got the impression that Todd was looking for a smaller and more personal type business model. If so, my advice would be to get a 1-ton dually pickup with a 5th wheel hitch, and get a good 30' enclosed car trailer.

That 30' trailer should give you plenty of room to load a car and load any spares that I see these cars frequently come with (such as 4 extra sets of wheels and tires, or extra fenders, or whatever). You can put a small DC wench in the floor to bring aboard those rollers and projects you mentioned.

The advantages of going this route are lower lower startup costs, lower insurance rates, and fewer operating restrictions (as compared to a big-rig). Also, you have the advantage of using the truck for other things, or using the combo to take your car to DE events.

Another thing you need to calculate into your costs is dead-head mileage. It's often difficult to line up a revenue run for the return leg of the trip when operating this size combo - unless you can get hooked up with a hot-shot outfit that can get you emergency and/or expedite loads.

[madmmac]

I had a retired friend who did something like this, only he would transport lots of different items. The thing was, it was his way of traveling across the US. Remember the retired part. The truck had a small but amazing RV setup to it. He carried his Harley and car. He could fit 2 other cars when he was hauling.

He just said no, no, no to people if he did not want to haul it, or if he did not want to "vacation" there after dropping whatever it was off. The hauling was more of a hobby to offset his travels.

He had tons of great stories and was a wonderful individual. Sadly, he passed on a couple of years ago.

I wonder what ever happened to that truck. It was really cool and a sweet setup.

[cashflyer]

THIS is what I had in mind when I made my suggestion:

[K9Torro]

Cash -

That is exactly what I had in mind, I actually already have the truck part, just need the trailer to go with it. Truck gets 16 MPG loaded or empty does not seem to matter much. Will tow up to 19K

Todd

[TerryBPP]

Are you going to drive yourself or hire a driver?

The only thing that will keep you from making big money is lack of capacity. You might want to get one of those double stacked trailer that can hold 2 car plus parts. Mo cars mo money.

[tc-sacto]

get a toter home and you can save on hotel/food bills.

[K9Torro]

I am going to drive myself, will probably get someone to ride along which will double up on the driving time and safety.

Todd

[on-ramp]

U gotta think about worst case scenario...ie. what happens when the car gets accidently damaged along the process.
Liability insurance costs factor in.

[bigchillcar]

sounds like a neat idea..i hope you follow throught with it. i'd think that you could immediately find a small market right here on the forum of people interested in the service. as much as i agree with wayne about business plans in general, if you are looking towards bank loans in the future, they're gonna wanna see something..
ryan