[NZ supercars]

Looking at the most optimistic numbers... 30 x high average $40K members upfront.

$1.2 million NZ dollars revenue - year 1.

Need to pay for cars, insurance, running costs, service, cars, service, service, cars, salaries, service. Need a website, booking engine, service logging app, car monitoring etc etc...

Duncan - what year does the club make you money in your rough calulations?

Hi Allan - obviously the big unknown is how many memberships I can sell.  At the moment, break-even is between 60-70% "occupancy", depending on how I finance the start-up costs.  So if enough people sign up, I can show a profit in the first year.  If not, I'm going backwards fast, because many of the overheads don't vary that much even with low membership.

Any business can make money if you can sell enough product at the right price.  The bit I'm still uncertain about, is whether I have a product people will want to buy...

[M308]

Any business can make money if you can sell enough product at the right price.  The bit I'm still uncertain about, is whether I have a product people will want to buy...

I think that is everyone's concern here as well

[j15]

The Supercar club in Sydney that folded with so much press was very financially viable.

I respectfully disagree.

If you read the Supreme Court judgment, you will find that at it's peak, the club had 100 members. If you use Al's average of 40k a member (admittedly hypothetical), that means revenue of the club at its peak was $4million p/a (and Sommers himself admitted they had a massive cash flow problems because memberships were sold on payment plans, not on up front payments).

Now factor in that all the cars were leased, the cost of renting two warehouses (one in Syd and one in Melb), fuel costs, staff, servicing a fleet of exotics, the cost of updating that fleet with new cars regularly, etc. etc., it would seem that not alot (if any) would be left over.

As a business proposition then, it doesn't seem viable (especially when start up costs would be in the many millions). Even though the Aust iteration of the Club went under for varying legal reasons, I still think that if you ran it as best you could, you'd find it immensely difficult to get any return on the investment for a long time. Again, if you read the judgment about the Aust Club, there are references to the club's financial position and business plan, and with the benefit of hindsight you can see alot of pie in the sky ambition (I recall reading something about anticipated revenue of $34 million from a plan to expand into the middle east, for example).

The only way a business like this appears to make remote sense is if a multi-millionaire wants an interesting side project, and is not too concerned about what it may cost him. It is doubtful that it would make an upstart entrepeneur rich though.

[allanuber]

Well written. All makes sense.

I reckon the go is to go buy 8 Ferrari 360's. All pretty. Will age well. Would look AMAZING on the road. Cheap enough. One lot of parts, one service human...   

[tentacles1]

If you are genuinely starting this business, buy the following car:

http://www.turners.co.nz/Vehicles/Pages/Car.aspx?RefId=873333

[allanuber]

If you are genuinely starting this business, buy the following car:

http://www.turners.co.nz/Vehicles/Pages/Car.aspx?RefId=873333

Is that driveable on the road in NZ?

[anotherforumuser]

I respectfully disagree.

 (and Sommers himself admitted they had a massive cash flow problems because memberships were sold on payment plans, not on up front payments).

The only way a business like this appears to make remote sense is if a multi-millionaire wants an interesting side project, and is not too concerned about what it may cost him. It is doubtful that it would make an upstart entrepeneur rich though.

I respect your disagreement, Id normally agree except for some inside knowledge.

Put those two together and you have why Sydney wasnt viable and why it was viable...
It had the money, not the management.   

[tentacles1]

Is that driveable on the road in NZ?

I would assume so, most things are in NZ. Can even register LHD cars from new there now too. A toy for you to use on holidays maybe?

[adam01]

Another factor is what externalities are likely to impact on projected cash flows.

Whilst the economy is buoyant, membership uptake can be punted, allowances should be made though for economic shocks ie GFC that contract discretionary spending, resulting in a big hole in the budget. Allow for say 1-2 years at 50% of your targeted numbers with fixed/semi fixed costs remaining steady, what does your profitability picture now look like and is the business sustainable during such down turns?

[Paulstar]

I reckon the go is to go buy 8 Ferrari 360's. All pretty. Will age well. Would look AMAZING on the road. Cheap enough. One lot of parts, one service human...   

 :scratchchin:This could even work, you could put a few wrecked 360s aside in the corner as and when they come up for sale and use them for spare parts.

Club 360 Sounds kinda nice