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Old 07-22-2009, 11:55 AM   #1
Mustang
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Join Date: Oct 2000
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From beginning to end : Starting my own business

I figured the dynasty thread was as good as any place to start a thread to track my progress in opening our own business. If you have paid attention to me over the last few months, you probably already know that I have my own online business and have been contemplating starting a B&M (brick and mortar) store. At some point, when we are official I'll put out what we sell, but until then.. we just sell widgets.

The LLC was setup in January of this year and should have been done sooner in order to take advantage of a lot of our business expenses rather than just reporting income, but for whatever reason, we never took the time to fully make it official. Probably was more procrastination on my part and fear on my wife's part as she really didn't have the foggiest idea and she wants to know everything about everything before committing to something. Don't get me wrong, that is a good thing, but at some point you need to proceed forward and just realize that you aren't going to know about everything, but you just need to know where to find the answer.

So, January 09 came and we setup the business at the beginning of the year. (To this date, no one in my family or my wife's family know that we 'own' a business. There are a lot of reasons for this, but that is a whole long topic right now. The main reason is my wife's mother who is very money driven and thinks that my wife should be providing money to her and her sister).

Anyhow, the first few months were spent flushing out some of the items for the business side - tracking expenses better, estimated taxes, how to write off loses (They just write it off Jerry!) and inventory tracking. It was business as normal from what we had been doing for the last few years. And then March came. In March, we branched off in a different direction that was related to our widgets, but was a different line, we also became more aggressive in what we were doing. Our shipments and sales raised dramatically from March to June from around 100 mailings a month to around 350.

My typical day right now consists of 10 hours day job, 3 hours family time, 6 hours sleep, 3 hours business and 1 hour whatever else. So, my time is stretched thin.

We hit a point in June where we just had to make a decision. Tone down what we were doing and ratchet back some or go full force forward. But, to go forward, we needed to open up a brick and mortar store which would allow us to carry some different products lines that are closed off to us because we are online only. At that point, I started to do some research and tried to formulate a plan on what we needed to do from a business standpoint , but also from a personal standpoint.

My wife has tried to stay out of the planning for now, she is just overloaded with information and was just wanting me to do the research, explain things to her and proceed. Last week I gave her a brief overview of what I saw us accomplishing with this business and had another discussion with her this morning and she sounds way more excited now than see was 30 days ago.

So, sounds as though I'm pressing forward. Our goal at this time is October 15th. Lots to do between now and then so, I'll throw down some updates in this thread from time to time. Some of the items will be new stuff that I'm currently working through and some will be items I've addressed in the last 30 days so, any comments, feel free.

Wish me luck. Hopefully this thread will be interesting for people in a similar situation to me. If not, at least I'll have a place to just list my thoughts.
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You, you will regret what you have done this day. I will make you regret ever being born. Your going to wish you never left your mothers womb, where it was warm and safe... and wet. i am going to show you pain you never knew existed, you are going to see a whole new spectrum of pain, like a Rainboooow. But! This rainbow is not just like any other rainbow, its...


Last edited by Mustang : 07-22-2009 at 11:55 AM.
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Old 07-22-2009, 12:04 PM   #2
hoopsguy
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I'll be reading along. Good luck!
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Old 07-22-2009, 12:05 PM   #3
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I'll be reading along. Good luck!

+1
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Old 07-22-2009, 12:23 PM   #4
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I'll definitely be following this. Good luck!
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Old 07-22-2009, 12:30 PM   #5
BYU 14
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Best of luck, this type of thing is always exciting!
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Old 07-22-2009, 02:33 PM   #6
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Good luck!
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Old 07-22-2009, 02:52 PM   #7
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What everybody else said.
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Old 07-22-2009, 03:52 PM   #8
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Ditto
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Old 07-22-2009, 05:26 PM   #9
Mustang
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Thanks much all.

Location, location, location....

Nothing new here, this has been going on a few weeks now. My first objective that I wanted to get a handle on was where to open up. I've pretty much decided on my own town given that there is a hole as far as what I'll be selling that pretty much covers a 20 mile radius. (Even further to the south given that the one business I'd be concerned about down there is poorly run.)

I had considered being closer to Milwaukee, but that would not work out from a logistics standpoint. At this time, I do not foresee any employees beyond myself and my wife so, if need be, I'd need my wife to potentially be close by to fill in rather than have to drive 25 miles. Granted, I will miss out on a larger population center, but if I become successful at the location I plan on opening, opening a second store in Milwaukee wouldn't be a competition vs myself.

I would prefer to open a place downtown. A walk around on a Saturday or Sunday, I saw a lot of foot traffic that could draw in people (much more than I though originally). Unfortunately, at this time, it does not appear that there is any space downtown other than office space in some of the buildings. This surprised me given that amount of businesses that I've seen come and go from this area - Comic stores, Sword Stores, White Elephant, Collectibles, etc, etc... guess the stores that are there now are doing ok. (Damn the luck).

I also looked into some of our newer strip malls in town, but I ruled those out rather quickly. For starters, they want a five year lease at a minimum, plus you need to get them up to where you can even open up a business. Thanks, but no thanks.

Some of the other ones I have weeded out - one place I looked into was too large. I'm trying to stick to around 1300 sq ft, this place was 1800. Much too large. Another place was a prior cafe so, I'd have to redo the walls and take out the plumbing sticking out of the walls and fix the floors since there were areas where there were sinks, but the floor was removed. Actually, there are several places in town that were old cafes that are like this. I don't want to have to do a lot of interior work.

