Car enthusiast Bill Hemming has paid a lot more than expected to get his Elfin car company running. But the ledger is not all one-sided - there's passion too.
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Entrepreneur: Bill Hemming, Managing Director
Company: Elfin Sports Cars Pty Ltd
Business type: Designers and manufacturers of sports and racing cars
Founded: 1998 (Purchased)
Head office: Murrumbeena, Victoria
Contact details: +61 3 9563 7811
The Elfin Sports Cars Story
When marketing professional and historic racing enthusiast Bill Hemming teamed up with car-restoration specialist Nick Kovatch to purchase the Elfin Sports Car company, he knew they had found their “love child”. The 40-year-old company was moribund, but it was to be a passionate hobby - not just a business.
In negotiating to buy the company, Bill concedes that he and Kovatch probably let their hearts rule their heads. He says they went “a little bit over” what they should have paid. However, if they had known about the bureaucratic minefield ahead of them as they ran the business, they may never have bought Elfin. It has been an expensive hobby.
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Key learning points:
- Passion dangers - Beware the heart ruling the head when a hobby becomes a business.
- Serendipity - Only serendipity can save you when you do things for all the wrong business reasons.
- Passion benefits - Indulging your passion is a great tonic for a mid-life crisis.
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Hemming says: “If you took the time involved, buying the company, getting all the engineering done, building the prototype and all the development costs, it would be the best part of half a million dollars.”
Keeping Elfin running has been a strain on Hemming’s other businesses, which include a marketing company, a timber treatment plant and a cattle farm. He says: “I am spreading myself a bit thin, and while I knew that this was going to be a labour of love, I have proved to myself that you should not let your heart rule your head.”
But Elfin - the name denotes “a small spritely creature possessing magical powers” - eventually began to run true to its name. There was a pent-up demand to have Elfin resurrected. After editorial coverage in the August 1999 issue of Australia's Unique Cars magazine, twelve vehicles were ordered locally - half the permitted annual local sales quota - the limit set by the Federal Government on the number of non-production-line vehicles which may be sold within Australia by any one manufacturer. Then the Japanese Trade Relations Organisation, in search of potential imports to help Japan's trade imbalance, sent a representative to visit Elfin. The result: free showroom space in Tokyo and the potential for fifty sales a year into Japan.
There have also been approaches from keen investors and an offer to purchase the company at a premium to the price Hemming and Kovatch paid for it. Hemming is convinced of Elfin’s potential to make a reasonable return on the initial investment.
Hemming says: “The success of it took us by surprise because it really was a hobby thing. If you are resurrecting a business, you can usually put a lot of faith and store in the goodwill, but in this case, Elfin had been out of business for quite some time - nearly twenty years.”
Hemming’s main business - the marketing company - has been very good to him, but he says marketing is a young person’s industry. He says: “While I’ve got a real use here and (touch wood) we’ve been going eighteen years and have not lost money, it’s not as enjoyable as it used to be because you have got to pretend to be young.”
Hemming says that indulging his passion by taking on Elfin has been a tonic for a mid-life crisis. “If I lost everything else but had that, I would die poor but happy. I guess the older you get, the more important that becomes.”