Whats next?

[seven47]

I've obtain a resale shop in my name dealing with furniture and appliances. This is nothing I want to do but I see it as an opportunity. What should be my next steps to building and branching off this store? I want my business name to build credit and get into a good financial standing with banks so I can obtain loans for other ventures. I thought maybe I could take out 500 to 1000 loans and pay them in full within a couple weeks. Any help would be appreciated, thank

[turboguy]

Well, building your credit is a good thing and can come in handy as you grow. Let me ask one question just because it may change some of the suggestions I might make. Are you in the USA or somewhere else?

Sitting down and making a business plan would also be something I would recommend as a top priority. It will be like a roadmap to your future and it is hard to find your way anywhere without a map. Some of the suggestions you get here may help you to define your plan.

One suggestion would be a web site if you don't have one already. Using social media would also be a good thing.

[seven47]

Yes Im based in the U.S. would taking out small loans and paying them back in a couple of weeks help build credit? Should I get a business checking account going even though Im just a cash business? I want to be able to either having a self service car wash, food truck, music studio, or become a used car auto dealer. I'm basically one of those jack of all trades kind of person. Now that this opportunity fell into place for me, I want to become a successful businessman

[vangogh]

Is there a reason you think you need the furniture and appliances shop to eventually run a car wash, food truck, music studio, or used car dealer? If you want to do one of those other things your next step is to sell the furniture and appliance business and start the business you really want to start. Building up your credit is a good thing, but you don't buy or run a business just to build up your credit score. Also your credit isn't what will get you a loan for one of the other business. You'll get a loan based on someone deciding your business is sound and will bring in the money long enough to pay back the loan.

If you want to keep the furniture and appliance shop then your next step was already suggested by turboguy. Work out a business plan. It doesn't have to be anything formal, though if you want a loan for the business you'll need a formal plan most likely. What you really need to do with the planning is understand how this business works and how you're going to make money with it.

[tallen]

(1) how is the business organized (legally)? sole proprietorship vs. some form of corporation? As a sole proprietor, you and your business are essentially the same, your own personal credit-worthiness is ultimately what will matter. For a corporation, if it is a start-up, it essentially has no credit -- you will likely have to provide a personal guarantee to get any kind of bank loan, or will otherwise have to convince investors to invest in the business. The business then establishes credit by doing business with other businesses, and paying its bills on time (or even early).

(2) bank account -- it is hard for me to imagine a legitimate business being able to operate without some kind of bank account. How will you pay your bills? You can't pay your taxes with cash (at least not easily), and many of the other expenses you will have to pay will be paid by check or electronic transfers -- maybe credit card, but most likely not cash. And even if you only take cash payments from your customers (no credit cards or other forms of payment? really?), where are you going to stash all of your cash?

[seven47]

Its a LLC. My personal credit is at most fair right now, which I will be working on. Beside business 101 and 3 business law classes that Ive took in college I don't know much of putting together a business plan for a resale shop other than relocating for bigger space or purchasing my own property to own instead of leasing my current space. I get most my inventory from people who buy storage lockers or I may go purchase a storage locker myself. I don't expect to make much from this shop because of its location. My plan is to have it out of my name within 4 yrs while moving on to something bigger and better.

[turboguy]

Ok, so lets look at the challenges you face.

1. It is not a business that really interests you but you hope it might be a stepping stone (Being an entrepreneur is even more challenging if you don't have a passion for what you are doing.)
2. It has a bad location (Some say location is everything.)
3. It is too small
4. Your credit isn't all that great. This does make it tougher.)
5. It doesn't make a lot of money.
6. I sort of think you don't have all that much cash as well.
7. I am guessing that since it doesn't interest you all that much I have a feeling you don't have a lot of expertise in the furniture field.
8. You don't have any first had experience running a business (We are here to help you)

If you can really get interested and into it then it sounds like you could learn more from making that business successful than you did in Business 101 and your other college classes. That experience will help you when and if you start a business that is one you dream of.

When you do that business plan it will give you an opportunity to sit down and think of ways to make the business grow and to make it better. It will help your creativity and give you a roadmap to growing the business.

I have more questions for you. How does the business sell right now? Have you thought about advertising on Craigs List? That might be good free advertising for you. How long does your lease run? Can you afford to move to a bigger place with a better location. That can open up more opportunities for you.

