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Re: My first question
Step Two - Look at it as an INVESTMENT, and be unemotional in your analysis.
I run into SO many prospective or current owners who "have a dream". And that is great -- but this SHOULD be about making money! Ultimately, it is very simple -- you are going to "invest" money - and time -- into a project, and you want to see if it is going to have the best return of your money, and time, compared to alternative investments.
When I see people write things like "I don't have to work" or "I don't mind working 70 hours" -- part of me thinks -- ok, that's good - that gives them some flexibility in terms of capital issues as well as tells me they understand the realities of owning a business.
But really -- NOBODY wants to work 70 hours a week for NO pay!!! To "break even" on all the money and time they invested! Or even to LOSE money!!! If you are going to do that, go start up a foodbank for the community in your basement and use the money to stock it with food for the homeless or something more noble than tanning! :)
So part of the BUSINESS PLAN should be whether or not you HAVE to draw money from your time in the business, to fund your own lifestyle and survival. But part of the business plan should ALSO be whether or not it DOES pay you for your time - at some reasonable market wage - as well as is making enough to pay back the initial investment at some reasonable market rate of return - as well as making some "profit" on top of those items! If it can't do all three -- it isn't an investment, it is an expensive and time consuming dream. Nothing wrong with that if you have that luxury - just know it going in.
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