I’m planning on opening a doggie day care business with two other partners. We are still at the beginning stages, and before we go any further, our major concern is how to support ourselves financially during the first couple of years? None of us have any savings, and we are perplexed as to how to pull a salary from a start up business that may not turn a profit for a while. Please let me know! Thanks!
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Once you have the passion to start your own business, I know it’s hard to fight the impulse to submurge yourself into it full-time (I know from personal experience). It’s probably better to resist the urge to go cold-turkey on bringing in cash flow. You don’t want your passions to be squashed due to worrying about how you’re going to put food on the table. Without cashflow, running your business will be bitter sweet since you’ll feel beaten down every month that you don’t see a profit. There are other options to keep your business in your life.
You can work a job at an existing, successful doggie day care business. Work any job, just to be in the environment, see how they do things, find out about vendors/wholesalers/software systems and learn the business from the inside… and get paid for it too! It’ll be like a training program for running your own doggie day care business. Have your partners do the same at different doggie day care busineses if possible. Do this for 6 months or so, learn about the business, then keep your jobs to retain cash flow, but make sure that your shift is offset from your partners. For example, you can work your job 2PM-9PM and work at your business 8AM-2PM while another partner works his/her job from 8AM-2PM and works at your business 2PM-9PM.
Also, try to simplify your lifestyle starting now. Try to see how you can minimize your living expenses (while not sacrificing your health of course). You might be living very modestly, but revisit your finances and see where else you can cut down on. Save up as much as you can in this time and aggressively go after loans/grants. You’ll need a good business plan to get a loan/grant, which has other benefits as well. By doing a business plan, you will learn more about your vision for your business. You’ll ask yourself questions about how your business looks that you may not have asked yourself before.
In terms of finding another job, keep in mind that it’s a bad economy and it looks like it’s getting worse, so be careful before you make any decisions. The bad economy is another reason to simplify your life regardless.
Good luck! Hope you have a blast!!
It may not be a good idea going into business without having something on the side to support yourself, generally businesses lose money the first few years when they first start out. But if your an extremely small business you might gain a bit of profits but you most likely wont be able to support all three of you and your life expenses.
Do not do it! You are setting yourself up to fail. You need a minimum of 6 months of living expenses in the bank.
This is the biggest reason for new company failures.
Credit, loans and side jobs. It will be hard. But if you’re successful, it will be worth it.
First, you’ve got to want to do it bad enough that you can tolerate the fact that money will be tight!! If you have no savings, you will need money from somewhere to survive ( just daily expenses could send you under). Here are some suggestions:
When negotiating your business loan, incorporate a modest salary for all 3 of you for the minimum time you may not be making a profit. It shows the bank you are conservative, yet hard-working, and will push that much harder to finally turn a profit. This may be the hardest to get, really.
Get loans or grants from elsewhere (industry, government). This takes some research on your part, to see what you qualify for, etc. Get as much “free money” as you can, before accumulating unnecessary loans.
Operate a side business, either related to your new business, or individually doing “what it takes”. Consulting, holding seminars/workshops, freelance writing, MLM businesses, etc … just off the top of my head.
Meanwhile, do everything you can to boost business and get the long-term clients you need to keep it going – offer contracts for a “discounted rate”, find a re-curring income that your clients just cannot turn down, free registration, that kinda thing.
Good luck! It’s a hard way to do business, but not impossible.