: Would you invest; if Northstar Performance offered investment plans?
07-14-10, 11:54 PM
Well with a lot of late nights; spending money so carefully I didn't even buy coffee on my way for parts anymore; and help from a few people I pulled off that deal on the 239 Northstar engine blocks, over 500 new cylinder heads; 900+ oil filter mounts that GM doesn't even stock any longer (apparently) 780+ flywheels, etc....
We're growing. Rapidly. Federal Mogul is still too ignorant to allow me an account with them. With my contacts within GM I believe I can get almost as good of deals on GM parts anyways.
Here's one for ya - 100 Aurora 4.0 engines- 2001-2003. Fully assembled. New. List price in Canada - $7,185 each. My cost; $1400 each. includes everything from camcovers to flywheel, balancer, and starter. Drop-in units.
90+ 2003/2004 RWD 4.6 engines. Very good price on those. Drop-in units again.
I can get a very experienced Cadillac Transmission Tech to start building 4T80 transmissions, stock rebuilds and also ugraded performance transmissions with LSDs, high stall converters, and shift kits.
Here's the problem. It takes money to make money. Anyone that has followed Northstar Performance from its beginnings knows that I started from a two car garage in a small community and am now working on setting up a second shop in western Canada. I owe a lot to my customers and the Cadillac community; some contacts (in higher places than I am) and help from the man upstairs. A lot of help from these forums and my family.
I keep sinking everything I make back into the business. But to secure some deals; it's still not enough.
Northstar Performance's asset list is growing; liabilities are diminishing. I have to pay $34k down on the second shop. I can cover that myself; that won't be a problem.
I am going to; over the next few days; lay out a company expansion plan that would be the envy of Victor Edelbrock in his humble beginnings. Expand too quickly; you will fall. Carefully; at a speed which allows you to meet demand; but still liquidate assets quickly enough to cover all expenses in case of a sudden drop in demand.
Would anyone be interested in investment plans that pay out interest rates as high as 25-30% annual? Short term investments; 3 months, 6 months, 12 months. Amounts from $250 to $20,000.
A list of assets and liabilities (company balance sheet) would be supplied to these individuals who choose to invest; as well as quarterly profits and also written, signed investment contracts.
I want to see how far I can take Northstar Performance and I know I can't do it alone. If I could get a million dollar LOC I wouldn't need any private help; but it's still not an option.
The end result would be cheaper parts for our Cadillac's and more money toward performance R&D and developing the aftermarket.
Part of the expansion plan would involve expansion into the USA, starting with a shop in the heart of the United States. Ex-Cadillac technicians would be hired; good ones; and paid more than General Motors paid them; but the hourly rate and pricing would be less than the dealership. With so many dealers closing; there's a necessity for this.
This shop in the United States would involve a repair shop, that can also perform any upgrades developed in our R&D department, an engine reconditioning facility, accessories store, and also a parts yard where old Cadillac parts would find a new owner. Possibly a re-sale area where beautiful Cadillacs that had mechanical or minor body damage would be repaired and offered for re-sale. If this first shop became profitable; the profits would finance a couple more.
I can make money grow and I will not fail. I will not screw anyone out of their money, because you get further in life through honesty.
Eventually as Northstar's phase out and diminish, Northstar Performance would retain its name and become known as the best place next to Cadillac to have repairs and routine maintenance done on all Cadillacs, with specialists for the CTS, SRX, Escalade, and the newer models.
07-15-10, 12:07 AM
Wait a second - Sal? Can I have my Casino Cash, in Cash? LOL :D that will help too!
07-15-10, 01:08 AM
i think there are some loose change in my deville that is out back jake.:)
your plans sounds like a fantastic idea, buti think you might have to go see other business first, maybe some business you have dealing with and propose the idea to them.
07-15-10, 03:41 AM
Whatever you do I support Jake and I will always recommend studs to others who have Northstar head bolt problems. Unfortunately, my cars are so far working fine... haha
07-15-10, 07:33 AM
Never say unfortunately! Glad to hear you're not having problems!
I have some previous customers who have sort of hinted toward helping me out. Before I make any hasty decisions I want to see how the second shop goes for a little while. I just got a call from a past customer of mine last night; did her Deville's HG's two years ago and now her neighbor has four Cadillac's with the same issue (owns a car lot). This lady was offered $200 for her mint Deville from a scrap yard two years ago and now the car is still running strong; working perfectly.
07-15-10, 08:04 AM
I'd definitely support you you Jake.
You've saved a lot of cars along the way. You've helped a lot of people when it "looked" like it was all over for their cars.
