[pitt]

I have a great business idea in mind and i am sure that it will work if i put effort into it. However, i am reluctant about moving forward with it because i know it will take much of my time away and i will have to be supervising the business for long hours. I am thinking more about making passive income and looking for a type of business where i can make money when im not also working so this business is not ideal for me when i think long term.

However, I just got the idea of opening this business, put hard work into it for few months and then rent out the business. Does this looks like a good idea?

I know a guy who is doing this same business and he said he could help me out with buying stuff and with the rest of the start up. He is also an expat and he just met someone who is offering him 30% of what he is making from this business per month but he didnt take the offer because he didnt think the money was worth it.

Because i am looking for passive income, do you guys think that it is a smart idea to open a business (i will be actually building it from zero), make it work and then rent it out?

I just want to find out what are your thoughts on this, i would be glad if i hear from you business heads.

[defguy]

The whole world is preaching starting a business, truth is I believe it is one of the only ways to become self sufficient as well, however one thing not commonly shared are the negatives.

Since your starting from scratch your going to have a learning curve, your friend is doing it and if hes been doing it for a while hes probably forgotten all the painful little lessons hes learned along the way. Here is what your going to have to sacrifice:

1) Time - However much time you think your going to spend, double it. Youll have all sorts of unaccountable setbacks from paperwork to business setbacks to personal life. Shit happens all the time in business and youll come to expect it, people break into your things and steal your things (from your home or your place of business) for no reason at all, forget the Porsche store right next door, they have to steal from you.

2) Money - However much you think it will cost, your way off. Everything cost $ and you have no idea how much it will be. Maintenance on things youve already bought, gas for your car if your going to have to do driving (most underrated expense in most businesses), brand new shit just breaks, also personal expenses may come up at the WORST possible time. Banks dont like to give loans for businesses that are less than 2 years old. Not even an SBA loan, youll need proof of income or a friend or family member to sign off on an SBA loan, so most of your business expenses are coming out of YOUR pocket, one way or the other.

3) Approval - many starting entrepreneurs get frowned upon by society. Its almost like a taboo to start a business, expect everyone including your own family and friends to assume your going to fail. If you randomly drop a "yea Im shutting down the business" like a month or 2 into it youll be shocked how many people tell you "I knew it would happen." This is the entrepreneur way, its a lonely walk to the top.

If you can overcome these obstacles then by all means go for it! My intention is not to scare you but to put a realistic perspective on what to expect instead of people just saying "most businesses fail" or "Its a lot of hard work." Know that your going to spend a lot of time and money on unexpected things for when your business plan (which usually goes right out the window) doesnt go smoothly. If your ok with the upcoming hardships then it will pay off, even if your business does fail you literally get what you put in. Would you drop $5K+ on the knowledge of how to become an entrepreneur?

[pitt]

Thanks for the input, i personally liked point number 1.

Anyway, why would i drop more than 5k on the knowledge of how to become an entrepreneur? Are you trying to sell me something? If yes, no, i wouldnt pay for it.

[WestIndianArchie]

This makes sense to do online, where the capital investment is relatively minimal and you can do it from most places in the world.

A new business model is picking key words, building up the site's traffic and ad revenue, and then selling it on http://www.flippa.com.

[defguy]

@Pitt your dropping $5k on the knowledge of how to become an entrepreneur IF your business goes under like the "95% of all businesses fail." You still walk away with knowledge you cant learn anywhere else but the school of hard knocks. And dont delude yourself in thinking your going to spend less than that... Unless by "entrepreneur" you mean your planning on living the lifestyle of Seth Rogans character in "Knocked Up"

You can do a website like WestIndian mentions but most likely that will cost you several thousands as well...

Having said that I personally want to do Flippa in the future, however I want to buy a website generating ~ $1k in revenue every month (will cost me around $20K) and throw time and $ into it to grow it into something that generates $4K+ in residual. In no time the website should pay its own loan payment (if it isnt already doing that at the start) and with a full time job I wont be sacrificing anything in terms of standard of living.

[Deluge]

(01-23-2012 11:41 AM)WestIndianArchie Wrote:  

This makes sense to do online, where the capital investment is relatively minimal and you can do it from most places in the world.

A new business model is picking key words, building up the site's traffic and ad revenue, and then selling it on http://www.flippa.com.

You don't need to sell it. The golden rule of assets (this goes for everything from stock to commodities to houses to websites) is to sell the ones doing poorly and hold onto the ones that are doing well. If you don't have the time to run it anymore, outsource it all, it's cheap (I would know, I'm involved in the ghost writing side of things). Why sell the golden goose?

[46.]

(01-23-2012 10:54 AM)defguy Wrote:  

probably forgotten all the painful little lessons hes learned along the way.

Yes. Great post. The business model sounds interesting but the devil is in the details. Think it through, make a list of all the things that can go wrong (should be 50+ things, not 3) and what actions you will take to correct them. If you're not scared, then go for it. IMO, the key to entrepreneurship is being humble enough to know that things WILL go bad. Don't be rosy-eyed like everything will be perfect. Know they will go bad and have a plan to deal before they get worse and debilitating. For example; what happens when your renter guy starts skimming and stealing and ruining your model? What happens when price of supply doubles? Etc.