My initial list that I came up with is quickly being weeded down due to too large, too much remodeling or too long of a lease at this point. A week ago, I added a few more places to the list because I didn't fully understand NNN. There is NNN and absolute NNN which I did not know. I was thinking that everything NNN was absolute which means that you are responsible for everything including the roof/foundation. NNN is just the guts and common area maintenance (CAM)

Surprisingly, there is not a huge amount of available space in town. Large spaces there area (5000+ sq ft plus), but ones around 1,500 sq ft? Not so much. So, I continue to look.

Humorous side story, on particular place I was interested in had just went off the market the day I called. I guess the people that leased it were opening up a combination Horse tack and bread shop. What the hell? I did not know there was a big demand for a saddle and a loaf of bread...
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You, you will regret what you have done this day. I will make you regret ever being born. Your going to wish you never left your mothers womb, where it was warm and safe... and wet. i am going to show you pain you never knew existed, you are going to see a whole new spectrum of pain, like a Rainboooow. But! This rainbow is not just like any other rainbow, its...
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Old 07-22-2009, 08:05 PM   #10
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will be folloing along!

I'm going to guess baseball card store
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Old 07-22-2009, 11:37 PM   #11
Mustang
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I'm going to guess baseball card store

Everyone can feel free to guess. I won't confirm or deny anything though.
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You, you will regret what you have done this day. I will make you regret ever being born. Your going to wish you never left your mothers womb, where it was warm and safe... and wet. i am going to show you pain you never knew existed, you are going to see a whole new spectrum of pain, like a Rainboooow. But! This rainbow is not just like any other rainbow, its...
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Old 07-23-2009, 05:47 AM   #12
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Porn store!

Very interesting so far, I'll definitely be reading...
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Old 07-23-2009, 09:24 AM   #13
Mustang
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Porn store!

Who the hell pays for porn???
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You, you will regret what you have done this day. I will make you regret ever being born. Your going to wish you never left your mothers womb, where it was warm and safe... and wet. i am going to show you pain you never knew existed, you are going to see a whole new spectrum of pain, like a Rainboooow. But! This rainbow is not just like any other rainbow, its...
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Old 07-23-2009, 10:06 AM   #14
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I think you might have mentioned this somewhere else on the board, but whereabouts in WI are you? Just curious if it is near me
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Old 07-23-2009, 11:46 AM   #15
Mustang
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I think you might have mentioned this somewhere else on the board, but whereabouts in WI are you? Just curious if it is near me

About 70 miles to the south of you. I'm in West Bend. I grew up in Menomonee Falls though.
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You, you will regret what you have done this day. I will make you regret ever being born. Your going to wish you never left your mothers womb, where it was warm and safe... and wet. i am going to show you pain you never knew existed, you are going to see a whole new spectrum of pain, like a Rainboooow. But! This rainbow is not just like any other rainbow, its...
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Old 07-23-2009, 12:05 PM   #16
Mustang
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Supply / Inventory :

Another one of those things I was researching for 2 weeks prior. If you are doing a business, good chance you are selling something. And if you are getting something to sell, chances are you are getting it wholesale. Quite honestly, beyond this, when I started doing the research into this, I had some slight ideas of how to get this information, but nothing concrete. People that are in the business are a little hesitant to give out this information with reason. 'Hey, I want to get into this business, where do you get your stuff?' That doesn't work too well. You might as well go up to them and go, "Hey, I want to be your competition and put you out of business, could you tell me how to stock up so I can achieve this goal?"

My searches basically began with going to the actual producers of the item and inquiring who did the distribution. I've found that some do their own distribution and others had a list that they dealt with. It will definitely not be a one stop ordering place and more than likely, I will be dealing with multiple sources to place orders. (Not unexpected). I have also found out that each place has it's own order levels, discount, product availability, manufacturers and rules. Some even setup you up with a generic line of their items, but I'm not sure I want to go that route. Seems most of this lines are flooded with donkey material. (unsellable stuff... not porn donkeys)

So, I have the basic parameters about what I need to do for most of what I want to carry. I've tabled it for the time being because I really can't do any setups or ordering until I have a lease in hand. The vast majority of wholesalers I've found won't even touch you if you do online only and if they will work with you, I've found that the supply and ordering points are prohibitive. For example, one place required a $5K upfront order and $1K every month after that for an online only store. If you did online and had a store, it was $1K order with no minimums after that. $17K/year vs $1K/year, that is HUGE. And that is one product line. Granted, that is an extreme example of one. Most require no initial order or at most $2K.
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You, you will regret what you have done this day. I will make you regret ever being born. Your going to wish you never left your mothers womb, where it was warm and safe... and wet. i am going to show you pain you never knew existed, you are going to see a whole new spectrum of pain, like a Rainboooow. But! This rainbow is not just like any other rainbow, its...
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Old 07-23-2009, 12:12 PM   #17
Mustang
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Had a lead on 2 different places. When I went to look at them, the one was already filled in so, must have been an old advertisement. The second is doable. It is 2000 sq ft (1000 up/1000 basement). Bad thing is it is about a mile outside of town. Can't beat the price though of the lease.

