Starting a business, finding investors & making business plan

[momxx5]

Has anyone undertaken the task of starting a business. Actually this would be more like opening a business store type thing.

There is nothing like it around here and there is a need. I can see it happening and I'll miss out.

The #1 thing holding back is investors. DH lost his job that ate our savings and we simply do not have access to the kind of money needed. However it would be a great partnership and success.

We live in central NC and to many people this is a great place to live, so an investor would not neccessarily need to be local. There are 2 business men in the area that seem to "own" everything. I was contimplating speaking to one of them.

So, anyone from the boards ever do this?

Thanks in advance.

 

[KimFIGFern]

Please be careful. Dear friends of us started a "store" type business and within 6 months they were thousands of dollars in debt without making hardly any money. Their clients were their friends and when their friends didn't buy any more, they were sinking fast. I would really think this through in this economy ... IMO.

 

[momxx5]

I know I should clarify but I am hesitant to say exactly what it is, I just know someone is going to jump on it.

It is not an actual store...not items to buy. It is more like an activity/sport type thing. People drive 30-40 minutes away for this and I know there would be a use for it.

I was hoping that the economy would be helpful as in doing this less expensively now and then be all set when the recovery happens.

Also, does anyone know it grants/government funding is available to first time businesses. I know we'd probably be incorporated so not sure if it would personally help us on taxes.

 

[lastminutemom]

Go to the public library and check out books on writing a business plan. Get one that guides you through the process of the plan step by step. Look for other books on starting a business as well. Once you get the plan done, then you are ready for the next step. (Doing the research for the plan should help you figure out if it is worth it to proceed.)

SCORE is a wonderful resource.

http://www.score.org/index.html

The Small Business Administration can be a good resource as well.

http://www.sba.gov/

BE VERY CAREFUL not to fall for scams about free money for business, give us $49 and we will get you grants kind of things...

In my community, our county commission sponsors workshops on starting a business as well.

Some things will be less expensive, but borrowing money right now can be very difficult. I would work up a plan to start with as few expenses as possible.

Good luck!

 

[AnninIowa]

I second contacting your local SBA and SCORE offices - they helped me start my home-based business 5 years ago! They are free and confidental, too.

 

[Blue.Fairy2]

I know I should clarify but I am hesitant to say exactly what it is, I just know someone is going to jump on it.

It is not an actual store...not items to buy. It is more like an activity/sport type thing. People drive 30-40 minutes away for this and I know there would be a use for it.

I was hoping that the economy would be helpful as in doing this less expensively now and then be all set when the recovery happens.

Also, does anyone know it grants/government funding is available to first time businesses. I know we'd probably be incorporated so not sure if it would personally help us on taxes.

Why do you need a store front and investors? If you have nothing to sell start small and work out of your home.

 

[KKB]

Investors are difficult to find..and even more so in this economy. And you lose a portion of personal control when you have investors. Additionally, investors are unlikely to be interested if you have no money of your own to invest. Do you work? An investor would not be interested in investing in someone who has no income.
I owned a scrapbooking store for 3 years. I did this with a partner and we went about $75K in debt to do it. We came in JUST as the scrapbooking business was taking off. There was one store in town and we opened ours on the other side of town. We literally opened with nearly every product available on the market at the time. The first year went well. Then the second year we opened a second store in a city 60 min. away. 2 weeks before we opened another store opened a few miles down the road; then a month after we opened ANOTHER store opened a few miles in another direction. ouch. That store never did the business of the first store (and it is in a bigger city)--not the loyalty of our first store.
After 2 year 9/11 hit and our sales took a hit of 30% immediately. People were scared of losing jobs. Still came in, just spent less. Then over the next year our sales slowly dropped 30%...due to road construction right in front of the store and another store opening less than a mile up the road (plus Michaels & Hobby Lobby were deep into the business by then--we would sometimes be able to buy product cheaper there than we could order from manufacturers!)
Needless to say after 3 years we were only bringing in enough to pay the fixed bills...but a store needs new product. And the amount of product on the market had exploded & there was no way to have it all (and scrapbookers want the newest NOW & will go wherever they can get it).
We had to make a very difficult decision to declare bankruptcy. My partner & I do not speak (she felt she was entitled to a share of the very little cash left after all was taken care of even tho DH & I had dumped $7K of our personal savings the last few months in an attempt to save things).
BUT IT WAS THE BEST DECISION I EVER MADE TO GET OUT. I got my life back. My DH was a saint...he did WAY more than his 50% of parenting and household duties during those 3 years. And a business is 24/7. If you aren't physically there, you are mentally. The hard part was as we got busier, I had to spend all my time on bills, ads, orders...not working w/ customers or actually scrapbooking.
Don't get me wrong--obviously many people own businesses and very successfully. But 4/5 businesses fail w/in 5 years.
You may legitimately see a need...but others will quickly follow your lead.
You need to ask yourself:
Can I afford to have this business fail? (it was hard, embarressing, but we have gotten through it--we still have our home & are debt free)

 

[Blue.Fairy2]

I am sorry you had a bad small business experience.

Our families decision to start a family small business was the best thing we ever did we have been in business for over 25 years now and have never advertised(word of mouth only)and so far in this economy our business has shown no signs of slowing down in fact it has even picked up a little being that people are holding on to the antiques they have and having them restored. I finally convinced my DH of his worth and he has increased his prices exponentially in the last 2 years.

Any small business is a risk you have to decide if it is a risk you want to take or not.

We have never regretted our decision, it gave our family the freedom we want to live life in our terms.

 

[4Seasons]

I second contacting your local SBA and SCORE offices - they helped me start my home-based business 5 years ago! They are free and confidental, too.

I third the recommendation. SBA favors women and minority-owned businesses. But you will need to go in prepared with your business plan in hand.

Also remember, you are reluctant to share your business idea, yet if you approach a private investor in your area you will have no choice BUT to devulge your idea. If you are worried about someone "stealing" your thunder that might not be the best approach.

If you really want to do this I think you will likely have to shoulder 100% of the financial burden, either thru SBA loan or personal credit.
Since you will not have inventory, it seems like your startup costs will be store space, utilities and probably some type of equipment. I assume your family will be the employees? Equipment can typically be financed. In this economy you can likely deal with a commercial landlord on terms (at least in our area, there is a TON of empty commercial storefront space). Utilities may take an upfront deposit to get turned on. Don't forget about liability insurance, and I'd highly suggest going the LLC route if at all possible.

I hope it works out for you. I watched a documentary last night on J.W. Marriott. It was fascinating. He came from literally nothing, did not finish high school (although he did go to college), and basically his path to fortune was recognizing a need before anyone else and filling it.

good luck!!

 

[KKB]

I am sorry you had a bad small business experience.

Our families decision to start a family small business was the best thing we ever did we have been in business for over 25 years now and have never advertised(word of mouth only)and so far in this economy our business has shown no signs of slowing down in fact it has even picked up a little being that people are holding on to the antiques they have and having them restored. I finally convinced my DH of his worth and he has increased his prices exponentially in the last 2 years.

Any small business is a risk you have to decide if it is a risk you want to take or not.

We have never regretted our decision, it gave our family the freedom we want to live life in our terms.

I have the utmost respect for those that have successful small businesses--I know the hard work. It was wonderful for the first year...and pretty rough the last year.

OP has no cash and no income--trying to bring a bit of perspective to the situation & help see the very real risks.