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Am I BatShit Crazy for wanting to start a small business?

JSB

By JSB
in Can You Help Me With This?

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RDCanecutter

RDCanecutter 26454

Posted
Posted
4 minutes ago, Surly Bevo said:

 


There are mobile video game trucks that show up at parties.

Park three trucks in a "U" shape around the bouncy house. Truck #1 has video games, Truck #2 has skeeball, face-painters, and caricatures, Truck #3 has stripper poles where you charge the moms to dance.

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Chewbacca

Chewbacca 7780

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58 minutes ago, JSB said:

OK, I thought this might be a good idea, but evidently not. I like the storage facility idea, but there are already a ton in the area. I'm talking with a Company that does bowling/mini golf/go carts for a franchise opportunity, that may be a better option. The need I want to fill though is family entertainment. Again, the closest thing other than a movie theater and a park is a good 30 minutes away. I've still got to figure out financing though. I've talked with a number of banks, and none of them loan anything greater than $500K for businesses that have not been operating for 24 months. 

Depends on what they're loaning it for, or if there is real estate included.  They'll do one loan for the land (with a substantial down payment) and a second LOC for operating cash flow, I would think.  The operating LOC will be smaller than you want, most likely, for the first year or two.  Make sure you have the ability to borrow from other sources if needed.  You'll have to negotiate that in since most banks want all the collateral they can get for the lowest loan amount.

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RDCanecutter

RDCanecutter 26454

Posted
Posted

Oh, and OP, despite all the Surly BS that I contribute to as much as anybody, seriously, you've got to start a business. The Drive-By Truckers explain it better than I can:

The first time that I raced my qualifying was a shame
I started out way in the back and came back about the same
I pulled her in the pit, couldn't look my Daddy in the eye
He said "If you quit now son, it's gonna haunt you all your life"

It ain't about the money or even being number one
You gotta know when it's all over you did the best you could've done
Knowing that it's in you and you never let it out
Is worse than blowing any engine or any wreck you'll ever have

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Chewbacca

Chewbacca 7780

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15 hours ago, Dbeasy said:

 

Well, I’ve started and run multiple companies over the years, so your take might be a little off. With the venture he is describing, there are ways to limit his personal risk. I’ve done it multiple times successfully.

 

Edit: one more comment. When you look at the capital investment required for this business, along with the working capital requirements, and the fact that the land is a collateral asset, with a few partners you can limit the financial risk to a very manageable level. Now, for larger businesses with deeper capital commitments and greater uncertainty about the time to prove the concept, you can get yourself into trouble pretty quick. And of course the OP has to have some money available that he can afford to lose, or else he will have potentially only a small piece of the venture’s equity.

If you limit the risk by bringing in partners (and investing little cash), you're also limiting your upside.  Gotta decide if that's worth it or not.

 

But any bank loan on a startup is going to require personal guarantees.  There's no way around that.

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Chewbacca

Chewbacca 7780

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3 hours ago, Brew said:

Correct answer is to partner with a contractor on a storage place where you can build it for near cost. You provide the rental labor, get it in the low 90’s in occupancy, flip it to a large storage company, profit, rinse/repeat.

Storage isn't a bad idea, but you're a real estate developer at that point and you better understand the ins and outs of that business before you jump into it.  Lots of upside, but also a ton of risk (and again, the personal guarantees cannot be avoided).

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JSB

JSB 677

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So,  I went home to visit my dad this weekend and we lived a few blocks from at bowling alley that also has a putt putt golf in the same parking lot.  The PP has been there forever,   I played there 40 years ago when I was a kid and we took our kids there when they were young and up visiting the grandparents.   As I drove by at about 10 PM on a Saturday, I saw that the bowling alley lot was absolutely packed, then I noticed that the PP was completely full too.  I'm talking a group at every hole and others standing around.   I don't know what this means other than there's nothing else to do on a Saturday night in Tyler, TX  (Narrator:  There's not.) or that puttputt golf is so fantastic that everyone wants to go play a round then hit some video games.  


This was my thought. There is a huge population of kids in the area and absolutely nothing for family entertainment other than movies, a park and yogurt shops. I know it gets hot as hell here, but there are very few days it is too cold to play outside.
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Surly Bevo

Surly Bevo 25078

Posted
Posted
Park three trucks in a "U" shape around the bouncy house. Truck #1 has video games, Truck #2 has skeeball, face-painters, and caricatures, Truck #3 has stripper poles where you charge the moms to dance.



