Is it dumb for me to do a startup right now?

[acardoso]

Background: I'm currently in dental school and have been working really hard to get high grades. There is a good opportunity to open a storefront business locally to help me pay for tuition, and I would scale back my schoolwork to maintain average grades so that I could have time to open a store. I would be seeking out about $170K for funding.

After school is done, I will have an outrageous $600K of student loans. Though I am confident that this would succeed, there's always a chance it may not. My question is, in the event that it fails, would that severely affect my plans to receive bank funds to open my practice under a business after I graduate? If it does, would this not be an extremely risky move? TIA

 

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[MidwestLandlord]

Background: I'm currently in dental school and have been working really hard to get high grades. There is a good opportunity to open a storefront business locally to help me pay for tuition, and I would scale back my schoolwork to maintain average grades so that I could have time to open a store. I would be seeking out about $170K for funding.

After school is done, I will have an outrageous $600K of student loans. Though I am confident that this would succeed, there's always a chance it may not. My question is, in the event that it fails, would that severely affect my plans to receive bank funds to open my practice under a business after I graduate? If it does, would this not be an extremely risky move? TIA

My brutally honest answer to this:

If you think "open a storefront and help pay for my school" is as easy as you imply in your post, you've got some major disappointment coming.

If you go out and get this $170,000 liability, combined with your $600,000 in student loans (my god), then you'll be $770,000 in debt...and likely both the schooling and the business will fail due to lack of time to take either seriously.

You're $600,000 into this school thing. Why do anything to jeopardize finishing that education and at least seeing some benefit to your student loan liability?

You should:

1) Read The Millionaire Fastlane book that this forum is based on. At the very least, the mindset it spells out will help you with your future dental practice.

2) If you want to earn extra cash and whittle away at the student loan (besides getting a regular old job of course) I would pick a "hustle"
That's a low risk way to make some extra cash here and there. (you know, flip stuff on ebay/craigslist or whatever. Lots of hustling ideas around the forum)

My question is, in the event that it fails, would that severely affect my plans to receive bank funds to open my practice under a business after I graduate?

Of course it would.

 

[acardoso]

My brutally honest answer to this:

If you think "open a storefront and help pay for my school" is as easy as you imply in your post, you've got some major disappointment coming.

If you go out and get this $170,000 liability, combined with your $600,000 in student loans (my god), then you'll be $770,000 in debt...and likely both the schooling and the business will fail due to lack of time to take either seriously.

You're $600,000 into this school thing. Why do anything to jeopardize finishing that education and at least seeing some benefit to your student loan liability?

You should:

1) Read The Millionaire Fastlane book that this forum is based on. At the very least, the mindset it spells out will help you with your future dental practice.

2) If you want to earn extra cash and whittle away at the student loan (besides getting a regular old job of course) I would pick a "hustle"
That's a low risk way to make some extra cash here and there. (you know, flip stuff on ebay/craigslist or whatever. Lots of hustling ideas around the forum)



Of course it would.

I apologize, as I can certainly see that from my original post, my plans for this may seem superficial and fickle. My wife would be my council throughout this venture, as she was the store manager for the same concept in a different state, so she understands how the business is run. I have been scouring business and management forums for the last 6 months. I am currently in the process of creating my business plan, and will have it reviewed by the local university business school committee and revise it before seeking capital. I know that this may be difficult for the normal person, but at the expense of sounding like I have a holier-than-thou attitude, I don't consider myself normal. I wouldn't quite consider anyone that joins these forums "normal" by any stretch of the imagination.

I understand that the big issue here is time. I have a 3-month summer break coming up that would give me time to open the store, get my systems in place, and train a manager to run the store in my absence. The location is 8 minutes away from school, giving me ample opportunity to be available. As far as the time constraint is concerned, I spent about 20 hours (which is what my goal would be to spend at my business every week) on my business plan and entrepreneurship this past week and still managed to
get a good grade on my exam and spend time with my wife and son. Would it be a time constraint, though? Certainly. Would you suggest looking into getting a partner to split liabilities and responsibilities?

