Starting a Froggy Wreckers in Sydney
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  1. #1
    Guru davemcbean's Avatar
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    Starting a Froggy Wreckers in Sydney

    In the Pug Forum, a few of us have been discussing what issues would be involved in starting our own froggy wreckers, including selling fast moving new stuff (brake pads, etc, etc).

    I thought I should make a post in the general discussion area, since this is of interest to everyone. Please read through the discussion in the Pug section and then feel free to post your comments here.

    It's the kind of thing which could go OK if well planned, or could be a monetary black hole if things go bad.

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    Dave
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  2. #2
    1000+ Posts BogMaster's Avatar
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    BogMaster:
    davemcbean:
    In the Pug Forum, a few of us have been discussing what issues would be involved in starting our own froggy wreckers, including selling fast moving new stuff (brake pads, etc, etc).

    I thought I should make a post in the general discussion area, since this is of interest to everyone. Please read through the discussion in the Pug section and then feel free to post your comments here.

    It's the kind of thing which could go OK if well planned, or could be a monetary black hole if things go bad.

    Dave
    A good idea Dave but you are right, it could easily go pear shaped.

    I thought about a similar scheme in the ACT some time back, had located a suitable space at the right rent, but didn't do it.

    The future for the cash flow side of the business would lie in supporting the newer model vehicles rather than the relics most of us here are interested in.

    I also figured that to generate cash flow you would need to branch into importing quality fast moving aftermarket spares at the best possible price and target the newer vehicles as the core of the business. Hence I ended up at Neumarsa in Barcelona and entered into detailed correspondence with some Turkish guys and an Indian engineering company.

    In the end I chickened out simply because the whole idea was turning into big dollars, particularly when you are looking at minimum orders of around $10,000 Australian at a time in order to deal with some of the bigger suppliers.

    On the other hand I could have landed piston and liner kits for the R12 1.4 motor for around $60 Australian produced by a reputable Indian engineering company. (minimum quantity 24 sets.
    I was thinking of a slogan like "Get an elephant under your bonnet!" or "Give your 12 some curry!" )

    At the time,I couldn't see that those who were then doing a lot of frog wrecking were making a motza out of it - the local euro wrecker had folded completely. But I reckon that the idea is a lot more viable today than it was then. Basically because of the growing Froggy local market share. By targeting the newer models in the spares import area, you could also service the older vehicles. With Neumarsa, for example, you can make up your order in whatever quantities required for whatever model as long as the minimum total is $10,000.

    I hope someone does something along these lines at some point.

    As for me I remain talking out of my arse as usual.

    The other little earner I was thinking about would have been to buy up a large warehouse at the right price and lease out project space....I figured the nagging missus factor would have seen cars on trailers coming from all over the ACT and the Bog retirement fund growing daily.

    cheers!

    <small>[ 16 March 2003, 09:21 AM: Message edited by: BogMaster ]</small>
    Woo Hoo Honi ko'u 'elemu (Hawaiian)

  3. #3
    Gone Fishin' Ray Bell's Avatar
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    Lease out project space?

    Now that's a thought! Having the gear on hand, engine crane, compressor etc, there would be a number of owners who'd pay for the space to enable them to do their gearbox transplants where they knew that help would be there if they needed it and any parts they happened to be shy would be available.

  4. #4
    Budding Architect ???? pugrambo's Avatar
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    Ray Bell:
    Lease out project space?

    Now that's a thought! Having the gear on hand, engine crane, compressor etc, there would be a number of owners who'd pay for the space to enable them to do their gearbox transplants where they knew that help would be there if they needed it and any parts they happened to be shy would be available.
    good idea
    still would have to weigh up insurance costs though maybe
    if someone was there and they got hurt working on their car under your roof or using your gear
    all great ideas but have to note them all down and jump on the phone and call some insurance companies and see what the outcome is
    it's all in covering your own rear end
    i'd hate to see people start loosing their homes over basically a hobby
    3 x '78 604 SL

    1 x '98 306 GTi6

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    1 x '98 406 STDT troop carrier and i don't care if it stinks, i don't sniff it's arse Death by wank tank

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  5. #5
    Gone Fishin' Ray Bell's Avatar
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    Agreed, hence my suggestion of shareholding... they would all be part owners of the business.

