I want to start a business...

[Brando]

And I'm an idiot. I hear stupid people make tons of money, so I figured it was time to dumb-down and make some cash.

Here's the skinny: I've got a friend going into franchise operation. They're willing to waive the franchise cost ($50k) so I would just need the startup capital for the location and other assets.

I know a little bit about running my side-work (as a sole proprietorship) but not nearly something as involved as a full-on retail storefront. Let's just say, I'm willing to do the work, get my hands dirty and take on the time-commitment, but I need to learn how to run it.

Where do I start? Take some classes? Seminars? I know there are many knowledgeable business people here and some valuable insight (or at least clear direction on a starting point) would be of monumental help.

I want to be able to get it going in 9 months to 1 year (I still have to work a day job right now).

[Jim Bremner]

find a someone who owns the type of biz that you're looking at buying. WORK for them for a while and see what they do right and what they do wrong. See if it's what you want and can do for a long time.

[Christien]

I agree, take any position available at another location in the franchise. If it's a Macdonald's, get a job as dishwasher for a month or 2. If it's a clothing store, work as a cashier.

[gassy]

If you don't love what you're going to be selling you're going to hate the whole process. Make sure you're in it for the right reason first-- not just because you think you can make money. If you own a retail shop it becomes your life.

[Cdnone1]

Do you have a decent business plan, does the franchise come with marketing support, do you have a clearly defined area of sole operation, have you investigated all the regulations and government fee's that will add up running a retail store?
There are all kinds of hidden things that will kill your dream and destroy your investment of both time and money if you do not do serious due diligence before you commit.
In LA there use to be a group called SCORE. It was retired CEO's that where available to help start ups free of cost. Basically successful retired board business people who still missed "the game". Look around and see if Costa Mesa has something like that. They have no skin in the game and will give you honest advise.
Good luck, it can be fun and rewarding.
Steve

[john70t]

There's knowing the market beforehand, before investing a big chunk of debt.
-Is the area growing or declining? (i.e. high end jewelry in an emerging ghetto)

-Will there be a continuing need for your product or services? (i.e. harp repair in compton)

-Can local business laws easily affect the business? (i.e. porn shop in vegas/chitown)

-Can the product be sold interstate if local sales fall? (i.e. homemade ice cream)

-Can the business be easily duplicated by other companies? (i.e. coffee house)

[madmmac]

Reputable franchises have their own training and marketing resources at your disposal, typically for zero cost.

[Porsche-O-Phile]

Don't do it in California. Trust me, I tried to start up my own practice there and the start-up costs, fees, permits, licenses and taxes will absolutely shell you.

[Porsche-O-Phile]

FYI McD's is EXTREMELY competitive for franchises. From my days when I had them as a client I learned (IIRC):

O-Os (Owner/Operators) have on average three restaurants already - individuals who are already O-O's are preferred.

At least $2M liquid assets (forget whether this was a requirement, but there was a pretty high liquid asset requirement even to be considered)

Prior restaurant experience

VERY comprehensive and detailed business plan

There's probably someone on here who's an O-O who can chime in. Also those guys have to pay a LOT to McD's corporate for the franchise and all kinds of other stuff as time goes along, but they do all right for the most part so long as they have decent oversight/management of their restaurants.

[scottmandue]

I don't own a business but I have two friends who do (or did)

One friend found a product he liked... threw a big pile of money at starting up (leased a place, bought a bunch of product, paid for a bunch of advertising)

he went bankrupt in about a year.

Other friend started working out of his house, built a clientele, now has an office and has been very well for over a decade (maybe two).

My dad also started out as a HVAC contractor working out of his house, he later bought a shop and then invested most of his profit into real estate back in the 70's, he is also doing very well.

I have been told you should have enough money to keep going for a year because you will not make any profit in that time.

YMMV

[Zeke]

In CA the dept of corporations controls franchises. If the franchise seller does not properly train you in all aspects, you can sue them if you fail. Not saying it would be easy, just saying people selling franchises are highly regulated.

BTW, waiving the fee is the first sign of a scam or a weak franchise.

The closest SCORE office is in Burbank or thereabouts. They hold seminars in various locations. Get in touch thru their website.

[Brando]

Thanks everyone, some great insight. The waiving of the fee is because the owner is a close friend. Make no assumptions, I'll still have to acquire the equity necessary for the storefront end. They look to start offering franchise options at the same time I (hope) to be ready to take on a franchise as an Owner/Operator. They agreed to train and provide everything, basically hold my hands, through the initial process. I may have issues in the credit/assets department but in a year who knows - that could be turned around.

Also since it's an entirely new business structure to me, they also agreed to have me in on weekends to learn how to run things. Do that for about a year, save up the money, repair the credit and attend classes/seminars as needed, I believe I can do it and be successful. I know I'm being vague on the type of business but I can say that with things running smoothly it nets a good return monthly if you only do it 5-days a week. I'm not about to jump right into this, I have about a year to evaluate and prepare, which I intend to do.

