Short of winning the lottery, how does anyone aquire the money to start a fairly large business?

I go to breakfast every Friday morning with a good friend of mine and we usually sit for an hour or two talking about life. We always end up talking about business ideas. It usually starts with a small idea and then our imaginations kick in and we develop a really good idea. The only problem is that our ideas usually need startup money that niether of us have. If I really buckled down, I could probably save $20K in two or three years and if I had to I could get a home equity loan, but that isn't enough for the 20% down required by most business loans. Even a decent sized carwash costs a cool million. It would take a lot of years to come up with $200K.

We've thought of a carwash- too much startup $$$
A mini-storage or RV/Travel trailer storage- Commercial land over $250K per acre! Too much $$$
A Family Fun Center- Too much $$$

I sure wish I knew how all these successful business owners in the world got started. IMO I have a lot of good ideas but unfortunately I'm not independantly wealthy so it seems that I will never be able to act on them.

 

That's how they come up with money. On a Grand Scale look at Donald Trump. He would not be where he is today with out having established many partnerships. It's a great concept called O.P.M. (Other Peoples Money). Your right on the money. Short of winning the lottery no one would ever have enough money to start up a large business. Just remember most new businesses fail in the first year. That's an unfortunate reality and the reason why getting enough start up capital is so hard. As far as a home equity loan, forget about it. You would'nt want to gamble with your house. I see to many people with great ideas use there homes as leverage and then lose them. On the flip side of the coin remember the phrase " Nothing ventured, nothing gained". Good Luck. At least you have the creative mind required to be in business. Try to start small and work up from there. And a great resource for you should you have an idea that becomes a reality is a group called SCORE (Service Corps Of Retired Executives) They are an invaluable resoource when you need to devise a business plan. You can look them up on the web. They also have some toll free phone numbers to help new business owners. They are just as there name indicates a group of retired executives offering there advice for free. If you speak with them they will open your eyes to many things you would have never even thought of. Sorry for the long winded post. Good Luck. And remember all great ideas started with one simple idea.

 

I was just reading in my office (flushing sound) the March 2005 issue of Petersens 4wheel & off road about opening up a new business. The add is for "Offroad Inc. It's a Texas company that is looking for people who want to start their own business. All offroad equipment. I have not researched it at all, but they say that they can be contacted at 1-800-809-6088 or log on to www.offroadinc.net.

If you like doing this kind of stuff, they may help with the $$$ end of things to get you going.

Good luck,
Tom

 

Thanks for the reply.

I have heard of SCORE. They are mentioned quite a bit on the Small Business Association's web page. I'm planning on taking some SBA business courses when I get done with my Business Management Degree in about a year. I wouldn't have time to do anything until then anyway, but maybe they will turn me on to some investors looking to get in on business ideas. I do plan on starting a very small side business when I get done with my degree, which primarilly will be me and my labor. It may bring in an extra $15K-$25K per year. If I invest this money wisely I may be able to use it for a startup in the next 5 years. I'm only 31 so I have time, but I get restless when my wheels start turning on an idea.

Thanks again for the advice!

 

That is intersting! (BTW- My office makes that flushing sound too!) I haven't thought much about retail, but it would be nice to get all those products at cost... WOOHOO! I'm curious about how much money is "...very minimal expense."

There is competition here for that. We have a Desert Rat and a Trucks Unique here as well as a few small locally owned 4x4 shops.

 

Keep those wheels turning and be prepared to take risks. As I look back with the 20/20 vision of hindsight, I find that I have few regrets about the risks I took and more for the ones (opportunities) I did not take. One problem I had as a young man was an intense desire for security and the resultant avoidance of risk. Thankfully I learned (through experience) that being broke is not fatal, and any hole you can dig you can also climb out of. I am not talking about dumb risks, I am saying look it over, think it out and go for it with gusto. I really believe that it is always better to try and fail than to not try at all. Good luck.
By the way, I was in a Line-X shop yesterday having my truck bed sprayed and I noticed they were looking for franchisees. Nice little store doing a good business spraying beds, selling truck accessories. Check it out at line-x.com.
Dono

 

LOOK-

Realistically, many new businesses fail in the first year. If you think you have a big enough stake, triple the amount you think you need, and buy a ton of insurance.

Also have a wad of liquid assets squirreled away to save your bacon when the heat comes on...

You talkin' risk money!

Unless it's a sure thing, or something that starts small and takes off, you are rolling dice that only give you one shot at the table.

Think big, but start small. When a small wager pays off - expand.

DON'T BURY YOURSELF. You might not be able to recover...