    Or maybe the idea should be to go with a co-operative.

    Maybe those with 'spares cars' in their backyards could transport them to the site (we'd need to go beyond Ingleburn, methinks) and earmark anything specific they'd want to keep off it. Then the remainder would be for sale, with some sharing arrangement regarding the dollars.

    Of course, if it all ran properly, very few would want to keep spares cars... many wives would be very happy.

  6. #6
    Guru davemcbean's Avatar
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    Ray Bell:

    Maybe those with 'spares cars' in their backyards could transport them to the site (we'd need to go beyond Ingleburn, methinks) and earmark anything specific they'd want to keep off it. Then the remainder would be for sale, with some sharing arrangement regarding the dollars.

    Of course, if it all ran properly, very few would want to keep spares cars... many wives would be very happy.
    Ray,

    I've been thinking the same thing. There's many with cars in backyards who want to move them elsewhere or get rid of them completely, but do not want to see them go to the tip.

    I don't think it would pay to buy many old wrecks because the market is limited, but wrecks that could be had for nothing are a good idea.

    Also, as Bogmaster said, we'd have to go for providing fast moving new parts for newer Frogs, as the core of the money making part of the business. The old car spares would be mainly a labour of love supported by the other money making new stuff.

    Here's a list of new "cheap" things which I think can be bought from wholesalers in relatively small lots:

    -high performance brake pads
    -DBA slotted Rotors
    -stiff bush kits
    -sports steering wheel bosses (the wheels can be bought anywhere, so there's no need to stock them)
    -Alinquant and KYB shock absorbers
    -radiator hoses
    -ball joints

    Body panels and lights tend to be more expensive and only avaiable in boxes of 30, so they can be big bucks.

    In second hand spares, I think we could get enough of the following backyard cars:

    -R12's
    -R16's
    -Feugos
    -some rusty 504s
    -some rusty 404s

    If the business proved profitable, then as sub-$1000 205GTI, 405, BX, R21 and R19 wrecks become more available in the next couple of years, then we could possibly get into them.

    A 20 foot container load of 15" alloys, 5 speed boxes, diesel engines, V6 bits and Mi16 bits from the US may also prove profitable, but it would require a capital outlay of atleast $10,000, so it's not something you'd want to do until things are running well.

    Dave
    NZ Fleet
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    1984 205 GT twin carb
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    1994 106 Xsi
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  7. #7
    Moderator Alan S's Avatar
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    "A 20 foot container load of 15" alloys, 5 speed boxes, diesel engines, V6 bits and Mi16 bits from the US may also prove profitable, but it would require a capital outlay of atleast $10,000, so it's not something you'd want to do until things are running well.

    Dave "

    What would a pile of half cuts of Pugs 405/6/7. 306/7, 205/6/7, R19s & Cits in XMs, BXs & Xantias cost by comparison from the UK given the prices over there & a recent mention on one of the boards that the wreckers have virtually stopped buying them due to the glut of both new & used parts over there??

    Alan S
    If it ain't broke, use a 12" shifter.....that usually does the trick!!

  8. #8
    Guru davemcbean's Avatar
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    Alan S
    [QBWhat would a pile of half cuts of Pugs 405/6/7. 306/7, 205/6/7, R19s & Cits in XMs, BXs & Xantias cost by comparison from the UK given the prices over there & a recent mention on one of the boards that the wreckers have virtually stopped buying them due to the glut of both new & used parts over there??[/QB]
    Yeah, well come to think of it, judging by the rate at which they chuck cars out in the UK, I think a container load of 306, 405, BX and Xantia bits from the UK could well be cheaper than a container load of 505 bits from the US, and they'd sell alot quicker too.

