If you had to use $10,000 to start a small business, what would you do?

[Coop45]

I never had the cajones to get away from a time clock, but with $10K maybe start an online store selling custom items you can manufacture yourself or customize an existing product.

 

[breakingcontact]

I never had the cajones to get away from a time clock

I think this is true for many hourly workers. As much as folks may complain about big companies and "management"...it is much easier to show up and work and have someone else take the risks.

As a contractor im my own business in a way but not in any scalable way. Best or worst of both worlds I suppose.

Also regarding risks I understand that to start a small business it usually takes a huge amount of time, that is another stumbling block the average working guy has to figure a way around.

There seem to be a huge amount of guys making custom kydex holsters. Blade Tech and comptac started off small I believe. I do think that market is saturated though.

 

[Mreed911]

Not a $10,000 loan. $10,000 cash money. No lines of credit. No debt.

The lower class in this country really believes they cannot get ahead. Also many folks believe they are "middle class" but when you look at the actual definitions most are not or just barely considered middle class.

The problem is scale. Let's say I spend $10,000 on something that allows me to generate $1,000/month. On paper, my ROI is great - 10 months! In reality, though, unless I'm starting this as a side gig, I can't live on $1,000/month, so most people see that discrepancy and simply don't try (or can't). In the stock market, I could double that money in 7 years, give or take. If I could grow a business twice as fast then I'd be making $2,000/month in just over three years. Still not great, but growing, and probably more than I'd make working minimum wage, two jobs, etc.

The real showstopper isn't the $10,000, it's the longer time required to see initial results. For $100 I could get a cheap lawnmower, some gas and start mowing lawns. For $1,000, I can edge, buy a beater truck to put the mower in, etc. For $10,000? Let's say I could get a truck, trailer and enough tools for me and two other people to do lawns. Now I can do 9 lawns/day @ $50/ea = $450, split three ways = $150/person/day. Six days a week and I'm making $900/wk minus expenses.

OR, I can hire three people @ $100/day/each, bill the same, make the same. This is where scale comes into play.

Assume I pay myself half of what I make in that scenario. I've got $450/wk to invest back into the business. In 20 weeks (5 months) I've got $10,000 again and can buy a second truck and crew. 3 months later, a third. Four months later, a fourth. Etc. I finally start scaling.

My numbers are probably WAY off, but I'm just generalizing. I am, however, thinking about starting my own consulting business, so I'm running similar numbers and doing some market research. The industry I'm in, we can't hire enough people with the technical skills needed to do all the work and it's truly a gating factor, so at least temporarily there's a market opportunity. The problem is that those people are EXPENSIVE and hiring anyone beyond myself would either require them be a partner/investor themselves (self-sufficient) AND that we hire someone for sales/marketing beyond just word-of-mouth so that we stay busy. We'd need to be billable at least 50% of the time, if not closer to 75%, and that's not including keeping up with training, etc.

The scale is there... but the hurdle is greater than $10,000 to start (for what I'm looking for). Opposite problem from "easy to start with $10,000 but takes longer to build true income, assuming the market supports it."

Interesting thread. Lots of good ideas and comments (and some fun snark, too!).

 

[Mreed911]

I never had the cajones to get away from a time clock, but with $10K maybe start an online store selling custom items you can manufacture yourself or customize an existing product.

In reality, that $10K is buying time. Either $10K worth of living expenses to focus on the business full-time and make it livable, or $10K of time to take away from something full time and ramp up.

Great book on this... START.

 

[oldag]

Precious few businesses capable of supporting a family can be launched with $10k.

Side business? Some.

 

[grasshopperglock]

$10,000

Used trailer $3000.

Lawn mowers, edgers, weed eaters, $4500

The rest in advertising.


Average residential yard runs $50. That takes about 30 mins. Once the clientele are established. $100 an hour per yards isn't bad. Add workers, add customers. 2x the yard, 2x the money and so on.

Expand to landscaping, tree removal and trimming. Etc...

 

[ZX9RCAM]

Average residential yard runs $50. That takes about 30 mins. Once the clientele are established. $100 an hour per yards isn't bad. Add workers, add customers. 2x the yard, 2x the money and so on.