The owner though wanted to make sure I wasn't a rock band. They just had a person inquire about the place because they had a band and needed a practice place. I had to assure them that no, I was not setting up a rock band.

Sidenote: The last few weeks I've found myself really paying attention to what businesses were in town and I'm amazed at some of them. (and how some of them survive just given the basic costs). I even found out there was a Mexican grocery store locally. (I had no idea... smart though. They must be doing good because they are expanding)
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You, you will regret what you have done this day. I will make you regret ever being born. Your going to wish you never left your mothers womb, where it was warm and safe... and wet. i am going to show you pain you never knew existed, you are going to see a whole new spectrum of pain, like a Rainboooow. But! This rainbow is not just like any other rainbow, its...
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Old 07-23-2009, 12:41 PM   #18
chesapeake
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Originally Posted by Mustang View Post
The second is doable. It is 2000 sq ft (1000 up/1000 basement). Bad thing is it is about a mile outside of town. Can't beat the price though of the lease.

They just had a person inquire about the place because they had a band and needed a practice place.

From an earlier post, you iindcated the downtown would be good for picking up foot traffic. How is this place on that point?

It looks like you already have a lead to sublet that extra 1000 sq ft in the basement
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Old 07-23-2009, 01:02 PM   #19
Mustang
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From an earlier post, you iindcated the downtown would be good for picking up foot traffic. How is this place on that point?

Not good on the foot traffic point. I'm not sure any place other than downtown would have foot traffic and based on the current businesses that are downtown, I would have no expectation that any of them would be available soon though as most are well established.

With the basement though, it does free up the storage unit I'm renting out freeing up that expenditure. I have to remind myself sometimes why I'm doing a b&m store and that is to help expand the online store right away with different options. Plus, similar types of stores I know of are off the beaten path and not in the core areas of traffic and they are doing fine. I need to weigh location vs this fact.

Wouldn't be able to sublet though. Most of the available business space along the main street are combo business space/residential units so, they were making sure my business wouldn't be noisy.
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You, you will regret what you have done this day. I will make you regret ever being born. Your going to wish you never left your mothers womb, where it was warm and safe... and wet. i am going to show you pain you never knew existed, you are going to see a whole new spectrum of pain, like a Rainboooow. But! This rainbow is not just like any other rainbow, its...
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Old 07-23-2009, 01:34 PM   #20
Mustang
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Received back a message today for 2 items.

1 was a realtor that I had contacted on and off about one particular place. (The cafe noted above). He said he had other places and could discuss with me. I responded back that I might be interested in the cafe place still, but was there anything they could do for an allowance to upgrade the inside. He responds back pretty quickly so, maybe I'll have more leads. I know he is the realtor on alot of the strip malls in the area so, not real hopeful for anything to come of that, but it is worth the email traffic to ask.

The second was my insurance agent. I wanted to get a rough baseline for insurance (liability/property). Wasn't too horrible based on the figures I gave her. One thing I did not know for insurance was you can add endorsements which ranged from employee theft, robbery and business loss due to inability to open the store. (like it there was a power outage for a week). Did not think of those things so, something new.
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You, you will regret what you have done this day. I will make you regret ever being born. Your going to wish you never left your mothers womb, where it was warm and safe... and wet. i am going to show you pain you never knew existed, you are going to see a whole new spectrum of pain, like a Rainboooow. But! This rainbow is not just like any other rainbow, its...
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Old 07-24-2009, 02:20 PM   #21
Mustang
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I'm pissed today.

For the most part, every business is in competition with someone (save for say a monopoly, but not going to get technical here).

Found out today that someone is using my work, my pictures, my information AND undercutting my price. Anyone that is even remotely ok with piracy should run their own business or create something, have someone steal it and then revisit their feelings. Absolute pure laziness.

What perplexes me is the undercutting. If I see that the market is at say $25, you might go a little lower, but 50% lower? One thing that you need to be careful on for competition though, is if you have a product line that is doing well and you go into someone else's product line that is doing well, you can damn well guarantee that that person could potentially intrude back into your product line. Which is what we fully intend on doing now. Their product lines were something we dabbled in before, but didn't put alot of effort into it. Well, that is going to change.

Having dinner tonight with a friend that is somewhat interested in coming aboard. At this point, sounds like he might be more interested in being a helper/advisor/employee which might be better anyways. Business/Family/Friends aren't a good mix. If he was just a straight up employee, I know his work habits and it would be great.
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You, you will regret what you have done this day. I will make you regret ever being born. Your going to wish you never left your mothers womb, where it was warm and safe... and wet. i am going to show you pain you never knew existed, you are going to see a whole new spectrum of pain, like a Rainboooow. But! This rainbow is not just like any other rainbow, its...
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Old 07-27-2009, 10:26 PM   #22
Mustang
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Have a meeting scheduled Wednesday with someone to look at a property. It is downtown, is in the price range I want and has alot of space.

Unfortunately, what might be a killer is that the rent now includes utilities. They are wanting to distribute that costs to the tenants so, depending on how much it is, the price right now is good. The price right now + added utilities is bad. Not going to hold out much hope on this one because of that, but I'll still look.

I'm starting to think that the place that is currently a Mexican grocery store might be the best option short term.
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You, you will regret what you have done this day. I will make you regret ever being born. Your going to wish you never left your mothers womb, where it was warm and safe... and wet. i am going to show you pain you never knew existed, you are going to see a whole new spectrum of pain, like a Rainboooow. But! This rainbow is not just like any other rainbow, its...
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Old 07-28-2009, 04:46 PM   #23
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Sorry I missed this when you started it..I am definitely liking it...

