Are you starting a new business?

[Steven Allen]

I have had a few inquiries from prime members who have asked for some advice on how to start a new business or become self-employed. I am happy to answer a few questions for anyone that needs help. I certainly have received my share of help over the years from those who have been kind to me and happy to reciprocate. I fully expect other prime members who have have experience similar to mine to particpate as well. Let's make this a true forum by kicking around anyones questions and truly offering them our best advice.

I have no problem taking a few minutes out of my week to try and mentor.
Please keep in mind I have a very tight schedule and so I cannot usually talk on the phone during the work day. However, I can often chat for a few mins
in the evening usually on Tuesday's and Friday's. As long as your questions do not take more then 15 -20 mins I am offering FREE help.

 

[PoohBEAR]

Steven,
That is really awesome that you're taking the time to share you expertise.

 

[myw]

+1

in my industry consulting for other business is anywhere between 350-1000$/hr. mr allen is VERY kind to be helping other primers out here.

Steven,
That is really awesome that you're taking the time to share you expertise.

 

[audax]

I'd be glad to offer my assistance in answering questions and advice also. I'm not entirely sure what Mr. Allen's background is, although I'm sure he has a few more years under his belt than me.

My background is in software development for marketing, data mining and process automation. I've co-founded several successful ventures, and recently completed the multi-million dollar sale of one business less than a year old.

I'll be subscribing to this thread to offer any advice/answers.

 

[Semnos_NSX]

Wow! You guys are very kind! I’m actually in the middle of starting my own e-commerce business and have been figuring things out through school (MBA student), friends, research, and trial and error. I would love to hear about some of the things that you guys have learned over the years that have helped make you successful. :smile:

-Steve

 

[Vega$ NSX]

Once you guys make tons of money following his advice I volunteer my time and expertise in advising how to spending all that money. I'm quite the expert in that area. :smile:

 

[Steven Allen]

To help those of you who want help a bit of my backround:

1) Worked in a sales capacity for AT&T selling telephonic equipment and services. The 70's

2) Worked in Engineering and Manufacturing of Semiconductors using both
silicon and Gallium Arsenide substrates. I worked for AMD, National Semi and Siemens in upper mgmnt. 70's and 80's

3) Founded a retail chain 1979 (video, TV and other electronics) of 16 stores - sold in 1988.

4) Founded a discount Fragrance and Cosmetic retail store 1986. Was in a major mall in the Monterey area until 2005.

5) Founded one of the first beauty websites 1998 or 99? on a new shopping portal called Yahoo. Still own many websites including http://www.FragranceWholesale.com
Did 1MM in sales in second year.

6) Founded a media cosulting firm called Artisitc Media Consultants. Have helped companies both develop media campaigns, develop their business
and imrpove slaes and efficiency. I charge $300 - 400.00/hr when at work.

7) Founded EmerchantsGroup.com a merchants collective. Primarily focused
on merchant services at present. We have had as many as 700+ merchants use this service and process over a 1/4 of a billion dollars a year in credit card through this program. In fact, we were number two to Citi-Bank in referral business to our merchant processing partner at one time.

8) Currently working on a smartphone accessory using BlueTooth technology.
Expect/hope to launch my engineered product by the end of this year.

My educational backround attended college in both undergrad and as well as graduate work in Psychology, Chemistry and Law School.

Yes, I know my career path is all over the place.

Audax,

Can you send me a PM I would like to chat with you about your post:

"software development for marketing, data mining and process automation"

 

[jond]

How do you go about selling as a wholesaler?
I'm assuming you have to prove to the manufacture that you have the customers, or you have to have lots of $$$ to buy a certain quantity of stock?

 

[Steven Allen]

How do you go about selling as a wholesaler?
I'm assuming you have to prove to the manufacture that you have the customers, or you have to have lots of $$$ to buy a certain quantity of stock?

What product, how many pieces, your expertise in the marketplace,
who are your customers, how will you pay for your inventory, what if the customer returns the purchase, who are your potential suppliers, other wholesalers, mfctr, distributors and on and on?