Unless the yards are next to each other, loading equipment, driving to next location, then unloading cuts in to the hour time frame.

 

[grasshopperglock]

Car detail is also lucrative. Either in house or on site. Professional auto detailing can easily run $300. At first only offer on site. Go to them. Glass companies have already figured this out.

Hit up every rental car place in town. Including dealerships and bodyshops. Have a specialized service. Say bio removal. And charge big money for it.

Advertising is the most important aspect to business.

 

[Younggun]

Not a $10,000 loan. $10,000 cash money. No lines of credit. No debt.

The lower class in this country really believes they cannot get ahead. Also many folks believe they are "middle class" but when you look at the actual definitions most are not or just barely considered middle class.

I see so many people trying pyramid schemes (multi level marketing) in desperate but lazy attempts to get rich and "own" their own business. It is really sad to me especially when people go into debt for a racket or to start a non-viable poorly thought out business.

It is easy to scoff at the rich and people who have inherited wealth in particular but what impresses me is how those folks originally got that wealth.

My friend who owns the hydro electric utility started with one small plant. You could wrap your arms around the 150 Kw turbine. He slept in the power house. Then grew the company over 30 years to around 40 plants, most in the 2-4 Mw range.

My point is, to the poor man, lower class, lower middle class...becoming truly wealthy seems a daunting task. I've known farmers who just had generational wealth going back 150 years. Of course those families have had to make good choices and change with the economy but my point is they started off ahead. Ive also known entrepreneurs who have started with nothing and made something impressive, employing 100 people and making an impact on their communities and changing their families status in the next generation.

It can be done.

Im trying to figure this out for myself as well. I do OK. About maxed out for my industry, might be able to squeeze out 20% more next contract. But there are only so many hours in the week. I look at my contract agency and think how much they skim off the top on these contracts...they aren't working hourly but getting paid many times over while others work. They just have to keep contracts coming in and people working for them. I understand that is a type of work but it is work with passive income once the initial work is done.

In order to really do something, you need to build something and not just work check to check or towards the golden ring of "retirement".

But where does the poor man/lower class come up with 10k cash?

In your OP you say it falls out of the sky, but in this post you say the point is that the poor man/lower class can do this. I'm not saying it's impossible, but the lower class/lower middle class will not have 10grand fall out of the sky to invest in a business, and if they do, they probably wouldn't be able to survive until said business became profitable in most cases.

Depending on current working hours, with the right motivation one might work the normal job, change shirts at 5, load the mower and hit yards till 830 or 9 when the sun went down (or paint, do minor appliance repairs, etc), go home, quick dinner, shower, sleep, repeat until he can't keep up and feels it's safe enough to drop the hourly wage, at which point it will be a mad dash to build the customer base to the point of replacing the list hourly income. But I don't think starting with 10k from the sky is realistic when looking at opportunities for the lower class/lower middle class. It ignores what is probably the biggest hurdle, getting the 10k in the first place.

Not trying to derail, just think it is an important part of the discussion that can't really be ignored if this is the point of the conversation.

 

[grasshopperglock]

Unless the yards are next to each other, loading equipment, driving to next location, then unloading cuts in to the hour time frame.

Yeah, I wasn't thinking too much into that aspect. You'll have to drive like FedEx....everywhere.

Then there's the dicklehead that'll call you out to mow 3' tall Johnson grass in a yard full of rocks.

 

[scgstuff]

Find places with bricks of .22 and the "gonna be banned" 5.56 in stock, buy $10,000 worth and then sell for twice that, then you have $20,000. </SARCASM>

 

[breakingcontact]

But where does the poor man/lower class come up with 10k cash?

In your OP you say it falls out of the sky, but in this post you say the point is that the poor man/lower class can do this. I'm not saying it's impossible, but the lower class/lower middle class will not have 10grand fall out of the sky to invest in a business, and if they do, they probably wouldn't be able to survive until said business became profitable in most cases.

