Should I buy a wrecking yard?

Of course I should, this is grm, as if you guys won't enable someone who wants to buy a junkyard. Even my parents and partner are fairly positive towards the idea.

Seriously though, would buying a junkyard be a bad idea? Can a reasonable income be made from a small yard if done right?

The yard in question is on 2 acres, with included living space and in the price range my partner and i want to spend.

Im a qualified mechanic, my partner is an accounts clerk and would be able to do the books and sort out online sales and shipping. The yard itself is Registered, and zoned appropriately, and has been around as long as I can remember.

Based on one of Australia's busiest highways, it would also provide a good reason to have a tow truck/flat bed which could provide additional income as a breakdown recovery service. It also gives me great acess to being able to ship complete cars meaning repair/flipping cars is also a potential income.

The place comes with an interesting inventory, Which although in need of thorough sorting and clearing provides a good starting point. Its then a case of wether to specialise in a particular area or wether to keep it a broad but fairly common car wrecking yard.

Id be under 4 hours from the largest city in Australia, providing good access to auctions, junk cars and a good buyers market. Its 2 hours from the nations capital, has 2 major regional centres within 2 hours and is about 5 hours from australias second largest city.

I don't know wether I need to be talked down from the ledge or be shoved face first into the abyss, but owning a wrecking yard presses alot of my buttons.

Oh, did I mention the place used to be a roadhouse? So as such also comes with a functional coolroom and a commercial kitchen. (Cooking is one of my life's other big loves)

I'll stop rambling and try and gather my thoughts. I need to go and do some research.

So, have you made an offer yet?

A well run and interesting wrecking yard seems like such a perfect GRM sort of business. It may well become my retirement gig when I finish my career.

I wish you good fortune sir!!

EastCoastMojo wrote: So, have you made an offer yet?

Im about to hide my phone so I don't do something stupid.

KyAllroad wrote: A well run and interesting wrecking yard seems like such a perfect GRM sort of business. It may well become my retirement gig when I finish my career. I wish you good fortune sir!!

Its the well run part that worries me. Im trying to figure out how you run a wrecker well. Other than that, it ticks so many boxes for me that I'm having a hard time seeing how I can't make money from a yard that I'd own outright.

Thanks for the well wishes, I feel like a kid in a candy store.

Next best thing to living my dream is reading about other people living my dream. Go for it!!!!

"Im trying to figure out how you run a wrecker well."

I think you may be over-thinking this. Wouldn't it just boil down to (1) Know what you have on the lot and price it fairly (2) Don't lie (3) Help people when you can?

I believe there have been threads on here about both good and bad JY experiences, and you yourself probably have a few. "Govern yourself accordingly," as they say.

Oh, and most customers will have to drive a couple of hours to get to you, right? Providing good, simple food (if you can get a permit to do so) would probably be a great business booster, assuming you also provided heavy-duty hand cleaner in the washrooms.

sirrichardpumpaloaf wrote: Next best thing to living my dream is reading about other people living my dream. Go for it!!!!

Thanks mate, we'll see how things go. :)

In reply to Stealthtercel:

There's a good chance I am overthinking things, pretty sure I started overthink when I realised there was a wrecking yard for sale that I could afford.

When you put it like that, its fairly simple. Id like to think that would be how I approach things, but I'm concerned its size and location is going to need more than just visitors to the yard to make it worth it.

The food idea is pretty cool, a junkyard cafe sounds like the kind of place I'd like to see.

Stealthtercel hit the major points pretty well. Every pick n' pull yard I seem to frequent in the US has no idea what is actually on the lot which mostly leads to frustration on my end because I need to actually walk the yard to figure out if the part I need is there. Most of the yards which don't allow visitors to pull their own parts seem to have a better handle on the inventory but it always seems to be next to impossible to actually search their inventory online so I have to call them individually.

Its made it to the point now where I'd rather just pony up the money for new parts off Rock Auto or Amazon than spend hours of my time attempting to save a few dollars on a random part. Engines for a swap are obviously a different story but I'm generally trolling for some random bits and pieces in addition to the central item.

So yea, handle on the inventory and the ability to advertise said inventory would be a huge boon for people like me to actually show up at the yard even if its a bit away. Food helps too.

Also: Do it!

Do it.

In reply to daeman:

I think you could make a living selling/shipping repairable 25+ year-old utes to US GRMers.

