Saturday, 27 August 2016

The Perfect Storm



Things were going great and that’s always a bad sign for me. I am a big believer that if things can go wrong they will, and if it wasn’t for bad luck, I wouldn’t have any. Sometimes its so hard and painful to look back to where things went wrong, but in my case it went wrong when things couldn’t have been going any better.

A few years before I had installed an interactive web cam on my lot, a guy who was working in Dubaii had been feeling a little homesick, and had searched Preston Webcams on the internet, he found mine which was just up the road from where he lived and he looked at my stock, saw a car that would suit his Wife, rang me from Dubaii and paid for it over the phone.

His only condition was that I would deliver it to his house, not a problem as it was just round the corner. When I drove the car round I discovered it was in the same little Close as my Dream House it was a house I had wanted to buy when it was first built, however at the time I couldn’t complete because I wasn’t able to sell my House fast enough and another couple had beaten me, You snooze you lose!
I mentioned this to my customer, and several weeks later I got a call out of the blue from her. She told me that things weren’t so good with the people who had bought the house that I had wanted, Hubby had been caught playing away, they were splitting up and selling the house, would I be interested.

Business was great, I really wanted the house, I could get it at a knock down price as the present owners could avoid Estate agents fees too. I wanted it! I had a great relationship with my Bank Manager and rang him to discuss a bridging loan until I sold my old house, he suggested that I actually keep my old one and rent that out, the rental income would easily cover my present mortgage and also give me an extra income he was right it seemed to be a no brainer. I had an overdraft secured against my old House, but he assured me that wouldn’t be a problem, and if I needed I could increase my limit to cover the capital that I was withdrawing.


I felt sorry for the Lady who was selling the house, she didn’t want to go, she had a great taste in décor and the house was beautifully furnished, She needed money to put down on a place that she had seen and she didn’t want to miss it, so I agreed to pay her £2000 up front in exchange for leaving a few items of décor, sadly her Husband still had a key and he removed most of these items before I moved in, argh well I wasn’t too bothered, I had got the house that I had wanted.

As reconditioning costs were spiralling, cars were becoming harder and more costly to fix, up until buying my new house my goal had been to reinvest the money I was making in tools and equipment so that in time I would be able to move to bigger premises, with my own fully equipped workshop which by then would be fully kitted out.
I had bought a state of the Art Diagnostic Scanner and a fully automatic Air Conditioning Machine.

I had a full set of Interior Trim and Upholstery Smart Seat And Plastics Repair Equipment and had Imported the best set of Dent Tools that were available from America. I was also busy taking every course that I could get on and learning how to use them to their full potential, My plan was to become proficient and self sufficient In all the tasks that I was spending a small fortune on at the moment, if I could cut my reconditioning costs, repair times and vehicle preparation times my profits would grow, or as the saying goes look after the pennies and the pounds will look after themselves.

Everything was going great, the only thing that was stopping me making more money was space, my Portakabin was taking up valuable real estate I could get another 3 cars on my pitch if I could get rid of it and then a chance conversation with the person who owned the house adjacent to the garage, gave me an idea, he told me that he was thinking of selling his house, my brain went into action if I bought his house I could 86 my cabin, have an office in the house, 3 more cars on the main pitch, 3 more up the drive of the house, and a place to store Sold and in Preparation cars. 


As the Internet grew so did distance sales, with my Car Videos and Video Test Drives I was attracting customers from a lot further afield and I knew I could sell a lot more if I could overcome their objections to travelling. I had plans to use the rest of the house as a guest house, the ideas came thick and fast, give them a choice, get them tickets for a show at the Guild Hall, or I would negotiate a deal with a local restaurant, I would make buying a car off me like a weekend break.

if you don’t like my car what have you got to lose? Worse thing that could happen is you get a night away with your loved one or your Wife, in Sunny Preston, go and see a show, or have a nice bottle of wine and a meal for two in a local restaurant compliments of BC Cars, next day you get to drive home in your nice new car, or your old one as the case may be.

