Starting A Business With Little Capital?
A good friend and I have been out of college for a few years now and would like to start a business. We really like the idea of a bagel/coffee shop and have some fantastic locations in mind!
The only problem is that we just finished paying off our college debts and we don't have much starting capital... Only about $10k between us.
Now I assume starting a bagel/coffee shop is pricey. Assuming all the non-financial aspects of our plan are solid, are we inevitably setting ourselves up for failure financially? Is bootstrapping even an option here?
Any advice would be greatly appreciated!
- Anonymous1 decade agoFavorite Answer
If you have a solid business plan and a good idea in a good location, the money should work out! Start cheap - find places where you can buy used - everything from furniture to cash registers to espresso machines. You can find equipment in good condition for a lot cheaper than new - and you can always upgrade later when the profits are rolling in! Most banks (despite the "poor" economy) are still willing to lend to small business - most of the ones I talked to wanted a 10% down payment for the amount needed, so if you have 10K of your own to invest, you can find a bank willing to lend you up to 100k. Also look around for grant options, and see what your city has to offer - most have money set aside to invest into entreprenuers - you don't have to pay it back, since you're helping the city's economy. As long as you are willing to work hard, you should be able to meet your financial responsibilities, especially in a field like food services. And remember - if the business does fail, you can always start selling the business's assets to make your payments!Source(s): in the process of starting a motorcycle shop, and have done a TON of research!
- 1 decade ago
Well if you do it you are bootstrapping! if you went to college for business then you should already know this is a really bad idea, and if you didnt you should. If you are having doubts then you should follow your instinct. If you want to raise some capital take the time to do it and save save save. This could be the worst mistake of your life and being young you dont want to start your life that way. You will be left with no credit and no future. If you think your going to start an empire in a coffee shop your wrong! Maybe you should just both gets jobs at one first, raise some money and learn the ropes. There is no shame in that. I wanted to be a hairstylist once and own my own salon some day so I got a job sweeping hair for $6/hr just to be around the environment and learn a little. Your probably to young to throw your life away. If you only have $10K then I am sorry to say but you are poor. People who only have $10K are not going to blow it on a dream, well I hope not. $10K is more like a great starter for saving. This does not mean you wont have this in the future but with proper saving, planning and time you can do it in the long run. Also, with todays economy dont think you can charge someone $2.50 for a coffee and $4 for a bagel to make some profit.....they will just eat bagels and drink coffee at home. Location is everything in a business like that, but you will be paying out the wazoo for a good one.
Dont do it!
Also, no bank is going to lend you $100K if you only have $10K because after you put down the $10K you have no money or assets left to pay back the monthly loan!!!!!!!!!!!
- 1 decade ago
With $10 000, it is really not enough to set up a coffee/bagel shop sorry to say with cost of fees, rent, equipment, etc.
You could always take a loan out assuming you both have jobs to pay it off or any other investments. But taking out a loan this early after paying off you college detbs is not advisable until you can get more financially secured with just living costs before business costs.
You could always use the $10 000 to invest into other things or buy(invest) into an already established bagel/coffee shop but $10 000 will still not cover buying one outright.
But I am very happy to see you two keen to own a business so you two keep trying and you will get there.
Hope that helps.
- Anonymous1 decade ago
If you're talking about starting from scratch. You're odds are against you 10-1. Especially lower in a economic downturn. You'd be safer to acquire an existing business that is clearly showing profits.
You can also buy a SBA qualified business if such a business qualifies for SBA guarantees. Watch the SBA loan video review at: BankersGlobal.com/ebiz/