trimommy
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Post by trimommy on Dec 31, 2015 12:56:32 GMT -5
I am expecting a six-figure inheritance in 2016 (the relative passed away in September and I am just waiting for the estate to be disbursed). When I originally found out, my plan was to max out my retirement accounts (I have very little in there already) and maybe put some away for my kids and do some renovations on our house.
But I have been unhappy at work for the past couple of years, and all I can think about now is using this as an opportunity to launch my own small business. I am thinking about an independent art house theatre with an adjoining cafe/bar. I know I have the skills and work ethic required, but I am really worried that this is a dumb move and I would be giving up a $70K/year job and ruining our financial stability. I have been reading and researching and I know the market is there - but I also worry about "pulling a Dark" and hurting my family financially. My husband has a good and stable job. I have been looking and receiving interviews, but still haven't found the right fit for me. I think I want to try this, I feel like everything is finally lining up, but it is stupid?! I'm 33, if that matters.
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ArchietheDragon
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Post by ArchietheDragon on Dec 31, 2015 12:58:48 GMT -5
I am expecting a six-figure inheritance in 2016 (the relative passed away in September and I am just waiting for the estate to be disbursed). When I originally found out, my plan was to max out my retirement accounts (I have very little in there already) and maybe put some away for my kids and do some renovations on our house. But I have been unhappy at work for the past couple of years, and all I can think about now is using this as an opportunity to launch my own small business. I am thinking about an independent art house theatre with an adjoining cafe/bar. I know I have the skills and work ethic required, but I am really worried that this is a dumb move and I would be giving up a $70K/year job and ruining our financial stability. I have been reading and researching and I know the market is there - but I also worry about "pulling a Dark" and hurting my family financially. My husband has a good and stable job. I have been looking and receiving interviews, but still haven't found the right fit for me. I think I want to try this, I feel like everything is finally lining up, but it is stupid?! I'm 33, if that matters. It probably is a bad financial move, but you won't know unless you try. Good luck on whatever you decide.
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trimommy
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Post by trimommy on Dec 31, 2015 12:59:04 GMT -5
ETA - I don't know the actual amount of the inheritance yet, which is a stumbling block. I'd like to think this isn't "all or nothing" that I could put like $80K into the retirement accounts and $50K in the business, but I don't know. I get 20%, but the amounts were based on the value of the accounts in 2004, so I have no idea what they looked like in 2015.
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Lizard Queen
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Post by Lizard Queen on Dec 31, 2015 13:11:27 GMT -5
I don't think that it's a good idea. That doesn't sound like much of a money maker at all. Of course, it's your life to live and your money to spend.
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chen35
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Post by chen35 on Dec 31, 2015 13:21:00 GMT -5
It does kind of sound like you're pulling a Dark, but you know your market best and if something like this fills an unmet need in your community? How large is your metropolitan area?
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zibazinski
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Post by zibazinski on Dec 31, 2015 13:30:33 GMT -5
Id look for a less soul sucking job. Would you do this if you weren't married with another paycheck coming in?
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Tiny
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Post by Tiny on Dec 31, 2015 13:56:15 GMT -5
These come and go routinely in my area - there are 3 available 'spaces' where these start ups, start and die. Same happens routinely with independently owned Ice Cream/Candy Shops (DD sells ice cream AND has a drive thru AND there's one every 2 miles or so...)
That said:
Do you have any "back" stage/ "back" restaurant experience? Do you know the people who could put on productions in your "theatre"? Be it bands or actors or art gallery? How will handle the café/bar - who's your target audience - the over 21 crowd or the under 21 crowd?
Before you quit your day job - do you have a Business Plan (and the contacts with the "arty" people you will need), do you have a 'space' that's available for rent/lease that's already set up for what you want to do? I strongly suspect the "art house" theatre people (and musicians, stage hands, etc) are a pretty tight knit community - unless you've already got an "in" with them - you might not have access to the best fit shows for your space. Artists don't do art for free. They need to be paid.
(ADDED: I'm 51... and my hindsight advice is: Invest the 6 figures and retire a year or two earlier. You are 33 in 20 years you'll be 53... do that plus keep saving at a good rate - and the world becomes your oyster while you are still in your 50's.)
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justme
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Post by justme on Dec 31, 2015 14:12:36 GMT -5
Creating a theatre and a cafe from scratch in a new place sounds like a lot of money. Like all of the 6 figures.
