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The business is dog grooming, correct? Pear Martini, good luck with this business, good to see people following their passions. And this one can be quite lucrative. The pet business is a very good growth industry I think.
Btw, why did you call yourself a moron in your other post? Just because you weren't good in school, doesn't make you a moron. You're smart enough to pursue what you like.
In that case it's your responsibility to do what's best for the business. The investor will be wanting to do what's best for him.
You need to be focused on leadership tasks not management or labor tasks. So, to think back to your original questions. The answer is, you should do what's best for the business in all negotiations.
Thanks, these are all great points. I need to really think about things. I think I would prefer using a bank, unless I could find an investor who was also a dog groomer.
So, if I need $30,000 to open this place and run it, I just realised, how will I eat? Can I expet profits immediatly? I'm not so sure, do I take out another loan for living expenses? Do I do some work on the side?
You are just now starting to grasp the financial complexities of opening a business.
No institutional lender will loan you money for opening the business itself with an excess of capital for you to live on while you create and develop the business. That's why you must have adequate resources for operating capital, insurance, rent/lease deposits, utility deposits, equipment, supplies, labor costs (wages/taxes/insurance/benefits), marketing/advertising/promotions, and disposables used in the business to last a forseable time frame to allow the business to build up clientele and cash flow. Don't forget all the little stuff, like a cash register, CC terminal/service, telephone service, yellow pages ad, etc ... all take money, up front money, and continuing money every month before you ever get to see a penny of "profit". Add in debt service costs and loan repayment each months and you are just starting to see the expenses that must be paid ... somehow ... every month just to open and keep the doors open so you can do business.
Generally speaking, you must meet all of your personal living expenses out of pocket while you develop the business to a profitable cash flow. Do not expect to see money back into your pocket for at least a year or two. Can you manage that financial burden? If not at this time, what would it take to save up to be able to do so? Between adequate personal finances and business finances, it can be a sizable chunk of dough, depending upon your standard of living and willingness to make the business work.
Be very sure your business plan is realistic in it's sales and net profit projections before embarking on any obligations which might sink your business before you even get started. For example, if you are avoiding a storefront location expense, where will you operate from? If you think you're going to do this from home, are you zoned for commercial business in this location? Is it accessible and convenient for your clients? Will this be a mobile service? what will it cost you for the transportation and the commercial vehicle insurance? What will it cost to operate and maintain that vehicle per mile? Have you checked into your labor UI and WC costs in your area so you can anticipate and make timely payments in full to a gov't entity with the ability to shut your business down if you don't pay in a timely manner? Literally ... they can padlock your door, seize any business assets and auction them off ... meanwhile, you don't have a business to bring in cash flow but you still have all the obligations to pay off to your suppliers and labor, etc.
There's a lot more to opening up a successful business than just renting a place and putting a cash register in there to go "ding" when the money starts rolling in. As it appears you aren't a dog groomer and will have to hire all of your talent for that, I think you may be in for a big surprise re the potential for profit above the labor costs you will have. If you're really serious about this line of work, you need to be able to do the grooming because the mark-up you can make over your grooming labor cost will be nominal if you are to be competitive with the others doing this work in your area. Consider, too ... that the big chains, such as PetsMart have in-house groomers at very competitive rates which you may not be able to match. If they are in your area, how do you plan to compete with these outfits who can amortize their business storefront location with thousands of other retail products in inventory?
It is essential that you have a well thought out and presented business plan in advance of opening your business if you are to get any funding for the "blue sky" idea that you have, particularly if you are going to seek funding from a bank. What do you have to collaterilize the loan? A legitimate lender will look to see if you have the ability to repay the money even if the business fails. If you don't have those resources, don't expect to get a loan just on the strength of your business idea and passion. Those two aspects of a business and $1.50 are only good enough to buy a cup of coffee .... not pay rent or operating costs or taxes or insurance which you need to fund.
You may yet find that the best way to approach opening this business is to get trained as a groomer and work up a small clientele that can bring in enough money and referral business so that "someday" you can quit your day job and open up a full time business grounded in your solid financials.
You are just now starting to grasp the financial complexities of opening a business.
I've started more than one business in the past. I've done a sole-proprietorship and LLC's on my own. Some types of businesses are quick and easy to start, some aren't.
If you really want to be *successful* don't go it alone. Hire an accountant, a lawyer, a business consultant, or whatever else you need to succeed.
Remember if someone "lends a hand" you don't have any legal recourse if their help is erroneous. If you hire professionals to help, you have legal recourse if they end up doing wrong.
*Most* of the successful business people I know have started at least one small business on their own. *All* of the successful business people I know don't start businesses on their own anymore.
Successful business people hire expertise. It's not because they are lazy. It's because promoting and growing a business is FULL-TIME work by itself.
Look at it this way. If you knew your business could not fail, would you do all the work yourself or would you hire people to do it for you?
The first thing to do is FIND CUSTOMERS!!!!!!! You don't have a business until you have customers. It doesn't matter if you spend a million dollars on everything you think the business will need. Without customers you don't have a business. You only have hope.
thanks rich and sunspirit. I really don't know what to do. I'm in college but my true passions are so out of line with what I'm doing right now. It seems I will have to save $ for the business and then money for myself to live off of for a year? Thats so insane for me to think or right now.
The most money I have ever had saved up was $10,000 and as soon as I had that, I took it out of the bank to pay off my car. I'm thinking I will need $30,000-$40,000 for me to just live off of and then get the money for the business from a lender?
I know I would have to hire help since I'm not a trained groomer, but in time I will be. I was planning on starting as just a doggyday care and then expanding into grooming services as well and once I do that I will have an ad one the animal planet "...And now offering precision grooming!".
I always thought it was better for the owner of a business to not be involved with the technical aspects of it and focus on growing it/managing it, etc.
I figure it would also be a lot cheaper if I was a groomer...
Before you find a lawyer, you need a small business ownership consultant/advisor who will run over the check-list with you.
Lawyer is the second step, or he will tell you when to get a lawyer.
There are books out there to help get started. Read the user reviews of each of these books and get your best one. Again, don't step in blindly and get burnt. You need this ground work to succeed. Failing to plan is planning to fail. Ambitions alone are amorphous.
It seems I will have to save $ for the business and then money for myself to live off of for a year?
If you are going to finance the business yourself then you'll need to save money to live on.
Investors know that the business leader may need to draw a pay to live. If it appears that a business will not be able to pay it's leader and still make profits then the investor will pass on the deal.
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