Always wishing you continued success.....
I've been looking for an investment opporunity for the last few months. Your stated ROI is attractive. Keep me in the loop.
You should first seek the counsel of a lawyer and a good accountant.
I'm not familiar with the investment laws in Canada, but in the states there are a lot of regulations around seeking private investment money, and how you represent the potential of the investment in terms of payback/etc.
Also, not sure how your corporation is structured, but you technically need to have stock to sell and maintain a cap table. You would need to ensure that either your investors are accredited, and/or limit your non-accredited investors to a total of 35 or less.
The whole thing is likely to be further complicated if you plan to take "investments" from US citizens.
IANAL, just a guy who has dealt with Angel and VC-backed companies for the last dozen years, so I have some working knowledge of how this usually goes down. You're setting yourself up for a potential endless string of lawsuits and complete loss of your assets if you pursue this the wrong way.
07-15-10, 06:45 PM
Everything would have to be done through a lawyer otherwise if something went wrong, nobody is protected. There is no other way other than on good-will and faith; and there's only so much money I'd lend anyone on good-will and faith.
07-15-10, 06:49 PM
I just may have gotten exclusive rights to be the only other retailer than GM for OEM Delphi suspension products. I asked my contact if that could be placed on paper and a contract written up; and he agreed. I plan on taking that to the bank with some numbers, statistics and marketing plans and see if I cannot get a loan or LOC to help along with that Delphi/BWI deal. The investment I have to sink into the shocks and struts is anywhere between $50,000 and $100,000. Very difficult to do business with a company of that size unless you can put your money where your mouth is. In my case; I have to put someone else's money where my mouth is.
Edit: I mean the only retailer for "GM" OEM Delphi suspension products. I don't care about any other automaker they supply. I'm a GM-only guy.
07-16-10, 01:09 PM
Keep us posted as things progress.
-I look forward to seeing your website blossum. Especially in the parts and performance parts department. People love to shop, even if thats all they do for awhile.
-How about a "Northstar Performance" exhaust sys.? A resonably priced, 3" aluminized, Mandrel bent, bolt up system with some straight through oval mufflers, with some stock style tips.
07-16-10, 04:11 PM
Anything with that kind of return is attractive. The question is, can it happen. I'm not totally well versed on your work around here but that doesn't matter to much.
I see what's going on, I believe you can do this. What is the risk and how volatile is this investment?
What do you need to make it happen and what do the investors get as security?
07-18-10, 10:04 PM
Code - I need money to move on certain deals. The initial investment to get the deal with Delphi/BWI for the replacement shocks and struts is $100k. $50,000 down before they produce the replacement shocks/struts (built to order) and $50,000 due on delivery.
As soon as the shocks/struts are in stock; they will sell. The profits would be reinvested.
Cadillacs are not going out of style anytime soon. Not too many garages want to work on them. Not very many aftermarket companies are doing anything with Caddys - well maybe the CTS-V and the newer stuff.
I'm at the point right now where I either have to expand or back off on the amount of things I'm trying to accomplish. I'm not sure which way to go right now.
Securities would be all shop assets; all parts inventory; physical and intellectual business property, the business itself in general. If something went wrong (which I don't forsee) I would want all assets sold and the proceeds from the sale distributed to the investors first until paid; suppliers second; and myself third if there would be anything left. The properties are in my personal name and will remain that way regardless; even if I use all of the equity in them to move the business further-
I'm quite careful with money; I won't invest into anything that I don't see at least an 80-90% chance on at least breaking even; if not turning a profit. Both properties I've selected for use as shops can be rented out as residential/commercial properties should something go wrong; rent being twice the amount of the mortgage payment. If Cadillac's all of a sudden no longer need repair; I can even live in the residence on the property and rent the shop out for enough to cover my mortgage payments.
I will need to set up a shop in the USA in a place that's accessible from many larger cities; in a short driving distance. I need automated machinery to do bolt hole boring and tapping; automatic parts washing systems and assembly line tooling to get the cars in and out quickly. Quick access to OEM GM parts. I already know who I want to run the shop; the man is an ex-Cadillac tech and a darn good one. I believe this shop; with an initial investment of $30-$40k, would start generating revenues of $3-$4k weekly in a short time- under one month. Return of initial investment in approximately 10 weeks. That $3000-$4000 per week would again get reinvested right aways into either expansion or another location. There would be a huge, permanent plaque on the wall when you walk in:
"We want to thank "#########(names of individuals)########" for your investment that made this shop possible".
