Starting a new business

[mrphuntt]

I think there are a few things for you to ponder, and many have been mentioned already. For any new business, it's always best to first know you're selling into a large market of crazy interested buyers. Sometimes you can even pre sell your customers and get them to pay part or all up front, but for a small retail store that might not happen. There are funding sources that can help you with use of your IRA/401k (that's part of what I do myself, is help get small business owners the funding they need), and even with a FICO score that's not stellar, you can still get funding. One of the programs I work involves getting your funding done with a partner who has a better FICO score, so maybe that's an option too. Also, with a business that will have you carrying inventory, I agree starting small and getting some positive cash flow up and running first is a really good idea. Once you know what's selling and making you a profit, then you can scale up.

[phanio]

Forget the 401k idea - given the small amount you are thinking about. To fund a business using your 401K or similar retirement plans, you will have to first create a c-corp around your business then change your 401k to a self-directed fund - then invest those funds for shares in your corp. This could cost you from $5,000 to $10,000 to accomplish - not worth the expense given the amount you need.

If you don't want the high rates of credit cards (which most people would do in our situation) go to a local credit union and apply for a personal line of credit. Easier to get than from a bank and the rate will be much lower than a credit card.

This was how I started my business. I found three credit unions in my area and apply for their lines of credit. Then used all three when I need the funds. And, since these were lines of credit, I only paid for what I used when I used it.