More details for more help.

 

[jond]

What product, how many pieces, your expertise in the marketplace,
who are your customers, how will you pay for your inventory, what if the customer returns the purchase, who are your potential suppliers, other wholesalers, mfctr, distributors and on and on?

More details for more help.

Gotcha. So basically you submit an application to a manufacture to become a wholesaler and then they audit your business for things like above?

 

[comtec]

How do you go about selling as a wholesaler?
I'm assuming you have to prove to the manufacture that you have the customers, or you have to have lots of $$$ to buy a certain quantity of stock?

Excellent question,
Finding wholesalers is hard and the reason i haven't launched anything yet. Even had one that wanted me to pay a fee to become a reseller. You can just try contacting them like i have but it hasn't lead anywhere yet.

I have had a web address parked for four years.

Mike

 

[jond]

Excellent question,
Finding wholesalers is hard and the reason i haven't launched anything yet.

What are you looking to sell? I had a list of wholesalers somewhere, I'll see if I can find it. It's on my home computer somewhere.
I'm actually curious about what it takes to BECOME a wholesaler(instead of buying from one) like Steven.

 

[Steven Allen]

Let me provide an answer by providing an example. As indicated I have been in the beauty busines for a LONG time. Getting started seemed daunting.
We went to flea markets at first and used the yellow pages for major cities
(think 1985 technology). After a while we networked thru some companies and started to attend trade shows. Later still wholesalers starting contacting us. Much of this can now be done online.

Typical wholesaler is primarily worried about payment. They do not care what you do past that. You can sell to the Costco's and the Sam's Club's of the world as a wholesaler - I have and do.

 

[comtec]

What are you looking to sell? I had a list of wholesalers somewhere, I'll see if I can find it. It's on my home computer somewhere.
I'm actually curious about what it takes to BECOME a wholesaler(instead of buying from one) like Steven.

Cool jond, you can become my wholesaler:biggrin:

I am just looking at something to move into when i retire and at this time i am open to almost anything so yes please pm me the list. What i would really like is to find a small manufacturer that would produce custom car parts per my specs that i would retail on my website.

Thanks
Mike

 

[Nefarious]

I have a foundation question if someone would care to answer.

The basis of any company is startup capital. What is the best way to get startup capital?

In my instance, my wife and I don't have much in savings because of recent medical emergencies that drained us. Our home is only 4 years old and we don't have much that we can use for collateral for an SBA loan. I believe you have to have roughly 20% in liquid cash to get a loan. Lastly, I became unemployed last month due to cut backs.

My wife and I have interest in getting into a franchise of some kind. We want to franchise because they have a proven track record of succeeding. After some time learning how to run a business and building some savings, we would likely want to expand to some sort of personal interest new startup.

 

[Steven Allen]

I have a foundation question if someone would care to answer.

The basis of any company is startup capital. What is the best way to get startup capital?

In my instance, my wife and I don't have much in savings because of recent medical emergencies that drained us. Our home is only 4 years old and we don't have much that we can use for collateral for an SBA loan. I believe you have to have roughly 20% in liquid cash to get a loan. Lastly, I became unemployed last month due to cut backs.

My wife and I have interest in getting into a franchise of some kind. We want to franchise because they have a proven track record of succeeding. After some time learning how to run a business and building some savings, we would likely want to expand to some sort of personal interest new startup.

Your question is posed in such a way as to provide almost no opportunity for providing a positive response. To quote: " I am unemployed, have very little money and am interested in proven businesses 'franchises' which of course will have really no flebility in starting captital."

I really do not know how to help you.

 

[NetViper]

I have a foundation question if someone would care to answer.

The basis of any company is startup capital. What is the best way to get startup capital?

In my instance, my wife and I don't have much in savings because of recent medical emergencies that drained us. Our home is only 4 years old and we don't have much that we can use for collateral for an SBA loan. I believe you have to have roughly 20% in liquid cash to get a loan. Lastly, I became unemployed last month due to cut backs.

