Re: Business Owners?
Hrmmm.... all very sound advice.
My ex-GF's parents ran a chip shop (fries) in England for a few years... from that, they were able to buy a place in Hong Kong, as well as a nice house in Canada where they lived for 13 years. It had also funded enough money to start 3 businesses in Canada (2 failed). All of that from a chip shop. They recently moved back to work for 2-4 years to make enough for retirement! Within 6-months of returning to England, they made enough to buy their restaurant (rather than lease) which was worth $500,000; I think it was dollars, not pounds. Anyway, it was a very lucrative business...
What are the expected returns on investment here in N. America? I have read some guidelines that state you should never put up capital unless there is a 40% ROI and others that say you should value a business by projecting the profits over three years then take the current value of those profits - in essence, recapture your investment within 3 years. Are these golden dreams or realistic advice? For instance, a small pub was listed for sale in my home town at $139,000. How do I judge if this is a good investment? My initial thought was to subtract existing inventory/undepreciated equipment value and then see how that number compared to the current value of the projected profits (the ad claimed they had 8 years worth of financial records).
BTW, the reason I have focussed on a pub style business for my examples is that I figure it is a straight-forward business, although no business is simple, I want something that is straight forward without all the pitfalls of say, IT Consulting (IT services are my past and I know how tricky/underhanded a business it is! Also, I figure a pub because I like beer, , and alcohol will always be profitable.
As for retail, I wasn't thinking about opening up a clothing shop, I was thinking more along the lines of an M&M Meats (heard of them?) or a franchise with a step-by-step process for running the business... as you can tell, I really just want to use this first business as a learning experience for me to move on to bigger and better things.
I have read your warnings and concur about a partner, but what other choices do you have when you are low on capital? Businesses I have seen in this are require a minimum of $150,000 upfront capital while most request $300,000 or more. haha, like this 26year old has that much cash on hand.
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