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Thread: Starting a substantial business in a bad economy.

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    Default Starting a substantial business in a bad economy.

    I have said many times that a perfect time to start a new business is in a bad economy. Well, now is a bad economy, which makes now a perfect time for starting a business. So, I am going to start a new business.

    I have said many times that to start a business that will be a substantial business, with substantial profit and great financial success for its owners, one must start a substantial business, not start a small micro-business and hope it will grow to substantial.

    And, I have said that the best route to a successful and profitable business is a partnership.

    So, I shall start a substantial business partnership in the coming months and I will plot the course of this business start-up here at SBF. I invite all of you to comment, advise, suggest, warn me when you think I am going wrong, propose alternative approaches for a better outcome, etc. I will be asking for your advice, your opinions and for your impressions and, as much as I can, tap your knowledge of the business world, as you know it.

    It's called "Putting your money where your mouth is!"

    The first steps have been taken. Considering that my past success was in identifying a need that my industry had that I was able to satisfy in a big way, I started looking for a need. I have spent the past week visiting business friends asking them what they felt our local area needed, what product or service they needed but could not find or that were not being provided well. I came up with an interesting list, but none of the items interested me or did not appear to be scalable.

    What do you think would work as a new business in your area? What product or service is not available or is available but poorly done? If you were starting a new business, what would it be?

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    Member Needs New Keyboard Array huggytree's Avatar
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    you have prior business/success, so you have an advantage

    you are breaking a lot of rules....at least in my rule book which could come back to bite you

    partnership....in my opinion you got lucky with your last partnership...i think your odds of failure go up incredibly by doing a partnership.......i dont know why anyone does a partnership.....the only reason seems to be that they are scared to go it alone and feel secure by sharing the risk.

    starting big.......if you know the market perfectly it could work....but if you just 'think' you know your market it could be a horrible failure.....best way to start a business is to go part time and only go full time when you cant keep up part time anymore

    starting at the begining of a double dip recession.....only certain segments of the rich are spending...middle class is only spending on whats necessary..if we go double dip no one will spend....im preparing for just 'surviving' this winter and cutting the spending in my personal life......

    dont get too cocky over your business skills....most people fail and odds are you will too....i think starting ANY business other than a Dollar Store or an Aldi is a horrible decision and one i wouldnt make in the middle of a recession....wait 5-10 years until things are on the upswing....it may not upswing in your lifetime ...who knows

    you may find out trying to be the lowest price in whatever you choose may mean doing business at 10percent below costs...remember my competition...you thought i only had to cut a few hundred off my prices to compete and it was thousands(not hundreds)....if youve been out of the business world for a bit you may be shocked at how low the low price guys are.

    time to smack me back Frederick and tell my im wrong
    Last edited by huggytree; 09-25-2011 at 01:56 AM.

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    Member Needs New Keyboard Array Paul Elliott's Avatar
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    Tell us more, Frederick.

    Paul

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    Quote Originally Posted by huggytree View Post
    ... time to smack me back Frederick and tell my im wrong
    No, I'm not going to do that, Dave. Maybe you're right - maybe I will fail. Time will tell. I won't disagree with your opinion of my strategy - we have covered that before - but I will disagree with your opinion of the economy. It is tough now, that much I agree with, but I believe it will turn around in a year or so.

    During my local travels this past week, I came across an industrial park that didn't exist a couple of years ago. A back road that I had not used for a long time was two-lane and is now a four-lane dual carraigeway with lawns and plantings in the center reservation. This serves an industrial park that I guess at over 100 acres and posssibly 60% built out or under construction. When the economy turns, our area is going to be way ahead of everyone else and ready for the business that will develop. While other areas are scrambling to build production facilities of varous sorts, this park will be up and running and making the profits. I guess there are at least 5,000 unfilled jobs right there waiting for the economy to require their activation.

    But I will take the conomy into account. Maybe it won't come back as quickly as I expect, but people still need to live during bad economic times. Right now 91% of the people who want a job, have one. Even if it gets worse, there will still be far more people with a job than there are unemployed. During the worst of the Great Depression, I think, unemployment stood at only 25%. I mean, that's pretty bad but even then, 75% of the available workforce had an income. The country still functioned. Business was still done.

    Perhaps my final choice of business should be something that will aid the recovery or will be a 'leading indicator' of a recovery. helping people find jobs, or re-training.

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    Quote Originally Posted by Paul Elliott View Post
    Tell us more, Frederick.
    I will tell you more when I know more, Paul. Right now we are in the 'discovery' phase.