Depending on current working hours, with the right motivation one might work the normal job, change shirts at 5, load the mower and hit yards till 830 or 9 when the sun went down (or paint, do minor appliance repairs, etc), go home, quick dinner, shower, sleep, repeat until he can't keep up and feels it's safe enough to drop the hourly wage, at which point it will be a mad dash to build the customer base to the point of replacing the list hourly income. But I don't think starting with 10k from the sky is realistic when looking at opportunities for the lower class/lower middle class. It ignores what is probably the biggest hurdle, getting the 10k in the first place.

Not trying to derail, just think it is an important part of the discussion that can't really be ignored if this is the point of the conversation.

Entering the real talk zone! Intellectual honesty ahead.

Understood. If a person stays or gets out of debt...that 10k could be saved towards. Might take a few years but it is doable on most budgets. Ah and that is another thing, having a budget. Your point is certainly valid and I respect that.

There are genuine emergencies that hamstring the lower class but often it is poor decisions. Thats just real talk. A lot of folks working low paying jobs are driving nice trucks/bikes/boats or hanging at the bar and making payments instead of investing or saving towards something. I understand that too. We all want to be rewarded in immediate tangible ways for going to work each day.

10k was just an arbitrary number though. You could start with $100. I built that little picnic table for something to do and sold it on facebook. Women eat up stuff like that. The lady I sold it to wanted to know if I could make more. Will I get rich selling picnic tables? No. But I could save up $10,000 doing it in a few years.

I get it. I come from working class people who came from abject rural poverty but I try to think like a master, not a slave. It has taken me awhile to shake off the "little guy can't get ahead" attitude but ive done it and am looking to do more.

Now what im dealing with is im making good money, why aren't I getting ahead faster? Well those I compare myself to who make about the same, who are seemingly doing better than me have either made better decisions, been handed inheritance or are swimming in debt. I dont have a rich uncle in ill health so all I can do is make good decisions and stay out of debt. Thats actually a danger when you start making more. If you have bad habits and make bad decisions you just use that bigger shovel to dig a deeper hole. It is also really easy to justify bad financial moves because I "deserve" it.

Who wants to buy a picnic table?

 

[Pilgrim]

Start a boardgame dev studio on the side. It would be a nice change from making video/mobile games...

 

[breakingcontact]

How about porta potty cleaning? Figuring that isn't something many want to do.

 

[Pilgrim]

How about porta potty cleaning? Figuring that isn't something many want to do.

You'd blow that 10 grand just in healthcare bills during the first month... yecchh.

 

[benenglish]

The problem is that those people are EXPENSIVE and hiring anyone beyond myself ...

Employees are expensive, period. It's no wonder so many jobs get offshored; it makes those pesky, expensive employees into someone else's problem.

There are ways around that. The most common one is to hire illegals. But at a $10K threshold, we're not even talking about a business big enough to do that. We're talking, imo, about the real, everyday persons definition of a small business - something a single person or couple can do that requires no more office space than the kitchen table.

A couple of ideas. The "S is gonna HTF" guys are frequently obsessed with the collapse of, well, everything. To them, the guy in the neighborhood with a few tools in the garage who knows how to repair anything is someday going to be king. Whether I accept their premise or not, I know of more than one person who simply advertises in a community newsletter that he's a "fix-it" man who will take on any small job from hanging a door to repairing a lawnmower. The one in my neighborhood certainly seems to stay busy. He doesn't have $10K worth of tools but he does have a long lifetime of experience in various trades. He can glue a broken piece of particle-board furniture back into usable condition for less than half the cost of something new. He can paint your bathroom. He can repair a section of rotted trim on the side of your house. That's a job that concentrates on "what do the people who live within a mile of my house need" and that, i.e. thinking in terms of geography and not tasks, has traditionally been a way some very small businesses survive.

I'm thinking of something along the same lines, actually. My neighborhood is exploding with development but it's still basically going to be 3 neighborhoods in an island surrounded by major thoroughfares. It could be walked in a few hours. Over the last 20 years, with half as many houses available, there have been ice cream trucks coming through about half the time. Some years they show up; some they don't. The neighborhood is on the cusp of profitability for those guys...but just barely. Next year, when all the construction near me is done and Exxon is open, it will definitely be profitable.

