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opportunity of a lifetime

Discussion in 'The Lounge' started by ryan22re, Sep 16, 2005.

  1. ryan22re

    ryan22re 1/2 ton status

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    so here goes...i've got an opportunity that could quite possibly change my life forever. was talking to my matco tool guy today, i mentioned how much work sucks, and how i think that i may just go either insane or just run down to mickey d's and get a job flipping burgers. he then proceeds to write down a name and phone number on the back of his business card. he says how'd you like to sell tools for a living?

    so anyway, he asks me if i can give my number to his district rep. no sooner did i get home, this guy calls me and pitches buying a matco franchise. my matco guy must have said some pretty nice things about me, because this guy is gonna send me some info, and arrange a sit down with me and my old lady. says there is a route that would be about 350 customers. seems almost to good to be true.

    so basically i probably would have to sell everything i got, pinch every penny and figure out how im gonna come up with the cash to do it. prob $ 20-30K. not to mention the instablilty that it could bring in the oncoming months. not to mention putting the k5 on hold for a long long time.

    im very seriously thinking about it. anybody ever went out on their own? liking it or hating it? go broke or strike it rich?

    ryan
     
  2. Z3PR

    Z3PR Banned

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    Don't go too fast. Try too talk too someone at the SBA (Small Bussiness Administration) about grants and loans. Worth looking into anyways.
     
  3. jhellwig

    jhellwig 1/2 ton status

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    Well, there was a guy here that sold snap on tool for a long time. Then Snap On eliminated his route one day. No fault of his own. Just like every other company that has cut back latley.
     
  4. ryan22re

    ryan22re 1/2 ton status

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    yeah, im gonna do my homework...i'll know more about it next week, talk to some more people, esp. my matco guy, going to his house prob. tuesday to make some shackles and zero rates.

    ryan
     
  5. Corey 78K5

    Corey 78K5 1 ton status

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    So out of those 350 customers what do You think is the percentage of customers who would pay their bills and what is the percentage of customers who would leave You holding the bag?
    I knew a guy once who did the same thing a year later He was broke and lost his house. Spent half his time trying to track down people who owed him money and the other half trying to figure out how to keep from having to pay for the tools himself.
     
  6. 4GUNZ4X4Z

    4GUNZ4X4Z 1/2 ton status

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    Around here a Snap-on route goes for about $100k+ to get you started. Hope it works out for ya. :D As far as going out on your own, well...... theres nothing better in life then being self employed. :D
     
  7. ryan22re

    ryan22re 1/2 ton status

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    what i am hoping to do is a little recon of my route. find out the shops on the route and maybe just pop in and see whats going on. like i said, gonna do my homework.

    ryan
     
  8. sledheadak

    sledheadak 1/2 ton status GMOTM Winner

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    i am self employed,lots and lots of work.figure on a lot longer hours for less pay to start with.we have been open for for 2 yrs and i still work 7 days a week 12-18 hr days.but it is nice being your own boss tho.
     
  9. ryan22re

    ryan22re 1/2 ton status

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    im just tired of putting in my 60-70 hours a week and seeing no real returns on my time invested. i know it will be alot of work, i would just like to see more of a payoff.

    ryan
     
  10. newyorkin

    newyorkin 1 ton status

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    I think being self-employed isn't that great, like someone said, it's a lot of work. What you wanna be is eventually the guy that's employing other people...

    Sounds interesting. If you don't have a wife or kids, or mortgage payment, or any other major responsibilities, I'd say go for it.
     
  11. ryan22re

    ryan22re 1/2 ton status

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    i have all of the above.

    ryan
     
  12. bigcountryk5

    bigcountryk5 1/2 ton status

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    having all of the above i vote for finding something else, i know it's not me in your shoes, but it seems your looking for opinons.....so here's mine---hating your job is one thing, and luckily that can be fixed what are your other options family/friends connections that could get you a different more "stable" job? the only reason i ask is if it doesn't work out for you w/ matco then it's not like oh well try something else b/c your family is part of it too. it would be a far better situation i think if you were young and on your own. it's a big risk and while it could very well pay off it also has a chance of being a huge strain on your family and yourself. if you go through with it just make sure your family is preparred, and you are as well because it sounds like a whole lotta work which leaves less time for the fam........

    whatever you do i wish you the best of luck and i'll send up a word for ya. keep us up to date.
     
  13. ryan22re

    ryan22re 1/2 ton status

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    but then again there is no guarantee that i will make money or be happy anywhere else. if i go to another shop, maybe theres no work, maybe i wont be happy i take that chance no matter what i do. the only sure thing is my current job. i know what i have there. my wife is there 100% no matter what. we have endured the last 4 years on just my income, and now that she is an RN, she makes more money than i do. im leaning toward this (provided i can meet the requirements and come up with the $$$), as long as i keep my toolbox and tools, i can get a job if this falls through. maybe i'll go bankrupt, maybe not.

    ryan

    ryan
     
  14. bigcountryk5

    bigcountryk5 1/2 ton status

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    true, like i said whatever you decide i hope you get success and happines out of it.
     
