MattFow

How to obtain stocking funding

85 posts in this topic

Hi my first post here, whilst I’ve been reading a lot of the threads I just haven’t found the time to comment as I’ve been running the trade business on the side of my normal 9-5, anywho I’m now full time as of January 1st and have a query.

 Over the last seven month ive been turning over around 6 cars a month from my drive (and the back of the pub up the road):-)  I’ve got a plot lined up ready to move into and want to triple that turnover of stock. However i can’t do that without some form of stocking loan. Most of what I have read up on is that stocking loans are obtained if you have been trading from business trading address for a minimum one year? 

Is this the case? Irdoes anyone know of anyone that can help newbies with profitable 1st year accounts?

Any advise would be great

Thanks in advance 

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Call Nextgear Capital, they will send a rep over. If it can be done they’ll do it.

Don’t bother with BCA Partner finance

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6 hours ago, Nick M.K. said:

Call Nextgear Capital, they will send a rep over. If it can be done they’ll do it.

Don’t bother with BCA Partner finance

What he said. 

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6 per month part time,that’s good.Stick to what you are doing because full time you could do 8 and you will also improve on the buying side.Don’t be influenced by bullshit traders who tell you they are regularly netting 2 grand per car and try not to take on debt.Regarding record keeping,you need a proper one ( they aren’t expensive for newbies ) and you should consider incorporating.

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Hi. Thanks for the replies. 

 I understand the comments, surely the only way to grow is by borrowing at some point along the way? 

 The other dilemma is that the pitch is in a prominent location (on a busy crossroads) and is in the same site as my garage and car wash. 

 It just seems to good of an opportunity to take.

Would be great to hear anyone else experiences making the transistion from driveaway to pitch.

 Thanks 

 

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12 minutes ago, MattFow said:

Hi. Thanks for the replies. 

 I understand the comments, surely the only way to grow is by borrowing at some point along the way? 

 The other dilemma is that the pitch is in a prominent location (on a busy crossroads) and is in the same site as my garage and car wash. 

 It just seems to good of an opportunity to take.

Would be great to hear anyone else experiences making the transistion from driveaway to pitch.

 Thanks 

 

Don't kid yourself that a pitch will automatically achieve massively more sales, that's my only advice because if P/T you're selling 6 pcm you're doing very well.

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I disagree with some of the above. 

Full time you will do MORE, if you borrow you will do MORE, if you buy higher value stock you will earn from it MORE, you have a chance for finance income AND for much better part exchanges. 

DO NOT stay small if you have a chance and desire to grow, you are just wasting time and opportunity. The following 5 years will give a lot of opportunities to clued up dealers that are willing to put in the investment and the work. 

NickGCS, Lucas and CCC like this

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11 hours ago, MattFow said:

Hi my first post here, whilst I’ve been reading a lot of the threads I just haven’t found the time to comment as I’ve been running the trade business on the side of my normal 9-5, anywho I’m now full time as of January 1st and have a query.

 Over the last seven month ive been turning over around 6 cars a month from my drive (and the back of the pub up the road):-)  I’ve got a plot lined up ready to move into and want to triple that turnover of stock. However i can’t do that without some form of stocking loan. Most of what I have read up on is that stocking loans are obtained if you have been trading from business trading address for a minimum one year? 

Is this the case? Irdoes anyone know of anyone that can help newbies with profitable 1st year accounts?

Any advise would be great

Thanks in advance 

What sort of stock are you selling? 6 a month sounds great!

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Why is 6 a month great and why do we continue to count only the number of cars sold as a measure of how well we’ve done? 

In my first year of trading (2006) I averaged 10 a month from a London house with 2 parking spaces. 

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24 minutes ago, Nick M.K. said:

Why is 6 a month great and why do we continue to count only the number of cars sold as a measure of how well we’ve done? 

In my first year of trading (2006) I averaged 10 a month from a London house with 2 parking spaces. 

You’re quite unique Nick - I think you probably put more effort in than most and probably always have done.

I also think that P/T 6 per month is an achievement.  I don’t know the margins and I guess when you have a guaranteed income it is less relevant.

