Starting a Business instead?

[zinc]

Gday team,

My journey in property investing so far has been pretty dismal, to say the least. Painfully, it hasn't really got off the ground after all my attempts and energy so far.

I reckon I may be going about it the wrong way ie - work, save cash, deposit IP, invest.

Hate to sound so cliché but maybe I should try a different path. Maybe starting some sort of small business, or being self employed, might give me the excess cash that I need to begin property investing.

Having had this property dream for over 13 years now and not even having a single investment property (apart from couple ppor's) after earnestly trying to save, hold down a job, and sacrifice is frustrating. life gets in the way, maybe I should take another path?

What are good forums/websites in regards to starting a small biz?

Thoughts.

 

[nhg]

If you look closely, most of the more successful forum members (and investors in general) are business owners.

I myself am looking at making a move and transition to business over the next 3-5 years. The more I learn about investment, the importance of cashflow, and generally focusing on improving myself, working for someone else no longer really seems to make sense at all.

What sort of business are you thinking about? Remember, there is a difference between a business and a job you bought yourself. It is long hours regardless.

Sites: http://www.flyingsolo.com.au/

 

[zinc]

well having worked in kitchens for several years - dish washer, potato peeler etc I was thinking owning a small cafe or even a coffee shop, thats owning the business and not slaving away in it 24 hrs a day. i dont know? Maybe delivering stuff to businesses instead? Maybe distributing cooking oil? Maybe selling herbs?
Maybe starting my own little farm? Pig farm? Vegies? maybe some easy thats related to construction or mining? Dont know.

Have many years labouring on construction sites too, throw in a couple years mining labouring aswell, oh yeah cant forget the Military too, oh and that tiny Taxi driving stint. theres a few things ive tried. Have a bit of experience.

Cant do just 'anything to get paid' any-more! Its not working and times going by. I dont wanna reach 40 and still be like this.

Oh dear, this starting to sound like a rant! a poor-me career rant!

Some one quickly validate my issues!!

 

[Aaron_C]

Move to self employment if you can. You are in control of your own destiny and your hard work gives you the rewards. However, you have to be a certain character to do it properly.

Easier said than done though - particularly in the hospitality industry the start up costs are quite costly since you need to pay for your fitout, security deposit for lease plus have spare cash for contingencies etc. You can't leverage much of those things except the equipment.

 

[moyjos]

Self employment is great. The control, the freedom, the stress!!! Seriously, yes self employent is probably the way to go, but try to set something up part-time first before you ditch your job.

I am sure you have read all the stats that 90% of business dont make their first year. So tread carefully and with a good plan.

Your first thought is hospitality, what about a weekend market stall cafe? Or a coffee van and scout around kids sports grounds etc......Nice start to test the waters.

Do NOT spend any of the profit from this..keep reinvesting into your business until you have either a: enough to leave your 9-5. Or b: enough to buy an IP

 

[geoffw]

I'd go against what most people have said.

I have been in business, and I did all right in the end, but it was a hard slog.

It would appear that you don't have much money to put towards it (possibly)- if you did you would have bought a property. That's going to limit your options. You won't be able to buy a business with a proven track record, for instance, and that will limit you to riskier businesses and will make it harder for you to get a loan. You really need a good solid cash backing to tide you through the difficult periods. Cash flow is really important.

It can be a lot of really hard work over a lot of time. I did eight years working 360+ days per year. When I wasn't there I had to be prepared to be called at any time. Hospitality is especially difficult for damds on your time.

As stated there are many businesses which fail. The ones which are more likely to fail are the small startups IMO. The ones which have a good idea and not a lot else. Mind you, some of those so spectacularly well- but we never hear about the majority which fail.

And if course there are many business models which aren't doing well in this Internet world. Hospitality has done well, especially the fast food segment.

A thought. Perhaps you may be better to spend the time for a year or two in some TAFE education to get yourself skilled in some area where you might be able to get better work prospects. It might even be worth while to do some sort of business studies. A knowledge of bookkeeping with MYOB or similar will be of value in any sort of business. (Bookkeeping might itself be a good area to have a business if you are good at that sort of thing).

