I can use some advice / ideas

[AGM]

Hi folks. I am a long time forum reader. My job keeps me busy and I rarely write. That said, I log-on most days to read the wide variety of comments, issues and thoughts in the forum. I also support the different great good-neighbor causes that come up from time to time. As the breadth and depth of the experience on the forum is amazing - I seek your counsel.

Background: I am approaching 60 later this year and beginning to shape the next chapter in my life. In preparation, we bought 8.5 acres, in rural Pacific Northwest to build a modest house - and a 40’ x 72’ shop with an apartment at one end for our guests. I will stake out about six ‘bays’ worth of floor space for my shop. Notwithstanding where I have been and what I have done over the years, I am a gear-head by desire and talent. There is not much that has stumped me over the years when fixing a car; I scratch-built molds and executed fiberglass repairs. I like the challenge of figuring out electronics, wiring and software. I have prepped and painted several cars and they turned out beautifully. I take time to research, seek advice, then practice with the right tools in order to complete tasks properly with very high standards. Ingenuity and creative fabrication are things I enjoy.

What I have not done at all is to find ways to make enough money to keep my car centric hobby fiscally self-sustaining.

Right, to the heart of the matter. I will not need to supplement my retirement income. I am not afraid of hard physical work, currently in great health and I will have a very decent shop chock full of tools, storage, diagnostic equipment - with a proper car lift. I want to build and paint a some FFR Cobras, a GTM, the FFR 33 hotrod, motorcycles and pick up a muscle car or two from the late 60’s / early 70’s to make it better for the next generation. I have read enough on this forum over the years to avoid the money pit of restoring’ a car - unless you really want to jump off the ‘go all-in cliff’.

My question: knowing labor pays very little / nothing per hour in real terms:

- What are options, within this sort of ‘cottage industry,’ to make enough money - at least break even - on parts and material?

- Keeping a sharp eye on a budget, can you actually put together a Cobra, GTM, Hot Rod, bike or reasonably improve an older muscle car, and at least get your money out of it?

- Is there really enough money in stripping donors - Corvettes / Mustangs - selling the parts you do not need, to pay for the parts you do need? What are the major muscle groups that make this work?

- What kind of market / niche demand is out there which a small hobby shop can support / take part?

- Can you reasonably search out, for example, a used car that needs its interior redone (low material costs but lots of labor), is otherwise in good mechanical shape and appearance, then sell it to make a few dollars - to pay for parts you need?

- What do you folks do to fund and placate your vice of building cars - besides the universal, tried and true tactic of simply hemorrhaging money?

My overall intent: have a great time with my kids and grandkids, while making my nearly full time hobby as self-sustaining as possible.

I realize geographic’s may come into play on most answers, but I am looking forward reading your thoughts, counsel and ideas.

I deeply appreciate your personal time and effort in responding - stay sharp out there.

Allen

[Cobra Cory]

There is a lot of guys here with plenty of experience in doing just what you want to do. I'm sure they will give you a lot better advise than me...But,for me, I had a little British car shop. PG's MG service. That is why my email has been pgsmgs @aol. com for over 20 years now. Just in my spare time taking in just a few cars a month I made a good $1500.00 or more sometimes a month on nights and weekends. depending on the car and the project of course. Sometimes no money at all. In my neck of the woods there just were not too many British car places so I had a sort of lock and I could have made more money if I wanted to devote more time. But I had a real job so I couldn't. After 911 I couldn't get people into my shop, seeing as my shop was on an Air Force Base. So that all dried up and I sold everything off.
I think everything depends on how much you want to make of something. If you are going to retire why bust your ass. Your supposed to be enjoying chilling out now. If you want to do hobby work like I did....Just a few nights and weekends, and you can make some good coin. I think it is a good idea to find out if you can corner a niche market if at all possible. That really helps a lot. Also getting you name in any car specific publication really helps business. Here is my shop in the AMGBA magazine...Under Technical Staff. over to the rights side.....Man that was a long time ago....

