Want to start a Porsche business; suggestions?

[dhopkins]

I would like to pursue my interest in old Porsches full-time and start a Porsche related business. My old body, with my back problems (I recently fell down and hurt my back on my way to teaching one of my classes here at Temple University), probably could not cope with being a mechanic, however. Does anybody have any suggestions about how I could turn my hobby into a business? My thinking is the buying and selling used parts and/or buying and selling the cars themselves might be the way to go. Perhaps buying rust free California cars, shipping them here to the East Coast and reselling them. I did this with a 356 and was able to sell it for $3k more than I bought it for. My problem with this approach, however, is that I have trouble resisting the urge to put money into these car and fix them up before reselling (it hurts me to see a problem that is neglected on one these historical cars). Or I could try to identify some parts that could be upgraded and have them manufactured (ala' PMO) but this would require an upfront investment and some risk. There are probably other business models as well. Anybody have similar thoughts? Any suggestions about what are the greatest needs in the old Porsche community that could be addressed by a new business? Anybody know of a Porsche related business up for sale? Any ideas would be appreciated.

Don from Philly
__________________________________________
1969 911S (almost finished with engine rebuild)
1976 914 (my newest acquisition)
1981 911SC (the green beast)

[jaudette3]

After I sold my company in 2000 I decided to do what you're thinking about. I started a business that specialized in restoration and buying and selling of 356's. I sold a number of cars for a profit, and turned out some beautifully restored cars -- and lost *a lot* of money.

I turned the business over to a new owner and he is now running it profitably. There are a number of reasons that he has succeeded financially and I failed:

(1) He runs it as a full-time business in order to support his family, as opposed to supporting his interest in Porsches.

(2) He does very few restorations. They are difficult to make money on unless you are dealing with open-checkbook customers.

(3) He does very little flipping. The market is pretty efficient and it's difficult to make a profit simply by buying low and selling high. You need to find a way to add value to the process.

(4) He does a lot of performance upgrade work and deals with customers who want the best and are willing to pay for it (his shop rate is $90/hour).

(5) He does a lot of service work. He was the BMW Master Tech at the local BMW/Porsche/Audi/VW dealer and has a lot of customer contacts.

(6) He has a talented crew but they are younger guys and he pays toward the low end of the scale.

(7) He's a true enthusiast and is able to use that passion to be an excellent salesman - he up-sells a lot.

(8) He manages his overhead carefully.

Hope that helps.

Regards,
John Audette

[72targa]

Excellent advice. One must decide between running a business (and the hard choices involved) and spending time on a hobby (full-time or not).

[RickS]

In the past I have thought it might be interesting to have a web-based clearing house for pre-74 (early 911 and 356) cars and parts. It would have to gain the status as the premier place to buy and sell parts/cars for the early enthusiast. You would take a small fee (percentage based) on every sale and would have a database which would automatically match Wanted to Buy postings with For Sale Postings. You would only maintain a database and web presence and collect fees from the sellers. You would need to advertise in the PCA rag and all the Porsche mags worldwide. Start-up costs for advertising would be high.

Convincing buyers the convenience you are providing in generating quick sales based upon the sheer volume of buyers would hopefully offset the fee angle.

Tons of details to work out, such as how do you prevent people from renegotiating sales behind you back and cutting you out of the fee. And of course, because it is MY idea, I would naturally expect a 5% cut on all sales income after the first year. I don’t ask for much.

[pu911rsr]

Don,
My advice is turning a business into a hobby is a great way to ruin a hobby. I'll echo John's comments above, stay away from resto business just too expensive to turn out high quality product, it takes years of expertise to do this well. I have know many people who have operated automobile repair businesses, tough business as well. You can make money IF you have the right people working for you, also very tough, you are usually dealing with people that have a fair amount of personal baggage. I don't agree with assesment about flipping cars, I think people are making a few bucks doing this but it's very competitive and you also have to really know the cars well and be a little bit of a gun slinger. Sorry to hear about your back, bad thing to hurt. Can you do any consulting work with your expertise.
Good Luck,
Phil

[jhora]

Here you go Don....check out this opportunity

http://cgi.ebay.com.au/LMK917-Porsch...QQcmdZViewItem

[dhopkins]

500k is too much for me; here's my current plan; I go to the bank and get a credit line of maybe 200k; set up a LLC company to protect my personal assets; I rent some property on a very busy street, in my area this would be a street named "Old York Rd" which is a heavily used road for people commuting to Philadelphia from the northern suburbs; I buy a collection of very interesting vintage cars using Ebay, Internet, auctions, private sellers and insist on buying at "wholesale" prices; maybe 10-12 cars in total; these cars would be mostly Porsches but could also be Mercedes, VW, BMW, Rx7, Alfas, Fiat Spyders, etc anything rare, sporty, vintage, and in good condition; I would not put meaningful money into any of them other than to dress up their curb appeal; I price the cars not necessarily to be competitive on a national basis but since the collection of cars would be rare for the area, I would price them on the high side to appeal to someone who is NOT researching a particular brand or model and conducting a national search over a lengthy time period BUT someone who wants a toy and might buy it on impulse on a sunny spring day;I perhaps would try to buy mostly over the winter and sell in the spring. What do ya think?


Don from Philly
__________________________________________________ _
1969 911S
1976 914
1981 911SC

[RonW]

Don,
your idea sounds linda like what stephen at route 30 classics does in oregon.

http://www.route30classics.com/

this along w/ a little coffee/ice cream parlor. built out of an old gas station off of a river w/ great driving in the area.

[Paul Schooley]

Uhhhhh, ya mean draught served on the terrace right????

[Bobboloo]

As pu911rsr says, turning a hobby into a business will ruin a hobby.

What was my passion in life, music, became my carreer. It's not such a bad thing but it comes at a price. The last thing I want to do when I have spare time is be envolved with music.

I play with old Porsches when I have spare time. I've even supplemented my hobby at times buying and selling Porsche parts. I've been very careful, however, not to turn it into a business because I know what it will do to your passion. It will kill it.

If you do decide to go through with it my suggestion is start small and work your way up. Going into hock to start up is a good way to really kill the fun. If the business isn't immediately profitable, which it won't be, you'll feel the heat from creditors and it won't be fun. Besides, loan interest cuts into profit margin and makes it harder for the business to survive.

Buy one car and sell it. Use the profit for the next car and so on until profit from sales are increasing your inventory. I had a buddy back in Texas (Houston) who did this. He was a drummer. He started with one drumset that he bought and sold for profit. He used the profits to increase inventory until eventually, in about 4 years he had a million dollar music retail business.

Moving inventory is only part of the picture if you want to be profitable. Use the business to buy real estate. In otherwords, the business should pay for the real estate property it occuppies. If the business can't pay for the property then it's not a good business. Come time to sell the business this property will go a long way towards cashing out.