What business do you start with $60,000?
December 27, 2004 3:14 PM   Subscribe

You have $60,000 and want to start a business. What do you do?
posted by stevis to Work & Money (34 answers total)
 
Open a yarn store.
posted by sugarfish at 3:22 PM on December 27, 2004


Web based training. Focus on cheap solutions to that are customizable to site specific issues.
posted by sled at 3:25 PM on December 27, 2004


Invest it instead.
posted by reklaw at 3:25 PM on December 27, 2004


A little background: I need to move to Kansas City to be closer to some older, extended family. If I sell my house, and pay off my debt, I'll have about $60,000. I'm tired of working for other people, too.

Someone at work advised me that an economic recession or depression might be brewing here in the U.S. I tried to find something about businesses that did well during the Great Depression, but came up a little empty handed. You all are the brightest people I know; any help is appreciated.
posted by stevis at 3:32 PM on December 27, 2004


Depends on whether you want to make money. (Seriously.)

If I had $60,000 to blow, I'd approach a couple of under-appreciated jazz musicians like Bob Brookmeyer and Sam Rivers. I'd ask them, "If you could record one album, any way you wanted, what would you do?" $60K would buy at least two big band recordings.

If you need the money to work for you, that's different. I'd say invest, simply because you're asking the question. If you have to ask, "What kind of business should I start," then you shouldn't start one. Find someone who's passionate about his own idea, and become his partner.
posted by cribcage at 3:36 PM on December 27, 2004


PS -- MeFites are the smartest folks you know? Jesus. Join a bowling club.
posted by cribcage at 3:38 PM on December 27, 2004


Live off of it while you open a coffee shop. Don't blow the money on coffee stuff, live off of it and start slow and cheep. Sell coffee, sell stuff that people could buy as gifts, sell random things for some extra dough, provide wifi access, allow people to print there for 10 cents a page or soemthing, setup a photocopier too. Make it a place people can come to to get out of the office. That's what I'd do.
posted by pwb503 at 3:43 PM on December 27, 2004


It depends. Stevis, what do you do well? What do you like doing?

The truth is that you can make money doing anything, as long as you do it well. One of my clients started a search engine placement sales company. He now makes several million a year at it. He enjoys the sales aspect of it, and the sales training. He has me as a contractor run the technical end of things.

There are two important things: 1) the business can be successful there, 2) you enjoy doing it and will do it well.

If you can go there and live for a while and find a market niche that isn't filled, you can do almost anything. Cybercafe and espresso shop. Chocolate shop. Plumbing company. Whatever you like. Heck, one of my friends makes $8000 as a pet sitter. Also find out who is in an established business, but has a lot of dissatisfied customers or is otherwise unpopular in the town.

Generally, if you're ambivalent, the best types of businesses to start are the 'affordable luxury' businesses like espresso shops. Of course, that depends highly on the area you're in, and how much money people have in the area. If you could give more information about both yourself and your skills and the area, we could help you narrow things down.

Sum total: we don't know enough about you or the area to reccomend anything in particular.
posted by SpecialK at 3:51 PM on December 27, 2004


If you decide to start a business, my advice is don't jump in with both feet. Start something you can do after work and on weekends for a while, so that you can build a clientele over a year or two. You may think you're tired of working for others, but working for yourself when you're constantly in the red gets real old real fast.
posted by vignettist at 3:56 PM on December 27, 2004


is the idea that you will be living with the older extended family (otherwise, won't you need it to buy a new place)? if so, what happens when (sorry) they pass away? will you need the money back quickly?
posted by andrew cooke at 3:56 PM on December 27, 2004


There are a lot of fairly visible businesses(like a coffee shop), and there are a lot of special interest, niche businesses.

Consider buying an existing business. I'm biased - I bought an existing business, made money every year for 5 years, and sold it at a profit. Okay, one of those years, I didn't make very much. I learned a lot and had fun, too. Talk to business brokers, but also look around in different places for niche markets that are not served.

