Pretty ironic from a guy currently pursuing the capitalist dream of success....
Just sayin'....
Its a fictional story, one that I did not care for, not a guide for business success. And its pretty hard to believe it is written by a woman considering the subserviant sexual themes in the book.. Not Irony, just not my cup of tea. At all. .. besides that, I don't look down on people based on their wealth and status, and that book clearly does. I may not be running a charity, but most of my clients are in the lower income brackets. Tattooing is not railroad baroning.
My profession is rooted in and supported by everyday people.. I won't be looking down my nose at them anytime soon as if they are less than me for not owning a business... thats just crazy.
I digress... this thread is about starting a business. I have a meeting with the bank about the loan today and I have to pick my dog up from the vet around the same time... I wonder if Elvis would like to sit in with me and the bank manager?
[This message has been edited by tbone42 (edited 05-16-2012).]
Maybe not railroads, but "Baron Von Tbone" sounds good.
Here is how I am gonna lay the floor plans out.
The piercing room is kind of in the middle of upstairs and downstairs..it was a backporch-type addition, with windows on the back. And theres a toilet up there too for some reason... at least thats one drain I won't have to run, but I will still have to get hot water up there.
Will need to put a sink and drain for each station, so one for me, two in the open artists area, and one in the sterile room. The open area will have a viewing window for the sterile room so people can SEE but not touch... which is the safest policy.
I have two walls I will need to tear down, but the window area for the sterile room is already cut out, just need to get the glass for it. Same with the window area on my office, there is a door there right now, so a little drywall fiddling around and a window and I am set there, too.
Keep in mind I have an entire upstairs portion that is unfinished as well the same size as this floorplan minus the pirecing area. LOTS of storage, but its trashed.
The meeting with the bank guy went well today, he just wants me to put together two more pieces of my projection for the business plan, email them in, and thats as much as I can do until the loan gets accepted or denied. After that, we send in an appraiser, possibly renegotiate the offer depending on their findings. Then as soon as I get approval, I get an inspector in there just in case the place is gonna crumble, and the last step is an attorney to look over the purchase contact and sign on the dotted line.
I started looking at this place on the last day of april... I have done all the prep work I can in two weeks flat. I don't know if that's some kind of record, but the bank is extremely pleased with the rate I am moving at and said they have not seen too many people as prepared for this as I am for their first business loan. That was comforting at the very least.
May not be updating for a few days until i actually hear something more, all I get to do now is wait.
[This message has been edited by tbone42 (edited 05-16-2012).]
Think you have troubles establishing a for profit? Try a not-for-profit.
In most states (that make any sense) a property tax exemption is automatic when a corporation is established as a 501c3. With Ohio we had to file an application to the state through the county. Our county told us that since the previous owner had let some taxes pile up we would need to pay those taxes to a certain point. They gave us a dollar figure and we paid it. The state denied our application based upon unpaid back taxes!!! WTF! We have letters from the county showing what we were told to pay and a cancelled check for the amount to the state. We have filed an appeal and are still waiting for the Ohio Tax Commissioner Board hearing. Mind you this all started back in 2010 and we are STILL awaiting an appeal hearing. We recently received a letter from the county prosecuting attorney stating we were going to be foreclosed upon for taxes. This took a few phone calls. Had to point out to the county that during the process of appeal they are not permitted to assess additional taxes or take any action on the property. They supposedly had no idea and had to call the state to confirm. Additionally it does not help that the county treasurer was recently dismissed from his position for failure to do his job for several years. Gheeze!!!!
I want to hit that ground running, but with the financing for the building up in the air, I am freaking out.
Something happened at one of the loan interviews with the chief guy at the bank I thought was... funny/interesting/a little scary.
Truth of the matter is, without my wife there is no way we could swing this loan right now. She got a big promotion and pay raise back in December, and she makes as much by herself that we used to together a few years back. The banker who probably has 40 years experience doing this was quite impressed by HER portfolio. He says to me: "Its quite impressive how much your wife is willing to help you in this business endeavor. She is *very supportive*" And when he said that , his right arm came up and his hand clenched into a fist, and his teeth ground a little bit to emphasize the statement. He had an almost "possessed" look in his eyes when he said that.