[AGM]

Cory,

Thanks for your thoughts. You are tracking in the vector I am thinking and I hope the guys out there with lots of experience have time to write a few lines. While I am describing a hobby, I want to use other people’s money - i.e. small profits from working on cars, turning over an occasional car (selling it), or stripping a car for parts to sell while I keep the parts I need and breaking at least even. You had a great cut on finding a niche need and fill it - will have to research that line of logic. As a retired military guy, I can see how 9/11 killed your shop as you were on base. Good point on deciding how much I want to make something - I find great solace in working with my hands and I really love cars and bikes. So, I am thinking along the lines that you did and not looking to get rich nor create a gristmill of projects with demanding times lines. I just want to make enough money to be self-sustaining while enjoying the build. I appreciate your view in getting a feel for the possible.

Allen

[Alain V.]

I've been in the repair/service biz for(31 years) and have been doing custom builds and modifications for about 15 of them,,,,and let me tell you it is real f-ing tough to make any money at all in today's market.

I do not and will not build any cars on speculation,,,,,,
I do them by order only and have managed to build right at 45 cars in the last 15 years (average 3 complete builds a year) but it is tough.
I also do a number of "partials" every year, mostly wiring harnesses, A/C systems, air rides for rods and customs,etc.

First you have to consider your overhead,,,AND YES!!!! even if you do this out of your home there will be overhead, because you WILL need liability insurance, utilities, tools, expendable materials such as tape-elec connectors-hardware-soap,chemicals,sand/soda blaster materials,etc and so on and so forth...

Then there's dealing with the endless lookie-lou's who want to come hang out at your shop like it's their hobby to waste your time! You need to nip that in the bud, because it will eat your time.

Then there's the guys who want you to make them a complete estimate down to the last nut on a build, who act shocked at what the bottom line really is to have a car built the "RIGHT" way.

Any doofus can bolt a bunch of crap together and have a piece of rolling crap when it is done,,,,and there are many, MANY examples of that type of build for sale all over the country every day,,,,,,,

My builds are highly detailed and meticulously done, there fore they are priced accordingly. All of my FFR roadster builds are IRS, with swaybars front and rear, power brakes and steering and cruise control as standard items.
This means an "average" FFR leaving my shop starts around 60k!
I've sent cars all over the USA and a number of them to European countries (which is yet another stress factor) My cheapest complete build was a $48k car quite a few years ago, and I've done them up to $125k depending on what the customer wants.


Some guys on this forum may think "phooey-that is just too much",,,,,and fine for them it probably is....
....but ask anyone who has seen one of my builds in person and actually ridden in one of my cars and they'll tell you the my price is a bargain.

Of course, not many folks out there today are willing to pay what it costs to do it right, so we are talking about a tiny market out there.

Luckily for me, my customers love to show off their builds and almost all of my new business is by referral from satisfied customers.

It is tough,,,
not impossible,,,but very tough,,,
and the current economic climate has made it even tougher.

I'm sure Mr. Mustang, Wayne Presley, Richard Oben, Mark Reynolds, Gordon Levy, and the other guys who have experience in this field would agree with most of what I've posted, if not all.

[AGM]

Alain,

Wonderful comments and I appreciate the time took to hit your points. I am paying attention and here are a few takeaways:

- It is very hard to make money with what I am thinking.

- Building cars on speculation - not at all a hot idea.

- Carrying Cory’s point forward: “partials” may have traction - accept specific work may be reasonable, find a niche.

- Loud and clear on overhead - even if I have everything paid for: insurance, utilities, tools, expendable materials such as tape, connectors-hardware-soap, chemicals, sand/soda blaster materials.

- Never thought of Lookie-lou’s hanging out, need to handle dead wood early.

- Price the work realistically and it will get the clients attention

- Avoid doufus boltups / bolt-ons.

- Do good work the "RIGHT" way - I like the way you think.

- Quality sells and is expensive - don’t blink during the what is costs discussion.

