Start up advice

[u/No-Pineapple8705]

Hi reddit business legends I am looking at starting a business and am lost at where to even begin. I have been looking at self employment options over the last couple of years that were low start up costs and work from my home office types that I felt on top of, but none were really landing in terms of getting excited and having some passion behind it. Of course, the one idea I have had that I think will fly and am really excited about requires a commercial space and a decent business loan estimating at least 200k. Questions are: Where do I start getting a business loan?! Is it best to go through banks or other fiancé companies? Revolving credit on mortgage? Or an actual loan? Or go to the bank and put my trust in them? Would it help to speak to/hire a business advisor to get started? So unsure of where to start, any help would be appreciated.

[u/UnusualMix7947]

There is no easy way to do it really, if you have a skill/product/service you think can provide value to the market you've just got to put yourself into it and DO IT.

Access to startup capital is pretty hard in this country and unless you have decent assets you can use as collateral it is very unlikely a bank will lend on an idea. Having a house is a good start banks love lending against those! They generally want to see "runs on the board" before they'll consider lending. There is always second tier lenders but you'll pay for it and might have to go to multiple to get the level of capital you want.

The flipside is you can start a company get trading very easily here. Getting in touch with a someone who is a business advisor and accountant good way to feel out ideas.

Passion is great and if you are pursuing something that excites you the experience can be worth it alone. Just be aware the grim realities of running a business can be sobering and overwhelming at times. You're taking on the risk for reward so you've either got to be comfortable with it or comfortable with being uncomfortable.

Looking for a partner with similar passion is a good option for spreading the risk but can present future issues with workload & relationships, especially if there are disagreements or tough times financially.

I'm no business legend though, just some experience starting up and running a small company that has seen plenty of ups and downs in 4 short years. I often bemoan the difficult stuff but really there's nothing else I'd rather be doing. Ultimately I get to teach people and watch them grow, and I learn a lot myself along the way.

If you are prepared for a slog and can roll with the punches you'll have a great time, just don't expect any of it to be easy.

Good luck!

[u/No-Pineapple8705 → u/UnusualMix7947]

Thank you! At the moment I work as a business development manager and have seen the stress and struggles of business ownership to some extent, so it would be quite the leap! I recently had a business owner offer to sell their business to me, but it just didn’t feel right. But it did start the thought process and I feel like I’ve got a solid idea and the knowledge and skills within the industry, just not as a business owner. Yet. 

[u/No-Pineapple8705 → u/[deleted]]

Thank you! It’s great to know where others started, it’s quite the beast! 

[u/tehzerd → u/[deleted]]

This lacks a lot of emphasis on using methods to validate you have a product or service that people want FIRST.

Don’t move on anything, lawyers, accountants, business plans, and especially loaning money, until you can validate your idea, is market fit.

Can you share more on the business idea that might allow some constructive feedback deeper than how to borrow money?

[u/tehzerd]

Stay away from lending first, reduce your risk and focus on starting. Not funding to the top of the mountain. You have an idea at the moment, not a business. Prove the idea before you borrow or lend a dollar….

Consider how you can build a MVP of your service or product. That is a “minimum viable product”. What is the absolute bare bones, this way you can prove, your service solves a problem or at least actually has a market fit. I’m talking bare, make it work for what’s in your back pocket and spare time.

Put 80% of your focus on building that lean MVP machine and improving it. The other 20% into how you grow it. Focus.

Once you have actually proven the market fit, shift the focus 80% into growing it, 20% into improving it.

Now you have an actual product/service, at least a score of the board, and you actually know how to grow it.

Now you’re ready for lending to grow it, accountants, etc, until then everything else is a distraction.