In the past I was going to start my own company catering to residential clients, but my employer didn't like the idea because they were a consulting company also. 6 months ago I took a higher paying job as the internal it manager at a software compony. The problem now is that I want to cater to business only rather than residential. I can't very well start my business part time because I often work late and my potential clients would be closed. I was thinking about taking out a $10,000 personal loan to help with bills for a few months and jump right in. I feel pretty confident I can get some clients quickly because it is a smaller town and I know a handfull of business owners. Is this a horrible idea?
Personal loan to start business. Bad idea?
- Thread starter macdiesel
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cmonova
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Yes it's horrible 
Seriously kind of hard to tell with what you have posted. 10K to start with is really not that much when you think about it. Of course some have said you can start with nothing and that is pretty much correct. But, alot really depends on your currrent situation.
If the 10K is to help with bills what happens once that runs out and if you don't have any business clients? To me a business client is one that sends me a check each and every month. Not a business that pays me when they need work done. Much harder to calculate revenue based on not knowing when you will have work.
Really depends on your finances and how business savy you are.
Seriously kind of hard to tell with what you have posted. 10K to start with is really not that much when you think about it. Of course some have said you can start with nothing and that is pretty much correct. But, alot really depends on your currrent situation.
If the 10K is to help with bills what happens once that runs out and if you don't have any business clients? To me a business client is one that sends me a check each and every month. Not a business that pays me when they need work done. Much harder to calculate revenue based on not knowing when you will have work.
Really depends on your finances and how business savy you are.
Paul Rodgers
Well-Known Member
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I personally have always been against credit if I can help it.
Without bringing my personal opinions on personal finances into this I can tell you it is a bad idea. If you can't guarantee you can pay you shouldn't take out a loan. With a computer repair business you can fail pretty big. Best to operate with what you have and keep adding to it.
Without bringing my personal opinions on personal finances into this I can tell you it is a bad idea. If you can't guarantee you can pay you shouldn't take out a loan. With a computer repair business you can fail pretty big. Best to operate with what you have and keep adding to it.
Thanks guys. I thought it was a bad idea. I just wanted to hear someone say it. I have a little money to start the business, but not enough to live off of as well. It just sucks because if I quite my job to pursue this I better be fairly successful right away or I am doomed financially (bills). By reading other people's stories it isn't likely to be successful right away. I thought about trying to get an evening job and starting the business, but I feel that would take away from the time needed to get this thing off of the ground correctly. Thanks again.
Paul Rodgers
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Don't quit your job. You want something to fall back on when the clients don't come rushing.
RichmondTech
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Start with residential and remote work. When that builds up enough, quit your job and go after businesses. When that builds up, start getting away from residential.
mraikes
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Yeah it's a bad idea, but . . .
None of your past posts reveal anything about your personal situation. If you're a single guy in good health, living with your parents or have some other very inexpensive living situation with no one depending on you for support then it might be doable.
Can you budget the 10k to last 12 months including all your living expenses, expected business expenses and personal loan payment? Some here might reject such an idea, but long ago before I was "married-with-children" I could have done it.
Of course you'd draw it down quicker early in the year when you have the fewest jobs rather than toward the end of the year when (hopefully) things would start rolling for you.
Are your business contacts good enough to actually swing work your way within a month or two? If so, how many and at what rates? Many people are surprised to learn that when real $$$ are involved their business buddies won't change tech providers so easily.
What kind of competition already exists for residential clients? Like it or not, they'll probably be your bread & butter for a long time.
We really know nothing about you, your market, your experience or your tenacity. No one in good conscience could say anything other than "don't do it!" But that doesn't mean it shouldn't be done.
Only you can evaluate the many factors and make the decision to roll the dice or just sit tight and collect the paycheck every month.
None of your past posts reveal anything about your personal situation. If you're a single guy in good health, living with your parents or have some other very inexpensive living situation with no one depending on you for support then it might be doable.
Can you budget the 10k to last 12 months including all your living expenses, expected business expenses and personal loan payment? Some here might reject such an idea, but long ago before I was "married-with-children" I could have done it.
