Hey guys. Looking for some feedback from some of our successful entrepreneurial members. I own a Real Estate development company and work from home. This allows me some free time as well as money to invest in other areas. I have maybe $30-$50k that I would like to invest in another business for my wife and I to run/operate. I’ve looked at a smoothie shop next to a large commercial gym in the area as well as a couple semi-profitable tanning salons but with the economy being the way it is those types of businesses that require discretionary incomes to survive scare me a bit.
What, in your opinions, are some of the better business opportunities out there. I've even thought about some online opportunities. How about any links to websites that sell businesses?
HH -- I've done i-banking and venture capital (funding startups) for my entire professional career to date. And I gotta tell you, $30-50k doesn't allow for much in terms of startup operations... Most places, that is the working capital needs alone, not counting fixed assets, branding/marketing, employees, etc.
Larger, successful franchises cost too much money. And smaller ones like Subway are not good financial bets (ask all the Subway startups that have to shut down or barely are breaking even).
I personally didn't deal with small business brokers, but they are in every city, and might have a turn-key opportunity for you. Another possibility is to scoop up a business in trouble, not because their concept sucked, but because the owner was in financial straights from this recession due to whatever (over-leveraged, poor speculative investments in real estate at the top of the bubble) and now has to puke out his good assets to make whole.
The assets you have are: 1) some time on your hands, 2) home office and 3) 30-50k. Internet businesses require low capital to invest, but can take serious effort to be heard above the noise. Ads get very little clicks, and on Google you will be bidding for ad space against others. Maybe start something by selling on Amazon or even eBay?
Consider your hobbies, and see if you can do anything in them on a more professional level.
Being in real estate, you prob have access to some kick-ass demographic databases. Take a look at the demos of the place you live and see what they look like. Has the recession missed your area? Is it mostly young people? Old people that need physical therapy?
I think the key would be to find something you can start small in, test the waters, see if there is a demand, then expand. If you do go the business broker way, remember that the economy is still not very strong, so be firm in negotiations and try to get a cheap price. Right now the large companies that have a lot of cash are being "vultures" and picking off the over-leveraged companies. Recessions are when the weak get culled or bought out, and you are in a nice position having cash and time when most people don't.
Heck -- you may be able to find opportunities not related to business at all. A lot of real estate is still in trouble, and though much of the foreclosure arena has played out, there are still pockets of profit to be had if you understand the true value and know how to take advantage of the distress.
If you know anyone in the banking business that may be starting a bank, this is one of the best times to do that in a generation. $50k won't get you there, but can buy you a piece of the bank. Old banks are in financial trouble with bad loans on their books; to meet regulations, they have to reel in their credit and therefore they aren't lending any money to anyone, not even great customers. So a new bank that opens locally (and which will have no bad debt at all on its book since it is new), will be able to make those loans... Hell, in some areas, that new bank may be the only game in town! Guess what -- you'll be able to cherry pick your business loans and mortgages. Only the best and biggest customers need apply. And amazingly, they will, because right now is the worst credit-lending environment I've personally seen.
I know this is kind of rambling, but you had an open-ended question so I figured I'd throw in a little bit of everything. Good luck to you.
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