Take a look at how you buy. Right now you say your are buying from people who buy storage lockers and sometimes buy them yourself. My son spends his weekends running around to garage sales. Then he sells what he buys on Ebay. He says he can make $ 1000.00 a month in his spare time and I have seen him buy things for $ 15.00 and sell them for $ 1500.00 Perhaps starting to get more involved with smaller items that can be sold on eBay and shipped might be an option. Craig's List even lists a lot of free stuff and some of it is quite nice but people are moving and just need to get rid of it. Perhaps get more involved with antique furniture. You need to research and know your stuff but as they say one man's trash is another's treasure. I just bought a small furniture piece from a guy today who just has his house crammed full of antique furniture. His prices are not cheap but he makes his living doing that and had some cool pieces (as well as a lot of junk) I have seen some estate sales with great bargains (and some that were not). Another option if you can find a bigger place with a better location might be to add some consignment stuff. I was looking at one web site and I will give you the link Cranberry Consignment Gallery (http://www.cranberryconsignmentgallery.com/) They have a couple of advantages you don't such as 4,000 sq. ft in a good location but they take a commission on what they sell so they have no inventory costs. The are very strict on what they take and if it doesn't sell in 60 days the owner has to pick it up and otherwise it becomes theirs. They have a pretty good explanation of how they work on their web site. Take a look at it and it might give you some ideas. I found their web site when looking for the piece I bought today from the guy operating out of his house. I might have more ideas but I will stop here.

[seven47]

I make a good $2k at the least, which is take home pay. The lease was just renewed last week. Everything I sell is advertised on craigslist, word of mouth, or I may do ebay local. Dont get me wrong its a good business, I run into a lot of top of the line appliances which are fairly new but can't really get the price I want because of the location. I dont mind doing it but I dont want to see myself doing it for 3+ years. I'm more concearn of the loan and grant money part to being an entrepreneur. Hoping that this business can help me someway in that aspect.

[turboguy]

2 grand a month is pretty good and if you can get it up a bit that would be great as well. The small bank loans will help your credit a little. Try and get some credit cards even if you have to get a secured one but pay them off in full every month and on time.

I have been in business since George was president, (that is George Washington, not George Bush). Well, not quite but for a very long time. Most of the time my business did fine and I did fine but over all those years I had two periods when I ran into financial problems. The first time it messed up my credit. I started back with a secured credit card and after some time went to a regular credit card and kept on from there. Right now my FICA score is about as high as you will find. Sometimes in business Murphy's Law does come true. That first time I had problems I had just had a divorce which wiped out a lot of my assets. I had bought another business which seemed like a bargain. I paid about one years profit for the business but in the few months the previous owner stayed on he managed to ruin a big part of the business. Then I was also importing some highway mowers from England and financing them with a bank floor plan. I had a handshake agreement with the largest Ford tractor dealer in the North Eastern USA to warehouse my stuff. He got access to my inventory and I paid him a fee on the stuff we shipped to another dealer. Then one day he committed suicide and Ford Motor Credit and the bank closed his business down. I lost my inventory but got to keep the debt. Actually if my lawyers wife had her baby one day later I might have salvaged the inventory but since it was on a handshake and I didn't have anything in writing my case wasn't very strong. I was stuck with the debt for buying the busienss which was generating little income, the debt for the equipment but no equipment to sell to pay for it and life was a struggle for a few years. I did pay back every penny by the time I did my credit was shot. I can remember when I would come back to my office the first thing I would look for when I pulled around the corner was to see if the Sheriff had padlocked the place.

Sorry for rambling. I know that doesn't effect the things you need to decide but you can build your credit but you need to make a conscious effort.

[seven47]

No problem, its always good to vent sometimes unlike me, I keep everything in which could be the reason why I'm graying at 30 yrs old. Well Im glad my divorce was finalized the beginning of this year. When I was young I messed over a lot of banks so now I cant even get a checking account, because of my low banking score (chex system). I guess I could maybe startat a credit union. But would I put it in the business name or do I need to open 2 accounts one for myself and the business. Sad to say but the only open line of credit I have at the moment is fingerhut lol.

[turboguy]

I would suggest two checking accounts, one personal and one business and it is probably better not to co-mingle the funds. Credit unions usually have better rates than banks so if that is an option go for it. Anyone can pretty much get a secured credit card and I would go with that to help build your credit.

I keep things in too and have very little grey hair even though I am much, much older than you are so I think it is the genes. The divorce probably didn't help though.

[Wash & Dry]

I'd like to know how this turned out.....