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billin21
12-12-2010, 11:35 PM
Hello,

My name is bill and I currently own a Tool Franchise. My brother and I would like to start an Auto repair shop in the near future.

Are there any shop owners on here that can give some advice?

We are looking into a couple diff. franchises and also some independently owned shops.
All of my Capitol is tied up in my current business, what might be the best way for us to raise the funds to do this?
Also, keep in mind that i am 25 and he is 20, so he deff. doesn't have a lot of money saved.. I think somewhere around 12,000

Any and all advice would be greatly appreciated

vangogh
12-13-2010, 11:36 AM
Are you planning on selling your current shop? If so I would think that sale would generate the money or a significant portion of what you need. It might also be enough to help secure a loan since it should be collateral as well as an example that you can run a business. Have you tried to get a loan?

How much money are you needing to purchase one of the auto shops? If it's not too much maybe family and friends could be a source of financing, especially as you're going into business with your brother.

I'm thinking though that between your brother's savings and your own business you'll have enough to convince a bank to give you a loan.

jamesray50
12-13-2010, 07:07 PM
Have you check with the SBA Guaranteed Loan Programs (http://www.sba.gov/financialassistance/borrowers/guaranteed/) to see what type of loans they are giving right now? Also, another organization that might help you is SCORE. They are a mentoring group of business people that volunter their time to help small businesses with questions. There is probably a chapter in your area, you could probably do a Google searh to find one close to you.

Evan
12-14-2010, 10:48 PM
Also, keep in mind that i am 25 and he is 20, so he deff. doesn't have a lot of money saved.. I think somewhere around 12,000

Much more than most 20 year olds have saved up...

jamesray50
12-14-2010, 10:52 PM
I was reading the SBA website and they don't give loans, but they can direct you to lender who do, so they are definitely worth looking into. And if you have a down payment then you are already ahead.

billin21
12-19-2010, 10:26 PM
Are you planning on selling your current shop? If so I would think that sale would generate the money or a significant portion of what you need. It might also be enough to help secure a loan since it should be collateral as well as an example that you can run a business. Have you tried to get a loan?

How much money are you needing to purchase one of the auto shops? If it's not too much maybe family and friends could be a source of financing, especially as you're going into business with your brother.

I'm thinking though that between your brother's savings and your own business you'll have enough to convince a bank to give you a loan.

Well, We have planned on me running my current business for about a year after the new shop is bought. We haven't tried to get any loans yet. We are still in the planning stages. We are estimating that we will need somewhere around 300-400,000 to purchase and run the shop.
We are going to get together this week to discuss some options, including the SBA.

Again any advice you guys can give will be very appreciated!
Thanks, Bill

Spider
12-19-2010, 10:53 PM
When I started my business, I estimated what I needed to get started. Can't remember now how much that was but it was a lot more than I had. I went to my bank to try for a loan and was refused. So, I started with what I had. It proved enough and we got under way without a loan - and, in fact, never borrowed after. Years later, I am so grateful for that first refusal. No loan payments to hold us back, not beholden to a bank who undertood banking but did not understand our business. I believe our success was partly due to being refused a loan.

I venture to suggest that the figure you have in mind is way more than you really need, and that you can get started with a lot less than you are thinking. And I strongly recommend that you do. Sure, it will be tough to start with, having to earn the money you need to grow, but not as tough as making those monthly payments when you don't have the cash to do it.

So, my advice is - Don't take a loan. Use your own resources, Grow your business by earning your way forward not borrowing your way forward - because borrowing has a nasty habit of taking you backwards.

vangogh
12-20-2010, 09:56 AM
I venture to suggest that the figure you have in mind is way more than you really need

Don't forget they're looking to buy an existing franchise or auto parts shop. They're going to need capital to make the purchase. I think a loan or some other source of capital is probably going to be necessary.

Bill I would definitely redo the estimate again to better know how much money you'll really need to get this going. I'm thinking your existing business will wok in your favor in regards to a loan. Will you be able to help start the auto parts store while still running the other business?

billin21
12-20-2010, 10:19 PM
Well, I have come up with another question. A shop may have come up for sale. The owner has passed away over the weekend. His wife passed away this past September. How do I go about finding out if this business is for sale?

I have no idea if the couple had any kids. I don't want to seem like a vulture, but I would also like a shot at this business. Locally they have a very good name and crank out a lot of work. What happens to the business if there is no one to leave it to??

Thank you
-Bill

Evan
12-20-2010, 11:36 PM
Depends on how his business is legally set up. If it's a sole proprietorship, it'll go to his estate right now. If it's a partnership, then the partnership agreement dictates. If it's a corporation, then there are other things to look at. To see if he does have other family, the obituary would be a good start.

huggytree
12-21-2010, 04:25 PM
be careful of franchises

a friend of mine is getting out of one and speaks poorly about franchises over all

his experience is all his profit went to the franchise...he couldnt raise his prices high enough to make profit and be competitive...his prices were already at the high end of his market. his franchise also would not let him be a 'worker'...he could only do office work and bidding

im sure many franchises are great, but make sure to do the math before you sign up. make sure there will be profit left for you