Forums: Discussions for entrepreneurs and small business.

Good afternoon startupnation!

It seems I have hit the wall before I have even had a chance to get started. I have "started" a business that is in retail sales of certain electronics. The west and east coasts are currently doing very well in this market yet there is no one to supply this product in the central US or south US. Being located in South Texas I have the prime ability to no only saturate this market but also sell to our neighbors in the south.

So heres the issue, as most have stated before many people want x amount of time your business has been open, a corporate location, total gross over x amount of time.

But being a startup home based business you do not have any of that information as you are a "startup business". It makes me laugh when I go to my bank asking for a starup loan and there first question was how long have you been in business? Just doesn`t make since to me but then again I am a mer mortal.

Suggestions? I was thinking about just doing a personal loan but the interest rates are higher on them.

Here are some of my stats so you all can get a better picture on my situation.

LIC / Loan Amount: 15 - 30K (mainly for inventory)
Company: DBA (sole proprietorship)
Location: Home Based (regional sales and internet)

Current Income: 65K
Own our home

Thanks!

You`ll need angel money or friends and family to make the first push.  Then once established you can go to banks.  What kind of electronics?  Seems to me this is a very competitive field.

 

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Travis Tschepen
Hibachi Bros. LLC

--My goal in life is to be as good of a person my dog already thinks I am.--

Yeah some electronics are. I am leaning towards the FTA receivers market. In Texas with all the rural areas around and the lack of knowledge of what is available FTA using satellites and receivers there is a huge market.

What is angel money? Is that money that magically appears :)

Based upon the info you`ve supplied, there are several possible approaches. I`m assuming that you have little (or no) funds to invest in getting started - but I would strongly recommend that you consider setting up the business as a separate legal entity. I`d also suggest a basic business plan which includes:

• some research that confirms the existence of a market
• a marketing plan (with budget)
• The essential financial projections (which indicate that this endeavor can produce profits)

Given the above, capital sources for inventory include:

• your suppliers
• your customers
• lenders who loan on inventory
• An government guaranteed loan (you may have more than one option)
• A home equity loan

This is just for starters. However, in all the above situations (except the home equity loan) the lender will want to understand how you are going to generate the money (profits) to repay them. So the basic business plan is pretty essential.

 

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Business Growth Masters, LLC -
Capital Catalysts for Entrepreneurs
Home of the Scalable Business Plan and QuikStart Capital Programs
http://www.bizgrowthmasters.com
info@bizgrowthmasters.com

This is some great advice! I am currently going through the "Business Plan Pro Premier" software and creating a full business plan. On the company as a separate entity, I am not sure as to why a DBA or (sole proprietorship) would not work in my situation. With minimal overhead and expected sales not to reach over 100,000.00 in the first year I thought it best to start off as a DBA.

Either way the company would ride on my personal credit as the company itself has no history of sales or longevity.

I`m glad you found it useful.

There are several reasons to set up a separate business entity including -it`s really not the best idea to leave all of your personal assets open to any business liability.

 

-------------------------

Business Growth Masters, LLC -
Capital Catalysts for Entrepreneurs
Home of the Scalable Business Plan and QuikStart Capital Programs
http://www.bizgrowthmasters.com
info@bizgrowthmasters.com

I`d actually argue the opposite. My advice is almost always for start-ups to begin as sole proprietorships. As you`ve already seen, you`re going to have to sign personally for the loan as it is, so forming an LLC or corp isn`t going to help you any there.

In my opinion the question is whether or not your particular business is likely to create any liability issues (from defective products for instance?), and would those be covered more cost effectively with an insurance policy.

Best of luck to you whichever way you decide to go!

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Accounting Made Simple | Sole Proprietor Tax Guide

Angel money is money form wealthy people(s) who like your idea and hopefully have some experience in what you are trying to do.  Mostly a passive role.

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Travis Tschepen
Hibachi Bros. LLC

--My goal in life is to be as good of a person my dog already thinks I am.--

good luck. i would start with friends and family first. try to get them onboard - if you`re doing well and they see progress they may invest more into your business.

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No Eternal Reward Will Forgive Us Now for Wasting the Dawn.

I truly can sympathize with you.  When I was beating pavement trying to get my own personal home-based business off the ground and establish it in a professional physical location, I almost lost hope.  I kept hearing the same thing over and over again at every bank I tried.

One of the biggest hurdles I faced as I tried to make my business a reality was how to convince a lending institution that my business would make enough money to repay the requested loan amount.

The bottom line is that I found out, in each attempt I made to acquire a small business loan, that collateral is one of the biggest setbacks most entrepreneurs and small business owner have to face and overcome.

I found it very difficult to convince any bank that my home-based business could be a tremendous success, if I could acquire the resources I so desperately needed to get things on stream.  The fact remained that my efforts were fruitless.

However, I discovered an online lending resource, www.thesnaploan.com.  Based on my experience with this site, I was able to successfully acquire a start up loan for $100,000.

What’s even better is that I was able to apply online, and I got my approval pretty fast, about two weeks.

It sounds like this website could be right up your alley.