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fashionmad
10-15-2005, 07:22 AM
Hello All,

I stumbled across this site whilst looking for commercial propert to rent so I am new to this site.

Myself and my husband have a hotel business up and running in Turkey and its doing very well, however this is more my partners dream but I have always wanted to run a small clothes boutique as its what I thrive on so I think thats a head start in itself!

Anyway, I have never been one to think of starting up my own business until I saw how well it can go (ı.e our hotel) but I would really like some advice about bank loans and what difficulties that I could run into whist trying to set it up.

Is there any advice that you could give me, and if so it would be much appreciated.

Thanks

BusinessMan
10-18-2005, 06:29 AM
Plan. Plan everything. Work out costs (everything!), marketing plans, potential profit and so on.

This will produce many benefits, but in the context of your question:
- an idea of how much money you will need to invest to start with
- something to present to your bank, so that they can see that it is a serious proposition.

In fact with respect to your bank, I would suggest that you are unlikely to get a loan if you don't have a detailed plan.

Generally, the more detail you can plan, the less scope for problems... but oif course always try to have a backup scenario in mind should things not go as you expect.

Hope this helps...

qaconsulting
11-08-2005, 03:05 PM
Raising capital is the most basic of all business activity. It can be a frustrating task but there are ways to obtain the money that you need. One option is from your personal savings or borrowing from family and friends. If this option is not feasible, then Banks are your next option.

Bank loads require a good business plan that shows that your business is a sound investment for the bank.

Banks make money by lending money. To be successful in obtaining a load, you must be prepared and organized. You must know exactly how much you need, why you need it, and how you will pay it back. That means you must convince your lender that you are a good credit risk.

Terms of loans may vary from lender to lender, but there are two basic types of loans: Short-term and long-term. Generally, a short-term loan has a maturity of up to one year. These include working-capital loans, accounts-receivable loans and lines of credit.

Long-term loans have maturities greater than one year but usually less than seven years. Long-term loans are used for major business expenses such as purchasing real estate and facilities, construction, durable equipment, furniture and fixtures, vehicles, etc.

Approval of your loan request depends on how well you present yourself, your business, and your financial needs to a lender. Remember, lenders want to make loans, but they must make loans they know will be repaid. The best way to improve your chances of obtaining a loan is to prepare a written proposal.

A good loan proposal will contain the following key elements:

General Information - Business name, names of principals, Social Security number for each principal, and the business address.

Purpose of the loan - exactly what the loan will be used for and why it is needed.

Amount required - the exact amount you need to achieve your purpose.

Business Description - details of what kind of business it is, its age, number of employees and current business assets.

Ownership structure - Develop a short statement on each principal in your business; provide background, education, experience, skills and accomplishments.

Market Information - Clearly define your company's products as well as your markets. Identify your competition and explain how your business competes in the marketplace. Profile your customers and explain how your business can satisfy their needs.

Financial Information - Financial statements, balance sheets and income statements for the past three years. If you are starting out, provide a projected balance sheet and income statement.

Collateral you would be willing to pledge as security for the loan.

When reviewing a loan request, the lender is primarily concerned about repayment. They will look at your credit history and work history. They will look to see if you have sufficient experience and training to operate a successful business.

Being prepared will help you secure a loan. Preparing a loan proposal and business plan that demonstrate your understanding of and commitment to the success of the business and how you will make monthly payments will help in your application for a loan.

Sincerely,

John Spinnato, Quasebarth Advanatage Consulting[/b]

tspires2
02-01-2014, 11:17 AM
I agree Plan, Plan and then plan again! Always assume EVERYTHING is going to cost more that it should and there will be MORE problems that there should be! Then hope for the BEST outcome available and worst case scenario you will have the cash flow to start the business, best case scenario you will have some extra cash to get started!

If the hotel is doing really well I would say save money and start purchasing inventory now and maybe you can start the new business with no loans. It still will not be a debt free start but it will be much better to pay yourself back with interest rather than the bank! This way you can consider it an investment for your dreams, if this is an option!

Good Luck to you and I hope your dreams come true!

jubvman
02-01-2014, 12:00 PM
When starting a business it's best to keep liabilities to an absolute minimum. Instead of looking at commercial premises to let, I would look at starting an e-commerce store online (can be started for as less as $25 a month). Also advertise on eBay and classified ads site and refer people back to your e-commerce store as eBay and other sites take a commission.