Of course you'd draw it down quicker early in the year when you have the fewest jobs rather than toward the end of the year when (hopefully) things would start rolling for you.
Are your business contacts good enough to actually swing work your way within a month or two? If so, how many and at what rates? Many people are surprised to learn that when real $$$ are involved their business buddies won't change tech providers so easily.
What kind of competition already exists for residential clients? Like it or not, they'll probably be your bread & butter for a long time.
We really know nothing about you, your market, your experience or your tenacity. No one in good conscience could say anything other than "don't do it!" But that doesn't mean it shouldn't be done.
Only you can evaluate the many factors and make the decision to roll the dice or just sit tight and collect the paycheck every month.
ArtemusComputerTechnology
Member
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- Brooklyn, NY
NO LOANS, please. Start out with what you have and continue to put in to your business. I'm still starting out and expanding to new clients everyday. Right now it is just my brother and me. 
I personally do not like credit, especially taking out loans. My business when it was started in 2009 has grown organically without the need for any type of credit or loan, apart from credit card and supplier purchases which are paid out in full when due.
Before jumping full time into the business, I was working part time from the end of 2007 slowly building up business and getting clients. At the same someone told me to try to save enough money to meet my 12 months of out-going incase I had to leave my full-time work. I started to do that. Unfortunately ( or very fortunately for me ) in 2009 I was made redundant from my full time work and got a redundancy package which I budgeted would last me for 8 months if I had no income coming in.
After 4 weeks of taking the family abroad for a long deserved vacation, I gave 200% into my business, however I found that for me a lot of business came from my clients whom I used to deal in my full time work and who when they found I was made redundant, emailed me and some asked me to look after their systems and support. Gradually about 95% of my new business is through word of mouth and referrals, for which I cannot place any value.
It has been though all these time, learning things, keeping track of paperwork, chasing payments. My wife has been very supportive all these time. Keep an eye out on the expenses. Small little expenses add to big amounts!
I have learned my strengths and weakness and accordingly have built up a network of people who can provide services for which I am not 100% familiar and we thus share the revenue or come to an agreement accordingly.
As most of the people here have said, try to avoid taking loans. Save up the money if you can and start slowly.
Good Luck
Before jumping full time into the business, I was working part time from the end of 2007 slowly building up business and getting clients. At the same someone told me to try to save enough money to meet my 12 months of out-going incase I had to leave my full-time work. I started to do that. Unfortunately ( or very fortunately for me ) in 2009 I was made redundant from my full time work and got a redundancy package which I budgeted would last me for 8 months if I had no income coming in.
After 4 weeks of taking the family abroad for a long deserved vacation, I gave 200% into my business, however I found that for me a lot of business came from my clients whom I used to deal in my full time work and who when they found I was made redundant, emailed me and some asked me to look after their systems and support. Gradually about 95% of my new business is through word of mouth and referrals, for which I cannot place any value.
It has been though all these time, learning things, keeping track of paperwork, chasing payments. My wife has been very supportive all these time. Keep an eye out on the expenses. Small little expenses add to big amounts!
I have learned my strengths and weakness and accordingly have built up a network of people who can provide services for which I am not 100% familiar and we thus share the revenue or come to an agreement accordingly.
As most of the people here have said, try to avoid taking loans. Save up the money if you can and start slowly.
Good Luck
Mr.Mike
Active Member
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Why dig yourself a hole by taking on a lone right out of the gate? Unless you are able to lose 10k and come back to where you are now, don't do it. Take a look at budgeting the income you have now to see where you can use those monies to run your business, at least part time. Can you sell something to make some quick money?
Are you saying it cannot be done?(Others have done it) Or that you cannot do it? If its the latter, what makes you any different?
If you leverage the right technologies you can build up a decent clientele while working a 9-5.
Cornerstone Technologies
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- Indiana Pa
By the time we opened my new shop, we estimate that we spent nearly 30k on renovations and inventory to make the what we had usable. Thats ontop of the 100k we spent on the property, financed by the bank. It worked out, but at the end of the month, the money I am paying towards all these lines of credit and mortgage makes me want to cry. But I am making okay money and having renters helps too.