Are you actually mailing the product out? You are saying only certain lines are open to you because you are Online only, have you explored Drop Ship relationships with some of the companies out there with the lines you want?

Just curious..
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Old 07-28-2009, 06:02 PM   #24
Mustang
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Are you actually mailing the product out? You are saying only certain lines are open to you because you are Online only, have you explored Drop Ship relationships with some of the companies out there with the lines you want?

I'm mailing the product out. I like to physically own the items that I'm selling as opposed to doing a drop ship relationship. I'm sure some of the manufacturers will do that so, I'll never say never, but at this time I'll be buying/owning the product.
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You, you will regret what you have done this day. I will make you regret ever being born. Your going to wish you never left your mothers womb, where it was warm and safe... and wet. i am going to show you pain you never knew existed, you are going to see a whole new spectrum of pain, like a Rainboooow. But! This rainbow is not just like any other rainbow, its...
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Old 07-28-2009, 06:12 PM   #25
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Have a second meeting setup. How your tone can change when money and free stuff is involved. Previously, there was a former cafe I looked at. I noticed that the interior needed some work so, didn't think much of it and when I did some follow up, the numbers came out to around $2200 a month that I'd have to shell out for rent/insurance/utilities and the broker believed they wanted a 2 year lease.

Well, 4 days later, the lease is now at 1 year and the initial numbers were way off due to some miscommunication. When dealing with the NNN items, I know enough now to get the cost per square foot and the NNN charges which are broken out into CAM, Insurance and Taxes. I had asked for CAM and he gave me a high CAM number and I computed the taxes (which I found online) and estimated the insurance which resulted in number that wasn't workable.

Well, the CAM number he gave me was actually the NNN number and even that was off. Also, if I do the work in there, they will give 2 months rent free. What was a $2200 a month is now effectively a $1475 a month commitment. The building is owned by a large company that is the anchor of the stripmall. I got the impression they own the building outright and anything they get is free money. Not sure if $8 is their bottom line, but if I could get it at $7.75, even that would save some $40 a month. Every little bit helps. Can't hurt to look.
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You, you will regret what you have done this day. I will make you regret ever being born. Your going to wish you never left your mothers womb, where it was warm and safe... and wet. i am going to show you pain you never knew existed, you are going to see a whole new spectrum of pain, like a Rainboooow. But! This rainbow is not just like any other rainbow, its...
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Old 07-29-2009, 09:54 AM   #26
Mustang
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The excitement of last night has faded quickly into personal conflict (again) and it is the same questions that I've fought from the beginning. Actually 3 questions that I keep asking myself. Can we? Should we? Could we? I say we because whatever I decide, it will have an effect on the entire family.

Can we? I don't doubt we could. Effectively, we have been doing this for the last 4 years so, we know the time commitment needed to do this and the business side we have a handle on so, I'm pretty comfortable with saying yes on this.

Should we? I don't think it is any big revelation when I say I dislike my current job. Nay, hate my current job. I've soured on the corporate world greatly and it just seems like such a waste of my life to be sitting in a cubicle. At the end of the day, when I leave this planet, I don't want my crowning achievement to have been 'Fixed Betty Sue's Banking Statements'
I want to be my own boss, run the show and have a different professional life other than this so, ya... this is a should we.


Could we? This is the question that is killing me right now. For the short term, I would be doing all of the heavy lifting. Just working this job, running the business so, that would suck up 70 hours of my time in the short term of 3-6 months where I don't see hiring any employees potentially. My wife has concerns of me burning out, I'm worried that my relationship with my 2 year old daughter will suffer. The business is a way to improve our lives potentially and change our lives. I don't want to be one of those people 3 years from now working 80 hours and my wife and little one(s) only seeing me 30 minutes a day and justifying it with 'I'm doing it for us'. I can endure the short term pain, but I have to absolutely make sure I have a plan to make sure that short term pain doesn't turn to long term pain***


*** anyone feel free to insert sagely advice.
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You, you will regret what you have done this day. I will make you regret ever being born. Your going to wish you never left your mothers womb, where it was warm and safe... and wet. i am going to show you pain you never knew existed, you are going to see a whole new spectrum of pain, like a Rainboooow. But! This rainbow is not just like any other rainbow, its...
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Old 07-29-2009, 12:15 PM   #27
DaddyTorgo
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set aside part of the basement for a playroom so the faily can be there?
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Old 07-29-2009, 12:51 PM   #28
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Originally Posted by Mustang View Post
The excitement of last night has faded quickly into personal conflict (again) and it is the same questions that I've fought from the beginning. Actually 3 questions that I keep asking myself. Can we? Should we? Could we? I say we because whatever I decide, it will have an effect on the entire family.

Can we? I don't doubt we could. Effectively, we have been doing this for the last 4 years so, we know the time commitment needed to do this and the business side we have a handle on so, I'm pretty comfortable with saying yes on this.

Should we? I don't think it is any big revelation when I say I dislike my current job. Nay, hate my current job. I've soured on the corporate world greatly and it just seems like such a waste of my life to be sitting in a cubicle. At the end of the day, when I leave this planet, I don't want my crowning achievement to have been 'Fixed Betty Sue's Banking Statements'
I want to be my own boss, run the show and have a different professional life other than this so, ya... this is a should we.


