Where to go with this business?
Discussion
Hi all. Looking for the worldly comments of the PH collective on this one.
We are auto electricians, and have a small workshop in S Wales. We have developed a way to repair electronic handbrakes, and in the UK have repaired many hundreds, and prob into the low thousands by now. Business on this continues to grow (slightly surprisingly), and of the 2.5 people in the workshop, 1.75 is spend repairing these units. The remaining time is spent repairing more traditional electrical problems, and that work is also growing. Most of the time we are completely flat out, and it seems likely to get worse.
In between fixing things we are thinking about the potential of passing on our skills to others in Europe to repair the hand brake units.
We think it's likely the market for brakes in Europe is higher than in the UK due to how the market works - Europeans seem to hold onto their car for longer, and be more willing to spend on it, and given there are more French cars in Europe than here, we think there's an excellent opportunity.
But how to access it, protect our repair methodology, and actually make some money on it as well?
We were thinking of showing a selected 'partner' how to repair, and selling them the bits (so they have technical expertise, and the parts). One of the worries I have with this is they could take our skills and go and buy the bits elsewhere. (Not easy, but possible), or alternatively,ask for some up-front payment - but that hardly seems like the most promising business start up.
Any ideas or experience on a decent way forward. (All you dragons out there)
We are auto electricians, and have a small workshop in S Wales. We have developed a way to repair electronic handbrakes, and in the UK have repaired many hundreds, and prob into the low thousands by now. Business on this continues to grow (slightly surprisingly), and of the 2.5 people in the workshop, 1.75 is spend repairing these units. The remaining time is spent repairing more traditional electrical problems, and that work is also growing. Most of the time we are completely flat out, and it seems likely to get worse.
In between fixing things we are thinking about the potential of passing on our skills to others in Europe to repair the hand brake units.
We think it's likely the market for brakes in Europe is higher than in the UK due to how the market works - Europeans seem to hold onto their car for longer, and be more willing to spend on it, and given there are more French cars in Europe than here, we think there's an excellent opportunity.
But how to access it, protect our repair methodology, and actually make some money on it as well?
We were thinking of showing a selected 'partner' how to repair, and selling them the bits (so they have technical expertise, and the parts). One of the worries I have with this is they could take our skills and go and buy the bits elsewhere. (Not easy, but possible), or alternatively,ask for some up-front payment - but that hardly seems like the most promising business start up.
Any ideas or experience on a decent way forward. (All you dragons out there)
Is your method of repair geniunely innovative and patentable? If yes, you could patent it and achieve some level of protection. That said, defending patents is very expensive.
Given the number of stories on here about these things failing, I would have thought there would be loads of demand here. I'd apprentice up and get a production line going, You've got a first mover advantage, build the business.
Unless you really know the partner, they will inevitably rip you off unless you are very tight legally.
Given the number of stories on here about these things failing, I would have thought there would be loads of demand here. I'd apprentice up and get a production line going, You've got a first mover advantage, build the business.
Unless you really know the partner, they will inevitably rip you off unless you are very tight legally.
Doubt it's 'patent-able' - it's just a selection of existing tooling, methodology etc. But it adds up, as I say.
The advantage to taking a partner would be exploitation of a huge European market. Although we have sold to France, (and much of the rest of Europe), it's more difficult due to language issues. Even if we were to overcome that, there is a time issue in postage, and even after that, we would need to increase our facilities to manage that work. For personal reasons, expansion of the premises might not be possible.
But you're right to identify the downsides - they are exactly the ones we had thought about, just hadn't found an acceptable solution yet. Ho Hum.
The advantage to taking a partner would be exploitation of a huge European market. Although we have sold to France, (and much of the rest of Europe), it's more difficult due to language issues. Even if we were to overcome that, there is a time issue in postage, and even after that, we would need to increase our facilities to manage that work. For personal reasons, expansion of the premises might not be possible.
But you're right to identify the downsides - they are exactly the ones we had thought about, just hadn't found an acceptable solution yet. Ho Hum.
Think about a brand like Chipsaway, they do the same as every other smart repair firm, with the same tools and products available off the shelf, however they have a "brand" and a training package for novices to get into the business as a franchisee.
How about that as a model?
Even better if it could be mobile, out of a van with site visits for dealers/customer?
How about that as a model?
Even better if it could be mobile, out of a van with site visits for dealers/customer?
How much are you hoping to make per repair? In my experience many garages won't bother to go look for the parts if they can make a decent enough margin on what they are doing already. Some will but most won't in my experience.
When you have a proven product that works every time a lot of garages are reluctant to try a new part when the fix will fall back on them if the part fails.
How much can a garage charge for the service and what is your cut? I might know a garage network in Ireland that would be interested.
When you have a proven product that works every time a lot of garages are reluctant to try a new part when the fix will fall back on them if the part fails.
How much can a garage charge for the service and what is your cut? I might know a garage network in Ireland that would be interested.
You have got a few options as far as I can tell:
- Organically grow your business focusing more on handbrakes.
- Get investment to grow your business faster focusing on handbrakes.