    Rusty 10 year old wrecks from New Caledonia and French Polynesia might be worth looking into also, not to mention NZ.

    Dave
    NZ Fleet
    1976 504 Ti
    1984 205 GT twin carb
    1991 205 SI 1.6GTI motor
    1994 106 Xsi
    1996 Mondeo V6
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  9. #9
    Fellow Frogger! James S's Avatar
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    On the same theme, I saw two guys dump a working orange R12 GL sedan as scrap metal at the tip on Mugga Lane in Canberra this morning. It had rust and some of the interior (dash) were ripped out. I was told by the guys dumping it that it still ran. One of them was going to restore it but decided he didn't have the time or money. Too bad there was no froggy wrecker to send it to instead of just seeing it get crushed. There were probably lots of good parts on it.

  10. #10
    Moderator Alan S's Avatar
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    Here's a coincidence.
    Where I live is a Cit desert but today I spotted an XM so as I was in the 16 V I caught him up for a chat. In the process of talking, this guy mentioned how he has 2 XMs & the only thing he's got against them is the price of front end bits as he has had a few altercations with 'roos. He reckons new headlights are costing him just under $800 each in which case, a front cut of an XM would be almost paid for with the headlights including its share of the container.
    Also in these cases, could there also be a market for diesel conversions in particularly BX, XM & Xantias as they are plentiful overseas. No doubt this would equally apply to other marques.
    To do a feasibility study, you'd need to find a "compliant" wrecker over there as well as organising a deal on freight and then get some idea of common parts & resale prices as well as the demand factor.
    I was told years ago that some of the wreckers in the UK had a deal with someone supposedly in WA who took all certain parts of certain Cits, so when these models came in, they'd strip out these bits and stack them in crates & then send the rest off to the crushers. They then apparently had a deal going with a freight company so that when the ship was loaded, they were notified & would seal up the boxes which would then be collected and use them to fill empty space thereby cutting down on freight costs (almost like backloading rates). This way the wrecker got a few quid for something normally valueless, the freight mob got something for the empty space instead of nothing & the customer out here got his bits, on an irregular basis but paid shiteye for them so had a big stock of good gear at low outlay cost.
    That's the kind of wrecker it would pay to get a deal going with.
    NOW; let someone ask me who the people in WA were & I've gotta act dumb. Maybe Arabs or someoone from a country benefitting from making it look as though they were in the export business in Australia???? I really don't know as I tried to track them down & had it confirmed they did exist but nobody could tell me who or where they were.

    Alan S
    If it ain't broke, use a 12" shifter.....that usually does the trick!!

  11. #11
    Fellow Frogger! MYT205's Avatar
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    With the number of 205's and 306's I see in Sydney now if we could get half cuts of these cars it would be terrific.

    I have a mechanic mate who makes up vernier cam gears for any car. We could sell things like these that are hard to find except by importing them which costs a bomb. He also does head porting etc and reconditioning. I'm sure if we could get business for him he would do the heads at a price that would benefit both parties.

    As for the brake parts etc they are good items to stock also. Even factory brake pads and rotors are ridiculously priced.

    The best part would be the fact that we would have a starting point for any parts we may need. From what I've seen its like trying to find a needle in a haystack for Froggy parts.

    As for the "restoration centre" thats a great idea but as others mentioned public liability insurance could be a killer.

    Even just renting out the space to store cars is a great idea. I know I would store my car there as I looked at a garage at a storage place and its over $200 per month. eek! If it was possible to get a space that I knew was secure for say $50 a month I would definately use it, knowing that I could also have some space to do some work on the car as well.

    Other things to consider are record keeping and GST. yes, they are the boring bits, but still vitally important. I'm more than happy to help out with this.

    Cheers
    Darren

  12. #12
    Gone Fishin' Ray Bell's Avatar
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    Does anyone need to say 'Let's do it!'...

    And how do we raise the cash?