This is a good idea but truck 3 should be where OP sells wine and fruity drinks and then truck 4 can be your idea.
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Angry Gorilla

Angry Gorilla 1768

Posted
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5 hours ago, NeverMarryAStripper said:

Buy a party bus with a stripper pole and make a mobile strip club.

https://www.bizbuysell.com/Business-Opportunity/Party-Bus-Business/1581973/?d=/wEFmgElMmZ0ZXhhcyUyZnRyYXZpcy1jb3VudHktYnVzaW5lc3Nlcy1mb3Itc2FsZSUyZjIlMmYlM2ZxJTNkJTJmd0VGUUdrOU1ERklNVVV3V1VRME9EZ3lOemxCT0VGR09EQlpRems1UVRWTVFWbEJXVUkwTWswM1dVVW1hWEk5TVNac2MzSmZjbXhpY0c0OU1pWnpjR2xrUFRRJTNk

 

Let's do it

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deft

deft 6857

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Posted
So,  I went home to visit my dad this weekend and we lived a few blocks from at bowling alley that also has a putt putt golf in the same parking lot.  The PP has been there forever,   I played there 40 years ago when I was a kid and we took our kids there when they were young and up visiting the grandparents.   As I drove by at about 10 PM on a Saturday, I saw that the bowling alley lot was absolutely packed, then I noticed that the PP was completely full too.  I'm talking a group at every hole and others standing around.   I don't know what this means other than there's nothing else to do on a Saturday night in Tyler, TX  (Narrator:  There's not.) or that puttputt golf is so fantastic that everyone wants to go play a round then hit some video games.  


I got kicked out of that course for brown bagging some beers on a work trip a few years ago. I just walked back to my room right next door at the holiday inn and watched hbo. Cool story bro.
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Jimbaround

Jimbaround 975

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21 hours ago, JSB said:

OK, I thought this might be a good idea, but evidently not. I like the storage facility idea, but there are already a ton in the area. I'm talking with a Company that does bowling/mini golf/go carts for a franchise opportunity, that may be a better option. The need I want to fill though is family entertainment. Again, the closest thing other than a movie theater and a park is a good 30 minutes away. I've still got to figure out financing though. I've talked with a number of banks, and none of them loan anything greater than $500K for businesses that have not been operating for 24 months. 

Don't underestimate the ability of the American public to pay good money to store crap they will never use again.

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DallasHorn26

DallasHorn26 586

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23 hours ago, davidg said:

So,  I went home to visit my dad this weekend and we lived a few blocks from at bowling alley that also has a putt putt golf in the same parking lot.  The PP has been there forever,   I played there 40 years ago when I was a kid and we took our kids there when they were young and up visiting the grandparents.   As I drove by at about 10 PM on a Saturday, I saw that the bowling alley lot was absolutely packed, then I noticed that the PP was completely full too.  I'm talking a group at every hole and others standing around.   I don't know what this means other than there's nothing else to do on a Saturday night in Tyler, TX  (Narrator:  There's not.) or that puttputt golf is so fantastic that everyone wants to go play a round then hit some video games.  

Ah the memories. My friends and I spent many Sunday nights at the Green Acres Bowl, $30 for 2-3 hours of bowling, a large pizza and a pitcher of beer+ whatever extra pitchers we consumed.

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Pescado_Rojo

Pescado_Rojo 19426

Posted
Posted
44 minutes ago, RDCanecutter said:

Hey, we got a business going yet? I have been tearing the sleeves off my tshirts and cultivating a carney tan. You ain't gotta pay me much money, just don't get too curious about what goes on behind the bouncy-house.

You selling cigarettes and Busch Lite to the 13 year olds again? 

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Errestaurants

Errestaurants 2570

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11 hours ago, T’Boo Ted Marshall said:

Buy an existing business that already cash flows your needs.

Are you a business broker? i'd love to hear how "regular Joes" finance these transactions. I'm asking sincerely and out of curiosity. for an example a business that cash flows say $500,000 what would that cost to buy? I'm a 20+ year restaurant executive, multi unit/multi state. Thanks in advance. 

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SKJ

SKJ 1311

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10 hours ago, Errestaurants said:

Are you a business broker? i'd love to hear how "regular Joes" finance these transactions. I'm asking sincerely and out of curiosity. for an example a business that cash flows say $500,000 what would that cost to buy? I'm a 20+ year restaurant executive, multi unit/multi state. Thanks in advance. 

You still in the restuarant business?

I'm looking to change companies,  but I'm in Oklahoma

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T’Boo Ted Marshall

T’Boo Ted Marshall 2737

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Are you a business broker? i'd love to hear how "regular Joes" finance these transactions. I'm asking sincerely and out of curiosity. for an example a business that cash flows say $500,000 what would that cost to buy? I'm a 20+ year restaurant executive, multi unit/multi state. Thanks in advance. 

Yes sir.

Most will go the SBA route but you’ll need some liquid to put into the deal. Expect 20% but at times the seller will carry some of that % in a prom note.

An example of one I’m closing this month. It’s an Asphalt company in DFW. 50 years old. Gross Rev was $2.8m in 2018 and the owner put $1.2m on his tax return. One crew of 4 guys.
In this case the bank wants to see that the new owner can carry the debt service and still make a living. In this case they absolutely can. We’ve talked openly about buying this one the margins are so good.