I am new to this forum and will start TMF right away. Thank you for the suggestion!

Thank you for the advice. I have a fire lit under me to take ownership of this opportunity, but I absolutely want to look at the financial implications of it, and you have brought a lot of that to light.

 

[GameOver]

Welcome to the forum; I joined not long ago myself.

What would be the hours of operation of this business and what days? How many staff would it have? Who would actually be managing the day-to-day operations of the business? If not yourself, what do you plan on paying a professional manager to be the on-site manager, and how does that compare to your potential profit margin? Do you know what your profit margin would be? Is that because it is a currently-operating business you would be taking over, or is it based on assumptions from the other business you mentioned? What do you think your gross margin is going to be vs. your owner's share of net profit? What is the ROI on that figure vs. the $170k investment... e.g. how many years to break even? A lot of times a new business isn't really going to make its owner real money for 2-5 years... if that is the case, why would you buy this now when your stated goal is to have income to help with school when you will likely be finishing school sooner than 5 years from now? What about your risk profile... that is a lot of debt you already have going-on, are you sure you want to add more to it? Would someone lend you $170k with so many loans already underway? What would your business structure be... would you be taking out a personal loan or is this opportunity such that you could setup an LLC, small corporation, etc. to buy it and also limit your liability? Would you have to maintain an inventory for this business and if so is the cost of goods sold included in your $170k calculation of what is needed for funding or would that be an additional, separate purchase?

 

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[OldFaithful]

There is a good opportunity to open a storefront business locally to help me pay for tuition, and I would scale back my schoolwork to maintain average grades so that I could have time to open a store. I would be seeking out about $170K for funding.

I'll be the contrarian here today and tell you what you really want to hear: Go for it man! You got this! Juggling a new brick & mortar business, a business partner, a young family, barely 3/4 million in debt, studying at dental school & then starting a dental practice...will be a piece of cake! You'll be picking the color of your Lambo in no time flat!




There are no better teachers than at the school of hard knocks.

 

[MidwestLandlord]

I apologize, as I can certainly see that from my original post, my plans for this may seem superficial and fickle. My wife would be my council throughout this venture, as she was the store manager for the same concept in a different state, so she understands how the business is run.

If this is a franchise, likely the franchiser would not allow you to be in school anyway. Franchiser's will usually not get in contract with a potential franchisee that is distracted by a major time commitment. They expect you to be married to it.

They usually have hefty minimum net worth requirements, and liquid asset requirements as well.

And if the franchise only costs $170,000, it's likely not a business model that generates enough net income to allow the hiring of a store manager, and I would venture to guess that anyone running this franchise with store managers has multiple locations.

(for example, the average Godfather's Pizza franchise makes about $70,000 per year net income. Pay a manager $50,000, and you'll need multiple shops to make any real money)

 

[SquatchMan]

My general rule of thumb for the internet. If you're asking the internet (or anyone really) to make major life decisions, then the answer is always no. You're gonna lack the confidence to pull through when the going gets rough, and it will get rough.

People that have fires lit under them don't ask the internet to make major life decisions.

They just do it.

would that severely affect my plans to receive bank funds to open my practice under a business after I graduate?

The bank will view your 600k in student loan debt and lack of dental experience as a much bigger problem.

That's 60k a year over 10 years (not sure how many years you have) and that's just to pay off the principal.

You also have to eat, live somewhere, have health insurance, and take care of your kid. The numbers just aren't adding up.

 

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[Nily]

Your dentistry background is a HUGE asset.

You can:
1. Sell teeth whitening kit
2. Design better braces for orthodontist
3. Licence toothpaste formula
4. Sell B2B dental equipment to clinics

What do they all have in common?

They can be sold WORLDWIDE!

Don't even get me started with SAAS/Apps that you can develop to help dentists around the world.

Finish your degree. Work for a couple of years. Find issues and pain points. Quit. Go into Chuma mode. Fastlane it. Get paid.

Half-assing things is not going to yield you results.

If one of your venture becomes successful, your student loan will be paid off within a few short years.

@MidwestLandlord made a good point. Think about what he said.