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05/13/2009 07:37:43 PM · #1 |
I'm looking to start a small business in the next month to 3 months. Given the economy what are your thoughts as to the type of business to start and why?
Few facts you might ask:
My work experience is construction 10+years (father's local small business 3-5 employees) and Management (over 1,000 employees) in the wireless industry for 10 years.
I live in Southern CA.
Interests - Golf (scratch golfer), travel, and learning more about photography.
Message edited by author 2009-05-14 11:21:52. |
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05/14/2009 09:45:33 AM · #2 |
What do I want to be when I grow up?
That's your real question, isn't it? You've worked for a small family business and a fairly large corporate type operation - two very different environments. What parts of each job/company/environment appealed to you the most, the least?
What kind of capital have you got to invest?
How much time have you to invest?
How much income must you derive from the business and how soon?
80% of all businesses are all the same - accounting, planning, marketing, managing. The actual 'doing' of the business is only 20%. So you must ask yourself if that ratio appeals to you or not, and if not what you can do about it, like hiring people to do the parts you don't, or can't do.
You can buy a going business - this takes capital of course, but you know what you're getting and the income starts immediately.
You can start from scratch, but the best way to do this is with a detailed plan which can take a year or more to create. Then it can take 3 years to even hope to break even, 5 years to turn a profit.
Since I first read your post (no time to respond then) you've removed the bit about golf and photography. Why?
Lets take golf as a simple example. You could buy a golf course (there's one for sale near me). You'll know what the sales/costs are under the current owner and some simple math will let you know what it will take to make ends meet. How many employees, etc, are well known. You know what's being done for marketing and what you might do to change things. It's easy to check out the competition - what they've got to 'sell', what they charge, how they treat their clients, how busy they are on a saturday, etc.
You could buy land and build a course from scratch - you can see how this will take much longer and very likely will cost more. If you perhaps already owned 100 acres it might appear to be cheaper, but I doubt very much. You also have no clientele, so you have to spend more on advertising to bring in customers from your competition, and since they'll be aware that you'll be doing just that they'll have time to fight back, so to speak, with loyalty programs or such. You are at a disadvantage when starting from scratch in most cases.
You need to do some real soul searching IMO, before you're ready to make the leap.
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05/14/2009 04:49:53 PM · #3 |
Thanks for the great feedback Prof_Fate. I added the golf back to my post. I took it out thinking that it might be to much info unless someone asks for it?
As for what I want to be and what takes care of the family and makes my better half happy might be two seperate things but I'd like to find a happy medium.
Maybe I should change the question a bit to get a more general answer regarding the type of business that others feel will thrive given the state of economy we are in. We must have some small business owners on DPC that are willing to share experiences with small business. If you were to open a Successful small business what would it be and why?
Here are some ideas I'm thinking about:
- Sandwich type shop (not a franchise).
- Real Estate - Buy and sell.
----- Flipping...some great deals out there but not sure about the buyers.
----- Investment...some great deals again. Buy and rent.
- Internet Marketing Directory for Small Businesses - Help support the local economy both Business and Residents. Any web designers?
- Follow through with a couple inventions. Need to research the process of patents, prototype, etc. Any patent attorneys?
- Retire to a house with 100's of acres and take pic's of the wildlife (not going to happen...yet)
Originally posted by Prof_Fate:
What do I want to be when I grow up?
That's your real question, isn't it? You've worked for a small family business and a fairly large corporate type operation - two very different environments. What parts of each job/company/environment appealed to you the most, the least?
What kind of capital have you got to invest?
How much time have you to invest?
How much income must you derive from the business and how soon?
80% of all businesses are all the same - accounting, planning, marketing, managing. The actual 'doing' of the business is only 20%. So you must ask yourself if that ratio appeals to you or not, and if not what you can do about it, like hiring people to do the parts you don't, or can't do.
You can buy a going business - this takes capital of course, but you know what you're getting and the income starts immediately.
You can start from scratch, but the best way to do this is with a detailed plan which can take a year or more to create. Then it can take 3 years to even hope to break even, 5 years to turn a profit.
Since I first read your post (no time to respond then) you've removed the bit about golf and photography. Why?
Lets take golf as a simple example. You could buy a golf course (there's one for sale near me). You'll know what the sales/costs are under the current owner and some simple math will let you know what it will take to make ends meet. How many employees, etc, are well known. You know what's being done for marketing and what you might do to change things. It's easy to check out the competition - what they've got to 'sell', what they charge, how they treat their clients, how busy they are on a saturday, etc.
