Ask an Expert
Starting an Automobile Customizing Business
Expert: Julie King
I am stuck at a dead end job and would like to do something with my life. I and a friend wanted to start a business of our own into Customizing Automobiles. What would be the first steps to accomplishing this and get the ball rolling?
Julie King answered:
Starting a business can be a lot of fun and is very challenging. Starting from a position of strength (where you have an income stream) always is a good beginning.
There is no perfect answer, but I can tell you what I'd do. One of the first things I'd do is to start saving money and while you do that begin to develop your business idea. For example, right now you probably have a good concept of what you'll do in your business - start to picture the whole business and imagine what each aspect of the business will look like.
For example, as you will be customizing cars, find out who your customers will be. What are their interests? What is their range of earnings? Are they a specific age or gender? Where do they live? And most importantly, how will you reach them when you actually start your business (flyers, demonstrations, word of mouth, etc). This is the beginnings of a marketing plan for your business when you actually start your business you will need to do both marketing (to promote the business) and sales (where you actually sell individual customers). Initial research and communication with potential customers is very important as it helps you assess the demand for your services in the market. If reaction to your initial business idea isn't what you'd hoped it would be, be prepared to adjust your idea, and always be on the lookout for marketplace gaps and alternative ideas that you can build your business around.
As you picture this aspect of your business, also think about what will make your business unique, how you can service your customers so that you'll get good referrals, and what you can do to grow the business. You can use the Internet to do market research; Strategis has a lot of data pertaining to specific industries. As you do this, it will probably help to make notes and create an initial plan - the beginnings of a business plan.
While you are planning the marketing end of your business, you will also want to think about the tools and equipment you will need to actually do the work. Do you need to buy equipment? Can you work out an arrangement to rent space in an existing garage? The one advantage you have right now is time time to build relationships with other businesses, time to source equipment and tools (are there auctions/places that you can access to buy equipment for less money?), and time to establish how your partnership will work (roles, responsibilities, contributions, and legal agreements that address current and future possibilities).
Finally, as you are currently employed, when you think about the launch of your business, think about ways that you can test the market and start your business without giving up your full-time job. It often takes 2-5 years for a business to become profitable, which poses great difficulties for someone who needs to generate an income from their business immediately. Starting part-time, while building the resources and customer base you will need to support you working in the business full-time, is a very effective strategy.
Since you're at an early phase of business development, I'll pass on this advice as well:
Money - one of the things most business owners learn is to have a new perspective on money. There are thousands of ways to spend money; what entrepreneurs learn is how to spend as little as possible in order to maximize their profits. This is critical at the initial phase of launching a business, as too much money could mean that you'll spend it more freely and possibly spend money on things that aren't needed by the business. Strangely enough, having limited financial resources can be a plus as it will force you to find the profits in the business very quickly.
Government programs - the government has sponsored many programs that are designed to help entrepreneurs get a business up and running. These programs can offer business training, along with access to consultants that can help you create a business plan. The programs often require that the business is not already registered/up and running, which is a good reason to investigate available programs before registering your business.
Business details - you'll also want to take care of basic business details such as choosing a company name, registering the company, and creating a corporate identity as you plan your business.
Partnerships - despite the best of intentions from the outset, the possibility of partnership problems always exist. Be sure to get advice from a lawyers, and have a proper partnership agreement drawn up before starting the business.
Licences and permits - depending on where you're located, you may need to get a special licence or permit. Check with a business centre in your area to find out what you need.
Other issues to consider- there are many details to take care of.
You'll want to:
- develop a good record keeping system (setting up a computerized accounting system at the beginning of your venture can be invaluable - get help setting up your books from a professional who knows how to set them up properly)
- handle lease negotiations .. with care. If you end up negotiating a lease be sure to read Negotiate Your Commercial Lease by Dale Willerton (ISBN 1-55180-250-3) before you get started. It's an easy read and offers many tips that can protect your business and save you money.
- research and acquire necessary insurance
- establish relationships with suppliers and possible marketing partners (working out win-win marketing relationships with non-competitive businesses can offer great value to both businesses)
I hope that information helps. Good luck with your venture!
About the author
Julie King is the co-founder and managing editor of CanadaOne, Canada's first small business portal.