Young Entrepreneur Forums  
en·tre·pre·neur –noun Entrepreneur, translated from its French roots, means "one who undertakes." The term Entrepreneur is used to refer to anyone who undertakes the organization and management of an enterprise involving independence and risk as well as the opportunity for profit.
Find Qualified Vendors
 

Welcome to the Young Entrepreneur Forums

   
NBTL NBTR

Find Business Partners Get Involved in Startups Commercial Real Estate Startup Jobs Find Business Opportunities


Young Entrepreneur Forums » Business Start up phase » Startups » Want to start management company..



Reply
 
LinkBack Thread Tools Rate Thread Display Modes
Old 04-25-2008, 09:06 AM   #1 (permalink)
Junior Member
SSpiro's Avatar
Activity Longevity
0/20 17/20
Today Posts
0/0 sssssss34
Location: Tampa, FL
Want to start management company..

I'd like to start a management company in form of an LLC.

This company would own and manage a few select franchise restaurants, possibly a hotel or two, some commercial real estate, and whatever else might make sense that follows along the business plan and company mission.

The company may also offer management services for existing companies as an outsourced service that oversees management, operations, legal, fiscal, and other aspects of an existing company that sees the need to outsource.

Obviously the company needs to start somehow.. most franchises require a certain amount of net worth, liquid assets, percentage of cash down, etc to get started. If a company is a NEW LLC, how will it have liquid assets and net worth, and what can a startup do to create this to get started?

It's like a catch 22.. Need liquid assets and net worth to start first franchise.. need first franchise to generate asset and net worth.

The idea of creating this management company and being an LLC is keeping personal finances, taxes, liability out of the hands of the partners/owners.

Anyone chime in and let me know your thoughts! Is this going to require personal funds or can this get started without personal funds?
SSpiro is offline  
Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Spurl this Post!Reddit! Wong this Post!
Reply With Quote
Old 04-25-2008, 09:18 AM   #2 (permalink)
YE Veteran
jasaunders's Avatar
Activity Longevity
10/20 6/20
Today Posts
0/0 sssss1607
Location: Chicago, IL
You won't be able to have a franchise with a new LLC. Franchises look for people with a high net worth and liquid assets along with previous success in the industry for a reason. They don't want to take a chance with a brand new company. So your only option is to your your own liquidity if you have it. You definately need personal funds.
jasaunders is offline  
Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Spurl this Post!Reddit! Wong this Post!
Reply With Quote
Old 04-25-2008, 09:26 AM   #3 (permalink)
Junior Member
SSpiro's Avatar
Activity Longevity
0/20 17/20
Today Posts
0/0 sssssss34
Location: Tampa, FL
Quote:
Originally Posted by jasaunders View Post
You won't be able to have a franchise with a new LLC. Franchises look for people with a high net worth and liquid assets along with previous success in the industry for a reason. They don't want to take a chance with a brand new company. So your only option is to your your own liquidity if you have it. You definately need personal funds.
So I'd have to Start a franchise based on personal net worth/liquid and then start the LLC, and perhaps sell to the LLC? Then go from there?

The experience I have.. I've ran 3 restaurants in the past. Just haven't owned any. Tired of working for someone else when I can do it on my own.. Know what I mean?

Just financial resources are limited.. so I was hoping the LLC would help me get over the need for personal net worth and liquid.
SSpiro is offline  
Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Spurl this Post!Reddit! Wong this Post!
Reply With Quote
Old 04-25-2008, 10:05 AM   #4 (permalink)
YE Veteran
rogercbryan's Avatar
Activity Longevity
14/20 3/20
Today Posts
0/0 sssss2593
Location: Washington, DC
It's like everything else in business- its a slow step by step process. You seem to have a great deal of ambition so all you need to do now is lay the foundation for your company. If during year 1-3 you get your first franchise going then year 4-5 you do your second.. then in year 6 your third... year 7 & 8 you add two hotels... then you would be on to something...

The key is always your first successful venture. If you can get one franchise up an running in a profitable manner then you'll be well on your way to accomplishing everything you want.
__________________
"Business is WAR - Take no prisoners - give no second chances" - The Hudsucker Proxy


GoGets Business Services:
rogercbryan is offline  
Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Spurl this Post!Reddit! Wong this Post!
Reply With Quote
Old 04-25-2008, 10:12 AM   #5 (permalink)
Junior Member
SSpiro's Avatar
Activity Longevity
0/20 17/20
Today Posts
0/0 sssssss34
Location: Tampa, FL
Quote:
Originally Posted by rogercbryan View Post
It's like everything else in business- its a slow step by step process. You seem to have a great deal of ambition so all you need to do now is lay the foundation for your company. If during year 1-3 you get your first franchise going then year 4-5 you do your second.. then in year 6 your third... year 7 & 8 you add two hotels... then you would be on to something...

The key is always your first successful venture. If you can get one franchise up an running in a profitable manner then you'll be well on your way to accomplishing everything you want.
You're absolutely right.. Thank you for the reply.

The key will be funding the first venture. This is and has been my first hurtle, unfortunately.
SSpiro is offline  
Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Spurl this Post!Reddit! Wong this Post!
Reply With Quote
Old 04-25-2008, 10:25 AM   #6 (permalink)
YE Veteran
rogercbryan's Avatar
Activity Longevity
14/20 3/20
Today Posts
0/0 sssss2593
Location: Washington, DC
Quote:
Originally Posted by SSpiro View Post
You're absolutely right.. Thank you for the reply.