I know I may be focusing in on the dollar signs... But I'm sure as hell tired working for someone else and just getting by. If that's the case, I'd rather work for myself and get by without the hassle of upper-corporate politic BS.

[Cdnone1]

Just be careful, you might end up working for yourself and losing money. make sure you keep your eyes open and get someone to give you lots of un-bias advise. And don't kid yourself you will not be getting rid of political BS in a franchise just getting a different type.

Steve

[Shaun @ Tru6]

Originally Posted by Brando

I know I may be focusing in on the dollar signs... But I'm sure as hell tired working for someone else and just getting by. If that's the case, I'd rather work for myself and get by without the hassle of upper-corporate politic BS.

Brandon, I like your enthusiasm, so clearly in your posts, but this is the wrong reason to start a business. You start a business because you have a passion for the product or service, not because working for The Man sucks.

Taking a year and learning the ropes is super smart. I hope in that time you can fall in love with the business you will be starting because it will make all the difference in your success.

[Tobra]

Shaun gives some sage advice

Originally Posted by Porsche-O-Phile

Don't do it in California. Trust me, I tried to start up my own practice there and the start-up costs, fees, permits, licenses and taxes will absolutely shell you.

this too, there is a reason they say California is the most anti-business state in the country

[lendaddy]

Originally Posted by Brando

I'm being vague on the type of business but I can say that with things running smoothly it nets a good return monthly if you only do it 5-days a week. .

This sentence bothers me, makes it sound like a pyramid type setup.

[notfarnow]

Originally Posted by Shaun 84 Targa

Brandon, I like your enthusiasm, so clearly in your posts, but this is the wrong reason to start a business. You start a business because you have a passion for the product or service, not because working for The Man sucks.

Taking a year and learning the ropes is super smart. I hope in that time you can fall in love with the business you will be starting because it will make all the difference in your success.

yep. anyone I know who has succeeded in business has also nearly starved or worked themselves to death first.Even then, some have done EVERYTHING right, and still had the floor fall out from underneath them. We all know people like that, and there are some on this BBS.

The sacrifice and risk is significant, and the ones who drive through the hurdles and tough times are generally motivated by something greater than $$$ alone.

If you LOVE what you do, the sacrifices don't seem as severe because you are excited by the work. Find the type of work that excites you, learn everything you can about it, and then build a business around it. Make sure you pay attention to those who have failed, and learn from their experiences

[bell]

come to florida and open a mr.hero or swensons........lol

[LeeH]

In addition to everything else that's been said... learn as much accounting as you can.

You mention that you will take time to "repair the credit." I know life sometimes destroys credit, but more often than not it's lack of knowledge and/or bad choices. Either will be deadly to a new business.

People who run small businesses pay people like me to keep track of their business finances. Sometimes that's because they don't have time. Sometimes it's because they just don't understand the whole accounting process.

If you learn about accounting between now and when you start, you won't have to pay someone to do your books and more importantly, you'll have a better understanding of how the money is coming into and out of your business.

[Chuck Moreland]

Some good advice above.

I'll add a couple tips as one who has started two business - though never a franchise.

Originally Posted by Brando

I know I'm being vague on the type of business

Stop being vague. The type of business really matters, both in terms of your prospects and what you need to do to succeed.

A common mistake of first time Entrepreneurs is keeping the business plan a secret. A better plan is to tell everyone you can, you will be surprised where help will come from - advice, contacts, money, etc. Seek and accept help.

but I can say that with things running smoothly it nets a good return monthly if you only do it 5-days a week.

Sorry, not gonna happen. Successful Entrepreneurs work long, hard hours. You will work long days and likely 6 or 7 days every week.

You really need to set your expectations correctly on the amount of work and dedication it takes to make a business succeed. It's very hard and that's why most fail. And it's why you need to do something you enjoy, you'll spend a lot of time doing it.

I know I may be focusing in on the dollar signs... But I'm sure as hell tired working for someone else and just getting by.

The quest to earn money is fine, admirable even. But you need more than this before starting a business. You need a burning passion to make it succeed. People find that passion in different places; a love of the product, a need to prove you can do it, a desire to live by your own wits or die trying, a love of the process of building a business, etc. There are many good reasons, but money alone won't get it done.

Know that most businesses fail. Hardly a guaranteed path to riches, it is filled with financial risk and hard work. If you can navigate those challenges it will be very rewarding, and you may do very well financially. Or you may fail.

3 years. That's how long it is likely for a new business to begin turning a profit. That means you work your arse off for three years, and you take nothing out. In fact, you pour money in trying to get it going. You need adequate capital to fund the business a personal expenses for that time period.

If you're not turning a profit in 3 years, you need to think about folding.

And the tip about learning accounting - gold.