- Got it on possible to do - but the economy sucks - very hard to pull off.

Again - thanks Alain - good stuff indeed.

Allen

[Alain V.]

yup, looks like you got it.

I did also forget to mention one other thing.
Make sure you have another hobby or get away you can do to "get away from it all",,,,,,because if you don't- you will eventually start to burn out. (ask me how I know )

I learned that part the hard way, and my "fuse" started getting shorter & shorter.
Now, I take my wife to breakfast every Sunday morning and then we spend some time together before going to the firing range .
This does two things for me,
#1 I get to eat some bacon once a week, instead of "healthier" stuff,,,,and #2 it reminds me that my wife is really a pretty good shot, so I better not tick her off.

[Motorhead]

Allen, when you do this, make sure you set up this "hobby" as a business. Last thing you want is a serious problem and the customer now has the right to go after your home for it. Remember that the USA is a lawsuit happy nation. Secondly, whenever you find your niche market, try to become a dealer for companies you use often. Could help lower the costs.

[TNCobra]

I may have a different take. To make this a business would require substantial overhead; business license, permits, insurance, sales tax.....This would quickly become a job in my opinion. To try to do this on the side, without all the above would put you at financial risk.

I would suggest the best path would be to do project cars and sell once completed as personal property, with the appropriate bill of sale, in as is condition.

[Motorhead]

Originally Posted by TNCobra

I may have a different take. To make this a business would require substantial overhead; business license, permits, insurance, sales tax.....This would quickly become a job in my opinion. To try to do this on the side, without all the above would put you at financial risk.

I would suggest the best path would be to do project cars and sell once completed as personal property, with the appropriate bill of sale, in as is condition.

Good thinking. My thought process included partial projects that involve someone else's car. That would need to be done properly as a business or take on some big risks.

[CraigS]

I wonder if you really want to get too far into working for others. Doing an entire car the right way needs to have a big final price tag as Alain says. This makes it tough to find someone who can write the check. I would approach this slowly. Maybe build an FFR or restore something else,hang w/ the local car guys,attend cruis-ins etc to build a circle of car guy friends. I know that there are some who have a car but their skills are limited. To use an FFR example, there are a lot of upgrades that can be done. Power brakes,power steering,swaybars,different seats,a soft or hard top install. Eventually word will get out that you are a guy who can handle projects and some will come to you. As your rep spreads you may have an opportunity to do larger projects but I'd be careful cause they usually come w/ a deadline which will ruin your family live. I have a friend who has been restoring 60s to 70s mustangs for about 12 yrs. He always has work. A recent example turned to a disaster for him as there was much more rust than originally thought and a deadline approached. One weekend his wife went to visit her Mom for a 3 day weekend just so he could work his butt off.He told me later that the first day he worked 18 hrs and the others he did 16 hrs each. He still loves it but I wouldn't want to get in that bind.

[Alain V.]

Craig hit on a very important point,,,especially when you take on "restoration" type work.
People rarely realize just how bad a shape their old car is "really" in until you have it all apart and find all the previously unseen rust/previous damage etc.
On projects like this I don't like to give an exact complete date or $$$ estimate, which can sometimes make the owner nervous.
It is my job to explain why-I can't do a to the penny est or to the date, because some disassembly and thorough inspection needs to be done.

You'd be amazed at how many nice "drivers" are hiding rust and previous crash damage,worn out stuff,etc. If my customer is already shaky when i explain the "harsh reality" of most restoration work to them,,,then I usually pass, as their needs do not fit within my program.
too many folks out there think a carpet & rubber kit plus a paint job equals a "restoration".

I'm almost to the point where I hate the word "restore" because it's definition is so different depending on who you are talking to.

[yankabilly]

AGM, I don't know if this will suite your ideas or not. But a good friend of mine (ASC Certified master mechanic) is a "part time" used car dealer to pay (almost) for his racing hobby. He buys older cars mid 80's - mid 90's cars for cheep, does just enough to make them "drivable" then sells for a small profit. He does have a dealers licence and every car he sells comes with a "hit list" of what was done plus needs to be done. He is very near a college town, and has a bunch of return business from students.