The key will be funding the first venture. This is and has been my first hurtle, unfortunately.
I'm going to throw out a guesstimate here... I would say 95% of people have the same problem 'getting funding for their first venture'. I used the BBS method to start my first company (beg... borrow.. steal). I started my company 2 1/2 years ago... second in April of this year... and my third is set to launch in June... so once you get the ball rolling its hard for anything to stop you.
__________________
"Business is WAR - Take no prisoners - give no second chances" - The Hudsucker Proxy


GoGets Business Services:
rogercbryan is offline  
Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Spurl this Post!Reddit! Wong this Post!
Reply With Quote
Old 04-25-2008, 10:34 AM   #7 (permalink)
Junior Member
SSpiro's Avatar
Activity Longevity
0/20 17/20
Today Posts
0/0 sssssss34
Location: Tampa, FL
Quote:
Originally Posted by rogercbryan View Post
I'm going to throw out a guesstimate here... I would say 95% of people have the same problem 'getting funding for their first venture'. I used the BBS method to start my first company (beg... borrow.. steal). I started my company 2 1/2 years ago... second in April of this year... and my third is set to launch in June... so once you get the ball rolling its hard for anything to stop you.
I think 95% may be too low of a guesstimate.

BBS Method will have to be my first avenue as well.

Let me also add that I have a few unique restaurant ideas that would not be franchise-purchased. I'm in the process of introducing a few select individuals to these ideas and concepts, but so far, not so good. I have some very tight friends and family.
__________________
My LinkedIn
SSpiro is offline  
Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Spurl this Post!Reddit! Wong this Post!
Reply With Quote
Old 04-25-2008, 10:55 AM   #8 (permalink)
Junior Member
SSpiro's Avatar
Activity Longevity
0/20 17/20
Today Posts
0/0 sssssss34
Location: Tampa, FL
I'm pondering...

I wonder if perhaps a first venture may be better obtained by buying an existing restaurant or business; perhaps via LBO..? What do you think?
__________________
My LinkedIn

Last edited by SSpiro; 04-25-2008 at 11:39 AM.
SSpiro is offline  
Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Spurl this Post!Reddit! Wong this Post!
Reply With Quote
Old 04-25-2008, 11:13 AM   #9 (permalink)
YE Veteran
rogercbryan's Avatar
Activity Longevity
14/20 3/20
Today Posts
0/0 sssss2593
Location: Washington, DC
Quote:
Originally Posted by SSpiro View Post
I'm pondering...

I wonder if perhaps a first venture may be better obtained by buying an existing restaurant or business; perhaps via LOB..? What do you think?
This isn't my industry (restaurants) so I want to be careful what type of advice I give. In my opinion I would think that your first venture would have a greater chance of success if you were to buy a preexisting business. This would mean lower start-up capital requirements as well as it would give you current income streams.

Many of my friends here in DC are bar/restaurant owners/managers/chefs so I've listened to them talk about their businesses. Its damn hard work and super long hours. This often leads to burnout. You may be able to take advantage of that to work your way into a partnership or a LBO (not sure if you meant LBO- Leveraged Buyout or if LOB stands for something else) if you can find the right person at the right time.

Its sounds like you already have management experience so you are now looking for ownership experience. Even if you can only work your way into a 20% stake in a place you'll be moving in the right direction. I would look for owners who have been doing this for 10+ years and that are over 40 years old. They seem to be ideal candidates for partnerships because of burnout.

Again.. not my indsutry... just giving my opinion... now if you want to start and auto auction... then I'm game to help.
__________________
"Business is WAR - Take no prisoners - give no second chances" - The Hudsucker Proxy


GoGets Business Services:
rogercbryan is offline  
Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Spurl this Post!Reddit! Wong this Post!
Reply With Quote
Old 04-25-2008, 11:22 AM   #10 (permalink)
Junior Member
SSpiro's Avatar
Activity Longevity
0/20 17/20
Today Posts
0/0 sssssss34
Location: Tampa, FL
Quote:
Originally Posted by rogercbryan View Post
This isn't my industry (restaurants) so I want to be careful what type of advice I give. In my opinion I would think that your first venture would have a greater chance of success if you were to buy a preexisting business. This would mean lower start-up capital requirements as well as it would give you current income streams.

Many of my friends here in DC are bar/restaurant owners/managers/chefs so I've listened to them talk about their businesses. Its damn hard work and super long hours. This often leads to burnout. You may be able to take advantage of that to work your way into a partnership or a LBO (not sure if you meant LBO- Leveraged Buyout or if LOB stands for something else) if you can find the right person at the right time.

Its sounds like you already have management experience so you are now looking for ownership experience. Even if you can only work your way into a 20% stake in a place you'll be moving in the right direction. I would look for owners who have been doing this for 10+ years and that are over 40 years old. They seem to be ideal candidates for partnerships because of burnout.

Again.. not my indsutry... just giving my opinion... now if you want to start and auto auction... then I'm game to help.
My type-o, sorry about that..LBO is what I meant.

Any of your DC friends interested in investing or partnering up in Fla? Wife and I love the DC area, maybe we'll just go there!

I still have a lot of learning and reading to do, but its looking like this is a better option for first venture. Purchase/LBO/Partnership of existing business. Would help generate revenue and worth to start second venture.

Restaurants are definitely taxing and require so much time and hands on. The goal would be, long term, to own the ventures and no longer manage the day-to-day tasks, but oversee via macromanagement.

New question is.. With a LBO of existing restaurant/business, would the LLC become the new director or myself personally?
__________________
My LinkedIn

Last edited by SSpiro; 04-25-2008 at 11:41 AM.
SSpiro is offline  
Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Spurl this Post!Reddit! Wong this Post!
Reply With Quote