Looking For Funding

Bigdaddi44

Registered
I'm looking at opening a room. I have the business plan, the drive, the location and the contact's. What I don't have is the 730 score to get bank funding. I have some cash and credit cards but nowhere close to what is required. Does anyone know of a "legal" way to get funding or had any experience's with crowd funding. I may even entertain having a partner as a last resort. (HAHA) Any help would be great.
 

Island Drive

Otto/Dads College Roommate/Cleveland Browns
Silver Member
I'm looking at opening a room. I have the business plan, the drive, the location and the contact's. What I don't have is the 730 score to get bank funding. I have some cash and credit cards but nowhere close to what is required. Does anyone know of a "legal" way to get funding or had any experience's with crowd funding. I may even entertain having a partner as a last resort. (HAHA) Any help would be great.

A wise business man once told me, always have a plan going in, and JIC it fails have a plan going out.
 

ideologist

I don't never exaggerate
Silver Member
Er, what are you asking for?

Are you asking for a loan from someone? Write a business plan

Are you asking for advice? File for a Limited Liability Corporation and get started
 

Bigdaddi44

Registered
I have the business plan that I let a SBA consultant read and critic. Thought it was a winning plan. Created a LLC. Problem for me is getting the funds. My current bank turned me down. So I'm looking at alternative funding. Any suggestion's
 

Island Drive

Otto/Dads College Roommate/Cleveland Browns
Silver Member
I have the business plan that I let a SBA consultant read and critic. Thought it was a winning plan. Created a LLC. Problem for me is getting the funds. My current bank turned me down. So I'm looking at alternative funding. Any suggestion's

Personally, since your a newbie....I'd search elsewhere.

Getting someone to pony up here, is not the way to go.
 

Bigdaddi44

Registered
Not looking for funds "HERE"!!!! Asking if anyone has any SUGGESTIONS......for alternative funding. If you look back at the previous post, I never asked for funds only sugestion's.
 

trentfromtoledo

8onthebreaktoledo
Silver Member
Just my $0.02/ borrowing to open a business is SUPER risky. That means if things don't go as planned, how on earth will you make it through the slow times? This is how most restaurants and bars/ pool halls go out of business so fast. In my opinion(I was trying to open a pool room with my own money and borrowing, thank god it did not work out because chances are that I would have lost heavily due to not enough "float money") you have to have the investment money PLUS at least a years worth of "float money" in case money is not coming in as planned.

I also learned this: Opening something risky like this should be a 2 tiered business: 1. A real estate investment 2. The Pool/ Bar/ Food Room.
If #2 fails at least you still have the real estate investment.

Good Luck to you!

Trent from Toledo
 

GoldCrown

AzB Gold Member
Gold Member
Silver Member
Not looking for funds "HERE"!!!! Asking if anyone has any SUGGESTIONS......for alternative funding. If you look back at the previous post, I never asked for funds only sugestion's.

It's good to follow through on an idea. The things we regret are the things we did not try to do. However is there money to made with a poolroom? You have to be there all or most of the time or you will get robbed badly. How much of a return is there? Too small and too big is no good. Like Trent said you have to be able to carry yourself. I'm sure you considered most of the risks. As for a partner... it has been said the best thing about a partner is their funeral. If you do not have collateral that's a problem.

Best I can say is to scrape and start out small and cheap. Low rent, used tables, etc. Maybe bar tables and promote tournaments to keep the cash flow coming'.
 

Island Drive

Otto/Dads College Roommate/Cleveland Browns
Silver Member
Not looking for funds "HERE"!!!! Asking if anyone has any SUGGESTIONS......for alternative funding. If you look back at the previous post, I never asked for funds only sugestion's.

Your OP thread title "Looking For Funding"....I guess that alone made me misunderstand your post....sorry.
 

SmokinJoe46

AzB Silver Member
Silver Member
I'm looking at opening a room. I have the business plan, the drive, the location and the contact's. What I don't have is the 730 score to get bank funding. I have some cash and credit cards but nowhere close to what is required. Does anyone know of a "legal" way to get funding or had any experience's with crowd funding. I may even entertain having a partner as a last resort. (HAHA) Any help would be great.
I'm speaking to you as a multiple business owner since 1974.
I'm also a newbie but will try to give you my advise:
1- California, big risk for current business there, business' are leaving
2-Get funding from those that love, trust & know you with the promise of profit sharing after 3-5 years
4- On top of the start-up costs, calculate the daily 'break even' revenue needed to keep the doors open, rent, utilities, insurance, EMPLOYEE'S, payroll, taxes, professional services, etc.
3-Most businesses fail within 3-7 years (95% +)
4- If you wish to pursue this venture after deep thinking on the above FORM a corporation or LLC FIRST. (only a few hundred bucks)
to protect you personally. Understand the corp veil can be pierced for misappropriation of funds, fraud, failure to maintain adequate records & more.
5- If a bank does not wish to fund you then it should cause serious consideration

Now the good news, lets say you were a talented tradesman or a billiards instructor, then your up front costs would be limited and slow growth potential unlimited depending on your age & drive.
You drive is the number one thing going for you, that alone can mean the difference between success & failure.
Best of luck in your decision making.
 
