So I need some additional opinions on this ... I've got the opportunity of a lifetime at my feet (metaphorically speaking) that will likely boost my reputation and business to new and profitable heights. But in order to win this contract, I need to personally sacrifice nearly all up front pay (crew will still get paid) in exchange for the first money out of the sale of this particular product. Now keep in mind, in addition to keeping the bid low by cutting myself out of it, my willingness to sacrifice my pay will give confidence to the customer/investor that my idea will be profitable ... if i can believe in it, they can believe in it. To me, this sounds like a reasonable risk with a reasonable reward. Certainly too risky to be anywhere near conservative ... but nowhere near the realm of gambling. In my mind, this sort of risk is part of business ... usually you go for slow and steady growth ... but every once in a while, you take a risk in the hopes of moving your company rapidly to the next level. (The personal risk we're talking about here is loosing about $14,000, not millions.) Personally, I'm 30 years old and at the bottom of the financial barrel ... credit is shot, 0 savings, car was repossessed (though I have one to drive in the mean time) ... but my house is safely paid up as are my school loans. Fortunately I live alone and have no dependents at this point, the only person I need to worry about is how my girlfriend (who is a lawyer and lives on her own) feels about our future. I do need to worry about my future (I would like a family) but I feel that with this opportunity I can move myself drastically closer to a stable career and the elusive "getting paid for what you TRULY love to do" scenario. But currently I'm suffering from being surrounded by nay-sayers or "realists" as some like to call themselves ... I say they've lost their capacity to dream of something better. What do you all have to say about this?
I think the problem here is that obviously you can only give us outline details so it's very difficult to pass an opinion without the full facts. All I can say is that you have all the facts and figures so you are the one who has to make the decision. What is your gut instinct on the matter?
I'm from the school of slow and steady growth. With your current financial position it sounds like loosing even $14,000.00 would likely be a hardship. But... if you think the payoff is worth the pain or possible consequences than go for it. I'm a big believer in gut instincts; mine are rarely wrong so learn to trust yours. One piece of advice I would like to pass on is that every time I have made a business decision based purely on profit it has come back to bite me in the ass. Whatever your decision I wish you the best.
has anyone put together a honest and realistic business plan? until then, you have nothing to consider and/or discuss. be wary!!!
Maybe they are right and can see things that you can't or won't. If it is something that you can put off until you are more stable that may be a good idea. If your girlfriend is willing to support you in the decision go for it, you may regret it if you don't try. If you become a millionaire in the $100's of millions can I have a gift for the valuable advice? :biggrin1: good luck.
If you can't build in a living wage to the break-even of a business plan, you are there to be fucked over. Re-negotiate.
What is your business formation? Is it a sole proprietorship? Partnership? LLC? Corporation? Is what you selling a product or service? Or both? Can you cut back your crew so that you can get paid some money? Could do other things related to your business to make you some side cash? Can you build a small prototype of your business model on $7,000 or less?
I have found it is never healthy to go so low on a bid that you did not make any money it. Your staff should be paid and so should you. Why work for free? If you go low now, they will expect the same pricing structure from you in the future. However, risk taking can be very fruitful when it works out. Let us know how things work out. Good luck.
I built and sold a very successful business that allows me to work only if and when I want to. Here are a couple of tips from my experiance: - Work up a complete business plan - Never enter a partnership even if you think that you "know the person" - Try to test it on a smaller scale or even using someone elses capital as crazy as that seems - Somewhere around 80% of all businesses fail in the first few year - Limit the amount of money that you have to borrow - Make the business a corp. with limited liabilty Also remember that the larger the risk the larger the reward or failure. One advantage is that at your age you have many years to make your money back. I would tell you good luck, but it is all about being a shrewed business person... there is virtually no luck involved.
Who is pushing you around such that there is no consideration for you? I'm assuming you are a general contractor? Are you bidding on a job - or are you taking an idea to an investor? Impossible to give you advice without some of these details.