It took restraint not to laugh.. after all, I am trying to convince this dude he needs to loan me $40k for the next 10-15 years, so laughing would not have been the best idea. Still, the look with the hand movement, it was almost emotionally charged. I can make a lot of guesses what that was about.. maybe his wife, or many wives out there for that matter, would not normally co-sign a loan. Maybe they don't believe in their husbands, but that's the thing I have been blessed the most by in my marriage is having a wife that backs me up 100%. If any of you fellas started a business, what was your spousal support like? Just curious.
They started working on the loan on Thursday morning.. I hope I get "the call" by Wednesday.. usually anything under $50k, and the bank supposedly knows pretty quickly if its a 'yea' or 'nay'. Man, I hope its a 'yea'.. I cannot wait to get this thing rolling.
Took this pic the other day while I was still elbow deep in the business plan..
LIKE A BOSS!
[This message has been edited by tbone42 (edited 05-21-2012).]
Not to hyjack the thread so just a short answer. Yes, if you put it back in specs. With unibodies, just about any kind of hit knocks things out of alignment and you need to anchor the car and pull it with the frame puller in order to get anything to line up. Core supports are considered frame and you cant have a front hit without tweeking it. If you dont pull it, you never get a hood, fenders or doors to line back up. They will not total a car that needs $100 frame pull. Manufacturers publish a book with exact measurements of every angle of every part of a cars substructure. You can theoreticly get more accurate alignments than the factory did at assembly if you measure carefully. They measure with an allowance one way or another and you can get it dead on.
I just have a question for you. Its great in these times you starting a business on your own and wish you luck. My question is since this is apparently your first business, why are you starting out by buying a building ? Wouldnt it make a lot more sense to rent or lease for at least a year or two to see how it goes first ? You can always move into or buy the building later and you wont have that killer initial expense. Id feel a lot more comfortable starting out with $45,000 backup in the bank, than spending every cent to own a building you just could possibly be stuck with in a few years and unable to sell. Just something to think about.
I could be wrong Roger, but I think the owner of the building probably isn't looking to rent or lease it from what tbone explained.
Either way, I think $41,000 is a pretty decent price for some commerical real estate. Especially since it will most likely appreciate in value as more business starts to return to his area.
This is an inspiring thread Tbone! I would love to own my own small business someday, and while I may not appreciate tatoo work, I wish you all the best in your endeavors!
I just have a question for you. Its great in these times you starting a business on your own and wish you luck. My question is since this is apparently your first business, why are you starting out by buying a building ? Wouldnt it make a lot more sense to rent or lease for at least a year or two to see how it goes first ? You can always move into or buy the building later and you wont have that killer initial expense. Id feel a lot more comfortable starting out with $45,000 backup in the bank, than spending every cent to own a building you just could possibly be stuck with in a few years and unable to sell. Just something to think about.
This is a great question, one I have given a lot of thought for the last couple months.
Most of the rental locations are $550+ for even the smallest, most ridiculously run down rentals. All of them will need a lot of my money (as landlords have already specifically said they wont put any of theirs in to make it work) to make it tattoo-compliant and client-friendly.
Now, along comes a building that is almost ready to move in and open within only a week or two of really light, inexpensive remodeling work on my part. I can do all the work myself. And when I am done spending money on the place, I reap the rewards of owning what I spent my money on instead of later walking away after paying to improve someone else's structure.
The mortgage, even for a ten year loan will be under $380. I cannot compete with that low of a cost by renting.
Now, the building is perfect for me. If the financing does not work out, I will make an offer to rent-to-own the place, and the owners already seem willing. I will be in this building one way or another, I bet. But yes, payments would be signifigantly lower in this town for a building you own. And the location is much better, too, then any of the rentals available except one that is trashed and would require 2-3k of my cash just to get it up to snuff. Instead, I will spend 3-4k on a downpayment.
