I want to start a business...

[Brando]

Thank you everyone, for the info. Tons of helpful advice, indeed. The type of business is payday advances/loans, title loans, prepaid credit-cards and money-transfer services. I'm just starting to get my feet wet in the knowledge of how these types of businesses operate. You're all spot-on, that it will be a hard commitment for the first few years. I'm 100% fine with that.

To find out that this is something I really want to do I'll be working on weekends for my friend to learn how to run it. He's offered to be a knowledge-base if/when I decide to take on my own location, including but not limited to even picking the location. Most of my experience (for running a biz) has to do with prior auto shop experience and my own side-work for graphic/web design. Entirely different fields, yes, but some of that carries over.

I'll definitely see what is available in terms of accounting classes at the local JC, or even vocational programs offered.

@PoP/Jeff -> I'm pretty much staying here. I know how anti-business CA is with their regulations, taxes, fees, etc but I figure if I can make it work here, I'll have even better luck in the neighboring states (AZ is where I really want to move to).

@john70t -> all good points and things I need to learn. I worry especially about regulatory schemes (see PoP's anti-CA statement above).

@milt -> Funny, my dad mentioned the same thing, but he couldn't recall what it was named. Another valuable resource.

@notfarnow -> I certainly want to be able to keep putting food on the table and I'm willing to put in the hard/long hours necessary to keep a place afloat. Right now I'm working for a company (day job) and doing my own work at nights, so I understand the commitment aspect.

That's why I'm going for the Owner-Operator aspect, at least until I can turn the business profitable and move on to location #2, rinse, repeat. The franchiser is looking to make it basically "business-in-a-box" for franchisees.

#LeeH -> I hadn't even thought about the accounting aspect. Excellent point. As for the credit... A series of circumstances that I did not handle too well when I was much younger have left a few nasty marks on my credit. I'm rebuilding now by paying off my first auto loan (should be done by this time next year) and hopefully then going on to secured credit cards. Once my income is a bit higher it will be easier to do so.

and...

@Chuck -> Guess I shouldn't try to hide it, eh? See the details above. This type of biz (PayDay Loans, etc) is no secret. I must admit my drive isn't exclusively about the money, nor is it exclusively about not working for 'The Man'; but more so my desire to be in a position of having adequate income to provide the lifestyle and resources I never had available to myself growing up and for the soon-to-be-fiance-wife and potential-kids.

My parents picked cotton and worked at diners before having me and still live paycheck-to-paycheck today, putting my sister through private school. I'd like to be able to do more than that when the time comes (for kids). Looking at my possible future I am realizing that I won't be happy living hand-to-mouth. Not to mention my long-long-long term goal of being able to retire at 50/55 and just restore old cars at my leisure. At 27 I have come to the [sad] realization that I will not be able to do that following my current course. Something has to change and I don't want to miss an opportunity. BUT! I also don't want to jump into something I am not prepared for and have it fail, taking my savings and assets down the drain with it.

Thanks again everyone for your input. If there's more to say, please say it. Positive/negative advice -- let's hear it! After a whole day of pondering on it I'm still excited about the idea.

[on2wheels52]

pm'd you
Jim

[silverwhaletail]

Originally Posted by Brando

The type of business is payday advances/loans, title loans, prepaid credit-cards and money-transfer services.

Super Capital Intensive. You will need a big pile of money to get that up and running.

Keep in mind that the CA State Legislature hates these businesses because they are viewed as exploitative by liberals. And Liberals control the CA Legislatures... They could put you out of business with one stroke of Jerry Brown's pen.

But it's a good business for the people who are good at it.

As far as the "making money" thing goes, I view this in two ways.

1. Work is work. That's why they call it work. It sucks. Some work sucks more than other work. But work is good, even bad work, because it gets you money to buy what you need to buy. Or allows you to buy/invest, to enable you to get different work that sucks less than the original work. So the more you work, if you plan and "stratergize" properly, eventually you can get a type of work that sucks much less than the work before.

2. Work that is not work, sometimes yields a profit, even though you would do the work even if it didn't yield a profit. The profit is almost a by-product of doing the work that doesn't seem like work. And because the work doesn't seem like work, you do more of the work, which yields even more profit.

I settled on a combination of the two. I work at work. It sucks. but it pays good and the benefits are very very good. So I will keep working at this work until I'm 50. Then I won't work at this work, but it will continue to pay me, just like I was working (90%). So I keep working at it, knowing that at some point, I won't have to work at it.