In my town, there's a specialized electrical and computer parts distributor. They have a storefront in an industrial neighborhood, the clientele is largely businesses with purchase orders. They move a lot of goods so they should be making money, and mostly don't work nights, weekends or holidays. It's not cutified, but they give good cutomer service and know their stuff. Look in your current town for solid, proiftable businesses, then look to see if the new town has anybody doing that job well. If not, fill the presumed need, either by starting a business, or buying a business that fits the bill, or can be retrofitted.
posted by theora55 at 4:10 PM on December 27, 2004 [1 favorite]


Save the money while you research. Read these two books: Good to Great and The Innovator's Solution. It's not as much the what as the who and how that you need to figure out. Your best ideas will come pretty naturally in the brainstorming phase. Find some good partners, get a good idea, become awesome at it, kick ass.
posted by will at 4:10 PM on December 27, 2004


I've said this before, and I'll say it again - use the $60k to pay for business school. The GMAT exam is less than, or close to $100. If you can get up into the 90th percentile or so, you will get scholarship offers from a number of schools. If you want to make a ton of money, try for one of the top-ranked schools. If you want to have fun and not worry too much about keeping up with the joneses, then the other schools will be great too.

You will learn things like business planning and make contact with people who have far more money than you but far less motivation to run a business. Some people go from business school to starting their own businesses, others take a few years to work for a large, successful company. Either way you will be much better educated than those that don't take the business school route.

Finally, never invest your own money in your own business venture. You have a conflict of interest - it is your idea so you will believe in it, even if it is the stupidest idea since DiVX (the play-once DVDs, not the free compression codec). If you can get outside investors, then *maybe* your idea has a chance of succcess. If you don't go to b.school, use part of the $60k to buy a nice suit for those sales meetings.
posted by b1tr0t at 4:20 PM on December 27, 2004


If you are not an innovator, not sure the business will work out and you just want something to work at, I would suggest spending the money on a capital investment that wouldn't depreciate much. That is, if you spend the money on rent for a coffee shop and it goes belly up, you're out everything and you would have been better off investing the money. On the other hand, if you buy a piece of used equipment (a backhoe, a limousine, a cnc machining center, real estate), you could possible recoup your money if the business doesn't work out.
posted by 445supermag at 4:38 PM on December 27, 2004


Conventional wisdom holds tha that the best recession Proof (or Recession-enhanced) businesses are:

1. Alcohol / Tobacco
2. Adult Entertainment
3. Entertainment in general
4. Cheap housing / Mobile Homes
5. Prison-related services

And I'm probably leaving out a few. But these really strike me as more investment opportunities than potential small businesses. For someone just looking to earn a good living, I'd say just find a large institution that's likely to survive any economic hardship (a wealthy private university, or a federal building, for example) and provide them with a cheap and useful service (coffee shop, bicycle store, etc.) If you play your cards right, you'll end up with with a steady stream of customers, even in the slow times, and an opportunity to mark things up a bit when the next boom comes! Anyway, that's what I'd do, YMMV. =)
posted by idontlikewords at 5:09 PM on December 27, 2004


Oh, and I forgot one other thing, the value of which ought to be enhanced by any large-scale economic mishaps:

Gold

Another advantage of which is that it's easily transferable into other currencies, should our own become less valuable.
posted by idontlikewords at 5:14 PM on December 27, 2004


B-school is not a bad idea. But I'd back up the folks who say that unless you have a compelling interest already, don't start a business just for the hell of it. Keep the money--invest it in something--and then be prepared to take it out when you know what you want to do.

This is also a bit of an unanswerable question, since we don't know what you can do or enjoy doing. You don't need $10,000 to start certain businesses, especially computer-related ones; but, in my experience, computer-reltaed businesses are like restaurants, and fail constantly.
posted by josh at 5:19 PM on December 27, 2004


I would take 3 of my long-standing software vaporware projects and put equal effort into them for a couple of months. After that period, I would take the one with the most promise, and develop on it full time, trying to develop it into a viable software enterprise or service (with an open source component).
posted by jimfl at 5:37 PM on December 27, 2004


In heed I forgot the most important thing.