Bakerpat
02-01-2014, 06:53 PM
As the above post state it is best to start your new business small as an addition to the hotel to keep expenses down, which will have you in profit faster. It may be smaller than you have dreamed of starting but it would not be a drain on your finances. Banks are hard to get loans at this time so you may need to be smaller for no other reason than start up cash. As you grow you may want to look at investors into the business if you don't mind giving up some of your profits.

To fill in some of the need for loans there are other sources available to get loans than banks but they may need you to have been in business all ready for some time and selling a certain amount monthly.

Good luck!

delusional
02-02-2014, 11:02 AM
Every country is different for starting a business. But also almost every country has a government department that helps small businesses. Whether you can get more info online or go to one of their offices, you will always find almost everything you need to get started.

Most countries also have guides about what you really need before getting started.

Thrix
02-03-2014, 01:11 PM
I would usually suggest you to do your business online, to minimise the costs, but it's different with clothes. People want to see for themselves how that shirt is going to fit them, or will those pants make their bottom look fat, you know?

So, what you need to do, is make them feel as comfortable as possible while in your store. And make sure to hire friendly people. You want your customers to return once they've stepped inside. There are some great informations here in this thread, after you've read it all, expand your views and browse this forum, other forums, Google around, ask around, etc.

Good luck!

jfab
02-04-2014, 10:21 PM
This will be actually easier for you since the banks will see that you have already an established business and it's doing very well. All you have to do is apply for a loan and I think you will be easily granted your request. However, interest rates could pull you down because that's just how banks are. I would still suggest to use some saved up money for this. Like personal savings.

Bonyi
02-05-2014, 08:03 AM
Since you guys already have a striving business, your bankers should be able to give you loan at a minimized interest rate. Another option is to use profit already made from your hotel business to reinvest in the cloth business. This means that you won't have to pay any interest.

novasparker
02-06-2014, 11:55 AM
Running a business requires having access to plenty of working capital. Sometimes this means that you have to take out a loan in order to cover your expenses, especially if you plan on expanding. However, if your plan backfires, you will still be on the hook for the repayment of the loan proceeds, which might end up bankrupting you if something catastrophic were to happen. So look at your situation in every angle before deciding to take out the loan and make sure that you understand the pros and the cons before you sign on the dotted line.

mikka254
02-06-2014, 04:02 PM
Basically, since you own a hotel, getting a loan will not be very difficult, especially if you have a title deed. In fact, it will be very easy because banks like auction-able assets. However, even before you think about getting a loan, I would suggest that you take the time you have now to full-proof your business plan. I realise that this might be your dream but in business, a dream is only as good as the profits. Make sure you clearly state when you expect profits in your business journal and if you do not see profits by then, count your losses and move on. That's why I always advice that a loan should be to expand an already growing business and not for ideas.

pahagwl
02-19-2014, 12:03 PM
The most likely difficulty would be related to procuring a loan from the bank. Bank generally asks for a a collateral when providing a loan and if you are not able to put up a collateral, u might not be able to get a loan. Also there there is a lot of paperwork involved prior to getting a loan. You would need to engage an expert to ensure that this procedure gets carried out smoothly.

VivaLa
02-21-2014, 06:54 AM
The fact you have a successful business should help you a lot if it comes to asking a bank for a loan.

Personally I'd be trying to use some of the money from the hotel where possible as this avoids you having to deal with anyone else. As others have suggested you can start online just to get up and running. More and more people are doing their shopping online and you can really exploit that. A few advertising runs and you will be good to go. There are ofcourse major downsides to being online only but until you get up and running its the way forwards. After that who knows,you may own a handful of shops.

Good luck.

Ryand88
02-21-2014, 08:18 AM
I think the experience of already running a business is going to help you out immensely as quite a few of the skills transfer across all businesses such as good management and money making skills and as many others have said earlier getting a loan will be so much easier for you making that one crucial step (gaining funds) that much easier but even if you do have the skills and the money there is no guarantee a business will succeed particularly one as specialized as this so I highly reccomend you search the local area for competition and cement your business plan and cash flow forecasts before doing anything.

owesem75
02-21-2014, 10:16 AM
Start small in the beginning and carefully work out a plan that will meet your short-term objectives and work from there to leap frog your business once you got the hang of it. Sometimes, we tend to run and operate business just because we thought it would run well... on papers. But actual operation is really different. I would not advice you to immediately go in full-time operation without testing the water. You have to make use of your time very well. Aside from setting up the business, you also need to consider your suppliers and believe me, finding the best and trusted suppliers will also require you the same amount of time and effort as during the initial setup.