Last edited:

Dan White

AzB Silver Member
Silver Member
Couple things I've learned:

Typical banks don't generally lend you money unless you don't really need it. Some lenders like CIT are willing to take more risk for business ventures, at least they used to.

A mortgage broker can do what's called a rapid rescore on your credit. If you can clean some things up they can sometimes quickly have your score recalculated. Normally it takes months for the score to increase after fixing some things. Of course they'll want you to take out a mortgage if they are going to do this for you.

If you go for SBA the cutoff used to be $50,000 where the bank had to get the OK from the SBA if the loan amount was more than that. I don't know what the dollar limit is now. That meant that the bank required far less paperwork and generally it was easier to get a loan for this amount.

If you max out your credit cards and don't keep up with payments in a timely way they are easier to deal with than a bank. In other words, if necessary you can stall off credit card companies for a long time and then settle for a lower amount with agreed upon payments down the road. This is not a preferred way of financing your business, but if you are certain that you will be profitable within a year or so this is an option. It will damage your credit score, but that can be rebuilt pretty easily if you only have one "episode" like that when starting a new business.

If you borrow money from friends/family do so with the understanding that there is a 50/50 chance that the money will ruin your relationship with that person.
 

Bigdaddi44

Registered
Thank you all for your help and suggestion's. As usual when I have a question this the best place I've found to get answer's.
 

jeephawk

AzB Silver Member
Silver Member
I don't know anything about what it takes to run a pool hall. There seem to be lots of threads in here with all sorts of good advice on what it takes for them to succeed and lots of good ideas.

But, in terms of what it takes to open a small business and succeed:

1. A lot of people that love cycling want to own bike shops, think it would be fun. Folks love shooting, think it would be fun to own a gun shop. I remember asking a doctor, who was very well capitalized, what his CPA said about whether he should buy a local bike shop that was for sale. His CPA said, "Doc, why don't you just buy a bunch of really nice bikes and give them away if biking is your passion." Almost all "passion into small business" ideas fail, even with the necessary funding to start them. Most folks overestimate, and I mean really overestimate what the real demand will be for the product, and underestimate, and I mean really underestimate, what they need for proper capitalization. Then there is all that goes into the nuts and bolts and tricks of the trade in operating the business to actually scrape out a profit. Of course, without the passion you are sunk as well!

2. I'm afraid you have your answer for now. If you don't have enough collateral to start up and you are even thinking of talking credit cards for financing (last few folks I've known that relied on credit cards for financing their ventures or keeping them going in the first year or so, or later, ended up in bankruptcy court) you just are very unlikely to find any source of funding.

3. Totally agree with the real estate suggestion. May not always be practical in some locations for lots of reasons, but even with a long term lease you add lots of risk elements even if you have some success at your location. But leases with options to buy can be good, etc.

4. Practically speaking, I'd guess your only real shot is convincing folks and yes, it is likely friends and family who won't mind losing 100% of their investment, to loan you money and be prepared, even if you get that as a source, they are likely to have to be unsecured because the bank will want to be first and may not allow any other secured debt on the radar screen. Most folks don't like the idea of being unsecured.

5. It can't be absentee - you just add another layer of cost it will be hard to cover.

Starting small businesses is tough, and it's dog eat dog out there.

Again, I know nothing of pool halls, but boy I think it would be tough to make a splash and create buzz with a room that is all second hand and potentially a little tired looking and if the "room" looks bright and new the contrast with all "old" stuff wouldn't be pretty - but that goes to demand and the type of niche you are looking to fill in that area and your target customers.

I guess maybe start the long, hard trek of putting money away, chipping away at any credit issues and see if the dream is still a "go" in a year, or five, or ten? Starting that process will tell you in a fairly short time whether it's something you really want to do - if those savings start going other places either by necessity or choice, the dream may not be as strong as you think.

Everyone should have dreams and goals, so I hope this works out if it's something you are really working towards.
 

GoldCrown

AzB Gold Member
Gold Member
Silver Member
I don't know anything about what it takes to run a pool hall. There seem to be lots of threads in here with all sorts of good advice on what it takes for them to succeed and lots of good ideas.