If you are serious, while you work on the business plan that was mentioned and do more research I would immediately start maxing my 401k and IRA if eligible and saving the rest of your income. You need to see now if you can live on just your husband's salary. Restaurants are notorious for taking a while to make a profit - if they don't fail before then.
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trimommy
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Post by trimommy on Dec 31, 2015 14:21:22 GMT -5
I could easily spend six-figures plus on this, but I plan to pursue the Lean Startup model and grow as I learn. But I do actually have both back-of-house experience with arts and food service/bartending.
And by theatre, I mean film and not live performances. Although I do plan to have a stage for small shows, lectures, open mics, etc.
I have two kids and most of my income has gone to debt repayment, childcare and vacations instead of retirement saving. It was also just not really a priority for me until I turned 30. I am in a much more responsible headspace now.
I don't worry about losing the inheritance money. I can make this place successful. I worry about spending years building it up though and the lost opportunity cost associated with my current income and where it could be in 3-5 years if I stay where I am now.
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phil5185
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Post by phil5185 on Dec 31, 2015 14:40:07 GMT -5
I think your fears are well founded. The stats are that 85% of business start-ups fail. And those are more conventional businesses - ice cream shops, fast-food, restaurants, machine shops, independent truckers, etc - not flaky shops such as boutiques, craft, art house theatre. The latter groups are usually hobby based, never profitable, they last until the 'owner' runs out of play-money.
The machine-shop owners & the truckers that I know are mostly in the "be my own boss", "hate working for the Man", "get rich quick group". Not surprisingly, the attitude issues drive away the potential customers.
You are age 33, by the Rule of 72, $100,000 invested at 11%/yr now will be $1,700,000 when you're age 60, a great opportunity not to be squandered. In my world, that probable outcome is FAR better than any of the small-business schemes. That gives your family all kinds of far-future options - eg, early retirement for DH & you, extra help for your adult kids, etc. And the money gives you an instant fall-back fund - a 'take this job - -" fund. You're free to quit for a couple months, look for a nicer job, accept $50k instaed of $70k or $80k if it pleases you - those details are much less worrisome to you when you have a $1.7M plan on-track.
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Deleted
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Post by Deleted on Dec 31, 2015 15:06:58 GMT -5
I don't think its a good idea.
That said, the one small independent theater like that, still making a go in our area, has aligned itself with the private university in town. So, in addition to the regular programming, they show the film major screenings ... I'd say at least 4 times a week for classes. I love these because those films are also free to the public. (we saw some Hitchcock, Ex Machina, Her, ... a few others this year). They also do live small theater performances, etc there, so there is steady income from the university helping to keep it afloat. Even still, I don't think it makes a ton. The theater has an apartment and the guy who runs the projector lives there, so I think that is part of his compensation, etc.
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Deleted
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Post by Deleted on Dec 31, 2015 15:08:31 GMT -5
I would take like 10% to travel do renovations, etc. and use the rest to shore up your retirement accounts.
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Bonny
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Post by Bonny on Dec 31, 2015 16:09:28 GMT -5
I'd park the money in a taxable account and fully fund your retirement accounts for the next couple of years.
I agree with Phil but if you really have a desire to do this try working on the weekends at such a venue. You'll get an idea of how much work it really is and whether there's any money to be made.
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Post by The Walk of the Penguin Mich on Dec 31, 2015 16:16:56 GMT -5
And by theatre, I mean film and not live performances. Although I do plan to have a stage for small shows, lectures, open mics, etc.All that I know about this is that you might want to look into this carefully before proceeding. We have a local theater that does something like what it sounds you want to do. They just had a money drive in order to update their system. Apparently you cannot get 35mm reel films anymore and everything is provided digitized. Digitized systems are a buttload of money, over $200K. They had a successful fundraiser, and have since upgraded it but it was not without a lot of problems. bbjtoday.com/blog/pickford-film-center-needs-pricey-upgrades-as-35-mm-era-ends/19245
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Artemis Windsong
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Post by Artemis Windsong on Dec 31, 2015 17:00:20 GMT -5
Find a good financial planner. Have him/her set you up a plan where you have an income stream coming in. The planner can help you maximize your retirement accounts.
If you heart is set on the own business, do a business plan and see how it stacks up against the income stream prepared by the financial planner. Compare those to the income stream from rentals managed by a management company.
The idea is to make the money work for you.
