What do you have an unfair advantage at?
i.e. some background, probably something you take for granted? A head start vs others?
Setup a service business first. $5k is not that much and it’ll go fast, but you can start a service biz for like $2k that banks $$$, then spend another $1k-2k on marketing and advertising, and you’ll be off to the races.
“boring” businesses - gutters, handyman, even Christmas lights can make $$$ if done right.
I am today literally working on a case study for Party Rentals.
What do you want to know?
We have some clients using us - SwiftCloud - for eDocs i.e. agreement, waiver eSign etc - also client management.
Good biz, not exactly passive but somewhere in the middle - pickup and dropoff, stuff has to be cleaned (kids…); weddings, kids jumpy houses birthday parties, corporate parties etc.
Good margins, but there is some asset depreciation, the houses don’t last forever.
Upside - not that much to start, like $5k can get you going even though probably more like $20, then like any biz it takes some work to get the momentum, but then the referrals and repeat biz starts flowing.
PM if interested, I’ll put a case study up on YouTube soon
All source-of-money is 2 categories: Equity or Debt.
Debt: SBA loan would be most typical; one of our (marketing) clients: FremontFunding.com does SBA loans.
Equity: Give up some upside, but no payments directly, no debt-load; spreads risk but limits upside.
Syndication is common.
There’s a ton of people lately talking about buying these businesses for zero money out of pocket, but that too carries a cost in one way or another - either increased debt load, or sharing equity.
For any of you crazy finance guys who wanna talk debentures, convertible debt etc I know there are hybrids, but loosely, it’s all one or the other: equity or debt.
Debt is easy IF there’s a history of cash flow AND some collateral (i.e. real estate, assets). No assets? no history? no cash flow? no loan, unless you have great credit, then it’s smaller i.e. $150k “credit card stacking” etc. (thought that can work, and often have 0% teasers).
Flag or nonflag (i.e. major franchise vs independent)?
If seller will carry, you could probably get creative and get this done.
A client - FremontFunding.com - does these sort of things, creative SBA loans - a buddy recently bought a trailer park for essentially almost nothing out of pocket by adding a promissory note for some of the trailers into the mix.
Loans like this are more based on the business income than yours; need 2+years minimum in business.
Also hotels are notorious for 3 sets of books: the tax-books (low), the buyer books (high) and the real books. You need to count cars at 3am a few random days.