- Franchise the hand brakes (as others have said chipsaway).
- Try and get a patent and licence it to a brand like ATS etc. You could do this anyway without a patent but would need a super water tight contract first.
Patents can be process related and don't have to have a new "thing" being invented. However I think you may have a tough time proving no one else has done your method in the past.
- Organically grow your business focusing more on handbrakes.
- Get investment to grow your business faster focusing on handbrakes.
- Franchise the hand brakes (as others have said chipsaway).
- Try and get a patent and licence it to a brand like ATS etc. You could do this anyway without a patent but would need a super water tight contract first.
Patents can be process related and don't have to have a new "thing" being invented. However I think you may have a tough time proving no one else has done your method in the past.
Frimley111R said:
Marketing across Europe with PPC and create a simple package/post/return system? Possibly with a 'send us you knackered one and we'll send you a refurbished one'.
Other way would be better - buy one and if you return the knackered one we'll refund a fee. Like the do with brake calipers.Hi All, some interesting ideas here.
Some of the problem with the business is my personal circumstances. The business runs from old farm buildings, and started life predominantly as an auto electrician. I'm tied to the premises because I need to be at home to look after the kids etc as they go to, and come home from school. Cook the tea, do the homework and stuff like that. That's going to be the case for a few more years yet. And I still feel a strong loyalty to the customers who helped me start. It started with nothing, and would still be nothing but for the support of those people that first came. I feel obliged to help them out now, especially given there are few people locally who do what we do. The other bloke that does has a 3 or 4 week waiting list.
Mobile is possible - not for me, but possible as a franchise type business - and there's no reason why that wouldn't work across Europe. We reckon there's about 1/4 million units in the UK, with about 5 - 10% of them failing in any one year. If we repair 1000 a year we are doing well. We warrant the repair for 12 months, and so far we have repaired 1 at 9 month, and 1 at 14 months, so we're pretty confident the process is robust.
But if there are 1/4 million in the UK, there are nearly 5 million in Europe. Probably about 1/2 a million a year failing. And we're seeing 1 a week.
One problem is that an exchange unit won't work very well, as the units are tied to the original car by software and the board design, so not so easy to exchange.
Some of the problem with the business is my personal circumstances. The business runs from old farm buildings, and started life predominantly as an auto electrician. I'm tied to the premises because I need to be at home to look after the kids etc as they go to, and come home from school. Cook the tea, do the homework and stuff like that. That's going to be the case for a few more years yet. And I still feel a strong loyalty to the customers who helped me start. It started with nothing, and would still be nothing but for the support of those people that first came. I feel obliged to help them out now, especially given there are few people locally who do what we do. The other bloke that does has a 3 or 4 week waiting list.
Mobile is possible - not for me, but possible as a franchise type business - and there's no reason why that wouldn't work across Europe. We reckon there's about 1/4 million units in the UK, with about 5 - 10% of them failing in any one year. If we repair 1000 a year we are doing well. We warrant the repair for 12 months, and so far we have repaired 1 at 9 month, and 1 at 14 months, so we're pretty confident the process is robust.
But if there are 1/4 million in the UK, there are nearly 5 million in Europe. Probably about 1/2 a million a year failing. And we're seeing 1 a week.
One problem is that an exchange unit won't work very well, as the units are tied to the original car by software and the board design, so not so easy to exchange.
What is the profit margin like?
How long does it take to process a unit and what sort of cost?
Are you dealing with end users or garages?
It seems to me that you need your customers to be able to remove and refit the unit and to be able to have the car laid up for however long.
It's a decent profit margin - enough to make it attractive for us, and presumably others.
A unit typically takes an hour or 2 - most of the work is fairly straightforward - cleaning, disassembling, cleaning some more, soldering and soon. There is an degree of intelligence and understanding to fix the more difficult problems. Typically the unit costs £200 - £300
We deal with end users and garages. We prefer dealing with garages, as there is less talking time. Much blunter and quicker to deal with, especially when the garage has decent diagnostic kit.
Yes - since we use the carriers, there is a minimum of 3 days turnaround, it's usually 4 to include the carriage. Some people come to us for fitting - about 3 hours to sort everything then. There are considerable difficulties in putting a different unit on a car, but it is possible.
How long does it take to process a unit and what sort of cost?
Are you dealing with end users or garages?
It seems to me that you need your customers to be able to remove and refit the unit and to be able to have the car laid up for however long.
It's a decent profit margin - enough to make it attractive for us, and presumably others.
A unit typically takes an hour or 2 - most of the work is fairly straightforward - cleaning, disassembling, cleaning some more, soldering and soon. There is an degree of intelligence and understanding to fix the more difficult problems. Typically the unit costs £200 - £300
We deal with end users and garages. We prefer dealing with garages, as there is less talking time. Much blunter and quicker to deal with, especially when the garage has decent diagnostic kit.
Yes - since we use the carriers, there is a minimum of 3 days turnaround, it's usually 4 to include the carriage. Some people come to us for fitting - about 3 hours to sort everything then. There are considerable difficulties in putting a different unit on a car, but it is possible.
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