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giramomma
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Post by giramomma on Dec 31, 2015 17:58:16 GMT -5
We live in a decent sized city, about 200K.
We used to have three or four independent theaters.
Then Robert Redford's Sundance chain moved in.
We no longer have independent movie theaters.
I don't know how old your kids are. If your kids were under 7, I'd consider it. Otherwise, no. Swamp said she had no work/life balance in her thread. Is your husband willing to pick up the slack at home, working full time, keeping the house going, and running the kids around so that you can devote all your time to your business? How will your kids adjust to not seeing you?
I've also gotten the anecdotal impression that small business owners don't get to take vacations.
And how does your husband feel about being the main breadwinner and having all the financial responsibilities fall on his shoulders? What does this new budget look like? Have you lived on it and enjoy it?
Is your husband happy at his job? Willing to stay, no matter what?
I get being unhappy at your work. I've been at my job for 15 years, and I've got about 17-20 to go. I've had a couple of stretches of a few years where I'd cry before, while, and/or after work because I was unhappy. It's gotten better over the last year, and the job has always had it's perks. I have incredible work/life balance, and for the most part, I enjoy my co-workers. We are a hardworking, non-backstabbing bunch.
I think happiness is a choice, chose to bloom where you are planted sort of thing. I don't have the option of quitting...we'd try to be raising a family of 5 on about 20K/year. So I have no choice but to make the best of it..
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Shooby
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Post by Shooby on Dec 31, 2015 18:28:36 GMT -5
It also sounds like you are diluting your business plan. Are you a cafe/bar OR is your major focus on the studio? You really need to do one of those things extremely well before branching into the other. People have unlimited media access now with Netflix and internet and phones and streaming everywhere. The need for a physical theater isn't all that important anymore.
Also, how would a spouse feel about this? If you are married, then any business venture needs both on board.
However, what is your line of work? What are you unhappy about In Particular? This might be a good opportunity to move on to something else. To take additional classes or look for something a bit different versus not using the degree and training you have. Can you also put that down on paper and consider some of those options as well?
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milee
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Post by milee on Dec 31, 2015 18:48:38 GMT -5
What is your background and experience in: management, accounting, finance, running café/bars and/or theatres? Length of time and type of work. Being a waitstaff or even manager at a café is very, very different than owning one or being responsible for its profitability, for example.
What size city and area of the country are you in? I'm sensing a bit of a rub in that if you live in an area where you can start a café/bar for only $50k, it's unlikely to be a sizeable enough area to be able to support such a business profitably. If you're in an area with a large enough population to support such a venture, it will almost always cost many, many times $50k to actually get it going. That was one of the largest objections I raised when Dark was considering starting his business - his market was too small to support such a business so even if it was the best toy store ever it was unlikely to be successful. And similar to Dark, you'd be committing to a lease of a large, expensive space which you'll be responsible for even if you don't pull in a single customer or decide to close.
The other point I made to Dark that I'd also make to you is that successful businesses don't usually arise from people who are looking to escape a miserable job and "be their own boss" while performing a hobby that they love. Choose to start a business because you are an expert in that area and have the financial knowledge to do reasonable projections that show it can be successful, not because you hate your job and want to get paid to do something fun.
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resolution
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Post by resolution on Dec 31, 2015 18:50:11 GMT -5
I am very sorry for your recent loss. It is a good rule of thumb to not take any extreme measures with an inheritance for at least a year, so that you have time to work through your grief and avoid any actions that are influenced by emotion rather than logic.
I know right now it is tempting to follow this dream and make a new life with the money that your grandmother left you, but it does seem like you are considering a drastic change at a time that you are still vulnerable. The best thing would be to invest the money in a safe investment for the first year, keep working at your job, and have all the discussions with your husband that people have recommended. If you can develop a good business plan and have your husband's full buy in, then wait and see if it still seems like a good idea in a year after you have fully processed your loss.
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Shooby
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Post by Shooby on Dec 31, 2015 18:51:56 GMT -5
Where is Dark? Perhaps he could give some advice.
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NomoreDramaQ1015
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Post by NomoreDramaQ1015 on Dec 31, 2015 18:56:24 GMT -5
Almost all of the small theaters have to closed here. It can run into the six figures to upgrade in order to accomdate new film formats. You could easily spend all your money just on projectors
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milee
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Post by milee on Dec 31, 2015 19:07:32 GMT -5
Hopefully, dark will see this and provide any insights or words of wisdom. Disagree. Instead of looking for advice from people who have failed at business, OP needs to be listening to people who have built successful businesses. People who have failed at business can sometimes tell you what not to do, but that's not nearly as helpful as advice on what to do.