  15. diesel4me

    diesel4me 1 ton status Premium Member

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    If you like your job,its not work...

    Its nice to be your own boss--but it comes at a high price..2 things I learned quickly when I tried starting a small engine repair shop--you'll work longer and harder than you ever did at any other job,and for a lot less pay..plus the fact you wont have a paycheck gaurenteed every week for a certain amount,and no health benifits or 401K plan...not trying to discourage anyone,but you have to think FAR ahead--I didn't,and now I'm in the worst spot in my life I've been in yet,nearly broke,in poor health,and no social security was paid into the past 11 years,so no benifits for me there..!..but living with and caring for an elderly parents was what helped make my venture a failure,plus the fact I didn't work hard enough to make a go of it properly..My health was not good enough to carry the burden..now I'm in real deep doo-doo.. :doah: :(

    I'd be very wary of any franchises..period..If you think you'll be happy pedaling tools,chasing deadbeat customers,etc,then go for it--if you love your job,its not work!..my "love" of fixing small engines lasted about a month..when it went from a hobby to a full time bussiness,it wasn't fun anymore..I like fixing things,but tired quickly of making silk purses out of sows ears(that means making someones JUNK run perfect!)-and for minumim profit..

    good luck at whatever you do..I might be working at Mcdonalds soon if things dont change here--beats smashing your knuckles wrenching,and having a backache every night--plus it pays better.... :crazy:
     
  16. rdn2blazer

    rdn2blazer 1 ton status Premium Member

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    a couple of friends opened up a street rod shop about 7 yrs ago, they were doing tons of side jobs before that time and decided thet should open up a shop. they did lowering and lifting and all the basic stuff but they also did custom fab work on frames and suspension, roll cages, grafting in complete drag chassis, stuff like that. both very skilled certified welders and fab guys. they bought in to a bunch of aftermarket companies to sell there products through the shop and did car swap meets. zoops, bilet specialties, morrison chassis components, flaming river, energy suspension, just to name a few they were dealers for.

    with only word of mouth and car shows displaying and showcasing there tallent. got so busy in just the first year, my bud nick was working 12 to 16 hr days and his partner who financed the shop was working a full time doc worker job and going to the shop for 6 to 8 hrs too, they had blank checks from wealthy guys into cars locally, to guys just wanting a bit of small fab work. they had to hire people. after four more years, and lots more work and at least a dozen or more guys hired for sayin how good they were, they gettin fired for how lame they were, it was back to just the two of them. now the wifes started bitchen about the time away from home, started puttin strains on the marriages, they started to fight too about who worked the most and who spent the most benifiting the shop.

    so after 5 yrs with a sucessful shop they closed down two yrs ago from just to much work for the two of them, marriages survived but the friendship really didn't. its tough to go in bussiness yourself, be prepared, anything can happen. good luck.
     
  17. spincast375

    spincast375 1/2 ton status

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    Be sure this is what you want to do . . .

    If Matco is such a good business opportunity, why are you having to put up $30k? Franchises - the way large businesses expand theirs using your money.

    Before you start this venture: are you and your wife debt free except for your house? Do you have three to six months living expenses put aside for emergencies? Cut up your credit cards. Do you and your wife have a family budget? Do you live by it? Basically, you are about to make a huge cash outlay, and then have no income for nine to twelve months. Is your wife ok with this? If she is not in your corner, don't do it. You will have enough stress building your business. You don't need family financial stress and her unhappy on top of it. To many new entrepeneurs, taking on a new venture is like having a mistress. She will take up all of your thoughts and energy. Is your wife ok with this? If she does not support you, this will fail.

    The 350 customers, ask these questions:
    • how many are active?
    • how many bought in the last twelve months? what did they buy?
    • what is the average purchase? how is it financed?
    • is your geographic area limited (an assigned territory)? what businesses in your territory are growing, closing, or moving in? study the demographics very closely.
    • are you buying the receivables? if yes, look at them closely; be sure to get a detailed aging with copies of the invoices; anybody over thirty days are the one's not to sell to, unless for cash; if you are not buying the receivables, get the detailed listing anyway; many times your customers see a new guy as a fresh start, the way to run up another bill they can't pay
    • who had this route last? what happened to him? find him; buy him lunch or a beer; pump him for all the info you can get; take notes; ask what he did right; ask what he did wrong; ask what he would do different; ask him about his relationship with Matco
    • an absolute minimum: five years of detailed sales and GM history on the route; by customer, by product
    Questions of Matco:
    • what is their franchise fee? is it the price up front, or is there a percentage a month of your sales you are required to pay them? their fee may be built in to the price of the goods
    • at what interest rate will they finance your initial inventory? should be zero for twelve months
    • do they tell you what to inventory? watch that they don't require you to stock up on items that they want to push, but don't sell well
    • if your business fails, will they buy back all of your inventory at the price you paid for it?
    • what is their delivery time from time of order? what is their fulfillment rate? who pays for the freight from their warehouse to you? when does title change hands? if the product is lost on its way to you, will Matco make good on it?
    • from the time you place your customer's order, when do you have to make payment to Matco?
    • do they set the sales prices to your customers?
    • how much free support will you get from Matco? there should be a week or two paid training offsite somewhere dedicated to running and managing a profitable franchise; after you are up and running, what kind of support do they provide? minimum monthly visits the first two years from a successful distributor where all facets of your operation are reviewed (sales numbers, your budgets and actual expenses)
    • how does the Matco franchise compare to a Snap-On? they have these facts and should be willing to share them with you
    • Thirty years from now, your franchise is wildly successful and you want to retire. You have spent a lifetime building up this asset. What are your options? At some point you want to walk away and still have residual monies coming in.
    Once all of your questions are answered, take a two week vacation and spend it with two distributors. The first week with a very successful one in a similar territory. The second week with the one in the territory you are about to buy. Then write a monthly business plan. It must be in writing. There are books on how to do this. Become a resident at the library. What contingency plan will you have? If you have a truck accident, how will you make your rounds? If you are injured, who will make your sales calls and deliveries?