    Dave, I didn't mean to buy the backyard relics, but to put them in the yard. The owner would earmark the bits he didn't want sold, the rest would be for sale. Maybe there might be some remuneration to the owner, but most stuff would be sold to benefit the business.

  13. #13
    Local Tyrant gibgib's Avatar
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    I've been doing some thinking about this & feel it's a good idea.
    Just last week, dad told me he is taking a trailer load of Cit GS bits to the tip. These bits are the saved ones from the last clean out so are pretty OK.
    Sure seems a waste to do this doesn't it?
    In the past I have thrown out a heap of GS & R4 bits as I was either moving interstate or got sick of looking at it all. Some of the parts were very rare, but also unwanted by others at the time (b4 this forum existed).
    I have spoken with the director of my co (me) & would be willing to put up some cash if there was serious interest & a workable business plan.

    Some questions I have:

    Where to have the wrecker?
    What's the rent?
    Is the property fenced?
    Is it in an industrial area?

    It could be better to have a shed instead of just a yard. Leave whole cars outside, keep parts out of the weather.
    If we were to import stuff, there would be a problem with thieves.
    What would we do for security?

    Running the accounting could be interesting although YEL020 mentioned he was an accountant.

    Questions about the wrecking yard:

    Who would run it?
    How would everything (secondhand) be priced?
    Who would strip the cars down?
    Who would collect "freebies" from all over the country?

    Obviously the persons running it from the front line would need to be compensated fairly, perhaps it would be a labour of love for a while but...

    I don't think taking on repairs is such a good idea. Please tell me otherwise.
    Perhaps car storage for owners without the space at home could help pay the rent, however we would surely need a shed for that.

    cheers!

  14. #14
    Gone Fishin' Ray Bell's Avatar
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    I don't think it would be smart to get into importing new parts... unless these parts aren't imported by someone else at the moment.

    Do like the Canberra people do, however, buy from those importers in bulk and sell at a reasonable price... again, as a co-operative it would all be above board.

  15. #15
    Fellow Frogger! MYT205's Avatar
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    I agree with gibgib as far as doing mechanical repairs goes. Selling parts, new or old, yes. But, actually doing repairs on cars for customers I do not think is a good idea.

    The main issue I see is another that gibgib raised. How is it going to function as far as personnel and $$$$ goes? Take gibgib for instance. He is interstate but willing to contribute some financial resources. Obviously he will not be able to put in physical man hours stripping cars, so what to do?

    Once we get the initial interest, which we seem to have, I think it is a matter of those wanting to be involved chatting and determining a course of action. Obviously this will need to be online so our interstate interested parties can be part of it. Maybe we can use the online chat facility on this forum, except make it closed only to those of "the wreckers". No offence to anyone else but this will be a business venture, so some privacy to those involved is a matter of necessity.

    Just thinking out loud so sorry for my ramblings.....

    Darren

  16. #16
    1000+ Posts BogMaster's Avatar
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    Ray Bell:
    I don't think it would be smart to get into importing new parts... unless these parts aren't imported by someone else at the moment.

    Do like the Canberra people do, however, buy from those importers in bulk and sell at a reasonable price... again, as a co-operative it would all be above board.
    I was going to undercut all and sundry to start with at least, as I didn't intend the venture to be my main bread and butter...would have been happy to take small losses at first or just break even.

    The plan was to retail the Indian pistons and liners at cost plus 10% and publicize their durability through a test vehicle on the website I was running then. (that was a bit of gamble really.....what if the bastards had turned to elephant shit before my eyes?)

    If you're not out to make a mint to start with this approach is fine..but and it's a big but, you have to either run the business from home or have a really good lease arrangement at low rent sorted before you start.

    A co-op would have no real need to make huge margins at all. Good idea.

    head_ban

    <small>[ 16 March 2003, 06:32 PM: Message edited by: BogMaster ]</small>
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  17. #17
    1000+ Posts BogMaster's Avatar
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    I can't see how the deadun's from all over the country would make their way to wherever such a yard was located. Maybe a number of locations provided by grace and favour to start with and an online database of what was where would be a good idea to complement the main facility. I'm sure some frogs would have some space somewhere to store a few wrecks. I could hide a few at the solar powered bog retreat...

    cheers!