My wife and I have interest in getting into a franchise of some kind. We want to franchise because they have a proven track record of succeeding. After some time learning how to run a business and building some savings, we would likely want to expand to some sort of personal interest new startup.

A company I do work for is looking for Franchises. GoMinis.com. I don't think they have anyone in your area.

 

[Vic Cardenas]

I have sort of the same situation, but I have started my business. I'll try to pose the question so that it can be answered. We've just entered our 2nd month of business. I started a food truck serving Peruvian food. 'Como Lomo' for anyone wanting to look it up. I believe we need more capital to keep operating. Just in case something expensive breaks (which it will). I've spent all our savings on building the truck. I feel I need to get credit but I'm wondering if business credit is hard to come by now?

I've been with the same credit union for my entire adult life. They turned me down for any type of business credit, even though my credit score is near 800. I've never missed a payment; I own a house that I've been paying extra principal on until recently (I don't want to leverage the house, though).

For the first time in my life, my credit card has a balance. A balance that exceeds my savings. But we are only talking a few grand here. For the past 10 years, at least, I've always had at least $10-40k in my savings account with that credit union. Now is the first time in my life I've really needed the credit but I can't get it. My question is... Is this normal for a start-up to be denied credit like this? If I were to "shop around" can I expect the same denial?

I did my first quarterly taxes and we were just barely below profit (not counting the initial investment). I have no doubt we will be profitable next quarter.

Should I just stick it out and say F-it about getting any credit? I'll always have my personal credit if I really need it.

 

[Steven Allen]

I have sort of the same situation, but I have started my business. I'll try to pose the question so that it can be answered. We've just entered our 2nd month of business. I started a food truck serving Peruvian food. 'Como Lomo' for anyone wanting to look it up. I believe we need more capital to keep operating. Just in case something expensive breaks (which it will). I've spent all our savings on building the truck. I feel I need to get credit but I'm wondering if business credit is hard to come by now?

I've been with the same credit union for my entire adult life. They turned me down for any type of business credit, even though my credit score is near 800. I've never missed a payment; I own a house that I've been paying extra principal on until recently (I don't want to leverage the house, though).

For the first time in my life, my credit card has a balance. A balance that exceeds my savings. But we are only talking a few grand here. For the past 10 years, at least, I've always had at least $10-40k in my savings account with that credit union. Now is the first time in my life I've really needed the credit but I can't get it. My question is... Is this normal for a start-up to be denied credit like this? If I were to "shop around" can I expect the same denial?

I did my first quarterly taxes and we were just barely below profit (not counting the initial investment). I have no doubt we will be profitable next quarter.

Should I just stick it out and say F-it about getting any credit? I'll always have my personal credit if I really need it.

Your question is typical of any start-up. So, I will answer your question with a question. Did you think or plan for a different position then the one you are in. Said differently, did you seriously expect that you would be turning a huge profit as soon as you started? I am guessing the answer is a a resounding no. Thus, you are in likely in exactly the postion that you expected and asking yourself the questions you should have already asked and answered.
With that being said, you are your best asset. IMHO business banking will offer you little to nothing. They will want to loan you money if you have too much money sitting in the bank. Banks are not good business partners PERIOD!!!!!! They have no clue on how to even run a bank more or less a business. Think 6 billion dollars in trading losses for Chase and the huge economic melt-down of 2008 and you will more then get the idea.

OK, what can I do help myself. Here is what I would suggest. Do a search on Google for the best credit card rates. Bankrate.com was a decent source in the past for this information. Use your best asset you and your 800 FICO score to secure as many credit card as possible with low interest rates.
Be prepared to incur some interest charges on a monthly basis. Use these funds as your foundation as you build your business. There will be no difference between what a bank would charge you for a business line and you will not need to go hat in-hand to Mr Banker and HOPE he sees past his own poor judgement.