If the business does not do well, I will still own the downtown location and be able to rent it out for the cost of the mortgage easily enough to pay for itself.. and still beat any landlord's prices in town.
Just got my "articles of organization" of my LLC from the Sec of State today. That was basically me sending them $125 and them sending me a piece of paper. That's a pretty good deal for Ohio, methinks. Sent it off to my guys from the bank, and now I *officiallY* have nothing I can do but wait to hear back from them.
OK, I agree your monthly payout will be lower..it usually is. The downside, like I said is IF you dont work out you do still own the building. You still have to pay property taxes and utilities even if its empty. I rent out half of my building which is 5 large rooms and 2 bathrooms and prob 2500 sq ft of storage space. While its empty, its costing me an average of $400 @ month. Everything is on separate meters. I just rented it out for $650 @ month plus utilities after being empty over 3 years. Its not that easy to rent these days. Im on a prime location about 50 yards from the citys downtown major intersection.
good luck man.. didn't read the whole thing.. I'll do that when I don't have a headache.. I really need to look into all of this.. not a tat shop... I'm no artist.. but I've watched my wife get promised better pay, only to get pink slips.. sometimes here own doing.. but rely'n on others for a pay check isn't the best way to look out for #1..
Not my first Rodeo, Todd.. back in 2000-2002 I owned a business and had to make quarterly tax estimates.. it sucks, but if you don't expect to make much the first year, you don't pay much. Not like poor Brad who had to make a quarterly estimate before even opening the business.. thats just crazy. I'm already registered, too. .
The IRS tried that crap on me too. I did that one year. Last 30 years, I just totalled things up at the end of the tax year..once... like everyone else and sent them a check. Never got another complaint from them. I was always a small Sole Proprietorship if that made any difference. Maybe they would have been more persistant if I had a bunch of employees.
Just heard back from the branch manager with an update. They have the full package of things they needed from me for approval, so there is no more information I have to shag down before they make their decision. (You know, "they"..) Anyhow, he said he expects approval/denial hopefully by tomorrow, maybe on Monday.
Hopefully by then I will know exactly what is going to happen and be moving toward getting open, be it rental or starting an appraisal and inspection for the purchase... waiting has obviously been whipping me up lately, in good and bad ways. I hate hanging there in Limbo with no answers.
You know, tomorrow IS one of those doomsday dates.
Put out a message to the building owner.. give me a year, maybe two, as a rent to own and I will take the middlemen (Loan underwriters) out of the equation, as it looks like no one is wanting to play ball. Hope to hear back from them by Monday to hear what kind of deal they would be willing to make.
I am still a bit miffed that we can not get this loan... its less than a year's pay and would be roughly 10% of our earnings (which we put more than that xtra into our mortgage principle now) monthly. We could afford it, I am having a hard time understanding why we did not get it, and underwriters did not give me a good reason, or "what I could do to make it work.."
If we had gone in to finance a comparably priced vehicle (like a used nice hummer) with a trade in, we would have been approved. Not sure why the business loan is so difficult, but will keep trying.
Edit: It took so long to get word of our rejection that i got bored and went back to the restaurant doing four dinner services a week to save up even MORE money for a down payment. You guys have no idea how hard it has been to resist spending it, on say, a paint job for the fiero. Or an engine swap. Or both.
[This message has been edited by tbone42 (edited 06-01-2012).]
Some people get instant approval for a $75,000 Escalade loan as apartment renters, no savings, 6 kids, unmarried and no job. Figure that one out.
I think your idea of rent to own temporarily is a great idea...your not instantly on the hook for all that money. You can walk away without losing your azz.
Id never start up a new business with a second mortgage on your home. It dont work out and you lose everything. Do the business completely separate. You might also see if you can find an investor. There are lots of people out there with money to burn if they think they will make anything with it.
[This message has been edited by rogergarrison (edited 06-01-2012).]