You could buy land and build a course from scratch - you can see how this will take much longer and very likely will cost more. If you perhaps already owned 100 acres it might appear to be cheaper, but I doubt very much. You also have no clientele, so you have to spend more on advertising to bring in customers from your competition, and since they'll be aware that you'll be doing just that they'll have time to fight back, so to speak, with loyalty programs or such. You are at a disadvantage when starting from scratch in most cases.
You need to do some real soul searching IMO, before you're ready to make the leap. |
Message edited by author 2009-05-14 16:51:11. |
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05/14/2009 05:15:32 PM · #4 |
Originally posted by Carlo21:
- Follow through with a couple inventions. Need to research the process of patents, prototype, etc. Any patent attorneys? |
Much of the information you need for this is available for a modest investment at Nolo Press and from the Patent Office itself. |
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05/14/2009 05:33:44 PM · #5 |
Originally posted by Carlo21:
- Real Estate - Buy and sell.
----- Flipping...some great deals out there but not sure about the buyers.
----- Investment...some great deals again. Buy and rent. |
Be very very careful in the real estate market right now- not from a bottom falling out thing- but from all the bottom feeders. Lots and lots of scams and frauds operating at the moment and likely only going to increase. Not three days ago I interviewed a guy in Georgia, licensed (and very succesful) real estate agent for ten years got caught up in a scam, looked pretty legit until the pulled the rug out from under him. And just today I interviewed a New Jersey state investigator that got caught in a flipping scam. He told me: "Twenty years I've put guys like this in jail. Now here I am a victim." |
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05/14/2009 06:56:57 PM · #6 |
Originally posted by Carlo21:
I'm looking to start a small business in the next month to 3 months. Given the economy what are your thoughts as to the type of business to start and why? |
It's the wrong question.... The failure rates are high enough on small business that just starting one is far from a good chance at success - you need to have an idea/concept/business you believe in is a passion, otherwise it's just wishful thinking. |
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05/14/2009 07:09:19 PM · #7 |
| There's always a demand for porn. |
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05/14/2009 07:13:10 PM · #8 |
Originally posted by Spazmo99:
There's always a demand for porn. |
lol... Good point.... catch is... is there room in that vast untapped market for a small startup? :-) I guess if you gonna fail, might as well be a fun one :-) |
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05/14/2009 07:26:34 PM · #9 |
| sell toner for printers. its one of the best areas you can be in now |
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05/14/2009 07:54:35 PM · #10 |
Originally posted by Carlo21:
Interests - Golf (scratch golfer), |
I hate you. (17 handicap on a good day)
Message edited by author 2009-05-14 19:56:56. |
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05/14/2009 08:21:49 PM · #11 |
Originally posted by Carlo21:
Interests - Golf (scratch golfer), |
Hustling financial company executives on the course ... |
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05/14/2009 08:23:46 PM · #12 |
Originally posted by robs:
Originally posted by Spazmo99:
There's always a demand for porn. |
is there room in that vast untapped market for a small startup? :-) |
"Small startup" would seem the opposite of what you want in this line of work ... |
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05/14/2009 09:07:19 PM · #13 |
Originally posted by Prof_Fate:
You can start from scratch, but the best way to do this is with a detailed plan which can take a year or more to create. Then it can take 3 years to even hope to break even, 5 years to turn a profit.
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This seems to follow my experience. I'm on my 3rd small business (The Sawdust Shop. Break-even happened right around 2.5 years, profits were looking good for year 4 but then the recession hit and business is way down.
Retail like a sandwich shop is a tough road. You have to work hard for every $. Something were you produce a product would be next on the list, you spend money up front developing the product but then can leverage that develop cost and hopefully sell the product for a long time. Software is even better, high development costs, but virtually zero production costs. Anything that can generate an annuity is a great business.
I currently have 4 businesses, the retail is the serious ones, the others are just dabbling.
Retail : The Sawdust Shop
Manufacturing : Gel Holders and Foam Core Stands
Software : iPhone games
Service : Photography
If I were starting over I would concentrate on creating an internet based service business or web site that would attract the interest of a lot of people.
