Poor Man's' Watch Forum
Business proposition. Long, but you Biz types, please read!
Posted By: Ricky Lee McBroom
Date: Friday, 1 December 2006, at 11:55 p.m.
OK, I'm about to enter into a business partnership with a family member. Yeah, yeah, I know. Seldom a good idea. But here's why it is, in this case...
My (step)son's a mechanic. I saw him start 3-1/2 years ago, at a muffler shop. After I'd taught him a few things about his own Camaro. Me an' his Mamma wa'nt even married then. Anyway, he's gotten good. He's got a knack for troubleshooting and solving drivability problems, a rare thing in itself. But he's also extremely focused on details, and a pit-bull about getting it right, when the project interests him. And therein lies his Achilles heel, as well.
For when the project does not interest him, he screws up and cuts corners. He can't hold a job for more than 6 months, for that reason.. basically. Conventional wisdom says I'd never go inta business with him. But I love him, and I got to do my level-best to fix this problem.
So what I'm gonna do is front him the nut on a building lease for 90 days. That'll be his auto-repair buisiness, and the place we got an eye on is a sweet location. The lease will run in the neighborhood of $1K/month. Insurance about $250/month. A top Hunter alignment machine and 2 lifts will run about 6 to 7K on a 1-year lease. Call it $600/month. $1850/month total, and after 90 days he takes over.
I'm also fronting him $12K on an interest-free 3-year loan for the installation of equipment. To buy things like compressors, parts-washers, etc. An most importantly, GOOD specialty tools from Mac or Snap-On. He'll actually pay $350 a month, so I guess it ain't interest free a'all. I'll make a princely $600 in interest. Does that make me a usurer?
Ennyway, here's the genius of the deal. I'm gonna make his Mamma his boss.
Now think about that. Pam will be the CEO, CFO, book-keeper and, most importantly (doh!), Mamma.
If a guy's Mamma cain't straighten him out, then he's beyond hope anyway. I'm betting $20K Dustin ain't.
OK, so vote button one - or ? Am I missing anything? I'm serious, Business Tycoon is definitely a new role for me, and I'd like y'alls honest advice.
Now, part deaux.
This building will have a small corner reserved for me. That's where I'm going to install the CNC machines which I'm going to buy via a seperate (unrelated to the Dustin's Nasty Autos© [DNA©] loan) Home Equity Loan. I'll have a CNC Turning Center (3-axis/Live tooling minimum) and a CNC Machining Center (4-axis minimum).
The eventual goal of this equipment is to land a lucrative "There's gold in them ther CNC Machines!" type contract.
But sometimes.. well, Sometimes, of course, on Contract Machining, you lose your a$$.
So I'm not gonna gamble on my side of the business. No indeed. If I'm goin' inta the Machining business, then I'm machinin' an artifact of me own design. I'll start a combo Direct and Online Storefront, then flog t'hell outta said artifact.. it don't have to set any records, just pay the nut on my Equity loan. I've already identified a handful of precision Miata parts (and, I gotta be honest wi' ye here, mates. Mazda Miatas, not watches, are my main obsession of late.
But - and here's the sole reason I di'nt put an icon in the header - it also occurs to me that I might be able to incorporate my Machining Vocation and my WIS Avocation, after all.
I do know how to machine custom watch cases:
Now, is there a market for such a baroque thing?
I could offer something like this (and I'm talkin' to the Retos and Matts and Duartes and Kents here, but..
$5K for one custom-designed case. You gimme the CAD model, I make it in the metal of your choice.
$5,000.99, you get 99 more of the same. $50/per, for a lot of 100. Prices will vary according to the chosen case metal, of course, but should be insignificant compared to labor costs.. provided you don't specify platinum!
The cases would NOT be finish-polished. No indeed, that's up to the skills of the buyer!
Viable? Come on, you WIS Bizness Types! Talk to me!
Messages In This Thread
It's almost owewhelming.. I'd like to answer each post individually.. but I'd be here all day. (My new Biz Mode, right? "Times a wastin'", [checks watch] Let's get crackin'!"
