[toffy]

Being entrepreneurs lets put our thinking caps on.... If you only have $1000 what can you do to make it grow? Show your real entrepreneur skills (FASTEST possible R.O.I wins) Possibility is a must, be realistic

[toffy]

I will open up a cigarette stand that also sells drinks near college areas. Cheap capital fast r.o.i

[GriZzly]

$1000 is the perfect amount for setting up an internet based company. I would use the money to setup a website that sells imported items from america to a UK market by buying the items from American resellers/wholesalers and would perhaps sell consumer electronics or airsoft merchandise.

[akula]

Originally Posted by toffy

Being entrepreneurs lets put our thinking caps on.... If you only have $1000 what can you do to make it grow? Show your real entrepreneur skills

Good Question.

In my experience the $1,000 should be spent on;

a) Proving demand for your vision
b) Putting a team and addition capital around your ambition.

The most common thing I've seen are startups failing to account for marketing costs and capital reserves to make up for intial screw ups.

So yes...I would formulate an expansive vision , and start recruiting cofounders so as to properly bootstrap the startup.

[GriZzly]

Originally Posted by akula

Good Question.

In my experience the $1,000 should be spent on;

a) Proving demand for your vision
b) Putting a team and addition capital around your ambition.

The most common thing I've seen are startups failing to account for marketing costs and capital reserves to make up for intial screw ups.

So yes...I would formulate an expansive vision , and start recruiting cofounders so as to properly bootstrap the startup.

That's a lot of pretty buzzwords you have there, but I didn't actually see you mention what you would do with the money, except make teams and visions lol

[Bscivolette]

Wow, as much as I like this question I must shoot it down. First, setting up a cigerette stand and selling drinks (I would assume alcoholic?) is a fine idea except you would well exceed your $1000 for permits to have the stand, the stand itself, inventory, and if you planned on selling alcohol you would need a license...which in most places around the USA go or about $5000-$15000 just for beer.

Secondly, The question is way to broad. How long is the investment for? Would you need some or part of that money in short term? What state is the money and/or venture to be located in?

[akula]

Originally Posted by GriZzly

That's a lot of pretty buzzwords you have there, but I didn't actually see you mention what you would do with the money, except make teams and visions lol

a) I would preffer not to spend it at all. Customers should finance businesses.

b) Practically, to start building a team and pursuing a vision, I would pay to get some test marketing done. There are a lot of ways to do it. If you have a portfolio of testimonies from people saying they want your product, or you have a collection of contracts for delivery- that's something you can build a business from.

In my experience, seed capital is best spent on extensive primary market research. But the money has to be spent neither to confirm nor to deny your market hypothesis, but to build an evidentiary case to use as leverage in further rounds of financing and team building.

Threw in a couple more for you.

The point: Before sales, you must make sure that people want what you are selling. This is best done when they've paid you for the goods, prior to you having delivered them. These contracts for delivery happen when entrepreneurs go out, ask questions from prospects and close deals without having gambled on buying inventory, and advertising, hoping their startups will get traction.

[toffy]

Bscivolette : Wow, as much as I like this question I must shoot it down. First, setting up a cigerette stand and selling drinks (I would assume alcoholic?) is a fine idea except you would well exceed your $1000 for permits to have the stand, the stand itself, inventory, and if you planned on selling alcohol you would need a license...which in most places around the USA go or about $5000-$15000 just for beer.

Secondly, The question is way to broad. How long is the investment for? Would you need some or part of that money in short term? What state is the money and/or venture to be located in?
Yesterday 05:03 PM

Not alcohol just ordinary nice cool drinks... but sure you can sell a little alohol. You dont have to spend $5000. I believe you can start a small stand with $1000.(assuming sure monoply of the location)

[akula]

Originally Posted by toffy

Bscivolette : Wow, as much as I like this question I must shoot it down. First, setting up a cigerette stand and selling drinks (I would assume alcoholic?) is a fine idea except you would well exceed your $1000 for permits to have the stand, the stand itself, inventory, and if you planned on selling alcohol you would need a license...which in most places around the USA go or about $5000-$15000 just for beer.

Secondly, The question is way to broad. How long is the investment for? Would you need some or part of that money in short term? What state is the money and/or venture to be located in?
Yesterday 05:03 PM

Not alcohol just ordinary nice cool drinks... but sure you can sell a little alohol. You dont have to spend $5000. I believe you can start a small stand with $1000.(assuming sure monoply of the location)

Dude. It's simple. To break even on this venture you'll need $xx amount in sales. Taking into account your opportunity cost and exposure to risk, the venture would need generate $100k plus within 12 months to make financial sense.

Because your marketing costs will be about 30% of revenues, you will need about $30k to get to $100k, adding fixed costs to your variable, and accounting for capital reserves, you will need a fair $50K to make sure this venture has a chance of meeting rational financial performance expectations, cover your risk adjusted cost of capital, show a profit and meet the hurdle rate.

I'd say, if the company doesn't get to $100k revenues, getting a job is a better decision than going live with this thing. Revenues have to be financed, and financial projections have to be run to identify all the key variables like break even, cash positive and time to out of cash. This stuff will tell you how to price the goods and heaps of other things, like how much money you need.

But as a rule of thumb, the analysis above is going to tell you how much capital you need to achive a set of specific objectives.

[Bscivolette]

Gentlemen, again we are avoiding the simple fact that they DO NOT allow just anyone to stand on a corner and sell alcohol. Bottom line is that it is very expensive to secure a license for this matter. If you were to sell non-alcoholic drinks that would be a completely different story.

Akula, in your cost analysis you make great sense but remember that the original question is what would you do if you had a $1000...remember? If an alcohol license costs $5000 your already way over your head - not to mention marketing, inventory, the stand, etc.

I think a more appropriate question would be:

If you had $1000 in your pocket but the ability to raise up to an additional $7000 in capital at a 6% annual interest rate what would you do? In addition, I believe setting such real life variables as the location of the would be venture would be helpful in establishing real results.

[GriZzly]