    Expect to find the 80/20 rule. Eighty percent of the sales will be in twenty percent of the customers. Expect to find one fifth of the customer base will turnover each year. This is where knowing the demographics in your territory comes in. Prepare now a list of potential businesses. Once started, 25-35% of your time should be spent on calling on new customers.

    Find another Matco distributor, a successful one, then ask him to be your mentor. Someone you can call at night and discuss your day, and run ideas off of. Take notes. Write everything he says down in a daily planner .When he gives you suggestions and advice, follow it. This person cannot be a woman.

    Do you have a PC on which to track your business numbers (sales, cost of sales, vehicle operating expenses (gasoline, oil change, tires, carwash), uniforms, taxes, etc)? What software package will you use? Who will do your bookkeeping?

    You will have to: register with the state for sales tax, with the IRS for FICA times 2 and make quarterly tax payments, buy a business license, buy business liability insurance.

    Make absolute sure you have an attorney review the franchisee documents with you. A business attorney experienced in franchises, not a real estate attorney, or an ambulance chaser. How often can Matco change the agreement? What terms are fixed and what are variable? As you become more successful, can they change ther terms to lower your take? Can they take away your territory without compensating you? Can you sell the franchise to anyone, or are you required to sell it back to the Company? Who sets the value of your business if you must sell it back to the Company? You and you alone sign on this contract. No one else. No co-signers. Not your wife.

    If you have to borrow money to get in, this is not a good deal.

    Make sure your wife works and can carry you and your kids on her medical.

    Put all of your personal assets in her name. Then you are pretty much judgement proof.

    If the Matco rep pressures you to sign now, or this golden opportunity will be gone, walk away. No, run, as fast as you can.

    One last point, you are probably twenty-five plus years old with little or no sales experience, and even less experience running your own business. In this business formula, what is Matco's financial risk? What is yours? You have to be brutally honest here. Can you and your wife live with this answer?

    Like playing any game in Vegas, know the rules, know the odds of your winning (most are stacked in favor of the house (Matco)), and know how much you are willing to lose before you get up from the table. You and your wife must agree up front how much you will spend on this, and then stop. There is no shame in trying. Have an exit plan. If you are meant to be an entrepeneur, this is the first of many adventures. Others will come by.

    The problem with a traditional business is that you are limiting yourself to what you personally can do. You are buying a job. Here's the perfect business: no inventory, no receivables, no employees, all cash, a product everyone uses every day and needs to be replenished often.

    Tom
     
  18. ryan22re

    ryan22re 1/2 ton status

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    man thats alot of info, but just what i am looking for. im not one to rush into anything.

    i am going to spend some time with my matco man next week and grill him pretty good.

    gonna talk with the wife more tonight, see if its really in the realm of posibility.

    gonna grill the franchise sales guy some to on monday.


    thanks for the info,

    ryan
     
  19. spincast375

    spincast375 1/2 ton status

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    You really don't want employees.

    Ignore those that say you want to employ others. Better to run a small, highly profitable operation. Employees are headaches: theft, accidents, workers comp, medical benefits, tardiness, FICA, state unemployment taxes, sexual harassment training, vacations, FUTA, sick leave, FMLA, grievances, should I go on?

    The federal and state income taxes apply equally to all. As a small businessman, you can take advantage of about 50 more than a W-2 employee can.

    Entrepeneurs make the world go around. We rock!
     
  20. ronnny

    ronnny 1/2 ton status

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    What are you going to do about insurance is the big thing for me. Go out side of you route and make a few sales if you need to at the flea market on the weekends or ask about you seeking other customers on your own if this is your own truck with mostly your own investment. Ask about setting up at car and truck shows or something on your own time to try and sale outside your normal route for extra $. Also may try if you and the other are not argueing about doing this in her name to try and get a grant for a minority owner business. You know women are a minority and discriminated agianst. This is just a couple thoughts.
     

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