In reply to Stealthtercel:

There's a street in a neighboring town where all the businesses become bars in the evening. I've not been there myself, but I remember a florist shop mentioned specifically. So food for jy patrons would be good, but a themed destination roadhouse could become more profitable than the yard...though realistically it's unlikely you'll have the time & energy to run both it & the yard.

set your cash making strategy to not emphasize the yard activities, but the ancillary activities.. Use the yard to make some regualar cash, but make most of your cash from the flipping or parting out of interesting stuff business. No reason you can't be on the interwebs and ship worldwide.

One of the easiest things you can do at this point is talk to other owners and see what their experience is, (keeping in mind don't go to the ones around your area and ask questions, just spy on them) how they get by and some first hand experience that's not coming from someone who is trying to sell something to you.

Good luck with everything and I hope to get a holden ute from you in the near future

Fueled by Caffeine wrote: set your cash making strategy to not emphasize the yard activities, but the ancillary activities.. Use the yard to make some regualar cash, but make most of your cash from the flipping or parting out of interesting stuff business. No reason you can't be on the interwebs and ship worldwide.

This. Online sales on special/rare parts would be helpful.

daeman wrote: The food idea is pretty cool, a junkyard cafe sounds like the kind of place I'd like to see.

Not Quite a junkyard café but close. http://www.kennyupull.com/en/other-prods#snack

I also like that place because I can check vehicle inventory online http://www.kennyupull.com/en/car-parts

And I can check prices http://www.kennyupull.com/en/price-list

Can't believe I didn't think of this before, but... if you do end up going with the food idea, put up a sign that says Great Reasonable Meals. (You could make some sort of deal with Tim to use just the initials.)

I was gonna say focus is very important for a small business. And unfortunately that means getting a junkyard and roadhouse off the ground at the same time is pretty unlikely. Unless you have an experienced hand to help you. But employees might make it even harder to make money!

Don't overlook how much work each element will be. You'd essentially be starting two complete businesses with all the work that goes in to each. There's not a lot of overlap between a junkyard and a restaurant and bar.

Still, it would be cool.

Dive into the environmental and worker safety responsibility aspects of owning the yard before you make up your mind.

If it is a yard where the public gets to harvest their own parts, what kind of insurance is carried on that?

I am assuming there is some kind of staff associated with the business. Do you have any experience with managing staff? Adopting staff is like adopting an older cat; not without its own issues.

A lot of small business sellers try to close the deal by mentioning the "Cash sale" side of the business in order to mitigate the book profits (lack there of) best not to put much into this.

Is there pending legislation that you should be aware of?

Think of your scrapyard as if it were a farm. How many acres do you have, and at the end of the year how much per acre did you earn? Might be easier to plant corn.

Oh! Another idea: is the roadhouse area separate from the house and junkyard offices? If so what are the chances you could lease it out to someone, rebating their rent for a period to offset startup costs? Or go partners with someone that has experience and give them partial ownership of the restaurant business (not the real estate) in exchange for getting it running with you?

There are lots of creative ways I can think of to get it running but they all involve finding outside talent. The flip side to that would be you run the restaurant and someone else runs or helps run the junkyard. I don't know which one is your greater love.

Every business looks easy to those who have never done it.

Have you ever run a business, or worked in a wrecking yard?

I'd want to know about liability insurance, governmental environmental controls (in the US it would be EPA regs), and that the property got a clean bill of health environmentally. If it has been run as a junkyard for a long time, it's very likely it's a toxic dump, AND that it is getting in the water supply. In the US, you'd be required to clean it up as the new owner.

No offense, but the LAST place I'd want to eat is in a junkyard.

As far as I can tell, value is NOT in used interesting cars and inventory. Value is in rolling parts over quickly for insurance claim work on late model cars, which yards generally buy at auction. The old crap sitting on the yard is just what was left over that they couldn't sell.

I would do my homework, and not turn to a bunch of Internet enablers with stars in their eyes who drool over cool old cars.

Oh, I first thought you were looking at the one I posted about a few days ago.

Enviromental issues would concern me.

Insurance and waste stream removal need a serious look!

I just know if you want a decent head for a 3.3l i6 ford you either try to track down the NLA very short run classic inlines aluminum or you cry and pay shipping for an australian head!

Dooooo it.