Buy land. That's what makes men rich where I come from.
posted by sled at 5:40 PM on December 27, 2004


If you're going to be starting a business in Kansas City, check out UMKC's Entrepreneurial Growth Resource Center. They're supposed to be a great resource for small businesses.
posted by whatideserve at 5:48 PM on December 27, 2004


Gold is a terrible investment.There is no inherent value to pretty rocks in the ground.
posted by Slagman at 6:11 PM on December 27, 2004


Another recession-proof area, if my life-long addiction is any indication: tobacco! Seriously. People pay crazy money for cigarettes.
posted by davidmsc at 6:39 PM on December 27, 2004


Jeez, don't buy a bike shop. You know how to make a million dollars in the bike business? Start with two million....
posted by fixedgear at 6:53 PM on December 27, 2004


I dunno. The bike shops where I went to school seemed to do some pretty fantastic business. Of course, it probably had a lot to do with all the rich kids who didn't understand the concept of properly securing their bikes and could afford to get a new one when the old one got stolen. =P
posted by idontlikewords at 7:48 PM on December 27, 2004


If you would like to find a recession-proof business and lifestyle, I recommend a) buying a home outright, no mortgage, and b) once a) is accomplished, buying an existing business that meets a basic need (food, shelter, medical services) or supplies those businesses that do.

To be honest, if I thought an economic depression was coming, I would use the money to train as an electrician or plumber. Things would have to get pretty goddamned bad before people don't need lights and/or toilets. Auto mechanic might be an idea, too--when times are tough, people fix their cars instead of buying new ones.

The factors that sent middle-class people into desperate poverty and homelessness in the 1929-1940 US depression seem to have been, primarily, the following: a) owing money to stockbrokers because of margin calls; b) losing savings in bank collapses; c) having mortgage payments that were too high because of optimism about "making it" in the stock market; d) having mortgage payments that were too high because of optimism about how one would get a raise very soon; e) having mortgage payments that were calibrated to one's income, but then having one's pay cut drastically; f) having mortgage payments that were calibrated to one's income, but losing one's job; g) losing one's job and incurring significant health-care expenses; h) losing one's job and savings and not having family or friends with whom one could share housing; i) alcoholism and/or substance abuse.

Blue-collar workers, farmers, and agricultural workers had other factors in play, including the drought and dust storms of 1930-1939, and the collapse of the international steel and timber markets.

Having read literally hundreds of first-person narratives of the 1929-1940 US depression, it seems that the people who survived best were the people who were flexible about their lifestyles (sharing housing with family and friends rather than hanging on to a house after it stopped making economic sense), the people who were already practicing frugality and voluntary simplicity, and the people who had paid-for housing with space to grow vegetables.

And luck was a big factor as well--one common thread in the narratives of people who became homeless was an unexpected disaster like a major medical crisis, a fire in the home or workplace, a flood, etc.
posted by Sidhedevil at 7:52 PM on December 27, 2004


There is no inherent value to pretty rocks in the ground.

LOL. Gold is fantastically useful, with enormous intrinsic value quite apart from any speculative value it may or may not have. It's especially useful in electronics, but it's handy in a huge range of applications.

Now, to the question at hand: $60K doesn't strike me as being enough money to start any worthwhile business, unless you're willing to go overseas (a small B&B in an underdeveloped country, for example). I don't mean to denigrate your savings, but $60K isn't very much money when it comes to running a business. Remember, you need to live, so you won't be able to dump the entire sum into your biz unless you've got someone supporting you.

Not to be morbid, but you might also look into speculative real-estate. You can probably snag beachfront property along the Indian Ocean for below-market value right about now. No, really. It's terrible, but it might be worth looking into.

Overall, however, I'd say save the money in a fairly well-diversified set of investments. It's more likely to end up earning you money over the long term.