BTW, I believe in the kind of business you are embarked on. It is a wonderful way to start and grow. There is plenty of examples of how some VERY successful eateries have started just as you are.

Good luck!!

 

[Vic Cardenas]

Thanks, Steven! Very sound advice. To answer your question: No, I didn't expect to turn a profit right away. I'm actually very surprised by how close we were just from the few days we were operating. However, I did not plan on spending all that money to start. I expected a bit less spending but should have known to expect the unexpected. :biggrin:

"you are your best asset" Words to live by! Thanks again!

 

[Nefarious]

Your question is posed in such a way as to provide almost no opportunity for providing a positive response. To quote: " I am unemployed, have very little money and am interested in proven businesses 'franchises' which of course will have really no flebility in starting captital."

I really do not know how to help you.

How about what is the best way for finding startup capital? Sources, types of loans to look at or steer clear from? I know I'm inbetween a rock and a hard place at this time and I will have to dig myself out of it.
Thanks

 

[audax]

How about what is the best way for finding startup capital? Sources, types of loans to look at or steer clear from? I know I'm inbetween a rock and a hard place at this time and I will have to dig myself out of it.
Thanks

No one is going to give you a loan without a solid business plan, and some confidence in your ability to run a business (read: prior experience/success).

It's probably not what you want to hear, but I don't think you're in the proper financial situation personally to even consider jumping into a business that requires funding.

Unless you have are getting into a service business where your main asset is your own skill, you need to get a paying job, get on stable ground, gather some savings and then leverage that to start a business you believe in.

I'd do more research into these franchises that you hear are so successful. If something is such a guaranteed success, then everything and their brother would be doing it.

 

[Steven Allen]

How about what is the best way for finding startup capital? Sources, types of loans to look at or steer clear from? I know I'm inbetween a rock and a hard place at this time and I will have to dig myself out of it.
Thanks

The option that you have is to partner with someone who has capital
and wants to invest in a business and have you be the working partner.
You can try and advertise such a relationship. Go to forums, perhaps Craig's List, talk with friends and family members and lastly if you go to a house of worship - pray. Because miracles do happen.

Good Luck!

 

[DocL]

Although I don't have formal training on how to run a business, I learned many things the hard way when I bought my business. The most important thing you have to realize is operating expenses before you even think about borrowing one penny. I had no idea how much things would cost on top of repaying my business loan. It was very frustrating paying staff more than myself in the beginning.

Second, you must have a marketing plan before you start or buy a business. If no one knows what you offer don't expect them to give you business. If there are other stores or people who do that same thing as you want too, why should they come to you?

 

[Nefarious]

The option that you have is to partner with someone who has capital
and wants to invest in a business and have you be the working partner.
You can try and advertise such a relationship. Go to forums, perhaps Craig's List, talk with friends and family members and lastly if you go to a house of worship - pray. Because miracles do happen.

Good Luck!

Thank you. I do come from family in a very comfortable financial position, however I do not feel comfortable borrowing or partnering with them. My father believes in being self made and I tend to agree that the struggle makes you appreciate things more. I struggled through my mid 20's and then got into IT and landed a systems admin job. After close to a decade, my wife and I had a comfortable lifestyle. Losing my job last month has turned things upside down for me and I'm just reaching out everywhere looking into ideas.

At this point, I am going to start a consulting business and try to grow it to a point of being comfortable again. I've been a systems admin for the last 12 years and feel confident in helping businesses get their IT side established as well has help the common person with computer problems. I did some contract consulting work 7-8 years ago and enjoyed it. I just need to register a business name, write a business plan, open a business checking account, and figure out how to get my name out there to get some business in the area.

In the future, my wife and I would like to open a high end pet boutique or franchise off of one already in business. We are involved in the dog show world and have 4 dogs of our own, so it seems natural to start a business dealing with something we are both passionate about.

If anyone has ideas on how to churn up local business, I'm all ears. I appreciate those taking the time to comment no matter good or bad. Criticism helps everyone learn and grow.