Anyone can sell many many more numbers (I know I could) but it is margin that matters (unless you’re a manufacturer).  Personally, I am greedy with margin but I stand by my cars, whatever happens and I like to pick my customers.

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Exactly. So why don’t we talk more about the gross profit and comissions earned but keep counting the number of cars sold every month, even if some of them can be at a loss? 

I can sell 3 times as many cars if I reduce my mark up 3 times but I don’t really see the point. 

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I was trading from home for around 6 years, we moved to a pitch and got in toe with Nextgear for literally the same reason you are mentioning, as well as freeing up some capital for setting the pitch up. Now 3 years into the pitch and it’s the best thing we have done. We also rarely use nextgear any more, it is expensive on a per car basis but couldn’t have grown without them!

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8 minutes ago, Nick M.K. said:

Exactly. So why don’t we talk more about the gross profit and comissions earned but keep counting the number of cars sold every month, even if some of them can be at a loss? 

I can sell 3 times as many cars if I reduce my mark up 3 times but I don’t really see the point. 

Well no one would believe you as apparently we should all be happy with pulling £600 out of a car. 

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maybe this is what we should expect from the finance comission income but I’d want a (fair) bit more from the metal, especially if bought for ££££ less thsn other people paid at auction. 

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OP,

Dont listen to the naysayers. Unless you have access to your own money then you’re right you need to borrow. 

I measure success by profit, personally, not how many units are sold or how many units you have. 

If you can stock 15, pull an average of £1500 profit per unit and sell 10 a month as a one man band then that’s success to me. If you need to borrow to get to that situation why wouldn’t you. Go for gold. 

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Sorry guys but I am a little confused.Matt has been operating part time with little experience and appears to have done very well with the added bonus of a day job.He wants to go from having negligible costs to running a pitch and taking on debt,so his ‘ stand still’ costs could easily rise to £3,000 per week.Also,I don’t think you guys can give out advice about pitches if you have never had one.You need to have worked on a pitch for several years to understand how to run one.If Matt makes the move and takes on debt,the chances are he will go bust in a short period of time.I have seen this time and time again.As for those traders we all meet claiming to make huge profits,it is usually bullshit and their businesses often have a negative net worth.So beware Matt,if you want to proceed to shark infested waters,then good luck because you are going to need it.

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“Added bonus of a day job”....

£2-3K per month for 80% of your time. I am very sorry but I will never call that a “bonus”. 

Burden is the word you were looking for. 

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1 hour ago, Nick M.K. said:

Exactly. So why don’t we talk more about the gross profit and comissions earned but keep counting the number of cars sold every month, even if some of them can be at a loss? 

I can sell 3 times as many cars if I reduce my mark up 3 times but I don’t really see the point. 

Because you can earn 3x the finance comms, 3x warranty upgrades, 3x th3 PX - not my model but clearly the car supermarket model.

1 hour ago, EPV said:

OP,

Dont listen to the naysayers. Unless you have access to your own money then you’re right you need to borrow. 

I measure success by profit, personally, not how many units are sold or how many units you have. 

If you can stock 15, pull an average of £1500 profit per unit and sell 10 a month as a one man band then that’s success to me. If you need to borrow to get to that situation why wouldn’t you. Go for gold. 

 

31 minutes ago, trade vet said:

Sorry guys but I am a little confused.Matt has been operating part time with little experience and appears to have done very well with the added bonus of a day job.He wants to go from having negligible costs to running a pitch and taking on debt,so his ‘ stand still’ costs could easily rise to £3,000 per week.Also,I don’t think you guys can give out advice about pitches if you have never had one.You need to have worked on a pitch for several years to understand how to run one.If Matt makes the move and takes on debt,the chances are he will go bust in a short period of time.I have seen this time and time again.As for those traders we all meet claiming to make huge profits,it is usually bullshit and their businesses often have a negative net worth.So beware Matt,if you want to proceed to shark infested waters,then good luck because you are going to need it.

There is a sweet spot between EPV’s optimism and TV’s pessimism - find that and write a book.  I will have th3 first copy.....please

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Hold on Mark, finance companies pay for a percentage of the advance not a fixed amount per deal. 

