"The problem was getting rid of ugly cars taken as trade-ins" - Gavin Smith, Dealer-Auction.com

Two Toyota car salesmen with young families had a good idea for making money.

The proposal had been discussed and refined over and over again.

What was hard was making the jump.

They both had to give up a steady income, start paying website design bills and live off fresh air to make the transition to entrepreneurs.

But when the moment came they were up to the challenge.

They reassured their wives, made the break and cranked the handle.

Dealer-Auction.com is not only up and running, paying the bills and generating money for their customers – it is paying them a living.

Gavin Smith saw the problem before he saw the solution when he was working for Toyota as a salesman.

The problem was getting rid of the ugly cars taken as trade-ins.

“For years we put all the hard work into selling new Toyotas. The trade-ins were sold out to the trade for whatever they owed us.

“For all the years I was in the new car business we did nothing more than get rid of them and get the money back that they owed us.”

The solution to the problem was no prettier than the problem. The dealership would have a small number of preferred used car traders: one to take the under-£1,000 cars; one to take the over-£3,000 vehicles and one to take the rest.

“It was always frustrating on a Monday morning. Someone would turn up when you were busy with a customer and make an offer which you would accept.

"Later in the day someone else would arrive for whom the car was ideal and they would have paid £300 to £400 more.”

Clive Colyer, his partner in Dealer-Auction.com, had been working in the same Toyota dealerships, but had a different focus.

He was more concerned with how to source the cars the dealership was happy to sell to its customers.

Between them, they thought there must be a better way. The business model they could see that might achieve the objective was Ebay.

Chance then played a part. They knew Neil Farr, a computer whizz who had bought a couple of Toyotas and lived nearby.

They called him for a chat and told him they had an idea.

Their idea was that they would solve the problem they had found in their ow dealership for all franchised dealerships.

The model was obvious enough –  they told Farr they wanted “an Ebay for the franchised motor trade”.

Farr had his own company with a wide range of software expertise. He started work on a disposal system that worked like Ebay with the best bid at the close of play winning the car.

But he also solved the cash-flow crisis for the would-be start-up entrepreneurs.

He saw the virtue in what Gavin and Clive were planning and took equity instead of cash. He is now a 5% shareholder in the company.

“We plucked up courage and put our suits on and approached two Inchcape buyers,” said Smith.

The early reaction was mixed.

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