It is a matter of assessing your risk and deciding what is best. If it can be done without debt, thats awesome. Giving up because something is hard just says you aren't ready to take the step towards self-employment, which isnt for everyone. It has to be important enough and a market in which you can sustain growth. Like others have done, its best to work on gaining clients on the side before taking the plunge.
It is a matter of assessing your risk and deciding what is best. If it can be done without debt, thats awesome. Giving up because something is hard just says you aren't ready to take the step towards self-employment, which isnt for everyone. It has to be important enough and a market in which you can sustain growth. Like others have done, its best to work on gaining clients on the side before taking the plunge.
inlinetech
New Member
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+1 on the no loan...start out small. Even if you get a loan, it will take time to establish a customer base. Maybe think about a loan if things are really growing and you need a retail front and you have the large customer base to support it then....
gikstar
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You need a team of players in this business to cover the needs of your clients, especially business clients. When the client's server is down you had better be available to handle it. That being said, the best way to handle the situation is with a 'partnership', partner with another tech who can help handle the load.
As was mentioned, a business client is one who sends you a monthly check, and to service that client you need 'tools' to do so, such as a proper billing/quoting/ticketing system and remote monitoring software, and the good 'tools' don't come cheap.
Also, if you are going to 'take the plunge', get those business clients signed up in advance. Work from home, but make sure you have a fabulous internet connection. We work primarily from our house and do a lot of remote support. We have Fios internet (35u/35d) and also cable internet - neither 'package' includes and TV. If one system goes down we can use the other system. We wired the whole house. Our living room has 3 professional tech benches and a workstation for our otherwise outside tech when he drops by. The way the house was built, it came with an office just inside the front door where the majority of the remote support is handled, and it has a large 'L' shaped desk setup with 4 monitors. What is really nice about this house is the skylights that are in the living room and the family room, in the hall bath and in the hallway so we don't need the lights on during the day to work.
So, if you have the right setup at your place, you can find a trusted partner, have businesses signed up and bring in the $$$, have all of your 'tools' in place and know how to use them, then I think you can start planning on when to make the move to 'business owner'.
If you feel the need to 'borrow' money I suggest it be for an investment in your company for something that you resell, like storage space (NAS units that you put in businesses).
nesrinamb
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- Southern California
Well when i started my business it was a flash drive and a couple of bucks to get some cheap business cards made. But then again i had no large expenses either.
It took me while longer then i originally thought to get to get to where i wanted financially.
I dont think its a bad idea to get a loan but make sure to get things figured out and you can support your self if the 10 grand runs out way to fast.
Personally i think it would be best to just save up 10 grand and then get a small line of credit just in case.
It took me while longer then i originally thought to get to get to where i wanted financially.
I dont think its a bad idea to get a loan but make sure to get things figured out and you can support your self if the 10 grand runs out way to fast.
Personally i think it would be best to just save up 10 grand and then get a small line of credit just in case.
sedigital
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Like other said, depends on your current debt load, where you live, etc.
I started out with a $60,000 loan, plus $20,000 line of credit and regret some of it (though I have equity in real estate). After a year of paying that stuff off it feels like a huge load, and when I think that there's four more years to pay it makes me want to cringe. I took out the loan to buy another business that generated $400,000 per year (total income, not profits) so there was immediate income since we were able to keep some staff, the location, phone numbers and email addresses.
Just be very careful and look at all aspects of how that debt will affect you. Also figure out what your worst case scenerio is and if you're prepared to go that far if things don't work out.
I started out with a $60,000 loan, plus $20,000 line of credit and regret some of it (though I have equity in real estate). After a year of paying that stuff off it feels like a huge load, and when I think that there's four more years to pay it makes me want to cringe. I took out the loan to buy another business that generated $400,000 per year (total income, not profits) so there was immediate income since we were able to keep some staff, the location, phone numbers and email addresses.
Just be very careful and look at all aspects of how that debt will affect you. Also figure out what your worst case scenerio is and if you're prepared to go that far if things don't work out.
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