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)
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.
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.
tumble dryer said:
How much does the end user save by going refurb v new at the same Indie?
Do they get replaced in pairs?
Typically we charge an average of £230. These will fit, work, and don't need specialist diagnostic kit to fit. A new unit is about £500 from ECP and another £150 or so from the main dealer. However this will need a good level of equipment to fit back onto the car. Part of our expertise is to advise the customer if it's the unit that's gone down or something else - we can normally tell once it's on our test rig and we have understood the error codes.Do they get replaced in pairs?
Used units are typically £150 or more, so we are a very competitive solution, with a good track record.
Interesting thoughts - thank you for taking the time to respond. I'm wondering if we should be looking at getting a load of units refurbed and made up, erasing all the data from them,and making them programmable to a new car - essentially this would be what the OE would do. I'll need to mull this over, and drink much tea to think about it.
One think I didn't mention of is that the units were only massively fitted in a 5 or 6 year window - since then other technology has been used. In 10 years there probably won't be a market for these things. (Though it might not bother me too much by then). So it's a case of making hay while the sun shines.
One think I didn't mention of is that the units were only massively fitted in a 5 or 6 year window - since then other technology has been used. In 10 years there probably won't be a market for these things. (Though it might not bother me too much by then). So it's a case of making hay while the sun shines.
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