But, in terms of what it takes to open a small business and succeed:

1. A lot of people that love cycling want to own bike shops, think it would be fun. Folks love shooting, think it would be fun to own a gun shop. I remember asking a doctor, who was very well capitalized, what his CPA said about whether he should buy a local bike shop that was for sale. His CPA said, "Doc, why don't you just buy a bunch of really nice bikes and give them away if biking is your passion." Almost all "passion into small business" ideas fail, even with the necessary funding to start them. Most folks overestimate, and I mean really overestimate what the real demand will be for the product, and underestimate, and I mean really underestimate, what they need for proper capitalization. Then there is all that goes into the nuts and bolts and tricks of the trade in operating the business to actually scrape out a profit. Of course, without the passion you are sunk as well!

2. I'm afraid you have your answer for now. If you don't have enough collateral to start up and you are even thinking of talking credit cards for financing (last few folks I've known that relied on credit cards for financing their ventures or keeping them going in the first year or so, or later, ended up in bankruptcy court) you just are very unlikely to find any source of funding.

3. Totally agree with the real estate suggestion. May not always be practical in some locations for lots of reasons, but even with a long term lease you add lots of risk elements even if you have some success at your location. But leases with options to buy can be good, etc.

4. Practically speaking, I'd guess your only real shot is convincing folks and yes, it is likely friends and family who won't mind losing 100% of their investment, to loan you money and be prepared, even if you get that as a source, they are likely to have to be unsecured because the bank will want to be first and may not allow any other secured debt on the radar screen. Most folks don't like the idea of being unsecured.

5. It can't be absentee - you just add another layer of cost it will be hard to cover.

Starting small businesses is tough, and it's dog eat dog out there.

Again, I know nothing of pool halls, but boy I think it would be tough to make a splash and create buzz with a room that is all second hand and potentially a little tired looking and if the "room" looks bright and new the contrast with all "old" stuff wouldn't be pretty - but that goes to demand and the type of niche you are looking to fill in that area and your target customers.

I guess maybe start the long, hard trek of putting money away, chipping away at any credit issues and see if the dream is still a "go" in a year, or five, or ten? Starting that process will tell you in a fairly short time whether it's something you really want to do - if those savings start going other places either by necessity or choice, the dream may not be as strong as you think.

Everyone should have dreams and goals, so I hope this works out if it's something you are really working towards.
Good post. And again a person has to be a good/great promoter. It’s strictly a business to make money. How much can be made? May I suggest buy some kind of franchise that will generate funds almost immediately. If the poolroom was an existing business with customers that could work. As for a new start up....It’s hairy.
 
Last edited:

jasonlaus

Rep for Smorg
Silver Member
Doesnt Diamond do a lease of their tables or something like that? You wouldnt need any money for tables, which I would assume would be one of your biggest expenses.
Jason
 

ideologist

I don't never exaggerate
Silver Member
Doesnt Diamond do a lease of their tables or something like that? You wouldnt need any money for tables, which I would assume would be one of your biggest expenses.
Jason

The No Excuses program, you need the proper business filings, they can explain more if you call
 

jeephawk

AzB Silver Member
Silver Member
Good post. And again a person has to be a good/great promoter. It’s strictly a business to make money. How much can be made? May I suggest buy some kind of franchise that will generate funds almost immediately. If the poolroom was an existing business with customers that could work. As for a new start up....It’s hairy.

Yep.

And if a franchise isn't available and you aren't buying an established "room", you still, with a willing seller, have the possibility of buying the building on contract - seller becomes the bank as far as the real estate goes, a little higher interest rate but sometimes very little down - all depends, but a good way to buy if you can't get "traditional" financing on the real estate end of things. Same goes, of course, for buying an established room, but again, sounds like you are starting fresh, so to speak. Also an option vs. a long term lease - gives you an opportunity to build some equity and eliminate some of that risk of being a tenant.
 

joelpope

AzB Gold Member
Gold Member
Silver Member
another option

You may have better luck trying to find an existing room owner that is looking to sell. There are many advantages to taking this route.

1) you can work there and will learn about the business for real before committing all of your financial resources

2) after proving yourself to the owner by working there, the owner may finance some of the purchase price

3) banks look at historical cash flow from an existing business more favorably than a start up business plan.

4) there is less "risk of the unknown" taking on an existing business than trying to build one from scratch. Especially as it relates to how much working capital you need. Working capital can be significant in a start up since you will not cash flow positive when you open your doors.

5) you may be able to "inherit" some league play which is typically part of being profitable in today's pool hall reality. As a start up you have to acquire league play which is not always easy

Good luck
 

doitforthegame

AzB Silver Member
Silver Member
The No Excuses program, you need the proper business filings, they can explain more if you call

They require about 25% into the transaction for shipping, setup and equip.

Startups can be done if your credit is decent (ie around 650+) with leasing companies. Usually require 1 or 2 payments in advance and doc fees.

Expect to pay high credit card type rates. For some reason people go into these things thinking they will get 6 or 8% type rates. They are stunned when I explain that startups are high risk credits and get high rates. Established business (over 2 years) and good credit equals good rates.

Bob
www.leasefundings.com
 
Top