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Thinking about sinking $50K into my business.

fuzzybabybunny

fuzzybabybunny

Moderator<br>Digital & Video Cameras
Moderator
This is the most money I've sank into something. I'm hoping that it'll pay off, but I really want to consult a marketing specialist, someone who has a way of doing formal market research so that I'm not so scared of the idea completely flopping. Anyone out there ever find themselves in this situation?

Any more web development company recommendations BTW?
 
rh71 said:
more web dev companies as in you're looking to hire someone to do you a website?
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I'm looking to hire a company (way too big for just one person) to help me build a web system. Includes website, databases, client accounts, content management, custom media player coding, etc.
 
I would not do it. I would rather take slow earnings over something that is risky, especially in this shitty obummer economy.
 
ThatsABigOne said:
I would not do it. I would rather take slow earnings over something that is risky, especially in this shitty obummer economy.
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I'm 26. I have no dependents.

I do not absolutely need a stable stream of earnings at this point. It is very risky, sure, but now would be the time to do it. I'm not getting any younger, and my life isn't going to stay this uncomplicated forever.

And my particular market is somewhat recession-proof, and it'll be better still considering this product I'm sinking money into can be sold nationally/globally and diversify my risk that way.
 
SandEagle said:
don't do it. why not apply for a small business loan? if the business fails, you don't lose a penny.
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I will look into this. Not sure what all is involved. Why then do most business books tell you that immediate family is the best place to borrow money from?
 
fuzzybabybunny said:
I will look into this. Not sure what all is involved. Why then do most business books tell you that immediate family is the best place to borrow money from?
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because if your business fails you don't lose a penny and your credit doesn't take a hit? But you won't be invited to the family reunion.
 
fuzzybabybunny said:
I will look into this. Not sure what all is involved. Why then do most business books tell you that immediate family is the best place to borrow money from?
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Because they are understanding if you fall flat on your face, where as the bank still wants their money 😀
 
Many business fail by going too big too fast. Small steps, one step at a time, are good.

However, $50k is a reasonable investment for an asset that will help you develop and grow your business. You might feel better by discussing this choice with other people. Whether it is family, friends, or the forum here. You may need reassurance by others to feel comfortable taking such a big step forward.

EDIT:
What will it take, or how long will it be for you to recover that investment?
 
chusteczka said:
Many business fail by going too big too fast. Small steps, one step at a time, are good.

However, $50k is a reasonable investment for an asset that will help you develop and grow your business. You might feel better by discussing this choice with other people. Whether it is family, friends, or the forum here. You may need reassurance by others to feel comfortable taking such a big step forward.

EDIT:
What will it take, or how long will it be for you to recover that investment?
Click to expand...

Ah, yes, thanks for the wisdom. Unfortunately I feel like I'm currently at the ceiling of what I can personally accomplish without making a new system. I can stop everything and start making six figures at the drop of a hat if I were to do all the work. But that's me grinding away at photography every single day. And that's as high as I can go without an additional platform. With a new platform, I can differentiate myself and hire others to take the work burden off of me so I can focus on other things, like guiding the business so it doesn't fail.

And as flowery as it sounds, it gives me great satisfaction to give opportunities to people, whether it be contractors I use or employees I hire. I personally don't need much. I just want to be able to travel everywhere and own maybe a shack in a number of different countries.

I'm hoping that it'll take me a year to make it all back. BUT if some competition pops out of somewhere that does everything I do, better, then I'm screwed. And this scenario isn't as unlikely as I'd like it to be. Bah, I don't know. I don't know if it's likely or unlikely, actually.
 
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You can buy all kinds of market research reports. They seem to run a few thousand each. To the people suggesting an SBA loan: I'm pretty sure you have to personally guarantee those loans so you are on the hook anyway if the business fails.
 
Weren't you in dire straits a few months ago when you had like $5k of damage when you wrecked your bike?
 
yh125d said:
Weren't you in dire straits a few months ago when you had like $5k of damage when you wrecked your bike?
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I was in dire straits when I thought I would owe 30 THOUSAND in medical bills. But after insurance I owe $6,000.
 
fuzzybabybunny said:
Ah, yes, thanks for the wisdom. Unfortunately I feel like I'm currently at the ceiling of what I can personally accomplish without making a new system. I can stop everything and start making six figures at the drop of a hat if I were to do all the work. But that's me grinding away at photography every single day. And that's as high as I can go without an additional platform. With a new platform, I can differentiate myself and hire others to take the work burden off of me so I can focus on other things, like guiding the business so it doesn't fail.

And as flowery as it sounds, it gives me great satisfaction to give opportunities to people, whether it be contractors I use or employees I hire. I personally don't need much. I just want to be able to travel everywhere and own maybe a shack in a number of different countries.

I'm hoping that it'll take me a year to make it all back. BUT if some competition pops out of somewhere that does everything I do, better, then I'm screwed. And this scenario isn't as unlikely as I'd like it to be. Bah, I don't know. I don't know if it's likely or unlikely, actually.
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1 year to break even with the 50k? You better turn that into at least 5 years, especially if you're starting from the ground up...
 
Could you give us a better understanding of what you're thinking about spending $50k on? Could this stuff be outsourced to less expensive regions of the country than the bay area? I'm sure that you could find much cheaper web developers if you looked for a reputable company based in Jacksonville, Fl or Savannah, Ga. The services you've mentioned don't seem to be too advanced. There are firms that can do them in many metro areas just as well as the bay area with lower costs.

Hell, you could get a nice vacation rental and write it and travel off as a business expense 😀

yhpm
 
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Wh...why? Everything you mentioned about what you want to do is available already (from hosting solution, cloud based management, etc...), for MUCH less than 50K.
 
1) Find someone very knowleadgeable, pull them in for a few days as a consultant to help you get an idea for what's feasible, use them to price check and verify any dev firms you might go with. With luck they might want to tackle the whole project for cheaper (I know you think it's too much work for one person, but you'd be surprised)

2) It sounds like from your situation that's way too much of a risk for you. You should keep that 50k cash for when you need it for an influx to your business. IMO you never want to spend cash on investments like this. Either incorporate it and convince someone to invest for a portion of stock to cover this or try with an SBA (unlikely to me from what it sounds like)

Or, identify the components of this new system you really need and/or do cost/benefit analysis on them to figure out what makes the most sense for you!

dev firms love to steal your money for no real reason. Dev firms to me seem to have a 2-3x markup compared to what you can do if you can recruit and effectively manage young talent yourself.
 
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Going from doing the work yourself to managing others doing the work for you is a big step for any business. You can rely on yourself but often cannot rely on others to have the same passion and drive for your business as you do.

A friend several years ago had a nice small business cleaning decks. Everything went well with employees so long as he was in control. However, his employees failed him when he attempted to scale up by giving his best employees their own van and crew to work with.

His trusted employees stole his vans and equipment. This happened to him twice. One sold the equipment. The other had the van and equipment stolen but somehow had the money to purchase similar equipment and start a competing business.

This is a delicate step. Manage it wisely.

I agree with the others. $50k is too much but then we do not know what you want to have done. (and I am not asking either. Keep that secret to yourself.) However, if they will sign a non-disclosure agreement or if you maintain ownership of the work, then it is not a bad price. I would happily pay $50k for a unique setup that I know would not be copied later.

EDIT:
There is a lot of good advice here. yottabit makes a good point. It seems like it is too large a step to take right now. Maybe try to have specific functionality developed for now that can be upgraded later.
 
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If you don't think you are going to make you money back plus interest in 2 years then it isn't worth the investment.
 
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