Please help asap??? Huge question?

Question

Ok so I'm 18 right now and I have about $40,000 in the bank. And I wanted to know in your opinion is that enough to start a small business or should I keep working and wait a couple more years? The small business I want to open up is like a donut shop, or a small store called Juice it up which is a small juice store? And please tell me in your opinion do you think $40k is enough and why?

Answer 1

For those that suggested going to school with the money :P Gone are the days where getting a good education and a safe job meant a secure future. Small business ownerships has the headache of employees, insurance, Workman's comp, franchise fees, rent and plenty of other headaches. Whereas if you take that money and invest it and have your money work for you instead of you working for it, it will payout much more.
40k in a savings account yields 1100$ at 2.75% interest a month, you could live on that or I have heard that an ING account pays 4% interest a month which would = 1600$ a month. I would suggest getting a fincial education, the best way to do that is read any book by Robert T. Kiyosaki
Best of luck to you in anything you choose to do.
Dutchess

Answer 2

Hi Young,

I am so envious of you because as young as you are, you are thinking ahead and that is really cool!

Here are my thoughts though:

Let me give you a rundown of possible things that you might have to spend for to open your own business: business permits, location rental, salary for possible employees (however few they may be), operations expenses such as water, raw materials for donuts, packing materials, cooking and baking utensils, waste management expenses, and a whole lot more. You'll never really know what all of them are until you get down and dirty and really start the business. The investment you will require will depend on how big or how small you plan your business to be -- if you are planning something like a home business where you do not need to rent a space and everything you need is at home, I guess what you have for now will be enough but if you're planning something bigger, you'll need to save more.

If you are a first timer in the entrepreneural industry, I suggest you do a market research or even do a little experiment to try to see things better - - I tell you if its all in our heads, we can get carried away but when we try to do it, that is when we gain a realistic awareness of things. Try going into a smaller business just to see how things are and how you feel about it.

As far as the money you have is concerned, if you still have no use for it; put it on a time deposit account that way you are not tempted to use it for non-essential things and you earn a little interest from it as well. Its a great way to hit 2 birds with one stone. Try the 30-day, 60-day or even the longer time deposits and see which ones will make your money's worth.

Hope I was able to help in some way.... Good luck!

Answer 3

I would wait for awhile even though the excitment and thrill of owning your own business seems like a dream come true in such temptation. It doesn't take long to go through the money. You will need to have a business plan and learn more about operations of one. Need to know your start up costs, your equipment, overhead, etc. Lots of homework and a plan implemented if you want to be successful. I have a friend who has a coffee gourmet shop. She is realizing she isn't making enough even after several years and has a book shop along with it as well as being in a high traffic area, so she lets her sister run the shop while she is in nursing school. I would even go to a college business department and post this question. They will even try to help you get started in the right direction. Take classes. Everything you learn will be just that much more ahead and smarter about your choices.

Answer 4

Congratulations on going after your first business venture. I am going to strongly recommend that you talk to a business counselor before you do anything especially spend money. I'd call the local office of SCORE (go to http://www.score.org and input your zip code to find the chapter nearest you), the advice is FREE. Ask for someone who has a background in pastry/donut shops and they'll try their best to match you with the right counselor.

The counselor at SCORE will most likely advise you to write a business plan which is very good advice because it will force you to dig out all of the start up details and the costs of starting a donut shop and force you to also understand all of the aspects of this business including the customers you'll concentrate on (your market ) and how you'll get them to find out and want to come to your fabulous donut shop
.
The location of the shop is important but doesn't make it successful. To prove that all you have to do is walk down a street in your town where there are several nice pastry shops all in a row and you'll find one or two that are empty while the others are very busy. It has to do with the product, the ambiance, and your reputation at the beginning and over time.

You also have to have food handling licenses, the right zoning, the right city and county licenses and permits and you have to be skilled at negotiating with your landlord about who'll stand the cost of the build-out or the changes to the premises to make it ready for your look and feel.

You also have to worry about the normal business planning and management issues related to starting up any business.

Take a look and read some of the articles at:
http://www.ychange.com/small-business-consulting-articles.html
especially the ones about a business plan and starting a business. Also try their Blog and their Bulletin Board.

Hope this helped.

Answer 5

Your on the right track with the savings. But theres more to a business than having money. You have to know how to run the books, which by the money u have saved is a good start. Get as educated as you can about the business you want to get into. If necessary, you might look into a small partnership with someone you know well. Dont just jump into a business because you have money saved up. You have to have a cushion to fall back on in case you fall on hard times, which you will. You dont want to dump all your money into it and have a bad month and be broke and filing bankruptcy. Got to remember inventory, taxes, health codes. There is so much more to building a business than the idea in general. Get as much info as you can on the businesses in your area. Make sure you can come in lower on the costs of your competitors. I hope this helps.

Answer 6

No its not, if I were you, I would take $20k and use it for start up costs, get some or 'a' partner, share the responsibility with someone else, with the other 20k use it as a backup plan, just incase things go south, you shouldnt use your own money really to start a business, if things go south, you're up crap creek without a paddle, invest or continue to save money, look at a business loan, and within a few years you will have paid it off, if not, then I would use your $40k as a fall out plan to get out from underneath the rock and break even.

Answer 7

You should call the police anyway. Does this fence have a gate? Does it have a latch that can be reached from the outside? Check-many of them have a slip-lock way up near the top. In the meantime, if the hole under the fence is big enough for the dog to safely come back through, get something from home that the dog would LOVE to eat but never gets--leftover meat or something like that. Go back to the neighbors and call the dog to the hole in the fence and try to get her to come through it, leading the dog with the treat. Make sure you have a good amount of this treat in case she grabs it before she's all the way back through the fence! Also, call your parents to come help you. (you sound young to me, sorry!) The neighbors won't be nearly so bold with your parents as they will with a teenager. In the future, use a lead that has a loop that you can put over your wrist. ALWAYS have the loop over your right hand. Then if you fall, the lead doesn't come out of your hand.

Answer 8

You have to consider alot of things, one being start up costs and knowledge of the business you choose to start, you definitely need to investigate what you are about to get into before you jump in, best experience would be to actually work in a juice joint or donut store, I would say you definitely need to get more experience from reading what you have share, either that or get some info on investments through your local investment firms. Good Luck!

Answer 9

It's plenty. You will most likely need a loan to fund this project and the fact that you can show the bank you are financially sound (you saved up $40K) will help you tremendously in an approval of such loan.
Get a good business plan going - trust me you need one!

Good Luck =)

Answer 10

I think you should invest your money wisely. Go to school and get a bachelor or master degree in business administration. (Education is always good!) While you are in school stick your money in a CD (at at least a 6% interest rate) or other investment.

Once you factor in rent, supplies, employment, etc. bills add up quickly. If you don't want to do the 4 year school thing (which you should! You sound incredibly smart to already have that much money saved) I suggest looking at community colleges for a one or two day class that teaches you how to write business plans. Then you can decide accordingly.