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    Member Needs New Keyboard Array huggytree's Avatar
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    i dont think your on track with the economy at all....from where i sit if Pres Obama is reelected were in for atleast 6-8 more years(from right now).....if he is defeated were still in for 3-4 to 8 years....maybe this is how were going to be for 20 years...who knows.....around here were going down hill right now....more businesses have 'out of business' signs in the windows in my downtown area.....i go to Home Depot and they tell me its horribly slow.....every small business guy ive talked to agree's that its gone down hill horribly since the debt talks around 3-4 months ago....no ones in good shape

    my town has an industrial/commercial area....nothing new built in 4 years (Walmart and Homedepot are it)

    nothing new happens....only things go under


    yes most people are working and even during the great depression 75percent still worked....buuuut not 40 hours a week...no one in my industry is working 40's....all are at 32's or less a week....32 hours is becoming the typical....

    what does 32 hours a week mean= survival...just doing what you need to do......

    my family is now in survival mode too.....no restaurants, no new toys, cutting 20percent off our food budget, no vacations, no extra activities that cost $$............im planning on this atleast until next spring 2012.........the economy is going down again.....something is different right now....it shows when i graph my sales/hours and compare it to the last 5 years....its not a 1 month thing...its a 4-5 month thing......started in June 2011........

    give me a date that you think the economy will recover next year???? how about we bet $100 on employment #'s for 2012??

    countries are failing........this thing were going through is not a typical thing....isnt Japan in a 10+ year recession/no growth period.....

    Frederick...just so you know i Dont want you to fail....i want you to succeed.......thats why i want to really push the economy into the #1 spot when making your new business decision......to me the most profitable businesses use people's extra spending cash......why start a business when people are in survival mode........are you going to sell gold???? or look for something recession related???? i saw a show on 'survival'...people building bunkers and buying 100's of MRE's and gallons of water......thats Hot right now.....ive even thought of buying a months worth of MRE's just in case...

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    Huggy, I really think your negativity is your biggest enemy. One of the things Spider really has going for him is his can do attitude. Beyond that spider has done it before and is cherry picking the business. I'm assuming he already has financing.

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    Quote Originally Posted by huggytree View Post
    ... Frederick...just so you know i Dont want you to fail....i want you to succeed.......thats why i want to really push the economy into the #1 spot when making your new business decision......to me the most profitable businesses use people's extra spending cash......why start a business when people are in survival mode ...
    I appreciate that, David, and I can understand where you are coming from. Wisconsin, as far as I can tell, is not like Texas. We are no longer a state of wildcatters, yet we do tend to be rather entrepreneurial. The industrial north - and I presume Wisconsin is part of that - tends to be less so, I think. However, while the country as a whole is fretting over a 9.1% unemployment, Texas is at 8.5% and Wisconsin is at 7.9% (mid-Sept.figures.) I guess the figures don't tell the whole story.

    Bill does have a point, though. Where do you get the idea that "countries are failing?" What does that mean? Greece closes the border, locks the gates and posts a "Gone out of Business" sign at all border crossings? The only country I know that is failing is Somalia, that supposedly has no government and the place is run by armed gangs. (Actually, even Somali has a government but it's not very effective.) Even so, business continues, things are bought and sold, services are performed and people paid. It might be chaotic and unregulated and controled by teenagers with rifles, but the place functions. The USA is nowhere near failure.

    I agree with you that things have worsened since the debt ceiling debacle, but it is just political nonsense - of the kind that will pull both parties down and create an opportunity for a third party to emerge. This is not the end of the line. One has a choice - you can shoot yourself or you can figure out where the opportuity is. Life will go on (even if one does shoot oneself!)

    So, let me go with your thoughts for a moment - If "everyone" is on "survival mode" right now, what do they need to survive, and is it being supplied well enough that a more efficient supplier cannot join the game and make money in the process?


    Re: your $100 bet - As we can see above, the numbers for unemployment are quite meaningless as specific numbers, but I will bet you $100 that the national average of unemployment will be lower than 9.1% by June 30th 2012, if you will take the other side that the national average will be above 9.1% by that date. (If it is still 9.1% it's a wash.) Are we on?

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    Quote Originally Posted by billbenson View Post
    ... I'm assuming he already has financing.
    I will be financing the project myself, while giving my partners the opportunity to invest. In fact, at the moment, I envisage that's how they will become partners, by investing in the capital structure of the company.

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    Quote Originally Posted by Spider View Post
    Re: your $100 bet - As we can see above, the numbers for unemployment are quite meaningless as specific numbers, but I will bet you $100 that the national average of unemployment will be lower than 9.1% by June 30th 2012, if you will take the other side that the national average will be above 9.1% by that date. (If it is still 9.1% it's a wash.) Are we on?
    give me 'above' 8.9% and ill give you July 30th 2012 and your on.....loser paypals the winner $100

    WI does have a lower than normal national average on unemployment...true....but remember im in construction, everyone i deal with all day long is in construction....that unemployment is going to be significantly higher.....also the 32 hour thing may be just in my industry...i have no idea what factory workers or office workers are doing.....my view of the unemployment world is large, but limited.....i may be over assuming....but i dont think so

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