If You’re Not Going All In, Stay Out
|America's trusted voice on money and business, Dave Ramsey is a personal money management expert and extremely popular national radio personality. His three New York Times best-selling books - Financial Peace, More Than Enough and The Total Money Makeover - have sold more than 6 million copies combined. His latest book is EntreLeadership: 20 Years of Practical Business Wisdom from the Trenches.
Buying an established business with management might be a better fit. Unlike real estate, a new venture demands constant attention. Your personal commitment is key to its success. If you can’t invest fully, consider alternatives.
I have an idea for a small business I think would be a huge success in my area. How do you feel about me keeping my current day job, and hiring a full-time manager for the business to handle the day-to-day operations, while I do the accounting and oversee things? If it doesn’t break even or better, I can always close it. In my mind, I equate my plan to being like selling real estate on the side, while keeping my regular, full-time job. What are your thoughts?
To be honest, I don’t think there’s a high likelihood of success using this model. Unless, of course, you’re willing to devote 40 to 50 hours a week to this new business, in addition to the time you spend at your current job. In my mind, you’d have a better chance of making it work if you bought an existing business with a manager already in place. That way, at least you wouldn’t have to be so entrepreneurial and constantly involved in things like adjusting the business model, checking prices and dealing with customers.
Honestly? This idea isn’t a lot like real estate at all. Real estate will run itself-for the most part-once you find a tenant. Also, the number of hours you’d have to put into selling real estate on the side is nothing like the time you’d spend getting a new business off the ground.
Here’s the deal, Victor. The secret ingredient to your small business success is you. You are the ideas, the passion and the energy. The problem with your plan is that you are only a small part of the equation. Franchises and chains try to train this kind of stuff into people with pep talks and other forms of motivation, but when something’s your baby, it’s really your baby. You’re going to do your best, days, nights and weekends, to grow it properly. You’re going to worry over it constantly, and treat it almost like it’s your very own child.
I love your entrepreneurial spirit, but I’m sorry, Victor. I just don’t like this plan. It sounds like your idea is to swing by once in a while, eyeball things and crunch a few numbers. And if that’s the case, I wouldn’t waste my time or money if I were you. You’d probably benefit your community more by just giving what you’d invest in the venture to a good charity.
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