Trying to start a business

[syrushcw]

I'm trying to start a business and something I love to do. I'm going to try to keep it vague all though it doesn't matter since it'll take around 10 years to break even from opening costs.I'm going to make this short and simple. Opening costs will be around $670K for the first year, yearly costs to stay open will be around $686K with yearly income being about $720K. Now my question is say worse case scenario I spend the whole first year constructing and preparing and I have no business income for the 1st year. What would the best loan to look into be? Currently the only things I own is 3 cars and a motorcycle. I rent an apartment and have about 650 credit score. Where I currently work they donate $100k a year to build something for the community, So I'm thinking maybe next year or so I have all my stuff strait I can present them with my idea.

[rogercbryan]

If it is going to take 10 years to break even then this in not a good business at all. My experience has shown me that a normal break even point is 6-18 months. Anything over 24 months usually gets put in the circular file under my desk.

Now I don't know your business nor do I have experience in every business segment. It just makes me nervous that you would invest your money with no positive return for such a long period of time. Is this some type of social venture? I really need more info to answer the loan question... I will say this.. if you are not going to make money for a year and you do not have the cash on hand to pay for a loan.. then no one is going to lend you money.

[chanson]

The rule of thumb in business economics is 2-5 years to payoff your initial startup costs depebnding ont he size of the business. However l;ooking at the numbers and seeing only a 50k/year profit i really hope your not putting a whole lo0t of time in because if it flops at 700k investment your going bankrupt no other way about it. ASlot of risk for little return, even if you love what your going to be doing id still say forget it.

[rogercbryan]

The rule of thumb in business economics is 2-5 years to payoff your initial startup costs depending on t he size of the business. However l;ooking at the numbers and seeing only a 50k/year profit i really hope your not putting a whole lot of time in because if it flops at 700k investment your going bankrupt no other way about it. ASlot of risk for little return, even if you love what your going to be doing id still say forget it.

2-5 years to break even? Wow, that is a long time. I've now started or helped to start 5 businesses and all of them have seen a break even in under six months except one which is on its eighth month of running red.

[paul2145r]

Personally, most of my ventures have a limited to nonexistent investment threshold. If I can't do it for under $5k, I don't bother with it. Most of what I do involves networking and being a middle man, however, so I am able to get away with not needing large sums of money.

As far as your business, you need to figure out a better timeline. As the other members have said- 10 years is way too long. Most of my ventures last 2-5 years, and that is including prepping them for sale for a profit. I understand the large investment requirement for manufacturing or something similar, but you had better be making more money than that within 18 months.

Then again, if you are figuring on paying the loan off in 10 years and simply paying yourself an enormous paycheck for the duration of that time, it may be more feasible. The only problem with that plan is that banks will want to see ALOT of collateral to give that much money away for that long a time on an a mediocre credit score.

[pboychuk]

Hmm, wanna give me 700k$, id give you 50k a year on your investment.. With that much money I would hope you could atleast jump into six figures of net profit.

[matt_15]

why would you go into a business that costs 700k to startup , and wont break even in the first year ? Could you not start smaller, and online. Then you might have that kind of money to use for startup