IF you were going to loan your child money for a bizness?

Question

IF you were going to loan your child money for a bizness, wouldn’t you feel better if it was a bizness, you were already successful in AND it was a bizness that your son/daughter wanted to be in? My mom & step-bro were going to help me start my own biz, exactly like theirs. We’ll call it: ‘AJAX’ AJAX biz they have over 20 yr. exp. They have a proven product, a local ‘house-hold name’. Great relations with suppliers & customers. I have intermediate exp in this biz.
I found a great location, 5k month rent, other side of town. In this biz, you buy for a dollar, sell for three. I researched all the costs for build-out, negotiated free-rent for B-O, a B-O allowance, etc. I figured I needed 65k, they backed out saying, “it’s a 100k, out of our price range, rent is too high”

Instead, they wanted to support me in different biz they have 0 exp in that I only have amateur exp in, an hour away in another town, 12k rent, AND buy it for a dollar, sell it for $1.30! Initial investment 100k.

I argued and argued this made no sense for a month and not until a cousin of mine explained to them, exactly what I have been saying ( he is a VERY successful accountant) did they acknowledge it was a bad investment. But, too late now, the first opp. is lost. The probability of success is much higher for the first biz than the second one described. I understand it was THEIR money to invest, but the deal was I had to pay it back.
I don’t understand why they did this to me and this question probably belongs in the Psyche category.

second biz was already opened and was failing and we would have had a partner in that biz on top of our 100k inv.

let me add that here in FLA, business in some cases, is seasonal. Back in July, MOM said, you can't open a bizness now, it's summer and biz is slow, you will fail after three mos. Now is not time to open. I EXPLAINED: We won't be open till Late October when SEASON starts. HER REPLY was: Then it will be right when season starts, you will be too busy and I will have to help you 60 or 70 hours a week.
SO, WHICH IS IT? Ya don't do the biz cause you'll have none or because you'll have too much? c'mon.

I should really ask this over in Psyche

Hooter responded "DON"T LOOK A GIFT HORSE IN THE MOUTH" Excellent advice. I think next time someone offers me a 100K loan, But I have to use it to start a bizness selling ice to the eskimo's, I'll take it. Irregardless of the fact that I have to pay it back and the biz might fail.

Answer 1

1. i think they wanted you to execute on the second initiative because they wanted to diversify also. If you continue with the first opportunity, then you may have succeeded but the business is still the same.

2. The 100K investment and the 65K investment cannot be compared. What can be compared in terms of investment, as i believe, is rate or return and return of investment :) I think, the second initiative had higher risks, higher required capital but had potential for more income :) Though it is only $1.3 at first, you just might open a new market segment for everyone :)

i hope this consoles you :)

Answer 2

Look it's their choice to help you or not. If i was me I would write out a business plan, then go to a bank and get a loan. There is a business outreach services near me www.sbdc.uga.edu that helped me write my business plan, they may know of an organization in your era that can help. But let me give you some advice I've had a few different business and i can tell you that you have to be passionate about it. You should really like what you are doing or it will soon become more a burden than a blessing. Good Luck

Answer 3

Forget it all, you are skipping rule 1 in business.

1. Never be in business with family or friends

I didn't listen, and tried. Lost best friend of 17 yrs and had to rebuild the biz later alone.

Answer 4

Well, there will ALWAYS be opportunities, cross these two off as no-go's and focus on a new one. It's a start from scratch, any way you look at it. Keeping the past in the present is going to only hinder any forward movement you're trying to make.

Answer 5

Quiet.Buck is right, money and blood don't mix! keep your family and business completely separated!

Besides, it sounds like they are trying to manipulate your life.

Answer 6

Don't look a gift horse in the mouth.