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Old 25th May 2006, 01:07 PM   #1
Tom and Bill
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Default Help needed!! Wanting to start business!

Hello everyone, My name is Tom and my partner in crime is Bill. We are both tired of working for "THE MAN" and we both want to get a business off the ground but as with anyone doing this...we have questions!!!

Do most people start a business based on their likes or how much $$ than can make???

Our problem is we want to start a business but not sure what direction to go in. We have talked about many different business' but always seem to talk our way out of following thru because we get so emotional over it and the next thing you know we have our business as big as Microsoft!!!!

We both are interested in a custom/fabrication shop that tailors to high end automobile accessories, audio/video systems, wheels.....ect.

If anyone watches SPEED CHANNEL you may have seen a show called UNIQUE WHIPS...well....that is what we really want to do as well as suspension and engine performace. We both have the skills learned from hands on as well as some informal training. We know that their is nothing we can't do and our former work related experiences have proven that.

We both know we can have a business that we can enjoy as well as make some $$. But.............

How do you convince your mind that we can't start out with the shop and equipment that we want?? We live in the Northeast and shop space is very expensive (We need a minimum of 1500 square feet to start out with....around here that a $3000.00 a month lease!)

We are average middle class 30 year old working stiffs that want to do their own thing and having a hard time moving forward. We don't have large reserve of cash to get this off the ground and I really think this is really putting on the brakes. We have thought of a few other less expensive business' to start but we feel we are just "SETTLING" on a "CHEAPER" business to start and will not be doing what we really want as stated above.

Please Help!!

Tom and Bill

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Old 25th May 2006, 02:53 PM   #2
Matt McGee
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I think doing what you love is the first step to success - you'll be more willing and able to put in the long hours and heavy lifting required to get a business off the ground.

On the finances and other things you mentioned -- look for some small business resources in your area. Maybe there's a Small Business Development Center (http://www.sba.gov/sbdc/) in your area? With a little bit of looking, you should be able to find local resources and local people to help you decide if this is a good idea to pursue, how to pursue it, and even how and where to find physical resources like space and funding (loans).

Good luck!

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Old 25th May 2006, 03:02 PM   #3
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Good advice Matt!

Lots to consider here although you have definitely overcome one big obstacle already which is beginning to define your niche. Kudos!

Do explore what kind of business financing might be available through your local economic development organization or something similar (in Canada we have the Business Development Bank of Canada). They will usually require a very detailed business plan but that is a must anyway given the kind of investment you will both need to make, both in terms of money, time, risk, personal sacrifice, etc. You can find a ton of good business plan templates on the web. And do be prepared to front a good chunk of your own cash and/or collateral before any of the lending instutions will consider investing in your startup.

Also, you will need to consider the legal aspects of forming a partnership which no one should take lightly, even if you have been best friends since kindergarten This will involve talking to a lawyer.

Is there a good market for what you want to do in your local area? That's another biggie!

Best of luck to you both and if you hang out here often it will definitely keep you inspired and get you asking the right questions.

Cheers,
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Old 25th May 2006, 03:13 PM   #4
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Can you rent at a lower rate from an existing shop that has extra space/equipment? Perhaps even based on a fixed % of revenue you guys earn. I would consider alternative routes before getting to deep into financing my future.

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Old 25th May 2006, 06:57 PM   #5
Tom and Bill
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Thanks for the input so far!! We both feel that if we don't follow thru on our initial plan, we won't be giving 100% to our venture. We MUST be successful, there's no option to fail (that's our feelings).

Between initial equipment purchases, building security deposit, initial advertising.....we are looking at 50K just to open the doors. That's with no customers lined up! (plenty of bills lined up!)I know we should also figure a good 8-12 months cash for expenses and guess what...we need to get paid as well!!!When we start putting all the costs and expenses involved in getting the show off the ground....it scares us! In reality, we would need in excess of $125K do open the doors that includes a cash reserve to pay the bills for 10 months!