Anywho, I'll try an interspersed reply a la the old Fidonet days...
} mlaw230 writes: 1) You buy the equipment and lease it to the kid
Naw, one of his big things is he wants to own the equipment. Everything except the alignment machine and lifts, which are simply beyond what Pa can loan him, comfortably. Kudos to him, as I want to own my CNC machines, too! A machinist and his tools are like a farmer and the land.. there's something sacred in the relationship.
} mlaw230 writes: 4) 90 days is too short,
I don't think so. I think once the word gets around in the tuner set, he'll be busier'n a one-armed paperhanger!. [crosses fingers, throws salt over shoulder]
} mlaw230 writes: 5) What's the kid going to live on during the start up?
His wife works, so they'll make their house note. They get hungry.. well, shoot, they ain't gonna get hungry with Mama havin' her own wee kitchen in the shop.
} mlaw230 writes: 6) Make him do the books with momma
Great idea! Yes indeed. I'll just say to all who've expressed apprehension about Pam being boss; You don't know, Pam, or you'd understand. Pam is the kind that, in a family situation, is in total control, anyway. In a good way! The fact that she's worked as a legal aid, and can keep books too.. well, that makes her the key to the success of the business, in large part.
Also.. look, think about this. What is very worst thing that could happen, me bein' in business wit Dustin? Right! If we had a fallin' out of such proportions that it came to fisticuffs! Well, this way, that's practically guaranteed not to happen. Pam will be something like CFO. Dustin's 'OWNER' and I'm 'SILENT PARTNER AND MACHINING GURU WHO DWELLS IN HIS OWN CORNER AND COMMUNES WITH CNC MACHINES'.
} Watchstuff writes: Be willing to make whatever
you give financially
} a gift, no strings, no repayment required.
} [...] If you can plan your involvement so
} that if this happens, if you never get a
} penny back, you can handle it both financially
} and from a family standpoint, then you are in
} a win-win.
Exactly! I'm not committing so much that, if it all goes down in flames, I lose the farm, too! That's key.
} Seamus O'Connor writes: Giving him the money makes his back-of-brain impetus "Dad believes in me and I need to make him proud"
Wise words indeed, my BFAM! Yes, perhaps I'll go the note on the building lease for the first year after all.. I mean, if it wasn't for this, I'd likely be doing it anyway, for a place to start my machine shop.
} Seamus O'Connor writes: Now the 20 large
is too big of a
} gift even if you were Ricky Lee Trump.
Right! No one seems to understand about Scotmen and their purses.. except maybe you, you cheap Mick!
} Seamus O'Connor writes: Same goes for
whilst at work, try to stay
awau from talking "family" matters.
Insightful, that.. and we'd do that, I think. But not the other.. well, maybe. I dunno, you got to realize that Dustin is very project-focused. And as an Italian, he loves to talk! But, hey, it's fun working with Dustin! We spent quite a lot of time working on the Miata, and that's what finally conviced me this could work.
} Seamus O'Connor writes: Mom as Boss
depends [..] If she has always been a
} "Momma Bird" type and he has never balked at that,
} then this is not a problem.
That's it exactly, my brother! Now ye ken. Pam's.. I'd've called it a "Mother Hen" style of parenting means that, long as she handles the books and money, and we handle the auto work and machining, we'll have a great working relationship.
} Lamsing writes: a skilled mechanic
should be able to generate
} at least $1k in billing per day without breaking
} a sweat.
It's not that easy.. first you have to attact enough clientele. But, yeah, it's certainly quite possible!
} mlaw230 writes once again:
3) Incorporate, it will cost you about $500 to do
} it right but it will provide a lot of insulation
} and tax benefits.
Great advice! Yes, rest assured that this is not going to be a hand-shake kind of company. It will be fully chartered with Pam being 51% and Dustin 49%. There will, however, be an 'exit clause' for Dustin that, assuming the business prospers, will let him buy out Mama in as little as 3 years. And on very attractive terms, too.
Again, my heart-felt thanks to all who've offered advise!
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