Could we? This is the question that is killing me right now. For the short term, I would be doing all of the heavy lifting. Just working this job, running the business so, that would suck up 70 hours of my time in the short term of 3-6 months where I don't see hiring any employees potentially. My wife has concerns of me burning out, I'm worried that my relationship with my 2 year old daughter will suffer. The business is a way to improve our lives potentially and change our lives. I don't want to be one of those people 3 years from now working 80 hours and my wife and little one(s) only seeing me 30 minutes a day and justifying it with 'I'm doing it for us'. I can endure the short term pain, but I have to absolutely make sure I have a plan to make sure that short term pain doesn't turn to long term pain***


*** anyone feel free to insert sagely advice.

Not much in the realm of advice as I am keeping my business purely online but i am going through the same thought process right now. My job is stable although commission based so income is down to the point that my online sales are actually equaling or paying more out than the job. The one thing keeping me there is the health insurance (Wife with a bad back and personal health care insurance here is expensive) however, I have been in talks with an insurance agent and with me incorporating the company he can come in and give me premiums a hell of a lot cheaper than even what I am paying at my current job.

So I have that going for me...

The biggest thought is growth and an exit strategy for you. Being a small business owner with a storefront will require that you or your spouse is there at all times. It's part of the reason I am able to sell our software easier and fast to SBO's than any others out there as they are tired of losing money if they aren't at their place of business.

Write in your goals for your business plan on long term growth and an exit strategy and include the way of life you are looking for in it, that way you have a sound strategy written down and will be more focused on it.
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Old 07-30-2009, 01:02 PM   #29
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Thanks for the notes guys. Yesterday was bad, today is good.

One of my friends actually has an interest in potentially working at my place. He was wanting to do the same type of business at some point in his life, but due to monetary constraints, it just isn't feasible for him. He wouldn't be a partner, but rather an employee and I wouldn't have any issues hiring him. If I can use him even 20 hours a month, it would be a huge relief valve and I wouldn't need to stress about certain things as much.

One place I checked out last night was WAY to large. Like 4000 square feet too large. Not to mention that the ceiling had no less than 20 ceiling fans and probably 100 lights with 3 bulbs each on them. I swear, if you flipped the switch on it that place it would cost you a $1 a minute to power everything. If the owner doesn't divide up that space, not sure what he will get in there especially since it is a few floors up.
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Old 07-30-2009, 09:34 PM   #30
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If you do take a large space, make sure you check whether sub-leasing is possible. Some rental agreements tend to make that a breach of contract and you want to avoid unnecessary legal issues arising.
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Old 07-31-2009, 10:55 AM   #31
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If you do take a large space, make sure you check whether sub-leasing is possible. Some rental agreements tend to make that a breach of contract and you want to avoid unnecessary legal issues arising.

At this time, I wouldn't want to even entertain the thought of getting a larger space with the intent of subleasing a space. The one exceptionally large space has been vacant for some damn near 3 years I think so, not a good opportunity.

Although, the spot that I looked at yesterday I really liked from a location and potential standpoint. It is along the main strip, centered in town & cheap rent. The downside is that it needs some work inside. Not a huge amount, probably in the neighborhood of $500-$750. Needs to be painted, have a 12" x 12" section of the drop ceiling put back in, the old cashier stand area needs to have the flooring replaced and some of the wood flooring needs to be replaced, but that is all pretty basic stuff. The landlord would cover repairing the bathroom that was basically destroyed.

My friend also said he could commit to more hours than I thought he would. He said he could do 2-3 days every week and 1 weekend so, that would be huge. He also mentioned that if his wife got a different job and took over the insurance, he'd work there full time for $25K. (Getting WAY ahead of ourselves here!)

So, with the potential of possibly putting in an offer to lease it, I need to clear up the following items. (In no particular order)

1. Accountant Discussions - Need to get the items in order to allow myself to hire employees and discuss a better inventory system than we are already using.

2. Finance - We have the cash to cover doing a startup, but I'd rather not burn through that. I'd rather get a loan to cover the costs of starting inventory, fixtures and probably 3 months of rent/utilities. Our cash on hand would cover the repair costs, 3 months of expected employee salaries, 6 months of rent and cash for new product lines. The local bank we use is pretty flexible. I'm not sure if they will need a full business plan so, we will have to talk to them. They are a small town bank so, pretty informal and my wife used to work there and keeps in touch with everyone still. Regardless if they need a business plan or not, I'll probably just go through the excercise for my own benefit. Bank finance is not essential to doing any of this anyways has I have other avenues.

3. Fixtures - I need to put together a store layout plan so I can finalize what I need as far as fixtures (Shelves, Counters, Register, Safe, Security Cameras). I won't be able to fix a hard number because I fully intend to use secondary markets to buy cheaper fixtures (going out of business sales, auctions and anything else I can find). I'll have to use past data to get a rough estimate though.

4. Credit Card processing. A black box for me right now, but the wife mentioned that the bank (see above) can help out with this. Not sure if the terms will be good though, but I can use as a starting point.

5. Business Association. There is a business association that I will need to join here (voluntary), but they help out with alot of items and have a mentoring program and other programs such as deals on credit card process and also a group health plan that you can join into. Basically a 1000 people have joined together to give them cheaper health insurance raters since they are acting like a large business.

