kranky
Elite Member
- Oct 9, 1999
- 21,014
- 138
- 106
The first thing he needs to decide is how much of that money is he willing to risk. Maybe he has his long-term retirement savings already set, so he might be able to risk all of it.
Then read "What Color is Your Parachute". It says it's for people looking for jobs, but it really helps you identify what you are passionate about.
Next thing he should do is to evaluate his business skills. He ran a limo service - how did that work out? If it wasn't successful, does he understand why? Does he understand his business strengths and weaknesses, and how to compensate for the weaknesses?
Next thing he should do is completely forget about running a bar or restaurant. I've seen plenty of them fail when run by people with no prior experience. Many think that just being the owner is enough because they'll hire people to run it, but they fail to understand how much people will steal from them. You can prevent stealing, you just have to be there from open to close every single day.
Next thing to do is decide whether investing the money in the market will satisfy him, or does he "need" to run a business. If investing in the market works, just follow the Bogleheads' methodology. Asset allocation, periodic rebalancing, and low cost mutual funds/ETFs. No need to hire someone. It's not glamorous, but it works.
If owning a business is important to him, and he thinks a franchise in a low-income area is a good idea just because he already owns the land, he should ask himself why nobody else has tried to buy his land to do the same thing. Unless he's willing to lose money and subject his staff to armed robberies, it's not a good idea. Hire a business consultant to do a feasibility study of the specific idea and location to see what the potential (or lack of potential) really is. And consider that maybe a company won't want a franchise in that location.
Above all, you can't latch on to a business idea out of thin air and plow ahead blindly. Potentially, a lot of money is going to be at stake. Take the time to self-evaluate and do the business research. There's no reason to rush into something.
Then read "What Color is Your Parachute". It says it's for people looking for jobs, but it really helps you identify what you are passionate about.
Next thing he should do is to evaluate his business skills. He ran a limo service - how did that work out? If it wasn't successful, does he understand why? Does he understand his business strengths and weaknesses, and how to compensate for the weaknesses?
Next thing he should do is completely forget about running a bar or restaurant. I've seen plenty of them fail when run by people with no prior experience. Many think that just being the owner is enough because they'll hire people to run it, but they fail to understand how much people will steal from them. You can prevent stealing, you just have to be there from open to close every single day.
Next thing to do is decide whether investing the money in the market will satisfy him, or does he "need" to run a business. If investing in the market works, just follow the Bogleheads' methodology. Asset allocation, periodic rebalancing, and low cost mutual funds/ETFs. No need to hire someone. It's not glamorous, but it works.
If owning a business is important to him, and he thinks a franchise in a low-income area is a good idea just because he already owns the land, he should ask himself why nobody else has tried to buy his land to do the same thing. Unless he's willing to lose money and subject his staff to armed robberies, it's not a good idea. Hire a business consultant to do a feasibility study of the specific idea and location to see what the potential (or lack of potential) really is. And consider that maybe a company won't want a franchise in that location.
Above all, you can't latch on to a business idea out of thin air and plow ahead blindly. Potentially, a lot of money is going to be at stake. Take the time to self-evaluate and do the business research. There's no reason to rush into something.
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