How Much Money Does It Cost To Start a Business?
So I opened up my Perry Belcher e-mail today and I’ve got this message from a guy this question:” hey Perry, How much money does it cost to start a business?”
After always being an advocate of the term “there is no dumb question” I don’t know, I may have to change my mind on this one.
Asking me how much money is going to cost for you to start a business is like asking “how much a bag of groceries”. It all depends on what’s in the bag.
If you’re strapped for cash, service businesses are usually lowest costs to start, because you can trade your time and skills for money. Often, depending on the type of business that you enter you may have little or no start up costs.
Retail and manufacturing businesses are cash hogs. These are two businesses and you better not start without a bankroll, that being said, there to the easiest businesses in the world to sell if you make them work.
Right now manufacturing is the fastest-growing sector of the US economy. If China continues to raise the value it’s currency the products are going to become more more unattractive US buyers, and with political unrest, the US could easily raise tariffs on Chinese goods and fundamentally price them out of the market.
Retailing, the first business I was ever in, is very tough nowadays. In my opinion, unless you’re manufacturing or importing the products that your retelling you’re going to get eaten up by national retailers.
The Walmart’s of the world, Home Depot, Bed Bath and Beyond and the Gap are all retailers that import their own goods to sell in stores. This cuts out the distribution chain, and gives them giant margins. So if you’re trying to compete by buying from a wholesaler that’s probably paying more for the goods he’s selling you than one of these major retailers you’re pretty much screwed.
The food businesses usually where people’s minds go next ” everybody says I’m a good cook maybe I’ll start a restaurant” Anytime you ever hear these words realize it $50-$200,000 is about to disappear out of someone’s bank account.
Being a good cook does not a restaurant make. Restauranteurs have to be some of the most cost-conscious, negotiating business minds on the planet to actually make that proposition work.
Between food cost, staff, and real estate most restauranteurs only get to keep between 2% and 5% of what they take in as profit, so you can see you have to sell a metric ass ton of hamburgers to make a living.
- A side note in the food business, I have made a lot of money in the mobile food business. I own several hot dog carts, and heve successfully ran a lunch delivery service, snow cone stands, ice cream shops and another a number of other specialty food cart businesses, heck one summer I made over hundred thousand dollars with a lemonade stand at a union station Mall in St. Louis.
These businesses are very different from true brick-and-mortar restaurants.
Basically if you’re wondering how much is it going to cost start your business, you’re probably getting way ahead of yourself. Firstly decide which business you want to be in, if any. The truth is that this is a really only for about 2% of peopleshould ever own a business. That’s the amount of people who are typically successful in business out of the entire population.
Time for you to speak up:
If you have ever started a business before, tell us about it, tell us how much it costs start, and how quickly you got a return on your investment. It might help all these other folks who are thinking about starting a business.
Just common in the area below. Thanks, Perry Belcher