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Really was just trying to make sure that the one-night-a-week bidness class from the former K-Mart Assistant Manager / "Teacher" -- who probably taught something like "Businesses use debt to expand their opportunities . . ." or some such nonsense was NOT the path she is taking.
Sounded really hard like she was . . . no?
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So -- instead -- get your suppliers to "floor plan" you. No debt for you. Their product is For Sale in your outlet. You market, you manage, you profit. Same on rents. Do splits with the site owner. Retail sites are available for that in Michigan. Get really smart and promote Local Only / USA production. Have an Amish-Made Line. Have a Ghettoz Hoodie Line, on and on.
If you wind up with your own site -- take it non-profit. Takes you off the tax roles. You can still make plently of money on this. If you make it this far, come back and we will tell you how.
There, cpg, you like that better?
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Meanwhile -- back to the OP -- No Debt for You. Mkay?
I would do it online as well. More of an audience. Look at places like Neff Headwear a company that is located in my area. They started small and now sell in 40 or so nations. Also Shaun Neff made his own stuff to sell which was differant from the rest. What he did was build a brand and you can do the same thing. Seems that building a web site with many of the companies out there would sure make that $2,000 last a long long time.
My advice: Work on creating a brand and exploit the heck out of it.
If you look at the stock prices for huge dollar store chains like DOllar Tree, Family Dollar and 99 Cents Only during the heavy recession they did really well. The NY Times used this quote that stuck with me; "We are now living in the Dollar Store economy." If you look at that as evidence of a business model that does well in a struggling economy you can imagine that since we are still in a weak and getting weaker economy it would be smart to pick a business that does well in those kind of circumstances.
My sister lives in a small town in Montana and is opening up her own dollar store there and I think it is a really good idea. I'm thinking of doing the same thing and moving back to Montana as well (I hate Las Vegas). She went through this company called Dollar Store Services and they did everything for her - got a location, financed her, trained her and she is opening up a 5,500 square foot dollar store in January of February depending on when the building is finished. She didn't have much money to begin with but good credit and they were still able to get her financed. It is pretty exciting and I thought I'd share since this seems to be a recession proof type of business.
There was this other article my sister emailed me that talks about how dollar stores are becoming "the new normal" in a prolonged recession. That sounds depressing if you are the person shopping at a dollar store, but it sounds good if you are the person selling all the merchandise. This is a really great article that proves my point I think. Either way good luck with whatever decision you make.
"I've taken a business law class, obtained an LLC, began a business account to start building credit with, obtained my Michigan tax ID."
Well you've done everything that is basically useless.
"I have been establishing credit, which is how any business begins."
Nope
"I'm a risk taker, in it for the long haul..."
That's a contradiction.
"I'll focus more on winter clothing (again, focusing still on the specialized items I'm choosing to sell) Sorry for the lack of details, for those idea thieves "
So, you plan on going up against companies that have millions for advertising and can buy product from some sweat shop for a penny a shirt. Not only that you figure the idea has never been done before.
"I will have no employees, and work a night time job for extra income through the 'growing pain' year..or two."
Well yes, you won't have employees you don't have any money to pay them. So, you're gonna' be profitable in one or two years even though we're in the biggest depression ever.
"Renting is silly..."
Yes renting is silly when you have the pull to get tax breaks that make it so cheap to build that it's stupid to rent.
"Please help with any suggestions you may have. "
Well, given your post I would suggest you start selling clothes out of the trunk of your car. If you can't build up enough "equity" doing that to organically grow your business then you sure can't make it with a store and all the expenses that come with one.
Probably not the response you wanted but it's a good one.
One more thing; Although I have 800+ personal credit, since this business is less than 6 mo old and have very little business credit, coming across a 40k loan may be a bit tricky. Chances are, I'll probably be solely responsible. So....I'll have to convince an investor, or a bank dumb enough to give out such a risky loan. Any tips on how to achieve this?
ROTFL, you're exicited and uneducated. We've all been there before!
You have bunches to learn. The most important thing you need to learn is *people*. You must get out and visit the banks, sell on the street, at flea markets, at your friends houses, everywhere and anywhere.
Getting loans and investments are for people who have the right connections. This is the real world. It's not fair, just, equal opportunity or anything else that you see in the movies. The only equal opportunity out there is for you to become someone's salary slave.
I've worked in software development for over 15 years. I can build software in one third the time it takes for large businesses and I still couldn't find funding for an offering in one of the fastest growing segments available.
Remember, no one who has a job wants you to succeed. It makes them a moron for having a job instead of a successful business.
I disagree. You're post was a good one. Too many youngsters today are targets of the *you can do it* if you pay me to help crap. They spend money on everything and anything to say *I'm in business*. Problem is they don't know a pinch about what it takes to succeed in business.
I say the OP owes you a thanks for such an open and honest post. Wait 'till they see my posts. I was even more forth coming. The good thing about investing in kid entrepreneurs is they have a lot of years to pay off the loans when they get a job after their business fails.
No, that was horse manure. She'll spend more time and money on things that won't help her succeed. Making money is how you succeed. Managing carrying costs etc. are for large retail that can save millions a year. She needs to get out and *sell* so she can learn business.
To the OP: The best advice would be for you to sit in the middle by selling to businesses. So, sell clothes to clothing shops. That way you'll be talking to people who are not only potential customers but also potential educators.
IMy sister lives in a small town in Montana and is opening up her own dollar store there and I think it is a really good idea. I'm thinking of doing the same thing and moving back to Montana as well (I hate Las Vegas).
This is awesome for the OP. The OP needs to find out exactly which store this is and follow it's progress.
I had a friend (a physician) who dabbled in a retail clothing store business selling children's clothes as a supplement to his medical practice income. His wife was the one that actually managed the store. His medical practice was profitable so he didn't really have to do this. But apparently his money was burning a hole in his pocket.....he said he wanted "diversify" his investments. My estimate is that he probably plunked down close to half a million bucks into the venture. Three years later, the business went belly up. $500k went up in smoke. If he had put that amount in a stodgy balanced mutual fund like VBINX, he would have received a steady stream of income/dividends over the last 3 years of $10k a year (dividend yield has been 1.94%). Total return has been 10.8% annualized over the last 3 years. His 500k would now be 680k. And that was achieved without doing any physical work whatsoever. No dealing with nasty customers and suppliers in the retail store business.
To the OP: I've been a business broker on and off for 15 years, and have started two businesses. I'm preparing to purchase another business this week. In my experience, retail clothing is a hobby - nothing more. High inventory and rent, lots of unsaleable product, labor intensive, and extremely difficult to succeed in most markets. I say "most markets" because there probably are some high end shops in Manhattan and Malibu that do pretty well, but the owners were wealthy when they started. I would caution against this unless you can afford the hobby.
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