6. Inventory. Need to work out the exact items I will be carrying and the amounts I want to order. Once I do that, I need to run items past the suppliers to make sure I'm not missing anything.

7. Admin Stuff. Primarily stuff like licenses, ADA items and employee rights. What I need to make sure if available or what needs to be posted. (Like signage about Employee Rights). Need to make sure my bases are covered.

Hopefully in 2 weeks, I'll have everything down and at that point, I'll make a go/no go decision on whether or not to proceed on this location. I had rough drafts of everything above, but now that I have a space in mind, I can fix more hard data to it (which is probably more important to present to the wife rather than the bank)
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Old 07-31-2009, 11:28 AM   #32
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Following along. Good luck with your venture.
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Old 07-31-2009, 06:35 PM   #33
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Stopping by to wish you luck!
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Old 08-06-2009, 04:31 PM   #34
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Quiet week.

Been working on a business plan to present to a few banks for a loan. Interesting experience, I feel like I'm back in college as a lot of it, other than the numbers standpoint, just feels like fluffy goodness.

Talked to the broker again about the price. He seems pretty adamant about the price not going lower because it is the cheapest in the area. True, but it has been the cheapest in the area for 1 1/2 years for some reason. I do like the space though, I'll probably have to get creative on my offer to them to try to cut down more on the rent. They offered 2 months free which effectively means the cost per square foot is $6.77 for year one which I'd rather have instead and spread it out over year 1.

All for now, don't expect much until the plan is done and I start sitting down with banks.
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Old 08-10-2009, 08:49 AM   #35
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There are some people that should not run a business or consider running a business. Like my friend's wife.

This is the friend that has offered to help out, without pay, for three months while the business is going. (Which is going to amount to probably 40-50 hours a month and for which I'm extremely grateful for).

So, last night we were going over details of the store, specific lines, fixtures, hours and things of that nature when she started asking questions.

"I think it would be a good idea to serve cookies."

I'm thinking cookies? What the hell? Before I have a chance to say anything, my friend chimes in "So, he is going to work 40 hours in a regular job, 40 at this job and then go home and bake?" She then suggests that my wife bake them to which he replies that my wife will be doing items during the day like customer service tasks, packing and oh.. taking care of the little one.

"What about incense, you should be incense.". Incense? I'm not opening a Amsterdam coffee shop here, let alone want something burning in my shop. "No, sorry, no incense. Some people might not like the smell so"

"Muzak, will you have that pumped in?" Oh, hell no. Maybe I'll have music in there, but it will not be Muzak.

"Oh, I know how you could decorate, in this section, you could run tire tracks up the wall and do blood splatters." How about a human head on a pike? Should we do that as well? Maybe we could advertise by having a guy being disemboweled yelling SAAAAAAAAAAAAALE!!! "No, sorry, not really productive to having a family atmosphere."

"Comics. You need comics." I wouldn't wish my enemies to have a comic book store. You buy 10 Wolverine #295, sell one and 1 year later you have 4000 sq ft of sh-tuff. "No, too much space and startup costs"

Then we get into one of the main lines and I explain it. I could tell she has a look of amusement on her face as I explain it to her. "Well, I wouldn't do that, anyone that would buy that is stupid." That is where the gnashing of the teeth start. "Look, you don't have to like it.. you don't have to understand it, you don't have to do it, but the bottom line is this demand exists. You know how I know that? Because it is what I'm doing now."

That is probably why a lot of businesses fail (and why people like my friend's wife should never contemplate opening a place). You can't just throw things into your business because you like it or think it is cute and you have to ask yourself what the general public will think about your place.

Lady opened a place in town, called it "Lisa's Cafe". Opened it down the street from Starbucks on the outskirts of town. The week she opened, she was a dead man walking and I told my wife who agreed. She had to have dropped $50K plus into it (if not more.. coffee equipment isn't cheap). She also had named it Lisa's Cafe so, it implied a place to eat. She only served coffee so, by the time she realized this mistake, she had to take out more money to rev up a food line and increasing prices across the board.

At the end of the day, while your perfect place might have cookies, blood splatter, incense and Chicago's If You Leave Me Now playing 24/7 your customer base might not be keen on that and it will kill you. Hopefully I can separate myself from my ideas and look at them from a business standpoint objectively.
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Old 08-10-2009, 09:03 AM   #36
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lol - that's pretty amusing about your friend's wife
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Old 08-10-2009, 09:44 AM   #37
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I just stopped by the thread because I heard there were cookies! Any left?
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Old 08-10-2009, 10:10 AM   #38
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I just stopped by the thread because I heard there were cookies! Any left?

No. I have some chocolate covered pretzels though.

True Story. Was at work and there was this rather large woman in our office. (Probably 5'4", pushing 350). One day, I was walking and she was walking towards me, after she passed I heard her say "Hey, Kevin."

I stopped and turned, "Yes?"

She cocked her heard to the side with an inquisitive look, "Got any chocolate chip cookies on you?"

"Umm.. no. Why?"

"I was wanted some chocolate chip cookies, thought you might have some." Then she turned and walked away.

Never underestimate the power of the cookie I guess....
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Old 08-10-2009, 02:11 PM   #39
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For anyone that wants to chime in...