And you can’t compare the 3 part exes on three £4K cars with one nice p/x on a dear car which often of similar retail value. Only the warranty upgrades will earn more if cost is the same, this is not one of my income stream. Yet. 

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As TV has just very sagely as ever put; having a site isn’t always all it’s cracked up to be or can appear, so move and learn slowly. 

I don’t think I’d take on a site if I came out of mine (or someone offered me sensible money to move out I would) but that’s as much the number of years I’ve been doing it. I would much prefer a small set up like AD etc now I think as I approach my fifties. 

I don’t think there’s anything wrong with borrowing money if you have to, but don’t think a site is ‘where it’s at necessarily, as the overheads are a killer, and the world has changed. I said on another thread earlier -as did others, that even with a main road site, the majority of the business is ‘virtual’.  

We hope that the gravitas of having a site helps a bit, but it isn’t the golden chalice it once was. 

BTW, I couldn’t have a ‘day job’.  I think I’m almost unemployable now and the cars game gets under your skin and on the whole is very rewarding and often hateful at the same time. Once you’ve been self employed I think most people would agree. 

If you don’t mind your day job and haven’t known any difference, then keep it while you can and do it on the side. This is what I did many years ago, until it got to a point where I was resenting the day job. 

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27 minutes ago, trade vet said:

Sorry guys but I am a little confused.Matt has been operating part time with little experience and appears to have done very well with the added bonus of a day job.He wants to go from having negligible costs to running a pitch and taking on debt,so his ‘ stand still’ costs could easily rise to £3,000 per week.Also,I don’t think you guys can give out advice about pitches if you have never had one.You need to have worked on a pitch for several years to understand how to run one.If Matt makes the move and takes on debt,the chances are he will go bust in a short period of time.I have seen this time and time again.As for those traders we all meet claiming to make huge profits,it is usually bullshit and their businesses often have a negative net worth.So beware Matt,if you want to proceed to shark infested waters,then good luck because you are going to need it.

My thoughts exactly TV. 

Slow and steady wins the race....  Build up your own capital first before putting the stocking loan noose around your neck. 

Sorry nick but buying more expensive cars takes more experience too. 

OP do what feels right, read the small print on everything twice and take advice if your not sure. 

5 minutes ago, Nick M.K. said:

Hold on Mark, finance companies pay for a percentage of the advance not a fixed amount per deal. 

And you can’t compare the 3 part exes on three £4K cars with one nice p/x on a dear car which often of similar retail value. Only the warranty upgrades will earn more if cost is the same, this is not one of my income stream. Yet. 

Accumulation is the game. 

We have another trader on a high horse, the best deals I do are the ones where customers trade down and I have to give them money back. 

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Because I have started with £200 cars I believe I am in a position to know the difference. 

My advice would always be to move away from the bottom of the market as quickly as possible. 

In my case it took me a couple of years (while having a day job) and this is one of my biggest regrets to date. 

A little debt doesn’t kill you. Not having any money to work with does. 

NickGCS, Lucas and Kes like this

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7 minutes ago, Nick M.K. said:

A little debt doesn’t kill you. Not having any money to work with does. 

We (I say we because it affects both the Mrs and me), are debating taking more debt or selling one of our properties (same tenant 4 years and more than washes its face).

I see no issue taking debt to fund growth, I see an issue taking debt to fund lifestyle - I have been guilty of both.

Edited by Mark101

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7 minutes ago, Nick M.K. said:

Because I have started with £200 cars I believe I am in a position to know the difference. 

My advice would always be to move away from the bottom of the market as quickly as possible. 

In my case it took me a couple of years (while having a day job) and this is one of my biggest regrets to date. 

A little debt doesn’t kill you. Not having any money to work with does. 

All the best pros I know in this job started by selling cheapies.A lot of them are now in their 70’s and back to selling cheapies to keep them active.I have always liked good cheapies.

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I wouldn’t take a pitch anyway, in a million years. So i’m not opining on a pitch. I’m saying taking a debt on can help you grow.  It’s has done for me. It did for Rory and Nick. Maybe it hasn’t for some. But i’d wager that the debt wasn’t the problem there. 

OP, what’s your average days to turn? 

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