I also work at work that is not work. I found out that I like buying, rehabbing and landlording. It has seldom seemed like work to me, so I didn't care that there was no profit. But then, suddenly, there was a profit. And I used the profit from the work that was not work, to buy more work. Which brought more profit. Which I used to buy more work, that to me, does not seem like work.

Moral of the story? The harder you work, the luckier you get.

[Hugh R]

No experience but with Title loans sounds like you will be hiring a repo man, and consigning vehicles to auto auctions. I think th CA legislature has bills every year to regulate the payday loan interest rates. One my get through one day.

[Zeke]

I hope this is not one of the mobile check cashing trucks. I had a relative fall for that deal and he ended up suing the franchisor before he turned a wheel. And he won his money back. All this happened 20 years ago in the OC where you are.

Plus, I'd rather raise the bar than to charge outrages fees to those that can least afford them. I don't intend to offend, but this is a bottom feeder type of business.

[Tobra]

if you want to be in AZ, you should start your business there

[Shaun @ Tru6]

Explain

Originally Posted by silverwhaletail

Keep in mind that the CA State Legislature hates these businesses because they are viewed as exploitative by liberals. And Liberals control the CA Legislatures... They could put you out of business with one stroke of Jerry Brown's pen.

But it's a good business for the people who are good at it.

Originally Posted by milt

Plus, I'd rather raise the bar than to charge outrages fees to those that can least afford them. I don't intend to offend, but this is a bottom feeder type of business.

[Tobra]

Shaun, the california legislature is very involved in all businesses here, and is particularly interested in any that can be used/abused for political gain. I can't imagine that you did not get that our legislature is quite meddlesome, but perhaps this clarifies some.


Milt is referring to the usurious rates the short term loan industry almost invariably charges. There are those who would say these businesses prey on the economically disadvantaged.

[Shaun @ Tru6]

Thanks. MA has a lot of regulations too, they aren't, in my experience, a deterrent to business. I find that states with a lot of regulation also have a lot of opportunity. Some folks see states taking advantage of business. I see it the other way around, and am happy for it, and so is my business. MA, NY, and CA are the only states I would consider.

Did some research. I see what you mean on usury rates. Nothing compared to some angel and VC rates, but that's a little different I guess.

[Zeke]

More on business: the best way to learn a lot about business is to start a new business and fail.

You will spend more time after the fact thinking about how it was supposed to work than any college student ever put into studies or a mock business model. Those that have not been in business for themselves have no idea about the commitment. Until you lose your equity, you just don't know how deep you have to dig.

I don't have any respect for those that start a business on borrowed money and fail. The people who loaned the money are the ones that learn on that deal.

[Porsche-O-Phile]

Originally Posted by Shaun 84 Targa

Thanks. MA has a lot of regulations too, they aren't, in my experience, a deterrent to business. I find that states with a lot of regulation also have a lot of opportunity. Some folks see states taking advantage of business. I see it the other way around, and am happy for it, and so is my business. MA, NY, and CA are the only states I would consider.

Did some research. I see what you mean on usury rates. Nothing compared to some angel and VC rates, but that's a little different I guess.

O-rly?

Hasbro to move 70 jobs from Mass. to R.I., lay off 75

[LeeH]

I get the "do what you love" concept, but it can be easy to waste a lot of time trying to figure out what industry you love and/or how to make a living in that industry. Personally, what I figured out is that it didn't really matter what industry I was in, as long as I could work for myself.

After two companies I worked for failed, I decided to buy a business. I knew I wanted a business that was already up and running. I spent about a year looking for the business that was just right. None met my preconceived notion of what my business should be. One day my wife suggested I find "a business" instead of "THE business." Within a couple of months I was a business owner.

No one has mentioned the "luck" factor. I think pure circumstance can be the difference between success and failure in many cases. Once I was business shopping with a clearer head, I looked at a huge variety of businesses in many industries. The one that made sense from a financial/price/terms/location aspect just happened to be in the building industry. And in the mid 90s, there just happened to be the beginnings of a building boom going on in Atlanta when I made the purchase.

Reader's Digest version is that the company I bought with four employees and around $450K in sales was soon 25 employees and almost $2 million in sales. I'd love to take full credit for that huge amount of growth in the 3 years I owned it, but reality is that there was a fair amount of luck involved with the success of that business.