Have a property I'm looking at. 1800 sq ft. Local market is around $12 for units that are in the < 1200 range and dropping down to $6-7 for units that are 3000+.

Some of this is repeat from above, but the unit I'm interested in, they threw out that they would give 2 months rent free and would do a 1 year with 1 year option. The 2 months free was because it needs some TLC in the inside. The bathroom has issues (they would fix) and then I need to do the rest, but it is basic stuff. Simple drywall repair, repair a section of flooring, paint and a 12'x12' foot section of drop ceiling. I asked about the $8 and the broker said he doubt they would move since they were the lowest in town. (eh.. not really). They've been vacant for at least 1 1/2 years in that spot, the owner is not local and it is my impression that the building is paid off.

Given those variables, I'm mulling how much haggle room on the price / sq ft I have. Granted, I could ask them to go to $7.99 and they could tell me to get lost, but don't want to miss an opportunity for a really good deal.
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Old 08-10-2009, 02:39 PM   #40
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You mention that it is not really the lowest in town -- how far out of kilter is it? Is the difference made up for by any variables -- location, size, fitting your particular needs? How much do you estimate your share of the repairs will cost? Do you get to deduct that from your rent or is it in return for the 2 months they are knocking of?
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Old 08-10-2009, 03:48 PM   #41
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You mention that it is not really the lowest in town -- how far out of kilter is it? Is the difference made up for by any variables -- location, size, fitting your particular needs? How much do you estimate your share of the repairs will cost? Do you get to deduct that from your rent or is it in return for the 2 months they are knocking of?

They are pretty close, I've seen a few in the $6-8 range, but they are a little larger. I'd say that they are pretty close to be the lowest, but even with being the lowest, the unit has sat for 1 1/2 years. I estimate there are probably

They are offering a free 2 months regardless of the cost to me. I estimate the repairs to be $600 + my time (2 weekends worth)

It feels right to go there and the price is decent, but unfortunately then I feel like I'm shorting myself and just saying 'oh.. ok, looks good'.
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Old 08-13-2009, 02:06 AM   #42
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Plans change.

We have been working on finding the spot to setup. The main place we were working on, I went and talked to the tenants that were in the strip mall. A few things set of my spidey sense. For starters, the tenants were saying that during the winter, the roof leaks in spots. I'm not too keen on that. Secondly, I found out that the spot has been vacant for four years. Four years? Wow. And last, the manager of one of the spots didn't have a number for the landlords, didn't know how to get ahold of them nor spoke to them in years. Leaky roofs, 4 years of neglect and the potential issue of not being able to reach a landlord if issues? Sometimes it is better to just walk away.

Or walk in circles because after talking to the wife, we are back to where we were several weeks ago. Discussing the Mexican store. We had to really step back and ask ourselves why we wanted to do this and that was to get a distributor, get an online store and go in a different direction. The spot might not be in the greatest location, but I can still accomplish that by being in this spot. If I can drive local customers by advertising and word of mouth over 6 months, that would be great, but I really want to get a toehold in the online world and getting this place, saving nearly 850 a month and rolling that into inventory and the business, I think that would accomplish our short term goals.
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Old 08-20-2009, 12:16 AM   #43
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Someone flip a coin for me and make a decision.

I've essentially narrowed my choices to 2 places.

Place A : It is downtown, $750 a month, no NNN charges. Total rent, utilities and insurance would put me at around $975 a month. To offset it, I would need to increase sales 40-45%

Place B : On a higher traffic road, NNN charges (I'm responsible for everything). Total of everything is around $1900. I'd need to increase sales 100% to offset everything to retain the same profit level I'm at.

My business 'advisor' (well, one of my friends that is going to help out) seems to think the first place won't work and I'd be throwing money away, no one will come because it wouldn't be 'cool'. Where as the other place is along a high traffic area (25,000 cars a day per stats).

Location is of the utmost importance, however.. I have to remind myself that one of my main drivers is to get a store front to allow me to have better entry into the internet and to have a storefront.

On a separate front, I am really really glad that I have no partners. There is no one that I know that shares the same vision and business goals.
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Old 08-20-2009, 11:34 AM   #44
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How likely would it be that you'd be able to increase the sales to the level you need at each location?

Furthermore, which location do you think has the highest upside for your particular target customer base?
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Old 08-20-2009, 02:19 PM   #45
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How likely would it be that you'd be able to increase the sales to the level you need at each location?

Furthermore, which location do you think has the highest upside for your particular target customer base?

I believe I'd be able to increase sales in 45-60 days at the first place to cover the first and probably 180-210 days at the other place.

For upside, if I was needing 100% store driven sales, it would be the one with the higher lease. I'm targeting a 50%/50% split within 1 year though starting at 100% internet/0% retail location at day 1.

The area I'm looking at, there really is no anchor store that would drive traffic. The main store is a hardware store and my client base would be 180 degrees from that target base. The town doesn't have any malls or super large strip malls (most are clusters of 4-5 spread out).

There was a similar business next door to where I'm looking at downtown that went out of business. However, I don't think that is a good gauge because I believe it was poorly run. The person started with $80K in inventory/debt, bought a bunch of stuff, sold it and never replaced it. I don't care what business you do, if you don't get in new stuff and sell the original inventory to pay bills and your debt, you are dead in the water anyways. There always seemed to be 10-12 people in the store when I was in there though. (Now, how many were spending, I don't know).

