Investor Wanted, Good Idea?

gunnapaul2

I am a 26 year old man who is trying to find a suitable investor to invest in my business idea. The business idea involves buying cars from auctions/auction sites, making any required repairs/mot's etc and selling on locally for profit.

I know for a fact I can make this work due to the fact I have been doing this for the past 2 years as a part time hobby whilst making approx 50-100% profit on each car. The only thing I need is an investor to invest the money to get started.

I was just wondering if an investor is a good way to get money for my business startup? What are the pro's, con's? How do I go about finding a suitable investor with minimal costs?

Thanks.

Astaroth

There are websites out there to match up investors to new businesses.

The first thing you need to do is to produce a business plan. There is plenty of help out there to guide you through doing this and I would recommend both the Business Link websites and local offices which both offer plenty of free advice including a template.

The next thing you need to decide is what sort of investor are you wanting to deal with? Are you wanting it to basically be a loan? Are you going to be selling them shares in the company? If so are they going to be a silent or active partner in the business?

The pros are the fact you do not have to go through credit scoring to get the money and can also get an experienced business person to assist you (being able to do the leg work of actually sourcing, repairing and selling the cars is one thing, running a business requires a different set of skills). The cons are you can lose control of parts of your business and you are operating under a bespoke contract which may be heavily in favour of the investor where as bank loan contracts are much more regulated and whilst they may favour the bank you are less likely to get terrible conditions.

jonesMUFCforever

Try BBC's Dragon's Den.

jonesMUFCforever

You have been making 50 - 100% profit at this as a part time hobby so what has happened to this profit and why do you need someone else to invest in your business?

gunnapaul2

Astaroth - Working on the business plan. Basically its a loan im after, however some adice and help with the business side of things would certainly be beneficial.

ejones999 - The profit that I make from the cars then buys the next car for more money, I need money invested becoz i havent got enuff money to buy approx 10 cars or more to make it into a business, I wud have to wait til my part time hobby has mounted to a huge profit which cud take some time.

jonesMUFCforever

Could you cope with 10 cars at once or would you have to employ someone else as well?
How many cars have you done up as a hobby?

Chelsea_Boy_2

10 cars are going to take up a lot of storage space! Do you have somewhere to put them such as a parking lot? If you have to pay rental/business rates on this space this will eat into your profits, or do you intend to sell them from the public highway?:(

Another issue (although I am not 100% on this), by selling as many as 10 cars at once it's possible that you will be classed as a "dealer" and not a private seller, and you may have to register yourself as such.

gunnapaul2

ejones999 wrote:

Could you cope with 10 cars at once or would you have to employ someone else as well?
How many cars have you done up as a hobby?

I could cope yes, but I do have a friend who has a similar hobby who is always willing to help out.

Chelsea_Boy wrote:

10 cars are going to take up a lot of storage space! Do you have somewhere to put them such as a parking lot? If you have to pay rental/business rates on this space this will eat into your profits, or do you intend to sell them from the public highway?:(

Another issue (although I am not 100% on this), by selling as many as 10 cars at once it's possible that you will be classed as a "dealer" and not a private seller, and you may have to register yourself as such.

Yes I wud need storage space, Ive been looking into properties locally but havent really found anything yet. Yes i wud become a dealer and self employed.


Definately some things to think about deeply, cheers

Astaroth

Be careful with "friends helping out" especially on something that has the potential to cause high cost personal injuries... liability insurance is obviously something that I imagine you wont be wanting to go out but if it is a "friend" that is doing the work then you many not be covered if they are injured whilst repairing or the subsequent customer is injured due to defective repairs.

If you want business advice there are websites out there that link mentors and mentorees together. I used to volunteer on one of them and I know as a mentor it was free but I suspect that the person wanting the mentor had to pay a nominal locator fee (dont know). This may be a better route for advice than taking private finance rather than a bank loan.

I would also recommend joining https://www.ukbusinessforums.com which is a forum for UK SMEs with a large range of people (solicitors, accountants, web developers as well as shop owners, hair dressers etc) offering and asking for advice from pre-startups to established businesses.

gunnapaul2

thanks for that Astaroth.