Afternoon at the mechanic
Late Wednesday evening I received a phone call from someone I didn’t know, asking whether I wanted to become part of a new business venture.
Depending on how successful it would be, I would assume the position of CEO* of a number of car mechanics workshops, perhaps with a view of creating a franchise.
We spoke on the phone a bit more, and it was then off to Essex with my new acquaintance Harry on Friday afternoon where we chatted more about the business opportunity on the train. There was some time pressure on the deal due to particular debts that needed paying, so we went in armed with questions on how the business could be turned around, and generally with an open mind as to what could be done with the place.
Once off the train, we found the building, and met with the mechanic, Ian, who was in charge. He gave us a tour of the cars they were working on, and also the different aspects that go into running the operation. There are several opportunities for revenue streams, that at first may not be apparent.
The main one is getting affiliated with insurance companies. After a claim on car crash, the insurance has a duty to fix the problem, and works only with selected workshops. The selection criteria is very fixed, and naturally the more professional the operation, the higher value companies a mechanic can work with.
There were also ways of adding value in buying knackered cars, getting them back into shape, and then selling them on for a tidy profit. And then all of the other operations that become necessary to have on site: tyre installation, spray room, and general maintenance.
The three of us talked about some of the ideas Ian had, but more pressing was the imminent eviction from the premises due to missed payments, along with repaying debts that were to be called in by the end of the month. In order to do this, he needed to (I love this expression) “liquidate the cars he owned”.
By this I mean sell them.
Other things that must surely be high on the agenda would be to generally tidy the place up. There were boxes of rubbish, invoices, dusty car parts all scattered by the customer entrance where we sitting.
Harry and I then sat down to “talk business”, and work out whether this was a viable venture for us to go in on.
I had my reservations, not least because the mechanic industry is something I know very little about. Whilst going in and getting something sorted when there was clearly a lot of room for potential was an attractive proposition, dealing on such a knife edge in terms of cash-flow and other money issues meant the margin of error was extremely thin.
Further, the two weeks we intended on going in and learning about the business to get up to speed with it were not really possible due to prior work commitments I had. Had it looked like a winner, then perhaps I would ask for more flexibility, but hand-on-heart, I didn’t believe it was worth it.
After speaking candidly, I said that despite the fantastic offer of having a go at running the business, I wouldn’t be going down this road this time.
With that myself and Harry got on the train back to London and were able to chat about some the other business projects we currently had going on, and it was great to get insights on my own ideas from someone as successful as he.
On reflection, walking away from this opportunity could end up being a mistake. Today, I went with my gut and, despite everyone saying you should always trust it, I can never be too sure.
Still, going and chatting to someone about turning around a business, taking the risks necessary and thinking how to make something of it, was thrilling. One tip I can share that Harry and I did (more by chance than anything else) was to give the person you are looking to go into business with a “moral test”. Ian certainly failed his, which I guess supports the notion that walking away at the early stage was correct.
Despite coming back empty handed, I learned a lot from the afternoon. Who knows when these lesson will next be put it into practice..
* It was later decided that MD sounded less pretentious**
** I once met a 15 year old lad who was CEO of his one-man chocolate making business..