That's my $0.02
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05/14/2009 09:25:58 PM · #14 |
Originally posted by robs:
Originally posted by Spazmo99:
There's always a demand for porn. |
lol... Good point.... catch is... is there room in that vast untapped market for a small startup? :-) I guess if you gonna fail, might as well be a fun one :-) |
All you need is a camera, a website and a few people willing to get freaky for you on camera. |
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05/14/2009 09:53:03 PM · #15 |
Originally posted by Spazmo99:
There's always a demand for porn. |
My idea: A Porn Film School.
Hookers for teachers, 'students' pay 'tuition' to learn to be 'actors'. Film it and sell the film/photos in addition to the tuition.
Education is a great money maker, just ahead of religion.
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05/14/2009 10:19:29 PM · #16 |
Originally posted by Carlo21:
Here are some ideas I'm thinking about:
- Sandwich type shop (not a franchise).
- Real Estate - Buy and sell.
----- Flipping...some great deals out there but not sure about the buyers.
----- Investment...some great deals again. Buy and rent.
- Internet Marketing Directory for Small Businesses - Help support the local economy both Business and Residents. Any web designers?
- Follow through with a couple inventions. Need to research the process of patents, prototype, etc. Any patent attorneys?
- Retire to a house with 100's of acres and take pic's of the wildlife (not going to happen...yet)
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Restaurants are always a possibility. Lots of pizza shops around here. A client of mine manages one and says NONE have closed up since 1999. Can't say too many new ones opened either. But then a friend and his brothers managed one about 40 miles from here and there was little profit in it and long hours. They then bought one and re-did it (name, menu, etc) and lasted less than a year - and 4 others folded in the same delivery area.
Concensus...possible to make a living, but still risky. People eat in a down economy, but eating out is easier to cut back on. Around here I hear the lunch bis is in the toilet (and our economy is good).
flipping. That was what made the bubble...or was how it was profitable to flip houses. Around here, again, no bubble to speak of, if a good house was worth $150k and the one next door needed $30k in work it would sell for $120k. There was very little profit in flipping here. The profit was made by buying for cash, fixing it up, putting an 80% mortgage on it and then renting it out. You get your cash back, tax free, with the refi and the renters pay the mortgage. get a 15 year and in 10 sell it.
From what I'm hearing here, the three worst states are Ca, nv and Fla for foreclosures. Here in PA it's the worst it's been since they started tracking it - .27%. //www.virginia.edu/uvatoday/newsRelease.php?id=7838 says some places in CA are the same, some are over 3.5%! So I guess it depends very much where you are.
If you have capital and can get enough houses rented then it might work. I've been looking into this in earnest as my retirement fund is a joke. At it's HIGH point I'd made about $3500 in 15 years. Total. I'd like to retire in 15-20 years...and if it even does TWICE as good that's $7000. Not gonna cut it. Had I take the initial money and bought a house for $45k then, it's worth $75k now, and with a 15 year mtge would be paid off and renting for $600 ish. $3500 vs $75k and $600 a month. No contest. However, during that 15 years I'd have made $0 in profit on rent and would have had to invest my time in maintence and repair, accounting, etc. there is no free lunch, I know.
inventions. My best bud since gradeschool works for inventhelp (google them). They help folks take an idea or invention and proceed to prototype and marketing, etc. They are under gov't rule to disclose the success rate...which is something like 1 in 300,000 folks make any money at all from their invention. So, umm, good luck with this one.
the land with animlas - it's called farming (or ranching or dairy or pig farming, etc). I have some acquaintances in farming having been in the horse training field years ago and if, and only if, you own the land you'll do good. If you have to lay out the money to buy the land and equipment the debt will bury you, fast. Leasing land from 'retiring' farmers is a better deal as the leasy payment is usually a percentage of the crop harvested (called share cropping....) so as long as mother nature doesn't rain you out or dry you out you might have a good year every 5.
There's a farm near here that went into the tourist trade...for lack of a better term. They do it up big for halloween (pumpkin patch, school trips, haunted corn mazes, etc) and christmas, and run a nursery/landscape center in the spring, have a restaurant and veggie stand on site, a souvinir shop, amish furniture, etc, etc, etc. //www.janoskis.com/index.html
I worked in mail order for 10 years and very seriously considered getting into that - sell 'stuff' at a discount. I worked at a motorcycle dealership that grew from 4 employees and about $300k a year in sales to 50 employees and $12 million in sales in less than 10 years.
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05/14/2009 10:20:17 PM · #17 |
Originally posted by GeneralE:
Originally posted by Carlo21:
Interests - Golf (scratch golfer), |
Hustling financial company executives on the course ... |
We know where that leads...
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