Dark fell into that trap as well. On the threads where he was contemplating starting a business, he tended to gloss over or ignore the successful business owners who were offering cautions or negative feedback, instead focusing at length on people he enjoyed talking to, people who always were positive and (most puzzling) a person who - although very articulate and enjoyable to read - had failed at a very similar business.
It can't hurt to hear the "what not to do" from people who failed, but you'll get much better quality advice from the people who were successful. Dark's always interesting to read; he's funny and has a unique style so even if you don't take his business advice he's worth reading just because. But if you're really looking for actual business advice, get that from people who have run highly profitable businesses.
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debthaven
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Post by debthaven on Dec 31, 2015 20:10:07 GMT -5
There is one in the next suburb from me, and it is doing very well, I think (well, both the movie theatre and the "new" restaurant are still there, about 6 years later!)
I can't speak to the financials at all ... I am guessing it may be partially subsidised by the town, but I don't know.
What I do know is, the cinema has a special designation, as an "arts" cinema. It can show two films at a time, it plays very recent films in VO, but it also shows film premieres of operas, London National Theatre productions, and it has "Director's Nights" where they invite the director (and sometimes the actors) for a Q and A period after the film. It also has "snack showings" for little kids on their days off and vacations where they charge reduced rates and provide kiddie snacks.
It also has a large parking lot, and access to the municipal parking lot a block away.
The restaurant serves lunch, tea/coffee, and dinner.
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souldoubt
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Post by souldoubt on Dec 31, 2015 21:31:43 GMT -5
So many people seem to think opening a restaurant or bar is a good idea but it rarely is. Some of my friends worked in the industry for years and we came across a lot of people who tried to open their own restaurant up and it generally didn't go well. Some friends still own the restaurant that they bought that they all used to frequent but they've had to make a lot of changes to cater to the downtown crowd to stay afloat and it wasn't what they envisioned. I can't speak to the type of business you're thinking about opening in your area but I do know that's the type of thing that seems to have become saturated around here as far as the art/hipster crowd. There's a small "mall" locally that has a lot of artsy stores and cafes and it's always packed but there's definitely turnover as some of the spaces seem to change every so often. I think milee has given some great advice on this topic over the years and did in this thread but if someone is set in what they want to do or unhappy with where they are then they've likely already made up their mind. Good luck.
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imawino
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Post by imawino on Dec 31, 2015 21:50:16 GMT -5
I could easily spend six-figures plus on this, but I plan to pursue the Lean Startup model and grow as I learn. But I do actually have both back-of-house experience with arts and food service/bartending. And by theatre, I mean film and not live performances. Although I do plan to have a stage for small shows, lectures, open mics, etc. I have two kids and most of my income has gone to debt repayment, childcare and vacations instead of retirement saving. It was also just not really a priority for me until I turned 30. I am in a much more responsible headspace now. I don't worry about losing the inheritance money. I can make this place successful. I worry about spending years building it up though and the lost opportunity cost associated with my current income and where it could be in 3-5 years if I stay where I am now. But you should be. If you're not worried that you are going to lose that money, you are not being realistic about the odds.
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Deleted
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Post by Deleted on Dec 31, 2015 22:21:57 GMT -5
I wouldn't do it, my brother took over an established, profitable restaurant and managed to lose over 100k in two years because he didn't know what the hell he was doing. Keep that nice 70k job until you can find something else and put that nice 100k to work on existing debt or invest it. It sounds like you are already living above both of your incomes if you have little saved for retirement.
This could cost you your marriage if you proceed or at least put a heck of a strain on it. You will be gone many hours trying to get it going and your husband will have to keep pouring money in to keep it afloat. You will likely then have to go back to work and it will be difficult getting another good paying job.
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Shooby
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Post by Shooby on Dec 31, 2015 22:44:44 GMT -5
Hopefully, dark will see this and provide any insights or words of wisdom. Disagree. Instead of looking for advice from people who have failed at business, OP needs to be listening to people who have built successful businesses. People who have failed at business can sometimes tell you what not to do, but that's not nearly as helpful as advice on what to do.