I rang my Bank Manager and pitched my idea to him, he liked it and readily agreed to help me fund it, I couldn’t afford to take any more capital out of the business to buy next door so the only alternative was to sell my rental property. The extra cars that I could stock on the pitch and the projected increase in business would more than offset any lost rental income so the next day I put my old house on the market. 

My Bank Manager was brilliant, he had helped me get started in Business and he had helped me grow, he absolutely couldn’t do enough to help, he assured me that as soon as I sold the house he would seamlessly transfer the Banks security charge to my New House.

There’s a saying in the Army that battle plans never survive contact with the enemy, and I should have known that things were going far too well. It took me a while to sell my house, I had signed the contract so there was no backing out of the deal. However in the time it took me to sell it, my Bank Manager had been promoted, he had introduced me to his replacement and apart from having a handshake like he was passing you a wet fish he seemed ok.

I rang to tell him that the money from my house sale would be coming in to my account, (it had to be done that way as they had a charge on it at the Land Registry as security for my Overdraft the Solicitors had to send it to them). 


When it did I would be using some of it to pay a deposit on the House next door. Instead of extending my overdraft I would also leave some in the account so that I could then buy more cars and fill the extra sales spaces that I would create.

There was a silence at the end of the line, and then he said “I’m sorry I cant do that” “Cant do what” I asked. Transfer the security to your new house, erm why not your Predecessor said it would be no problem. Perhaps it wasn’t then but it is now, first of all we would have to have your House valued, that would be £1500, then we take 75% of the Valuation, Minus the amount of your Mortgage, then whatever that leaves we can lend you a percentage of.

Being the reasonable type I told him what I thought.

Long story short, I had lost the rental Income of my 2nd house, and I had now lost my overdraft too, My cash flow was decimated as although there was enough to pay off my overdraft, I was now working without a safety net, and technically I couldn’t afford the cars I already had, I had had a great quarter and would soon have to pay a big VAT Bill, this would take another 2 cars off my pitch and make it harder for me to earn enough money.

My old Boss used to say “Don’t talk to me about Banks, they lend you an Umbrella when the suns shining, but when it rains they want it back”

My Bank took my Umbrella back during a prolonged heat wave, but I would soon be engulfed in a Perfect Storm.


That was my first set back and although it wasn't a coup de grace it seemed at the time it would have been kinder if it had been, over the next few months I was hit with one blow after another. it was about that time that the recession started to bite in Preston, and I was about to fall victim to one of my other brilliant ideas too. 

Long before Finance figures became virtually standard on Car Dealers Websites for which the rates, APR's and  Monthly Payment Figures are populated automatically, I'd had the idea to add them to my site which I'd built myself. In each description I showed Finance payments for 24, 36 and 48 Months, each one of these had to be worked out individually and manually entered into the html coding on my website. 

It was a lot of extra hard and time consuming work but Interest Rates were pretty low and I found that I could save customers money on their monthly payments from what they would be at any High Street Bank and still make good commissions, whilst I have never been one to shoehorn someone in to an "Payday Loan Interest" agreement, I was fair and it was another welcome source of income for me.


My terms and conditions with the finance company stated that if an agreement was settled after at least a 3 month period had expired there would be no commission debit backs. However it also stated that if the customer went into arrears or defaulted completely they would take it all back (pretty standard clause). I went through a period when I was frightened to open my mail as it seemed like every customer I had dealt with over the last 3 years was having financial problem, and the Finance Company wanted their commissions back from me. It was a tough time for me and I remember opening one letter which showed that I owed them £2500 pounds in clawed back commissions. 


If you’re in the motor Trade and things aren’t exactly going your way, please get in touch. I may not be able to help but I am a good listener.

Theres nothing to be ashamed of as in my opinion "If you've never failed, you've never tried anything new" 

My advice to others, when things do go wrong, sometimes you can’t see a way out, its not pleasant but “what doesn’t kill you, makes you stronger.”

I may have that put on my headstone :-)

Barrie Crampton 



If you think you may need professional help, give Ben "The Automotive Industry Charity" a call !




2 comments:

  1. Replies
    1. Thanks Mathew, that happened a few years ago, had to put the wagons in a circle for a while but im still here :-)

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