So, who's spent enough time on the east side of Houston to see the ice cream vendors there? They don't waste money on gas, insurance, and expensive vehicle wear and tear. They use these:

Because these things sell pre-packaged foods, only, it's generally possible to get all the required permits without having a commercial kitchen for clean-up and without gas and water hookups. It would be difficult to spend more than $6K on a new one, complete with solar powered refrigeration. If you rely on dry ice, the buy-in drops closer to $2K. (Yes, like in everything else, there are custom makers who charge stratospheric prices for fancy stuff, too. I'm not going to address that.)

Believe it or not, given the construction going on in my immediate area and the increased population density that will come with it, I'm actually considering this, probably to begin in the summer of 2016. It's good exercise. It's limited, really, to just the summers when the kids are out of school. The initial investment is close to pocket change. The receipts are all cash (which might have some advantages of which I am completely unaware so don't ask me about that). If there's a special event like a street fair, the whole shebang can be loaded into the bed of a pickup and offloaded elsewhere. Gross profits tend to be small but margins are larger than you might think; the markup tends to be roughly $1 per item sold.

For an old retired guy like me, this is the sort of idea that percolates in the back of the mind. For a younger person who, for example, has a good weekend location in mind to work after their regular 9-to-5, it's a viable extra income stream.

Like the picnic table and completely unlike the power generation examples quoted upthread, this is definitely not a way to build a large fortune over the long term. But it is an option for some people. There are many people for whom an extra $200 a week will, over the long haul, make the difference between worry and peace of mind. I see value in that.

 

[Shotgun Jeremy]

Back to the dreams - I'd want to start a gun cleaning/repair buisness. I'd do it now, but I have no clue how to get a buisness up and running or if there's enough demand to pay the bills plus a little extra.

 

[benenglish]

"And now for something completely different."

If you want to hire employees, here's a business that costs far less than $10K to set up and I've seen it in action.

• Put ads on craigslist or pick up some bums hanging around the downtown bus station.
• Pile them all in your pickup truck.
• Feed them a McDonalds breakfast.
• Give them a bucket to sit on, a bottle of water, and a "Poor me, God Bless, anything will help" sign.
• Drop them off at various highway intersections in a limited area.
• Drive around in the early afternoon and give each one a sandwich.
• Drive around in the evening and pick up them all up.
• Take half their earnings for the day, maybe more.
• Drop them back where you found them.
• Lather.
• Rinse.
• Repeat.
• Pay no attention to any laws regarding labor or taxes. If you get caught, slither away and start again elsewhere.

I've seen this business plan in action and it works well. It takes a special sort of low-life to make it work but the OP didn't ask for moral, ethical ideas, now did he?

 

[Shotgun Jeremy]

Why would the bums pay you for what they do anyways?

 

[benenglish]

Back to the dreams - I'd want to start a gun cleaning/repair buisness. I'd do it now, but I have no clue how to get a buisness up and running or if there's enough demand to pay the bills plus a little extra.

How would you limit it? If you turn away work that requires expensive tools, people will stop using you. If you expand to do everything, you'll spend so much on tools and education that you won't make much money.

Not trying to be negative, here. In fact, quite the opposite. I think you've got the kernel of a good idea but I think it needs refinement.

If you want to do something like this and keep the initial investment small while having enough business to keep you busy without getting so large you grow into problems, you need to specialize. Teddy Jacobsen posted an intro message on this forum a while back that was actually an ad. Thankfully, (in, I assume, recognition of what an artist and institution he is) he wasn't banned for commercial posting. AFAIK, he's a one-man shop. He doesn't do heavy fabricating but he'll take your S&W double-action revolver and make it sing. That's a great model for a "gun business" - something you're passionate about and do well but that doesn't allow yourself to delude yourself into thinking you'll grow it into the next LaRue.

Another idea? There sure seems to be a bunch of people who would like their firearms refinished with something like CeraKote but finding someone close, reliable, and affordable sure seems to be more difficult than it should be.

You're on to something. Give it some more thought.