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Wanting to start a business, questions about funding

Figure the best way to find out how to finance a business would be to ask people who have successfully done it so far.

A little background. My credit is still kind of shot from when I was 18 with medical bills so that makes it harder to get a traditional loan. I'm getting a small settlement of around 25K over the next few months and wanted to invest it into my own thing. I currently have a great job but the idea of building my own income is exciting. I'm mainly interested in starting a higher end brick and mortal electronic cigarette store in a market that isn't currently over-saturated but I know I'll realistically need 100K for building out the space, stock and keeping things going the first 6 months while business builds.

Would I be better off looking for private financing or will the fact I'm injection 25K of my own money into this help me get normal business funding?

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Answers (3)
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Thanks to both of you. Marvin, the main reason I'm staying away from online is because it's becoming over-saturated and quite competitive. I'm pretty well rooted in the community so I may still have a chance but I've found a market in California that is still seriously lacking any real B&M shops with a good college population that I feel would do great.

Apr 28, 2014
Marv White
Hartford County, CT
Premium Broker

Hi Dominic... Mr Barrick has offered some solid advice that I agree with. I would like you to consider another alternative for your desire to "do your own thing". Consider an online store as a precursor to your brick and mortar store.

You can have a significant online business with a budget of $25K. The knowledge you will gain from being profitable online will transfer to your brick and mortar store. Additionally, this allows you to keep your job and pursue your dream with less risk.

Apr 28, 2014
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The BAF Group LLC

Dominic, the electronic cigarette market is growing by leaps and bounds. It has some serious challenges, as well. The first thing you need to do in my view, is to put together a business plan that formalizes and examines all aspects of your proposed business. You will need that regardless of which way you go with sourcing funding.

Your two best ways of obtaining funding is either through the SBA or, as you suggested, private funding. You will see a number of writers on this bulletin board that offer funding, sometimes at incredible rates; but frankly, a lot of these people are either rank amateurs or con artists, and I would be extremely leery of dealing with any of them, unless you personally know someone with whom they have already, successfully dealt, to use as a reference.

The SBA will want 25% to 30% ideally to come from you. With $25,000, you are in that ball park. however, with poor credit, you may have a real uphill battle with that source. If I were you, and I had access to people that can provide you with the kind of money you're looking for, I would certainly try to go the private funding route. That would be a much quicker route and, once you have a year of successful operation under your well to, it would put you and will better situation from a credit perspective to either go out and expand your operation, or to seek funding from the SBA, and ordered by your original investors out.

We have blog that talks about various areas of starting or buying your own business. You may want to check out the post that deals with financing, which can be found at:

Apr 28, 2014

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