What kind of business can you start or buy into for $50k or less?

Discussion in 'The Pub' started by Rick Lee, Mar 3, 2015.

  1. Rick Lee

    Rick Lee Member

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    Other than a Snap-On tool truck, what decent small business is it possible to get into for under $50k? I'm just about at the end of my rope with working for others. My problem has never been lack or work ethic, but rather lack of ideas. I got talking to a guy who bought a UPS store a while back. He said UPS required $7k just to talk with him about it, but then, if he went forward, credited that toward his franchise fee or other start-up costs. I don't think he's gonna get rich with that place and they seem to be everywhere.

    I've spoken with a guy about a Snap-On truck franchise, but they wanted $50k cash to start and I'm not keen on becoming a lender and collector, which those guys have to do when selling tools on credit.

    So what's the best way to make a living with $50k or less in seed money, with a strong back and a weak mind?
     
  2. ACfixer

    ACfixer Member

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    What kind of mad skills to do have? Numchuck skills... bowhunting skills... computer hacking skills...?
     
  3. Rick Lee

    Rick Lee Member

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    18 yrs. in sales in various fields, speak near native German and lots of professional writing experience. I'm pretty good with wrenching on cars, but don't want to touch that.
     
  4. ACfixer

    ACfixer Member

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    If you're good at sales Rick then something like a home improvement business can be done for $50K. Patio covers, windows, sun rooms, hvac... But you're going to need to hire people with journeyman field experience.
     
  5. Rick Lee

    Rick Lee Member

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    Yeah, I have no experience in the home improvement field at all. I get flooded with coupons and advertisements for such several times a week. I probably need something I have a little knowledge of. I would love to just do consulting and work from home on a 1099 basis. But I'd need to find clients and a value prop. as to why I can do it better than someone else.
     
  6. Staggerlee

    Staggerlee Member

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    I would very seriously start by watching Shark Tank. Some of these folks have amazing ideas and it helps that the Sharks are scrutinizing them.

    I would also buy some books from the harvard Business Review store, such as the HBR Guide to Building Your Business Case, HBR's Go to Market Tools: Pricing for Profit, and anything else on entrepreneurship.

    Don't be afraid to scrutinize any idea, but make sure you run as much numbers as possible and as you can find. You need a realistic picture.
     
  7. NormH3

    NormH3 Member

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    have you considered something like RedBox? I don't know the costs involved
     
  8. donnievaz

    donnievaz Member

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    Find a really great German product and set up a US distributorship.
     
  9. Peteyvee

    Peteyvee Premium Platinum Member

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    Boutique pedal builder. You start off with a cheap Chinese knockoff and rehouse it, get a well known artist to endorse it, then some TGP shills, then take a 50% deposit for a few thousand @ $200 each, deliver 10 or 20, get found out and disappear with the rest of the cash! :idea
     
  10. 27sauce

    27sauce Supporting Member

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    Landscaping. These are usually contractor gigs. Find out who's good, offer to have them assemble/manage a crew. Take their clients. I'm sure where you are you have plenty of rock yards with weeds in them, grass that needs to be maintained.
     
  11. 27sauce

    27sauce Supporting Member

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    Actually, there is a brilliant pedal maker in AZ that, IMO, is sitting on some really good product that he can't make fast enough, and has no clue on how to market. He's had a couple of "name" players use his stuff, but he's really stuck.

    He's a character…but man, the best fuzz/tone bender circuits I've ever played.
     
  12. Peteyvee

    Peteyvee Premium Platinum Member

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    There you go. Maybe Rick could invest his company and do all the sales, marketing and logistics...My idea sounds like a lot less work though.
     
  13. 27sauce

    27sauce Supporting Member

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    It does! I've got a "colleague" that has his own Nash factory in his garage.
     
  14. Madsen

    Madsen Member

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    If you're in a warm climate a pool cleaning service.

    Carpet cleaning service also has relatively low overhead. You can start with a portable machine & grow into a truck mount system.
     
  15. stratovarius

    stratovarius Supporting Member

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    I've caught a couple episodes of this TV series. It may help you come up with ideas and understand the realities.

    http://startup-usa.com/
     
  16. markjsmith

    markjsmith Member

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  17. Rick Lee

    Rick Lee Member

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    Are you talking about Billy? I've tried his prototypes several times and they wanted to test them with my SLO, which I brought over. Great stuff, but nothing to retire on.
     
  18. 27sauce

    27sauce Supporting Member

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    Jonny Hafer, Sound Sounds. He's making a name for himself with his boost, Rich Robinson, Mike Ness...but his fuzzes are spectacular.
     
  19. Rick Lee

    Rick Lee Member

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    As for landscaping and pool maintenance, the market here is very saturated. I've never seen a non-Hispanic male doing landscaping around here. It's pretty well-known that you have to hire illegals here to make it viable and there are plenty of them running their own landscaping businesses. Pool maint. is also very saturated and I know very little about it. I DIY my pool, but have a guy I call when I get in over my head. He does jobs I could not begin to handle. I just don't have the skillset for that and don't feel like spending the time doing an apprenticeship to learn.

    Edit - I did hire a non-Hispanic guy to clean up my yard a few years ago. He and his helper charged me $400 for what my current guys charges $60 for. Lesson learned.
     
  20. emdub123

    emdub123 Supporting Member

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    When I worked in real estate, I dabbled in business brokerage. Here's a few points to ponder:

    1. A typical small business will sell for 2x verifiable owner benefit (essentially take home pay). Watch out for declining gross sales and claims of off-books (and unreported) cash sales. Both are serious red flags. For some reason, liquor stores sell at a higher multiple.

    2. Businesses that are largely dependent on the skills/personality/relationships of the owner (e.g. accounting firm, landscaper) will typically sell for 1.5x verifiable owner benefit.

    3. Franchise sales have pros/cons when they are put up for resale. Typically, these resales are handled by the franchisor, but sometimes the owners can sell them on their own.

    In most of the cases that I've seen, there are two main reasons people sell their franchises. First, their gross sales never reach a point where they can make a reasonable living. This happened a lot with the mail/ship related franchises, which always seemed to have an owner benefit somewhere around 10-15% of gross sales. The store might do $400-500k for a couple of years, then a similar business would pop up in a close-by strip center and the gross sales would plummet. Next, the franchisor bleeds the franchisee by taking an unreasonable percentage off the top (gross revenue vs net revenue) and/or requiring them to buy their goods through the franchisor exclusively (often at a substantial markup over what you could buy them for on your own).

    4. The restaurant business will run you ragged. Take a look at how the Presidents look when they take office compared to how they look when they leave office. They always look like they've aged 20 years, right? The restaurant biz will do that to you too.
     

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