~Wolf

PS: Bottom line- if you can't afford to lose it, don't risk it. Bank your assets against losses.
"You take the chance, and you pay the piper"
If you can't afford to pay the piper, you DROWN

 

There are investors out there looking for ideas. You can do a franchise if they hold the note. Look at it this way: if you have 2-3-4 hundred thousand to put into a business, why bother. Whatever you are doing is working fine. Why would I want to invest a pile of cash into something, and then try to earn it back.

There are people out there with money invested everywhere. I wanted to open a motorcycle shop. I put an add in a motorcycle publication for investors. I had three willing to invest. Use somebody elses money.

Start networking with more people. Go to the country club and get friendly. You won't find a lot of investors at the pool hall. Go where rich people go. Have a business plan ready. Talk to Score. It won't happen unless you make it happen, and there is nothing stopping you. Pick a good idea and run with it. Develop the whole thing, not just an idea but a complete plan and sell it to people. Keep at it until you get where you want to be.

As said before: you can be safe and secure, or you can take a risk. You either inherit money or you take a chance and step out and make it. Will you be laying in bed when you are 85 wishing you had not spent your whole life kissing your bosses behind, or will you be happy you were willing to take a chance?

 

I'll be happy if the bank doesn't foreclose on me -
Justifiably!

You're suggesting buying on a margin

 

Don't bet the house on a new business!! I have been in business for my self for just shy of 3 years. Did not borrow a dime, just a credit card with "0" intrest for a year. Jesse James did not borrow a dime to start West coast Choppers, he earned it! You will be more likely to get a Business loan than the average Joe cause of the degree. I work for a guy who owns 37 Subways, another owns Dunkin Donuts and IHOP's, franchise's man!! Like everybody else said think big but start small, take risk's but none that will take your house or your ASSest's. Incorperate, but if asked you did not incoperate to shield yourself from liability, that is a arrow right through the corporate shied. Being that this AMERICA, you would be amazed at what people buy or are willing to spend money on. I live in Miami, the crap I see would blow your mind. Do it, I am passing up a goverment job @ $22 an hour to keep my dreams alive. May not be able to afford the six pack at the end of the day, but atleast the day is all mine!! Good Luck
Al

 

I'm going to chime in and just agree with what everyone else has said. Start small but keep thinking of how to grow. You'd be amazed how how many started their fortunes with laundry mats.(Quarters add up quick)

Be willing to take a risk but do your homework so that the risk is minimized. 95% of new business's fail in their first 5 years. "Most business's dont plan to fail, they fail to plan." Meaning, research the market to make sure what you want to do will have customers, see what it will take' land, buildings, rent, equipment, loan interest......

"Successful people do what unsuccessul arent willing to do." Be willing to take calculated risk that could help you out. Be willing to go into debt because if you do it right and do your homework it can pay out in spades.

Never doubt your dreams, but be realistic. Understand that you can opnly do so much in a year, and set goals for what you want to accomplish in a year, 2 years, 5 years. Write out a biz plan and have SCORE look it over and help you out. Remember Bill Gates started in his garage, Trump went form a billionaire to nearly a billion in debt and back to a billionaire. DO IT!!!!!

Hope this was long enough and enough of a babble.

 

I have a question for those of you in the know...

When you're talking and hob-knobbing with the big guns about your business idea, how do you PROTECT your idea from those same people copying it and beating you to the market?? After all, they got the big bux just sitting around...why wouldn't they just go and do it themselves?

I would think you'd have to get them to sign a confidentiality agreement before revealing the details of your idea...but don't you think that would "sour" the discussions right off the bat??

It is this exact detail that's preventing me from going forward with my proposal...I think it's pretty hot and don't trust anybody with the details at this point.

So how do you suggest this issue be addressed?? I'm really curious. Thanks.

 

I'm trying to start a shop now, it's pretty slow going. Good equipment is expensive, but cheap stuff costs more-you usually have to replace it a few times. I have been buying used and factory reconditioned stuff nearly every payday, and I am right on the line between really awesome garage and functional shop. But until I can get the business up and running, I still have to work 48+ hours a week to support myself, plus whatever time I devote to my shop and projects.
As far as locations, think rural. In a rural zoned area, you can have a business with low property costs, and usually much lower property taxes.
Dons- the USPTO has a confidential disclosure form, basically you submid your idea to them with $10, they stick it in a drawer, and there's your proof. I have one in right now until I can refine one of my ideas, then it's a patent. Hopefully I will be able to get a grant or something to pay for it.

 

I'm actually thinking about starting up my own business, too. Just about got the business plan and financial projections finished, now if I can just get my partner to finish his part of this whole thing, I can start applying for money.

 

Thanks Jared...USPTO is the Patent Office?? Mine gig is along the "services" line, so think that'd work with them??