Id be suggesting to get a solid base behind you first. That IP might be very difficult to get- but it will be a solid base for you in a business, providing collateral.

 

[Truly Exotic]

+1 to geoff

let me say from experience in multiple small businesses across different industries

Property investment <<<< harder <<<<< own small business

easiest one liner I always say is:

"your IP, worst case scenario will drop 10% over night especially if you have overpaid, compared to a small business which can drop to $0 overnight through no single particular fault of your own, even if you paid $300k for it the month before"

edit: and from someone who has extensive hospitality experience, its one of the toughest industries to get into, especially a small one like a corner/suburban cafe

 

[pinkboy]

Some very good suggestions by some very successful business owners above!

Another quick one, which many people don't realise until its too late:

Don't dive into a business where you just bought yourself a job. Its true that in the beginning it is a real hard slog for most, but don't fall into a trap where you really cant grow. Self service start up businesses where the owner/operator IS basically the business isn't going to make much more than a wage earner in the whole scheme of things. Your idea/model has to have room for expansion to make a really good go of it and make the more serious dollars you are after.

Agree with the above - you have to have a pretty solid foundation before you can build the walls and finally the roof. There is no other way in business!

Saving is finite, earning income is infinite!

pinkboy

 

[ok180]

Some good responses here. I have been in business for 9 years myself in two different industries.

Business can be good but it can also be very very hard. Sometimes you can toil away for years on something and only be breaking even. It's not that easy to turn the ship around once it has sailed either you really do have to stick at it. Also it chews up a lot of free time, weekends, nights etc worried about things. It's not easy to take vacations and employee's are generally not very good and cost a lot in this country.

The one thing it does do for you is shift your mindset. You now basically have to be the driver to make everything happen. If you don't come up with the ideas and strategies no one is going to do it for you. This in turn makes you a better investor because your so used to having to do all the digging yourself.

Sitting here writing this now that I know what I know, my business ventures have been reasnobly successful but if someone swaned in and offered me a high paying job (say over 150K) I would probably take it over running a business. I don't really know if I could actually work for someone else again though, I started in business when I was a puppy (im 31 now) I can't even remember what it was like to have to follow orders from someone.

 

[MRO]

I rate employment quite highly. Maybe you just need to find the right job. I get paid well, get annual leave, sick days, paid public holidays and get to finish on time occasionally.

I try to use my extra energy and reliable cash flow to pay for investments so I can retire early. I am not saying the going into business is bad, I just think you should look at all you employment options too. Have you considered any study to enter a new field?

A business that can earn you $100k plus is worth a fair bit or money and will take time to establish yet you can probably get a job paying the same by scanning seek and sending in a 2 page resume.

 

[atti]

property investing isnt harder then running a business, you have to have goals see what your strength and weaknesses are.

property investing isnt for everyone, u have to know only a small percentage of the population have the means to do so.

you should be focusing on what makes you happy first. then go from there.
" i have strong desire and determination of replacing my income in 10 years with all passive income and have a low goal of only 1k per week passive income thats what gives me happiness" when u work for someone else i guess you'll just have to harden up and takes it because of your ultimate goal." been in that boat churning out 40k income for boss a night 12 hrs shifts and i get pay 150$.... seems hardly fair .... but just deal with it..

if you not a self starter i strongly recommend against doing businesses.

to borrow large sums from banks signing your life away for 25-30 years is a hugeeeeeeeeee commitment, alot longer then most marriages i would say i hope i contribute something to your understanding....

i think you should search for the bad side of property investments and headaches people going through before you make any decission because property spuikers always find the bright side of things.... imagine if you borrowed 500k and have an empty property 3-6 months can you handle that ? .... what networks support you if you cant make it on your own...

its much less riskyer say if you have 5 like minded family members to split the 500k loan and rip profits say in 7-10 years time when its worth 1 million but thats all networking....

i've had bad experience with tennant and going through claim with insurance to fix everything up and that almost made me give up investing... i only have 2 ip and i live in 1 of them and surrounded by 2-3 people supporting me unconditionally.. thats why i made it even through face of injury and unemployment, do you have the network ??

