About Jim D. Ray Expertise Jim Ray is coordinator of a regional venture capital network, serving entrepreneurs and investors seeking funding relationships. Ray is an experienced entrepreneur and is presently involved in the operations of several business concepts, including a national commercial real estate company and a web design firm. Areas of expertise include the overall startup funding process; writing venture capital proposals; and win-win exit strategies for existing private funding relationships.
Expert: Jim D. Ray Date: 6/12/2005 Subject: Business star-up
Question Hello. Thank you for your repsonse. However, this is not a homework question from a business student. I have been working my Business Plan with a Volunteer with SCORE through the SBA. I have every intention to start my new company. However financing is a major problem. My question was if I don't have the standard 10-25 % down should I give up my idea? You see the property that I want is, and it is raw land, $ 700, 000. 00. I have completed my plan up to the financial projections. It shows after, expenses, to still have over $ 1.2 million per year net profit. Problem is if I had $ 500, 000. 00 to start I wouldn't need the financing I am after. I am attempting to build my company from the ground up. Litterely. I have stuck to the KISS theory preparing my plan due to the fact I know that no one will want to read a 150-250 page book. However doing it myself I know every aspect of its contents. Now back to my original question you think is a home work question, should I give up my plans due to the fact that I do not have the financial resources to get this off the ground and fair not pristine credit to boot. I am stuborn to the fact I have thoroughly reasearched this in my market research and analysis and would not even attempt to continue if no profit was being shown after the first three years. Developement expenses show I would need, on the high side, $ 4. 6 million to turn on the lights and display OPEN signs. I have included plans for possilble expansion to other market ares after the first 2 years. The initial loans should be paid off in no longer than 10 years, maybe sooner. With the exeption to early pay-off penalties. I have even considered the thoughts of going public in approximately 10 years, again maybe sooner. That depends alot on the legalties and such as to issuing stock certificates. I am not not very knowledgeable to that aspect, YET.
So, again thank you in advance for any insight or advice.
Answer Friday, June 17, 2005
6:33 PM CDT
Jerry:
Thank you for your question. While I appreciate your persistence, I assure you, this is a homework question -- in that you must do your homework, searching yourself, to get the best answer for the question.
You are essentially asking me for permission to give up on your own goals. It is not that I cannot advise you to do this -- I will not do so. Where there is a will, there is a way.
Whatever you decide, I wish you great success in your endeavors.
