Industry sector:

Classic car restorer: Cash sales


'Cash sales' means all income received at the time that the customer comes to pick up their vehicle - or before, for example in the form of a deposit. While some of your customers may pay you in cash, remember that Cash sales can also include:

  • debit and credit card payments
  • cheques
  • electronic bank transfers

To prepare your cash flow, you need to estimate how much income you will receive over the next 12 months, including VAT. To do this you will need to estimate how many vehicles you are likely to work on and at what price, together with an estimate of how much you will receive from any other services you decide to offer.

There are a number of things to consider when you make your estimates.

Type of business

Give some thought to the details of what your business will be like and how it will operate:

  • who will your customers be
  • the size and location of your premises
  • what type of work will you undertake

Your services

The type of work undertaken by classic car restoration businesses is quite varied. Decide whether you will:

  • specialise in the complete restoration of rare and valuable vehicles (projects which may take months or even years to complete)
  • carry out more straightforward work, such as mechanical repairs, welding work, or general servicing
  • concentrate on a particular type of work, for example engine rebuilding, suspension overhauls, interior refurbishment and re-upholstery
  • specialise in a particular make or model of car
  • offer general paint spraying services
  • carry out modifications (for example fitting cylinder heads suitable for unleaded petrol, uprating braking systems and so on)
  • offer a range of these services for any type of classic car
  • sell classic cars and other vehicles (perhaps restored vehicles and restoration projects)

Pricing

Think carefully about pricing:

  • what will your pricing policy be (you must be able to cover your costs, overheads and drawings)
  • how will you cost general repairs and small jobs
  • how will you cost long-term restoration work
  • how often will you review your prices
  • will you offer discounts, special offers and so on

To help with your decisions, click on the checkpoints for guidance. Once you have worked out a Cash sales figure add it to the relevant field in your cash flow forecast.