Meeting with the building owners tomorrow to discuss rent-to-own options.. find out what they want, they find out what we want and see if we can come to agreement or I walk away. It would be a shame, the place is damn near perfect for my needs and a good location.
Dropped off my business plan, portfolio and statements with the owners today. It's in their hands. If they want to make some money now, I think they will go for it. If they want to hold out they could find it does not get bought for a year or more, that's a $4k deposit and another $4800 they could have had in their hands. We shall see soon enough.
Now I gotta go work.. time to prep for dinner service.
The IRS tried that crap on me too. I did that one year. Last 30 years, I just totalled things up at the end of the tax year..once... like everyone else
I did this two years ago (I think it was a 949 form?), & this year they sent me a complaint that they didn't see my filling for March.
My tax preparer suggested that anytime I'm going to owe in more than $1000, I'm required to make quarterly payments.
I noticed you didn't have a place setup for "office". Reception is fine. You have a private tattoo place is nice too. Take it from me though, a place to conduct business is a MUST. You will need a PC, desk, filling cabinets etc. You can get behind on paperwork if you get overloaded keeping the doors open (business) quite easily. I wouldn't want a messy work area out in public view and certainly not where you will be conducting your work. Just something to consider.
Sorry to hear about the loan. I can't say that I am surprised. Small business loans can be rather difficult to get. Most small business fail in the first 5 years. Your wife's salary usually means very little in the way of securing the loan. Also making more per year isn't usually what is considered. They go off of debt to income ratio. While you may make more that the loan, they subtract a certain amount based upon what they think you require to live. For example you want 41,000$. Your wife makes 50,000$. They assume it cost XX,XXX$. This number can vary, but it isn't based upon poverty level and also factors in any applicable reoccurring debt that you have. I can't imagine a household that operates on less than $1000 a month. If you take that as a baseline. That would put your wife's ability to pay (figuring 25% taxes on her income) at $25,000. I assume that their basic cost of living is much higher than $1000 a month. I budget my household at $2000 a month and I REALLY feel like I am scrimping. Then they throw your credit scores into the mix. Also any seizable assets. They also factor things like viability of the business and potential revenue. I am sure they consider your particular line of work "unconventional". They probably don't know you from Adam or care about you either, so saying no is the smart bet for them. A real shame too.
I personally like the idea of rent to own, just for your own safety. We REALLY got lucky in the building we purchased, but we are on a 10 year 'lease-to-own" as well. We now have the money to pay it off in full, in cash, but haven't yet. 1 we are concerned about the economy. 2 maybe we will want to move if we outgrow this place inside of the next 5 years. 3 we haven't explored the tax burdens associated with the purchase of this building (possibly want to buy it privately and lease it to ourselves). 4 we might want to get a loan and have this as an asset for a credit line. Really a lot of other thoughts processes and having as much in operating capital hasn't been a bad thing. Other than our building we operate as a 100% debt free company. We look at the building debt as something we can walk away from and just forfeit all of our lease payments. Our assets are probably close to the 1M, not bad for $50,000 line of credit and 4.5 years time. While I don't think you are going to be operating on the same margins, I definitely think there is a market for your services. Leasing really might be a huge blessing to you. We thought our building would be perfect, but after being in a business a while I have a much better idea of perfection. I hear it is this way when buying a first home.
Well, there is a whole un-finished upstairs that could be office space. Also, the piercing procedure rooms might not even happen, and THAT could be an office. But yeah, thats great advice... need a place for conducting biz, papers, etc.
Still have heard nothing. I am going to c all tomorrow and bug them. I hate to do that, but I am watching summer (a.k.a. the best time for business..) just fly right by and I don't want to open a shop after "the season" is over. Honestly, thats why I started on this is friggin' March, I wish I did not have to spin my tires so much to get to the point we are at now, wish I could have immediately approached the owners in the beginning instead of all the loan applications and nonsense.
After tonight at the restaurant, I GOTTA get out of there, and soon. I am completely surrounded by monkeys, rude monkeys who only care about themselves.