[AGM]

Alain,
Roger-dodger on having more than one pursuit - after all, building is supposed to be fun, not a death march. Taking the better-half out for breakfast on Sunday morning, good move and one I already emulate. Like you, it is the only time I get to eat a manly breakfast. We have not added the firing range yet - good idea.

On your follow-on note, got it on not giving a specific estimate or timeline until you have had a chance to see the damaged parts or see what is beyond repair. I liked your phrase - “If my customer is already shaky when i explain the "harsh reality" of most restoration work to them,,,I usually pass, as their needs do not fit within my program.” I will need to keep this in mind.

Motorhead,
You are spot-on and reinforce my research, make sure you insulate the hobby from your personal assets; lawsuits are expensive. Regarding the niche market - I had not thought about being a dealer for companies I would often use - that a great idea on lowering costs and perhaps getting leads.

Your follow-on note about working on other peoples cars - either do it properly as part of a business or do not do it at all. Yep, sounds right to me.

TNCobra,
I agree with your insight. If I am not careful, it will be a business - yet just trying to keep everything as an on-the-side operation may create the unintended result of putting me at financial risk. I am leaning towards following the vector of selling my projects as personal property - in ‘as is’ condition. I realize I cannot do that in any volume, I think I am limited to selling about eight cars a year before I need a used car dealer license. That said, this logic loop sidesteps much of the business route and it will likely be enough volume to make the hobby self financing.

Craigs
I really liked your train of thought as it incorporated much of the insight Cory, Alain, Motorhead and TNCobra. To do a bit of active reading from the great responses:
- Approach the entire process slowly.
- In building my first FFR car, it would be for me. When I get it done, sell it as personal property in ‘as is’ condition. Hope for the best to break even.
- Find the local car guys / gals / clubs / cruise-in’s, meetings, etc as they likely people I want to meet and they may need things done; and they will likely know things I will find useful - a great resource for knowledge.
- I really liked the idea of upgrading FFR cars - but if I do this, it puts me in the ‘business’ loop and that needs to be done right.
- Do good work and people who need things done will seek you out - and again, this is now on the business side of things.
- Be careful about taking on work as it usually comes with a deadline and that can be problematic and again, it is a business transaction.

yankabilly,
Yep, I was thinking about this line but I will need to be careful on how many cars I turn over in a year. That said, your thoughts follow the earlier advice of selling any cars as personal property in ‘as is’ condition, hopefully for a small profit. I liked your friend’s honesty on being upfront regarding the work completed on the car and what still needs to be done.

Gents, I really appreciate your thoughts and guidance. Good stuff.

[yankabilly]

AGM, Here in Mi. over five cars per year the state wants their "piece of the action". Ryan does have a dealers license , that was the cheep ($200) part and insurance. What adds up is the 6% sales tax. Like I said he is a "part time" dealer, after his day job, between sat. and sun. drag races. Most of his customers are collage students and first time buyers (high school kids).

Edit: all sales as is where is, but he will give some customers a 24hr return promise.

[Big-Foot]

If you are thinking of doing this as a source of income, it will change from being a hobby to being your job. Also, from the experience of many here (myself included), this will be a very poor source of income.

Now, if you're doing it because that is truly what you love and want to do regardless of the income being sometimes less than the out-go, then rock on and best of luck to you.

[AGM]

yankabilly,
yep - got it on the number of cars that can be sold by a single individual. I will need to keep that straight or get a used car - dealers - license. Your friend has a nice touch on a 24 hour return promise.