 

[Propertunity]

Maybe starting some sort of small business, or being self employed, might give me the excess cash that I need to begin property investing.

This may seem a bit harsh, but IMO, if you can't hold down a decent job and make a go of investing, then you are not going to make it in small business either. (in fact you'll probably make less)

 

[investor2009]

Please forgive me for sounding off but.. In 13 years you still have no investment property? Have you been actively working toward this or just willy nilly?

It's just such a long time

 

[Peter_Tersteeg]

Please forgive me for sounding off but.. In 13 years you still have no investment property? Have you been actively working toward this or just willy nilly?

It's just such a long time

My thoughts exactly.

I'm definitely an advocate and a good example of small business success, but if you haven't been able to get things together in 13 years towards property investing, then you probably don't have what it takes to got into business. This may sound harsh but being in business is a lot harder than saving a deposit and buying an IP.

Business is a great way to become wealthy but realistically only about 20% of business owners come out better off than they were when they went in. I'd estimate that less than 5% actually do really well out of it.

It can be high reward, but like everything, there is also high risk involved. People people end up loosing everything they have in business.

I can also assure you that if you want to go into business, you're kissing goodbye to the idea of buying property for a couple of years. The only people I know where were able to start a business and still buy property, still have a PAYG job.

Ask yourself why you haven't been able to get into the property market and what you can do about that. Do you really have the skills run a business? It's not just about delivering the product or service, there's just as much work in sales, marketing, compliance, book keeping and a thousand other management tasks.

Washing some dishes and peeling potatos is worlds away from running a cafe, and that's gotta be about one of the toughest business I could think of.

 

[John_]

A friend of mine purchased a cafe in castle hill about 2 months ago after investing in property for a long time, it's 7 days a week work but he only spends very little time there as he has other family members looking after it makes 30-35k per month clear profit, is he happy...? it has changed his life 360 and he is looking for a similar style cafe.

For that sort of return it's hard to pass up, that's if you get the right business.

 

[mattnz]

Check out flyingsolo.com.au

 

[MRO]

A friend of mine purchased a cafe in castle hill about 2 months ago after investing in property for a long time, it's 7 days a week work but he only spends very little time there as he has other family members looking after it makes 30-35k per month clear profit, is he happy...? it has changed his life 360 and he is looking for a similar style cafe.

For that sort of return it's hard to pass up, that's if you get the right business.

Wow - $360k profit pa from a café with no owner involvement. Are you sure this number is right? There aren't too many small cafes that make money without the owner working 7 days in it themselves.

 

[pinkboy]

A friend of mine purchased a cafe in castle hill about 2 months ago after investing in property for a long time, it's 7 days a week work but he only spends very little time there as he has other family members looking after it makes 30-35k per month clear profit, is he happy...? it has changed his life 360 and he is looking for a similar style cafe.

For that sort of return it's hard to pass up, that's if you get the right business.

That is a lot of Devonshire Tea! Are you sure it isn't Irish Tea being served?


pinkboy

 

[Ace in the Hole]

A friend of mine purchased a cafe in castle hill about 2 months ago after investing in property for a long time, it's 7 days a week work but he only spends very little time there as he has other family members looking after it makes 30-35k per month clear profit, is he happy...? it has changed his life 360 and he is looking for a similar style cafe.

For that sort of return it's hard to pass up, that's if you get the right business.

Wow - $360k profit pa from a café with no owner involvement. Are you sure this number is right? There aren't too many small cafes that make money without the owner working 7 days in it themselves.

I don't think John said it was a small cafe.
Seems like a good business.
However, 2 months earnings may not be a clear indication of long term results.
Could go either way by a little or alot, depending on many factors.

 

[John_]

Business was started about 10 years ago, my friends brother in law worked at the cafe from day 1 they don't only sell coffee but coffee sales are around 70kg a week that is only coffee plus they have a lot of other things.

What happened was original owner wanted out and since my friends brother in law has been working there for 10 years he knew its good but couldn't come up with the funds so my friend came in and got it, friends brother in law still works there along with 18 others on/off.

BTW.. not a franchise, making very very good money.