Not only would Northstar Performance have its own product line (eventually), it would sell Cadillac accessories from all kinds of different manufacturers and also offer installation. The possibilities are endless.
Not all of this is fun and games- I have a lot of sweat; blood (seriously) and late nights into this. Going the extra mile even on Sundays to please customers (or try to).
Many people can profit on this with me; without anything invested other than their money. But I will not accept anything without first having plans in place; contracts and paperwork in order. If a shop does open somewhere in the USA I want to invite all investors and also forum members to be there; while the red ribbon is cut at the grand opening. I found out I can own a business in the USA without being a U.S. citizen. I have to file for an IRS/SS number. I can then; eventualy; use the business to help me become a United States Citizen; if that becomes my desire in the future.
07-18-10, 10:26 PM
OK well let's see if I can help. Are you stable with the services you currently offer?
Do you have the man power to handle the current workload without issue?
Are you physically and mentally ready to take a jump like that. Can you make it work or will you regret all the extra operating headaches that lye ahead?
Some things have changed regarding my household income since I wrote that but I am still interested. I don't have a ton but maybe I can be of help.
What's the time frame to produce the funds?
07-18-10, 11:05 PM
Code this will take a bit of time. As I mentioned in an earlier post; I have a shop being set up in southern Manitoba Canada. This will be the second. I want a few months to see how it goes with both shops first; if things are running smoothly then I want to take the leap and set up another one. I won't be ready until the beginning of 2011. I'm still unsure of where I will remain; in Ontario or in Manitoba. I'll be out there for a while during the set-up anyways. The head office follows me regardless.
Current workload is being handled but we've had a few small setbacks in the last few weeks. Income is still up though. I was down with the flu for the better part of the week.
The biggest issue right now is automation. If the time could be chopped in half on ever car that was done; consider the difference on the financial bottom line.
You have to think like a big factory - automation; assembly line; tools that make speed and accuracy a reality. I believe with a 3 person workforce and the right equipment in place; 6 cars could be done every week. Figure a grand profit per vehicle after all costs (labor; rent; insurance; utilities; and such are paid). Roughly.
Before I had to deal with so many issues (customs; shipping; fianances; etc.) I was doing two cars per week pretty much alone. With the right tooling; and a shop staff of three skilled; dedicated people; 6 cars would be no problem at all per week. I'm talking complete engine reconditioning; not just the head gaskets. Bottom end re-sealed as well. A towing company could be contracted to bring the vehicles in from distances as far as 200-300 miles, which would broaden the customer base for big jobs like this.
07-19-10, 11:54 AM
Sounds like you've thought this through and it sounds like you know what's ahead. Don't let automation damage your reputations.
Do what you're good at doing, make good time but don't cut corners to save time. It's never worth it.
Hopefully things here will get back to normal in the near future so I'm planning on being part of this.
07-19-10, 03:26 PM
Automation will not be used if it cannot do a better job than what we can do by hand. Machinery can be a good thing; but I agree- not in all situations or applications.
08-06-10, 02:49 PM
I think you should talk to Tony At North Texas Performance about setting up the shop... Dallas is central to everyone in the US. I have already told him that he should be working with you for referrals.
He is small enough to where this would benefit both of you.
Worth a thought
08-06-10, 04:39 PM
Yep. Really huge gamble to do this in the location you have specified. Location, location, location!
Wish you the best of luck though, dude!
08-07-10, 01:20 AM
I cannot discuss any plans publically online anymore. At least not for now. But Manitoba is a wonderful second location- do some area reasearch and you'll find that with the CN Railway running East/West and also South into the USA, and also the low utility rates and Winnipeg with a population of over a 633,000 people, it's not a bad area at all. Calgary/Edmonton Alberta is within roughly a 12 hour drive, Ontario is 4 hours away, Grand Forks, Fargo, are close by and also The "Twin Cities" of Minnesota are only about 6-7 hours away on I-94. I already have set up an account with CN Rail for vehicle shipments and I'm getting car dealers' rates.
And what I was saying before about farmers having Cadillac's parked in the garage, that is very true. The Prairies and the Northern USA is farm land. Next to the old trusty John Deere, often sits parked for the weekends, a Sedan DeVille..... farmers are careful with their money and take pride in their hard work. What better way to show it than with a nice vacationing/cruising car! Winnipeg is very industrious and business-oriented but they still haven't lost the understanding that people come first before the bottom line.
08-09-10, 12:58 AM
I never understood how the Canadian farmers are always dressed well and drive nice cars. Most of the farmers that live around me drive beat up trucks and are always in work clothes. From them I learned an old saying about farming - "You live poor and die rich".