Bigfoot,
You are spot-on; I am not at all thinking that this will be a source of income. Rather, I just what my car vice / hobby to be mostly self-supporting regarding money. It is clear from the other comments, and yours reinforces their points, operating a small shop is a very hard way to make money. Your second bullet really captures my intent - I just want to build a few FFR’s / buy an older muscle car or two and have fun putting it in better shape than I bought it. I realize it may sound counterintuitive, but I want to offset the cost of the FFR builds by doing things like turning over a few cars for a small profit. Perhaps I can do some piecework - but now I am in the business mode with all of the red flags to consider or perhaps barter work, but that too touches on the business and again the red flags. I appreciate your ‘truly what you love and want to do regardless of the income being sometimes less than the out-go, then rock on and best of luck to you’ comment. That is about right.

Allen

[Motorhead]

Allen, you seem to like the idea of helping other car guys with their projects. You already know this would mean you need some sort of business setup to protect yourself. A LLC does't cost much to do, your bigger hurtle will be insurance. Talk to the insurance company that you have your home with, they might have some advise and solutions for you. Even if you only stuck to complete builds sold as private property, you still need to check with your insurance company to see how much they will cover in your garage and then check with your car insurance to see what they can do. There are insurance companies that will cover kit cars before they are street legal.

You're getting enough information that you're coming to a cross road that involves real life numbers. It's time to do the math so you can form a realistic plan of action.

On a different note, have you thought about making parts and kits for various cars? This is a different form of business entirely and could be done with just a LLC. There are a few on here that make parts for various FFRs, be it Roadster or GTM. This would be a way to do small projects for customers that want more for their car. The great thing about the GTM is that it leaves a ton of empty space on the body to make it your own.

Back to the complete turnkey replica idea, have you looked at RCR? I think if you did FFRs and RCRs, you would cover a huge portion of the replica market. RCR has some REALLY cool replicas and they are top notch.

[yankabilly]

Just curious, where in the pacific northwest??

[Motorhead]

*edit*
LOL! I read where is, not where in.

[TimC]

Remember, you can only sell eight cars per year. So can your wife. Any more than that and you probably wouldn't have time for anything else.

[ROB J]

Originally Posted by Alain V.

I'm almost to the point where I hate the word "restore" because it's definition is so different depending on who you are talking to.

I could not have said it better. That is so true Alain.

[AGM]

Motorhead,
You had a good read on me - I do like doing positive things for people in general and I look forward to meeting the car crowd. Good words on insurance, I have not gone down that path just yet but it is on the to-do list. As for doing the math to make some choices - yep - about there.

I had not thought of making parts under a LLC. I will need to give that some thought. I do know there is quite a bit offered on the forum and other places and I would not like to replicate a niche someone has already filled. That said, there is always room for new ideas.

I have not really considered RCR - I will put that on the research list. And, you found a great map of the Pacific Northwest - I think I am at the top of the ‘t’ in Washington.

Yankabilly,
Where in the Pacific Northwest - Whidbey Island, it is in the Puget Sound. It has unique geology in that it sits in the rain shadow of the Olympic Mountains. 40 miles nearly due west from my land gets 200+ inches of rain a year - on the west side of the mountain. Whidbey Island sits on the east side of the mountain range and we get about 18-20 inches a year. Seattle sees about 71 sun days a year and on my part of the island, we see about 180 days. So, did the research and found the most sun possible and still be close to family - important when leaving Key West, Florida.

TimC
Yep - I think you are right - I am fine with the number of cars I can turn over. When I mentioned to my wife that she might be in the used car business, she said that she is not interested in any junk - they had better be cool cars - that run - or don’t bother. I think she was a bit miffed when I pointed out that we can have two non-working cars per acre and because we have 8+ acres, I can have 16 cars sitting around in awaiting repair. I then added I would ensure each car had a tarp over it. I wished I hadn’t brought that imagery up

RobJ
Regarding the definition of ‘restore’ - loud and clear my friend. I have added the words ‘improve what I bought’ to my lexicon. I really do not think I can truly fund or want to take the time to restore a car unless it is in superb shape. Then a personal choice question arises, should you even begin restoring the car, as it is original only once?

Take care,

Allen