Or travel for a couple years.
posted by aramaic at 9:02 PM on December 27, 2004


foolish & fun suggestion: become an "angel" and invest $10,000 in 6 different B'way shows that seem likely to do ok. (Wicked just made back its costs, and now goes to pay their angels, etc, for instance, and i had a Spanish teacher in high school who made a lot of money from Sweeney Todd.)

dull suggestion: go to franchise shows, read up, and learn about what's likely to be an upcoming food/service trend, and become a 1/2 owner in something. Stay away from vending machines and things that don't have wide appeal. (i'd look at Chipotle, and other fresh, premium ingredient, fast food things myself.)
posted by amberglow at 9:37 PM on December 27, 2004


Use it to acquire an asset that will deliver passive income. Think parking lot, storage business, self car wash or real estate. Something that generates steady monthly cash flow.
posted by donovan at 1:15 AM on December 28, 2004


Seriously, amberglow has a good dull point. Having spent years as a small luxury business owner, I say screw that and go with franchises. A member of my family is making a killing in the local mall with one of those cinnamon bun stores. That being said, if I had to start frosting shit at 5 a.m. every day and training teenagers to brew coffee after school, I'd be homicidal. The hours are insanely long, the work is repetitive... But? Those places *make money*. It's not by accident that franchises are everywhere.

The second best way to make money from relatively little money? As a landlord.
posted by RJ Reynolds at 6:35 AM on December 28, 2004


If no competition exists there yet, it would be fun and profitable to open a margarita machine rental company (probably just as a side business to start). Minimal investment (~$3000-7000), a few hours work, a couple hundred bucks a week.
posted by fourstar at 7:45 AM on December 28, 2004


Some thoughts...

You absolutely must read E-Myth. Read this before "shopping around".

"I'm tired of working for other people" is a fragile, unreliable motivator. (Understatment!) In my experience and opinion, you need to have/find a handful of 1) powerful and 2) positive motivations. "I'm tired..." is neither.

By "positive", I mean "moving toward" vs. "moving away from". By "powerful", I mean that you actually FEEL something when you think about it.

Spend serious time in brave introspection/journaling alone AND with a respected friend. Evaluate 1) your mental habits and 2) the emotional benefits you receive from entertaining the concept of starting a business. The thought of "I might start my own biz" is a thing of its own that, IMO, requires extreme scrutiny. You may be one of many, many people who entertain the idea because doing so provides a soothing emotional balm.

If, after a rigorous friend-assisted gut check, you've decided to go for it...

DO NOT REINVENT THE WHEEL!

Buy an existing business or buy a franchise, both of which seem entirely possible with your $60K.

Most important: Know thyself.
posted by Moistener at 12:11 PM on December 28, 2004 [1 favorite]


DO NOT REINVENT THE WHEEL!

Buy an existing business or buy a franchise, both of which seem entirely possible with your $60K.


I just feel a need to point out that you are in fact not stuck between two polar opposites of 'reinventing the wheel' and taking over someone else's ideas. If you actually have your own ideas and visions, you can create a business that reflects something original. If you're just looking to make a buck, a franchise is probably safer, but it is also probably far less fulfilling.

If I had the opportunity, I would open a coffee shop, or maybe a bookstore, but I love coffee and books and local stores which sell either, so for me it would be at least partly a 'labor of love'. If you don't have any particular interest in the field but want to 'be your own boss', just remember that being your own boss means being your own employee, too. Everything that goes wrong is your fault and if you can't get someone else to do something properly, you'll have to take care of it yourself. For the most part, you will end up working harder, so you really should choose something you are personally interested in or excited by.
posted by mdn at 12:44 PM on December 28, 2004


We started our business as a boring and basic computer consulting business (and still lost money the first year). We then used the profits from that to fund more interesting startups (on our third startup now).

There's nothing wrong with using your $60k to try to build a money-making machine which you can then use to build a more interesting/creative business.
posted by mosch at 1:34 PM on December 28, 2004


"Open a yarn shop"
Hey! that's what I did. 40k. opened shop ... made money first month.
posted by BrodieShadeTree at 3:32 PM on December 28, 2004


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