    <small>[ 16 March 2003, 06:38 PM: Message edited by: BogMaster ]</small>
    Woo Hoo Honi ko'u 'elemu (Hawaiian)

  18. #18
    Gone Fishin' Ray Bell's Avatar
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    If we could obtain a significant number of the cars at Bungendore, we would be on the way to having a good stock of the older Pug stuff... and protect it from 'overseas investors' too.

    Maybe we could sort out units from among that which would make good project cars as well, so as to prolong the life of the models, increase numbers instead of reducing them?

  19. #19
    Guru davemcbean's Avatar
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    gibgib:
    Where to have the wrecker?
    What's the rent?
    Is the property fenced?
    Is it in an industrial area?
    :
    As far as the proerty in Ingleburn is concerned:

    -it is in an industrial area
    -it is fenced but has no buildings
    -there is a shop building on the block next door which is also for lease from the same land owner, but it is very run down.

    I imagine the rent for the bare block would be alot cheaper than one with a building, but I will check tomorrow.

    One thing to keep in mind about the block at Ingleburn is that the current leasees may pay up in the next week and may take the cars. Also I'm not sure how much the estate agent would want for the cars and parts if it came to that, although if we were to lease the land a cheap deal could possibly be struck.

    South west Sydney (i.e. Ingleburn) is a handy location because it's almost right next to the M5 freeway, and it is a fairly "poor" area so many things tend to be cheaper in this area (e.g. many mechanical workshops charge about half the hourly rate of ones on the north shore).

    I think quite a few backyard freebies could be had within relatively cheap transport distance of this area too.

    Dave
    NZ Fleet
    1976 504 Ti
    1984 205 GT twin carb
    1991 205 SI 1.6GTI motor
    1994 106 Xsi
    1996 Mondeo V6
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    1955 203C
    1997 Civic Cxi (great allrounder- revy, flexible, nimble, comfortable , economical, simple and durable )

  20. #20
    Guru davemcbean's Avatar
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    YEL020:
    I agree with gibgib as far as doing mechanical repairs goes. Selling parts, new or old, yes. But, actually doing repairs on cars for customers I do not think is a good idea.

    The main issue I see is another that gibgib raised. How is it going to function as far as personnel and $$$$ goes?
    I agree regarding the repairs thing.

    As far as $$$ goes, I think it would have to start off as a break even labour of love thing (phase 1 of the business plan). I'd be willing to put in some time to get things organised, strip some cars, etc, etc. Hopefully we could get a growing and dedicated group of customers reltively quickly, and if that was the case then we could bring in phase 2 and start talking about wages for a couple of full time people, etc, etc, but I think it would be good to work out a defining point between phase 1 and phase 2 and have an exit stategy if phase 1 is unsuccessful.

    I'd be willing to contribute $1000-$2000 towards buying new stock for phase 1, if there's also one or two others who are willing to make contributions.

    Who else is there in Sydney who'd be willing to donate a day or half day a week to help get such a thing started?

    Is there a time sometime this week when a few of us could possibly get together to discuss what phase 1 and phase 2 of the business plan would actually constitute, the legal and accounting issues, etc? It sounds like Darren and a couple of others have quite a few skills which could be brought to bear in getting a plan together.

