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Forum nameFinancial Feast
Topic subjectRE: LOOKING FOR BUSINESS INVESTOR
Topic URLhttps://www.businessownersideacafe.com/forums/dcboard.php?az=show_topic&forum=105&topic_id=39&mesg_id=40
40, RE: LOOKING FOR BUSINESS INVESTOR
Posted by lannygoodman, Sun Aug-27-06 09:47 AM
hi.
you probably don't want an investor. the reason is he or she will be looking for a return commensurate with their risk. a minimum of 20-25% and usually much more. they also will be looking for an exit strategy, meaning how to sell their interest.

the good news is you have an interesting business with intrinsic value. that is newsworthy. i suggest you do some PR work to get some press coverage.

if you only have the one store, you have what i would call a proto-business. that is, you own your job. the only way you are likely to make money will be to live as cheaply as possible to take as little out of the business as possible and build your inventory that way.

you might also talk with your suppliers. manufacturers might well be interested in helping in some way either through extended terms (which would give you more working capital) or perhaps donations (factory seconds) that would help increase inventory, push up your volume and inventory turns and therefore your retained earnings with which you could build your invenory base and ad budget.

once things are working better, whatever you do, don't open a second store! it takes just as much management infrastructure to run five stores as it does to run two properly and with two you don't have the revenue to support that infrastructure. if you get to the point where you want to expand, plan and capitalize for five and drive there as fast as you can. getting stuck with only two locations is the worst case scenario.

hope these thoughts are helpful.