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Exactly. Absolutely nothing. But you have been on here haranguing me and a hundred million people like me that it's a rational and responsible thing to take the plunge and dedicate our lives to running a business anyway, insisting that after enough failures, we will finally succeed, whether we're suited to the task or not.
And about that, you are absolutely, and immorally, wrong.
Actually, you have some serious reading comprehension issues. At no time on this thread have I ever said that. In fact in one of my posts on this thread, I distinctly said that entrepreneurship isn't for every one. Too bad that you won't be honest enough to acknowledge that.
Actually, you have some serious reading comprehension issues. At no time on this thread have I ever said that. In fact in one of my posts on this thread, I distinctly said that entrepreneurship isn't for every one. Too bad that you won't be honest enough to acknowledge that.
My apologies, and I corrected my post before I saw what you said, which is quite correct. It was not you who made that representation. I find that when a lot of people gang up and start using me as a strawman, it's sometimes hard to remember who said what.
Isn't that whole premise contingent on your business running itself, and leaving you to keep your day job? If you need to attend to your business all day, your business would have to return your investment expectations PLUS your former regular income.
Yeah, a return of 15% only makes sense if it was a passive investment and/or your salary is separate. In the case of corporations the salary would be separate, but many small businesses are sole props, etc so you'd have to appropriately separate matters. Small businesses are rarely passive investments.
Anyhow, there is a good deal of equivocation that occurs with the word "profit". A sole prop refers to their earnings as "profit", but it really isn't profit, rather a salary. Profit is what exists after all expenses and owner salary should be included even if it isn't explicitly separated for tax purposes. In this sense few small-businesses have "profit", just owner salaries.
Actually, I have talked to plenty of bootstrapping restaurants. I've seen their balance sheets and income statements. And I've never met one of these guys who wasn't scrounging for cash or wishing that they started out with more resources.
Firstly, as I mentioned before, your sample is poisoned. Business owners aren't randomly coming to you with their balance sheets, you are seeing business owners that are having problems. Secondly, you really don't seem to understand bootstrapping, you are equating it to under-capitalization. Bootstrapping is not the same as being under-capitalized, bootstrapping is a start-up method that seeks to minimize start-up costs (and hence risk) by efficiently utilizing founder resources and making monetary trade-offs.
Bootstrapping is about efficiency, your "deep-pocket" strategy is about waste. The more money you put into it, the more it has to generate. Far more businesses die from over-eating than they do from starvation.
Quote:
Originally Posted by cpg35223
Another thing. It is highly naive for you for think that a landlord will hand you the keys to a halfway desirable space and say, "Hey, two year lease with a buyout? No problem!
I don't know why you continue to speak about what I'm planning without knowing even the basic details, is this how your consultant or is this silliness just reserved for forums? The vacancy rates for commercial-property in Southern California right now are rather high, its not a landlords market. Seeking out a property in the most desirable areas would be contrary to our strategy, not only would the rents on these properties be too high but it would be unlikely that we'd be able to negotiation satisfactory lease terms. Instead, the focus is on finding a modest property with low rents and making up for the lower foot traffic, etc by utilizing our resources.
As I said before, we've already done the basic research, property costs and lease terms are filed under "basic research" in my book. There is nothing unrealistic about what I stated, a 2-3 year lease with some sort of buy-out is obtainable in this area. Can you tell me something interesting yet?
Quote:
Originally Posted by cpg35223
In fact, when it comes to renting your space, be prepared to put your personal assets on the line, including your house, because they'll ask for it--particularly in today's risk averse environment.
Oh no! I better "never, ever" do it! I'm so scared... You're not listening, to say it once more, I'd never do something that could cause major financial damage. The total lease would be treated as a liability and would be offset by ample assets.
Anyhow, you're not saying anything conservative or interesting, instead you're trying to be "scary". Its a bit funny....
Reckless CREDIT/DEBT created too many naive, incompetent Chiefs
Quote:
Originally Posted by ndfmnlf
When starting a small business, one has to think of the rate of return you want to achieve to make the business worth your while. If the type of business you want to get into only has a ROR that matches a passive portfolio of stocks and bonds (6-8% annualized real returns), then you might as well forget it. Just stick your money into a mutual fund. For a small business venture, I would demand returns at least double that (12 to 16% real).
No wonder there’s no truth about competition anymore. Starting up a business now focuses on competing with the investing & speculation of the Stock/Bond market; not to mention competing with the over-saturation of similar business via easy credit/massive debt—now I see why small business has been suffering in this country.
Running a business is supposed to get easier & more profitable as time goes on; that can’t happen when debt isn’t weaned from the business as it matures. The CREDIT/DEBT costs are stifling incremental growth & the only way to compete is to continue out-borrowing the next guy.
User_id has a business concept that’s based on minimal startup/operating costs & the implications projected here are his efforts will be futile. The sad part is that these implications are justified—constructive criticism based on knowledgeable people who have ‘been there, done that’.
However, this country has to stop dummying down & complicating small business via easy money. This bootstrapping concept sounds like HEALTHY, TRUE competition to me. Only dedicated, workaholic, foundation-building, job creating, small business owners will survive! TIME WILL TELL.
It's funny to think that the people who do have actual business experience and sense will read this thread and laugh their butts off over the ignorance of some.
Business is not for everyone and that's why there is a huge gap in income among the owners and the workers. Owners take more risk and think far ahead of those that don't. Bootstrapping only takes you to the end of this month, what about the next 3, 5 or 10 years?
User_id has a business concept that’s based on minimal startup/operating costs & the implications projected here are his efforts will be futile. The sad part is that these implications are justified—
Here, yes, but in the business world bootstrapping is an accepted start-up method. Bootstrapping is being equated to under-capitalization and the two are rather different. A bootstrapped company is going to start with the minimal amount of seed-capital (usually cash, not debt) to get the gears turning, once turning it will use internal cash-flow to generate growth. All the other aspects of a bootstrapped company are really just side effects. For example, since you're funding everything from internal cash-flow you have to be extremely careful what you spend money on. There isn't much of it.
There are many successful companies that bootstrapped their way up. One of the best known examples is HP, as David Packard said, more businesses die of overeating than starvation.
Honestly though, the negativity towards bootstrapping is only natural. The deep pocket (usually deep debt...) folks are great for consultants and people selling services/products to businesses. Bootstrapped businesses are very cautious and are much more likely to do things on their own.
Bootstrapping only takes you to the end of this month, what about the next 3, 5 or 10 years?
Is this suppose to make sense? Bootstrapping is a method of financing a start-up, it does not negate the need of short and long-term planning. In fact planning becomes even more important.
And yes, people with real business experience will laugh at these sorts of comments.
The workers can be taking far more risk, especially if they are not allowed to know how well the business is doing, or what direction the business is likely to be going in!
Getting a mortgage to pay off, just at the point that your employer has decided to close up shop and head to the Bahamas, is no fun, and couldn’t have been allowed for.
Where is the risk there?
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Reckless CREDIT/DEBT created too many naive, incompetent Chiefs