    Dave

    <small>[ 16 March 2003, 09:59 PM: Message edited by: davemcbean ]</small>
    NZ Fleet
    1976 504 Ti
    1984 205 GT twin carb
    1991 205 SI 1.6GTI motor
    1994 106 Xsi
    1996 Mondeo V6
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    1955 203C
    1997 Civic Cxi (great allrounder- revy, flexible, nimble, comfortable , economical, simple and durable )

  21. #21
    Guru davemcbean's Avatar
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    Ray Bell:
    Dave, I didn't mean to buy the backyard relics, but to put them in the yard. The owner would earmark the bits he didn't want sold, the rest would be for sale. Maybe there might be some remuneration to the owner, but most stuff would be sold to benefit the business.
    No worries Ray. I knew what you meant.
    NZ Fleet
    1976 504 Ti
    1984 205 GT twin carb
    1991 205 SI 1.6GTI motor
    1994 106 Xsi
    1996 Mondeo V6
    Aus Fleet
    1955 203C
    1997 Civic Cxi (great allrounder- revy, flexible, nimble, comfortable , economical, simple and durable )

  22. #22
    Guru davemcbean's Avatar
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    gibgib:
    It could be better to have a shed instead of just a yard. Leave whole cars outside, keep parts out of the weather.
    If we were to import stuff, there would be a problem with thieves.
    What would we do for security?
    I agree a shed would be good, but the rent would also be considerably higher. It may be possible to use something large and heavy (i.e a shipping container) as storage, or there may be some other alternative. Just an idea. I'd prefer a nice factory unit, but I can't see things breaking even for a while if we were to get too extravagant. I don't really want to get too far out on a limb as far as borrowing money, etc.

    Also, I'd imagine there might be government regulation issues pertaining to whether we can just operate from a vacant lot or not.

    There's so many things to look into.

    Do we have any volunteers for researching the various issues:

    -liability insurance and workcover regulations
    -warranty/fair trading
    -ABN, gst, other taxes, etc, etc
    -registered company name
    -security
    -facilities
    -wholesalers
    -use of vacant lots versus other types of premises
    -what niches in particular could we satisfy which aren't currently being satisfactorily catered for.
    -there's stacks of other issues which I can't think of off the top of my head right now, but I'm sure others will jog my memory.

    Dave
    NZ Fleet
    1976 504 Ti
    1984 205 GT twin carb
    1991 205 SI 1.6GTI motor
    1994 106 Xsi
    1996 Mondeo V6
    Aus Fleet
    1955 203C
    1997 Civic Cxi (great allrounder- revy, flexible, nimble, comfortable , economical, simple and durable )

  23. #23
    Guru davemcbean's Avatar
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    This looks like a useful website for those of us who are small business tadpoles like myself:

    <a href="http://www.business.gov.au/BEP2002/" target="_blank">http://www.business.gov.au/BEP2002/</a>
    NZ Fleet
    1976 504 Ti
    1984 205 GT twin carb
    1991 205 SI 1.6GTI motor
    1994 106 Xsi
    1996 Mondeo V6
    Aus Fleet
    1955 203C
    1997 Civic Cxi (great allrounder- revy, flexible, nimble, comfortable , economical, simple and durable )

  24. #24
    Guru davemcbean's Avatar
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    davemcbean
    [QBHopefully we could get a growing and dedicated group of customers relatively quickly, and if that was the case then we could bring in phase 2 and start talking about wages for a couple of full time people, etc, etc, [/QB]
    Sorry I forgot to mention the all important discussion of profit margins among the shareholders. There will have to be some monetary reward eventually for those who are willing to risk some money during the set-up period. Just how large and ongoing this reward is, will depend on the success of phase 1 and I guess early phase 2 (sorry, I know I'm probably stating the obvious in some of this, and being a little vague in other bits, but there's alot to cover).
    NZ Fleet
    1976 504 Ti
    1984 205 GT twin carb
    1991 205 SI 1.6GTI motor
    1994 106 Xsi
    1996 Mondeo V6
    Aus Fleet
    1955 203C
    1997 Civic Cxi (great allrounder- revy, flexible, nimble, comfortable , economical, simple and durable )

  25. #25
    Sense Pug307's Avatar
    Join Date
    Mar 2002
    Location
    Australia
    Posts
    4,355
    I wish you well.

    Peugeot 307 XS 1.6
    Aussiefrogged in MEL, PER, SYD, BNE & ADL.
    Rendezvous Adelaide 2005

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