Planning on starting a business, any advice?

[gmandan]

I'm not sure if this post is appropriate for this forum, but I'm interested in starting my own business. I’m hoping to spend a great deal of time first actually doing some research before I jump into this. Does anyone have any good advice or sources of information I could learn more about developing a storefront, commercial leases, and health regulations that I will need to consider? I’m hoping to sell a type of food product I believe could be very successful. There doesn’t really seem to be a comparable business, so I’m thinking about researching similar companies like Jamba Juice to get an idea of a similar business and maybe possibly get a part time job there to learn firsthand how to operate a store similar to the one I wish to open.

Since I’ll be building the store from scratch, I plan on estimating startup costs such as equipment, remodeling the store, ingredients, etc. These fixed costs should be easily quantifiable, but what I’m more concerned about is what should I be looking for in an ideal retail location? Ideally the first thoughts that come to mind are tons of foot traffic with a majority of them being the demographic that I plan to target.

Also, any recommendations on low priced but high potential locations in the general southern CA area? Unfortunately, I’ll be limited to only that region.

I’ll probably update this post with anything else that comes to mind or to answer any questions.

[ColdCaller]

[ QUOTE ]
have a plan b

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[Mr. Now]

Start something someone else has proven actually works. Use the same advertising media he uses, and model your business the same way across the board with only minor variations once you know what the hell you are doing.

You must enter a growing market. This setup forgives your many early errors. If you enter a market that is growing slow, you must execute perfectly. This is going to be tough unless you have either real experience or a great mentor.

Business is a blood sport. Prepare to die. The odds are stacked against you. 80% of new businesses don't get to year 5.

The road to ruin is littered with the roadkill of over-exuberant startups that had that great, unique, cant-lose idea.

You must prove others are doing it successfully for the same entry costs you are estimating. By all means try. Copying the model of another guy is the safest route.

Every entreprenuer who succeeds will tell you how hard it was, and how off-by-a-mile his estimate of effort to get there actually was. Most will admit they would decide against it if they knew then what they know now.

That said, you have to try if it is in your blood. I dont like the sound of what you are doing. It sounds expensive to start, expensive to find out if you have a winner. I strongly dislike that situation.

What you want to a cheap-to-enter business where you can make 500K by year 4, 250K by year 2 and 70-90K annualized almost immediately. Take these types of shots when they cost 15-25K to get started--these are the kind of shots you want to take. Remember that any equipment you buy except vehicles are a near-total loss if you fail. Whatever you buy, you have spent and you never get it back if the business fails.

Avoid debt. If you have a great idea, sell of pieces of it to equity investors with expertise in the domain, who can assist you-- people with more than money who can mentor and guide you. If you have a big idea, dont worry about having a minority interest. That's what you are signing up for.

If you cannot attract equity investors, your idea may be too small, or worse-- it may actually suck. Banks are all too happy to help you sign over your home as collateral. They dont care sbout the merit of your idea, and they will loan you money on your home-- and capital assets you buy that you may have to sell for 15% of value if/when you fail. Oh ya-- the bank gets your house. What a deal. Avoid debt. Your idea needs to show profit fast to do so.

If you are successful, pay off your house ASAP. Dont kid around with alot of consumption. It can all end "just like that". Keep your lifestyle in check, even when you start experiencing huge paydays. Make it clear to any mooches in your family that you owe them nothing. Be on your guard when they flatter you.

Getting into a growth market cheap usually means some kind of service. You are talking product, and that is expensive to get into.

Are you prepared to lose 200K to find out if this works??

You might consider the book THE ORIGIN AND EVOLUTION OF NEW BUSINESSES by Amar Bhide. It is the definitive book on entreprenuership.

I started a business from absolutely nothing in 1993 and grew it to 4.3MM in sales via 70% compounded annual growth within 7 years. Prior to that I tried many "original" ideas. All of which were losers. However with the big winner, I experienced many astonishing paydays over several years. The amounts were stunning, huge obscene sums and more than I ever imagined or thought possible.

I've done it. It can happen-- to you. Read Bhide's book.
THE ORIGIN AND EVOLUTION OF NEW BUSINESSES by Amar Bhide

[Jim T]

It doesn't seem to me that you have any idea what you are doing or thinking about getting into. I guess asking for advice (even from anonymous complete strangers) is somewhat of a good sign. I have no idea what your financial status is, but unless you are able to finance everything yourself, I'd think that the chances of finding funding are about nil anyway. And if you DO have the personal funds, I would advise you to save your money.

If you really want to go into business for yourself, find something where you can start small and build it up. That way when you screw up - and you WILL screw up, many times - you won't cost yourself that much, and the lessons you learn will likely be more valuable than the money you lose.

Finally, having a partner (or two) who has skills which complement your own is invaluable. Just make sure that you can trust them.

My wife and I started our business in 2000, and had sales of about 20K. Last year we did over 2M. We've been profitable from Day 1, but if we'd actually had the money to start out bigger I honestly think we'd have gone broke, crazy, or both. We came close enough as it was.

[kyleb]

I've gone into business for myself, and just quit a pretty good job.

However, I've been working in this niche market for about 2 years part-time, and I am solidly in the black. My advice to you: Don't quit your day job when you pursue this.