The bank offered really good terms of only 10% down and they would carry the rest. RE was an option at about $450k.

Our sale price is $4.4m which is a 4x multiple of his Avg 3 year EBITDA.

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TwiceHorn

TwiceHorn 31510

Posted
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On 9/2/2019 at 8:22 AM, T’Boo Ted Marshall said:

Buy an existing business that already cash flows your needs.

Yeah, there's starting a business from scratch, buying an ongoing business, and, the CPA pathway to riches, getting into and eventually acquiring a client that you have observed for a while.

I don't know that the last way presents itself to every or even most CPAs, but I sure have known a lot of them that got nasty rich that way.

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Incredulity

Incredulity 11678

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On 9/3/2019 at 5:54 AM, T’Boo Ted Marshall said:


Yes sir.

Most will go the SBA route but you’ll need some liquid to put into the deal. Expect 20% but at times the seller will carry some of that % in a prom note.

An example of one I’m closing this month. It’s an Asphalt company in DFW. 50 years old. Gross Rev was $2.8m in 2018 and the owner put $1.2m on his tax return. One crew of 4 guys.
In this case the bank wants to see that the new owner can carry the debt service and still make a living. In this case they absolutely can. We’ve talked openly about buying this one the margins are so good.

The bank offered really good terms of only 10% down and they would carry the rest. RE was an option at about $450k.

Our sale price is $4.4m which is a 4x multiple of his Avg 3 year EBITDA.
 

Not to be a buzzkill, but a absentee owner in the asphalt business is EXTREMELY likely to get his/her ass chewed up by the GC community.    

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T’Boo Ted Marshall

T’Boo Ted Marshall 2737

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Posted

Maybe we have different definitions of absentee but we would promote from within and give that person equity to owner operate. We’d also hire a controller. That’s us though.

I have a buddy at a paving company that the owner has been involved sparingly over the last 12 months and they routinely turn down work they can’t get to.

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Chewbacca

Chewbacca 7780

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Maybe we have different definitions of absentee but we would promote from within and give that person equity to owner operate. We’d also hire a controller. That’s us though.

I have a buddy at a paving company that the owner has been involved sparingly over the last 12 months and they routinely turn down work they can’t get to.
Nobody cares about your shit more than you do. I'll never be an absentee owner. I'll sell before i do that.
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Incredulity

Incredulity 11678

Posted
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35 minutes ago, Chewbacca said:
54 minutes ago, T’Boo Ted Marshall said:
Maybe we have different definitions of absentee but we would promote from within and give that person equity to owner operate. We’d also hire a controller. That’s us though.

I have a buddy at a paving company that the owner has been involved sparingly over the last 12 months and they routinely turn down work they can’t get to.

Nobody cares about your shit more than you do. I'll never be an absentee owner. I'll sell before i do that.

totally agree.

Construction has been pretty hot for the last 7 or more years in the majority of the country.  The 09-11(or whatever years you want to call the bust) thinned the contractor herd so much that if you haven't made a lot of hay in the last decade your pretty much a moron.

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Chewbacca

Chewbacca 7780

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6 minutes ago, Incredulity said:

totally agree.

Construction has been pretty hot for the last 7 or more years in the majority of the country.  The 09-11(or whatever years you want to call the bust) thinned the contractor herd so much that if you haven't made a lot of hay in the last decade your pretty much a moron.

You'd be shocked how many contractors are still using money from one job to finish the next job even today.  It bottles the mind how bad so many of them are with their finances.

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Incredulity

Incredulity 11678

Posted
Posted
Just now, Chewbacca said:

You'd be shocked how many contractors are still using money from one job to finish the next job even today.  It bottles the mind how bad so many of them are with their finances.

Oh I know.

But, they have a new lifted F250 and Nautique in the garage.   on credit of course.

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TwiceHorn

TwiceHorn 31510

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13 minutes ago, Chewbacca said:

You'd be shocked how many contractors are still using money from one job to finish the next job even today.  It bottles the mind how bad so many of them are with their finances.

That's such SOP for residential contractors you have the "trust fund" statute here.  But it doesn't apply to cost-plus contracts, so that's what even reputable contractors do.

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RockyMountainHighHorn

RockyMountainHighHorn 894

Posted
Posted (edited)

Sorry if this is already posted above but my brother and wife are halfway done with opening a barre studio in Austin. They wanted to originally be independent but looked into a franchise and found it to be more beneficial. That is something you should think about. I don’t know how many putt putt franchises there are but it gives you the foundation and network that makes everything easier at the start. Just a thought! Also, I know it’s much more difficult to obtain but having a putt putt with beer and drinks would be interesting. Don’t think I’ve ever seen one of those. Somehow making putt putt more of a top golf experience is an interesting idea....interesting but difficult with potential value at the end. 

Edited by RockyMountainHighHorn
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