I know location is important, but assuming that just because I'm in X location, I'm going to get all this drive by traffic to come in is just as bad think that if I'm in Y location, I'm going to get no traffic.

My friend said that if cost was a concern, should wait a year. For me, if the other place makes more sense financially, I could go there, build up the internet base more and see what happens on the retail side. Waiting a year seems like lost time and right now, I'm almost capped out at what I can do without going to the retail side.

I could probably ask 10 business owners and would probably get 10 different answers unfortunately.
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Old 08-20-2009, 02:38 PM   #46
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I just read an article that laid out some good advice on separating yourself as a destination store or a store that will drive traffic via foot traffic. The advice from several people was that if you are wanting to be a destination store, location is not as important. I'm really going to become a destination store so, I think I have the information I want/need to make a decision.
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Old 08-21-2009, 12:35 AM   #47
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A typical Mustang weekday day.

Monday - Friday

6:00 AM- 6:30 AM : Get up, check out morning messages, browse night time sales. Shower, grab lunch and head out to work.

6:30 AM - 7:00 AM : Morning commute.

7:00 AM - 4:00 PM : Day job. Sit in cubicle all day. Answer questions. Run tests (browse FOFC while jobs running, tapes being pulled, waiting on phone, etc)

4:00 PM - 4:15 PM : Head out. Head to post office for daily international mailings.

4:15 PM - 4:45 PM : Drive home.

4:45 - 9:00 PM : Family time, dinner, dishes, play with daughter. (Me and the wife rotate giving the daughter a bath from 8:00 - 8:30. The other one usually does the dishes and picks up the house)

9:00 PM - 11:00 PM : Various business related items. Answer questions, prepare shipments (15-18 a night), adjust inventory. (They key to shipping is having the right boxes on hand. We always have 4x4x4, 12x9x2, 9x6x3, 10x10x4, 20x12x4, 15x15x4, 22x12x6, 24x12x4, 4 types of priority and 2 types of bubble mailers, 8-12 rolls of tape, 15 cubic feet of peanuts. I spent $8K at the post office this year so far. For all the crap that USPS gets, I estimate I've sent probably 7500 packages out, I've only had 1 go missing and I don't even think that was missing and I think it was a scam. Fact: You can't send playing cards to Spain. Interesting reading some of the stuff that is/isn't allowed)

11:00 PM - 12:00 PM : Relax with a show, read or surf net.

We try to cut off one day (Tuesday or Wednesday) at 9:00 PM after the daughter goes down and do nothing business related. Although, for us, tonight was that night.
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Last edited by Mustang : 08-21-2009 at 12:40 AM.
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Old 09-08-2009, 10:55 PM   #48
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It has been a very quiet 2 weeks. More so on purpose. I needed a good head clearing.

My business plan was done, in hand and sent off to our bank. We had done a sit down with them without our plan in hand just to go over the basics of the business and what we are doing. At first, he seemed rather skeptical, but once I started laying out what we were planning, what we have done and where we see ourselves in a few years, their mood definitely shifted to more of a 'Ok, they know what they are doing and have thought this through'. Which is expected.

We expect to hear back from them this week on our business loan.

Our search for a place is in limbo though. I definitely believe I'm stuck in paralysis by analysis as I wildly swing back and forth between several options, but I'm just trying to cover all the bases and make sure that I'm doing the right thing.

The building above, the old cafe, that is pretty much dead. Being vacant for 3-4 years, they wouldn't tell me what has been done maintenance wise with the HVAC system nor would give me any guarantees. Replacing a 5 ton unit 1 month into the lease isn't something I wouldn't want so, gotta let that one go.

One particular unit, where the landlords seem REALLY wanting to get someone in one of the units ASAP, seems willingly to negotiate on length (even would do 3-6 months), give guarantees on HVAC and dropped the price without me even doing any negotiating (went from $13 to $9 right off the bat). I reworked the layout and while tight, it works out better than I thought. Other good things is that it is dead bang off the highway and is part of a busy restaurant franchise.

The website is in a holding pattern. I've decided to go with an Ecommerce package that will allow me to setup pretty easy and has hooks into what I currently do. I'd rather go with a standalone, but that requires me to do alot more upfront work or hire someone at around $1500 to do the work. I'd rather use the money somewhere else.

Distributors are in a holding pattern. I have my stock picked out, but to get the best price I need to be a customer and to be a customer, I need a lease so.. no movement there.

Fixtures. Researched and holding pattern.

I have a high level of confidence that once the bank gets back to me, and it is positive and I get some concrete numbers from the place I'm now looking at, I'll sit down this weekend and give a go/no go and move forward at a breakneck pace. October 15th is still the target which is pretty aggressive. I could realistically push to November 1st, but I feel that is the absolute latest.

Fun Fun Fun.
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Old 09-08-2009, 11:01 PM   #49
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Oh, and in other good news, for the month of August, we had the highest sales volume that we have ever had for a 1 month time period.
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Old 09-11-2009, 02:33 PM   #50
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Got the call today and we are approved for the business loan amount that we wanted and I can move things along more quickly now.

Only some minor things that need to be answered such as what to use as collateral. (They don't want to use the store inventory). We will probably lean towards using home equity as even if the business would fail, we still have equity. Other options we have are probaby CDs or 401k. 401k would probably have negative tax implications, CDs are cash so, don't want to use straight cash as collateral.
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