Dark fell into that trap as well. On the threads where he was contemplating starting a business, he tended to gloss over or ignore the successful business owners who were offering cautions or negative feedback, instead focusing at length on people he enjoyed talking to, people who always were positive and (most puzzling) a person who - although very articulate and enjoyable to read - had failed at a very similar business.
It can't hurt to hear the "what not to do" from people who failed, but you'll get much better quality advice from the people who were successful. Dark's always interesting to read; he's funny and has a unique style so even if you don't take his business advice he's worth reading just because. But if you're really looking for actual business advice, get that from people who have run highly profitable businesses.
Ok then dont talk to him.
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GRG a/k/a goldenrulegirl
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Post by GRG a/k/a goldenrulegirl on Jan 1, 2016 22:04:17 GMT -5
I think you really, really, really need to do some research before you do this.
I don't think it is as easy and straightforward to show films as it once was. There is the constant change in film technology, but, also, one needs a strong relationship ($$$$$$$) with a film distributor to even get films to show that people actually want to pay money to see.
Around here, the big chains have the upscale theatres with comfy seats, tables, food, adult beverages, and table service. I can think of just five independent movie theaters in the entire Greater Boston area because the chains have cornered the market (and the distribution).
I agree with the others. Invest in your retirement. In twenty, twenty-five, years if you still want to start such a business, you will have the financial strength to do so confidently.
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AgeOfEnlightenmentSCP
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Post by AgeOfEnlightenmentSCP on Jan 2, 2016 11:26:01 GMT -5
I am expecting a six-figure inheritance in 2016 (the relative passed away in September and I am just waiting for the estate to be disbursed). When I originally found out, my plan was to max out my retirement accounts (I have very little in there already) and maybe put some away for my kids and do some renovations on our house. But I have been unhappy at work for the past couple of years, and all I can think about now is using this as an opportunity to launch my own small business. I am thinking about an independent art house theatre with an adjoining cafe/bar. I know I have the skills and work ethic required, but I am really worried that this is a dumb move and I would be giving up a $70K/year job and ruining our financial stability. I have been reading and researching and I know the market is there - but I also worry about "pulling a Dark" and hurting my family financially. My husband has a good and stable job. I have been looking and receiving interviews, but still haven't found the right fit for me. I think I want to try this, I feel like everything is finally lining up, but it is stupid?! I'm 33, if that matters. As many people have pointed out- if Donald Trump had taken his inheritance and invested it, he'd be worth the same or more than he is now without the hassles. Point being- invest windfalls for retirement, and keep plugging away as though it never existed. Experience has shown almost without exception that inexperienced people blow windfalls. If you really wanted to start your own business, you'd have done it already. The fact that you haven't, and you're only now considering it in light of a financial windfall is probably the best indication that you should never start a business. If, however, you want to start a business- go ahead and do it, but do it without any of the inheritance money. Invest that money for retirement so you have some long term financial security, and then go ahead and plan to start your business by working, saving, and bootstrapping.
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AgeOfEnlightenmentSCP
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Post by AgeOfEnlightenmentSCP on Jan 2, 2016 11:34:50 GMT -5
Hopefully, dark will see this and provide any insights or words of wisdom. Disagree. Instead of looking for advice from people who have failed at business, OP needs to be listening to people who have built successful businesses. People who have failed at business can sometimes tell you what not to do, but that's not nearly as helpful as advice on what to do.
I don't completely agree with this. What not to do can be vastly more valuable than what to do. Not talking about negative people who can tell you 100 reasons it won't work, or you can't do it- but real experienced entrepreneurs who have worked out the kinks.
Dark fell into that trap as well. On the threads where he was contemplating starting a business, he tended to gloss over or ignore the successful business owners who were offering cautions or negative feedback, instead focusing at length on people he enjoyed talking to, people who always were positive and (most puzzling) a person who - although very articulate and enjoyable to read - had failed at a very similar business.
It can't hurt to hear the "what not to do" from people who failed, but you'll get much better quality advice from the people who were successful.
Not necessarily. A lot of successful people have mistaken luck for genius- myself included. Sometimes it isn't until you hit the wall that all of the sudden you see why what you were doing was really working, and why it's no longer working.
Dark's always interesting to read; he's funny and has a unique style so even if you don't take his business advice he's worth reading just because. But if you're really looking for actual business advice, get that from people who have run highly profitable businesses.
Unless a person is just reflexively and unnecessarily negative (or positive), all perspectives are worth listening to.
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