I have always been an advocate of owning your own business...through my 17 years as a public servant serving as a US Marine and as a Raleigh NC Police Officer and Firefighter, I always had a "side" business related to Real Estate. There were many years where I made much more "off duty" than I made in my paychecks from the City. But I digress ...
Several months ago a friend of mine who is/was a builder in our area decided to go out into the retail world. Now the reason I want to share this is to illustrate how retail business differs from the Real Estate industry. My friend let's call him "Dave" had been successful in building upper end homes, building in the $2-10 million range. But like in most areas that price range has been stagnate for the past 2-3 years in our area.
Dave wanted to open a Theme Bar/Restaurantin a location which is popular for area night-life. OK I said, what is your business plan? After he disclosed his ideas, I then asked what about upfront cost and when do you expectto be profitable? Needless to say, Dave was excited about his new idea and he had done his homework. He had figured it would cost between $450-500,000 in start up capital to get the doors open, he had to sign a 5 year lease triple net, and personally guarantee the lease payments. He would have to work 14-16 hours a day for a least the first 3 years until he could afford to hire a manager. (Until then he would be working for managers pay $35-40K). Dave calculated it would take 2-3 years to turn a profit.
It struck me right then that I was in the best business in the world - The Real Estate Business! I didn't have to invest but a few thousand dollars when I started and most of whichwas for license fees and Board Dues. I didn't have to sign a long term lease or personally guarantee a note. And although I have put in some 12 hours days occasionally...I can't ever remember working 16 hours in a hot kitchen.... and for $35-40,000 a year????...We have the greatest business opportunity in the world...High returns with Limited risks! Don't for get to prospect for new business today...You are the best advertising you've got!
Eddie Brown 2010
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