We have also figured that maybe we should just start out "small" and grow into the business. By starting smaller, we could get started for a ton less initial investment. We could knock the above number down to 30-50K instead of 125K.

Our only concern is our clientele. We will be dealing with the extreme upper class individual who is willing to invest thousands of dollars into their vehicle just so it is different than their neighbors (We have a ton of EGO-RICH people in our area). From dealing with this caliber of cliental, they expect nothing but perfection, and having a shop that is not up to speed as others will hurt us.

This is such a hard decision. We want to get this off the ground ASAP, we have planned on how our shop should be set-up, equipment needed, advertising materials and so on....What we need to do (what we haven't yet) is do a real business plan. Scratch notes on paper doesn't really spell out our future!

Please respond with any input you can think of (good or bad)!We must get this on a roll!!!

Thanks!
Tom and Bill

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Old 25th May 2006, 08:52 PM   #6
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Tom and Bill....

First - Welcome to SBB

Next - You gotta love people that have hopes and dreams and want to take risks to make a go of it in this fine country. Hats off to the both of you!

My first thoughts are how can this be accomplished while using the least amount of money. I'm a tight wad.

Since you have some experience I assuming that you know where to get everything you need. What I mean by that is this. If you can hustle of a "job" through people you already know, couldn't you rent the tools you need from your past experiences? Couldn't you rent them for the day?

As far as office or warehouse space couldn't you use someone's shop for the day? I've seen small car shops that only get used at night and on race weekends. I think those type of shop owners would rent you some space for a while.

If you decide to take the high-risk investment loan option - - - advertise like crazy. There are ways you can find prospects and not use much money at all - it just takes physical labor and determination.

I sincerely believe you can pull things off without getting a loan. You just have to spend more time thinking about how to accomplish your goals without funds. If you focus your thoughts on - "we will do this new business venture without going into debt" - the thoughts will come.

Keep us posted and let us know if there is anything else we can do to help!!!

All the best........

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Old 25th May 2006, 11:47 PM   #7
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Keeping in line with Scott's idea about avoiding debt, I bet you could get a lot of marketing mileage in through referrals. There must be a few "important" and influential trend setters in your neighborhood with deep pockets that you could draw in as first customers. Offer them some kind of incentive if you have to but just do whatever is necessary to do to get those first few clients through the door.

Then incent them again to refer more business your way.

Network like crazy through local venues like the Chamber of Commerce. Create some local buzz with a press release (you've got a buzz worthy idea here!). Get all spiffed up and have your business cards with you always. Show that your auto business is truly different and very high end. You only work with the best tools for the best clients. Keep it super niche. I believe Michael Port calls this the "velvet rope policy." i.e. clients are knocking your door down to just be "allowed" into your shop!

Sounds like you both have already worked out a lot of the details in terms of your financial requirements. Now you need a marketing plan and a partnership agreement

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Old 26th May 2006, 06:55 AM   #8
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Brilliant ideas Karri

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Old 26th May 2006, 07:34 PM   #9
Tom and Bill
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Thanks for all the input!!!!

We have doing some serious thinking on how to get this going

In order to keep initial costs down.....we could start this operation out of my home garage. The size is do-able and the rent is just right!!! FREE!!

We could always outsource some bracket and metal fabrication until we get this off the ground.

Advertising might be tough...being located in a residential area. This may or may not be an issue because we only operate by appointment only and we also offer pick-up and delivery of clients vehicle(s).

So, the wheels are turning!!!

Thanks again for your input!

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Old 27th May 2006, 12:34 AM   #10
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Quote:
Originally Posted by Tom and Bill
Advertising might be tough...being located in a residential area. This may or may not be an issue because we only operate by appointment only and we also offer pick-up and delivery of clients vehicle(s).
Thanks again for your input!
Try not to think "advertising." Think "marketing." Think "networking." Think "niche niche niche." In the end, your "advertising" might only cost you a couple of jazzy looking suits and some business cards

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