samm1973
02-21-2014, 01:19 PM
If you really want to start a brick and mortar, is there room inside your hotel that you could turn into a boutique? I don't know if it's feasible, but many hotels have diners and gift shops or boutiques inside. You could pay your hotel business for the space and retain visibility on both ventures at once. That minimizes initial costs though not as much as e-commerce.

janineaa
02-26-2014, 09:49 AM
If you are concerned with bank loans, it will not be as difficult for you because you already have a hotel business to prove that you are capable of running and paying for business expenses. There is usually a collateral when loaning from a bank, so you may be able to use the hotel business. I think it depends on the country though and what they require for you to be able to loan. Also, if you are thinking of putting up a clothing line, it would be more simple to start online. You can showcase your designs on social media, set up your advertising and marketing tools such as having endorsers, giveaways and print ads. Make sure you target the marketing to the right people though so that your investment would not be a waste. Once you are already popular online, you can venture into setting up your own store, where the major expenses come in. Mainly, planning everything and timing it is the most important thing to do now so that the future business will be up and running in a smooth manner.

Lithium
02-26-2014, 11:18 AM
It shouldn't be very hard to do, no matter where you live. However, if you're an European, it's a bit easier it seems. You will learn all the tricks and you'll be okay, I guarantee it. Everybody can do it, so why wouldn't you?

LindaKay
02-26-2014, 01:52 PM
By coming up with a good plan and making sure that your money is right, you should be fine. You should definitely plan for more funding than you think you need; not only could you incur additional business expenses that you don't expect (these things always seem to be more costly than you think), but you will also need to have some cash of your own on hand to get you by while you're building up your business. Good luck! I can't wait to hear your success story.

Francisco23
02-28-2014, 05:03 PM
Plan. Plan everything. Work out costs (everything!), marketing plans, potential profit and so on.

This will produce many benefits, but in the context of your question:
- an idea of how much money you will need to invest to start with
- something to present to your bank, so that they can see that it is a serious proposition.

In fact with respect to your bank, I would suggest that you are unlikely to get a loan if you don't have a detailed plan.

Generally, the more detail you can plan, the less scope for problems... but oif course always try to have a backup scenario in mind should things not go as you expect.

Hope this helps...
I find that to be true. Some information must be deliberately withheld from the loan officer, unless he/she really probes. They are looking for security/collateral...so keep confidential.

dolly fsession
03-05-2014, 07:03 AM
When starting a business it's best to keep liabilities to an absolute minimum. Instead of looking at commercial premises to let

tspires2
03-05-2014, 08:12 AM
I would not ever call starting a new business super easy but it you eat, sleep and breathe the new business it can defiantly be an amazing adventure!

A clothing boutique is kind of my dream too! I am starting an online version as we speak!

Lithium
03-05-2014, 11:54 AM
You just need to be extra careful and plan everything before doing something. This way, you won't fail and you'll make profit too!

DomDom
03-05-2014, 02:18 PM
You just need to be extra careful and plan everything before doing something. This way, you won't fail and you'll make profit too!

Yeah! Minimize your risk and be prepared for every thing that might go bad!

daleo717
03-05-2014, 02:26 PM
You definitely need to have a good business plan to present to the bank loan officer. It can be very difficult to get a start up loan for your business, especially if you don't have any money of your own to put into your business. In this business plan you need to let the bank know how much of your own money you will be using, your projected sales and expenses for the upcoming year. Also the bank will want to know your background in the field your business is in. They will also ask what kind of schooling you have such as a degree in business etc.

They will also want to know how you will manage the day to day operations, how you will promote your business and your objectives of how much money you are wanting to make. They will also want to know the amount you need to make a profit.

Having a well thought out business plan is the key to getting a loan. Be very prepared and go over your plan and practice what you want to say.

novasparker
03-09-2014, 07:19 PM
I am of the opinion that it is never a good idea to start a business on borrowed money. It takes too long for a business to truly become profitable and if you are saddled with debt payments, it makes it that much harder to put a business in the black. If at all possible, use money you have set aside, get an angel investor or raise money through crowd funding before you take out a loan. If you have to take out a loan, see if you can take one out of your other business without jeopardizing the cash flow for that business. Then, when all else fails, head over to the bank and see if you qualify for a business loan. But use this as a last resort.

idlecuriosities
03-09-2014, 10:39 PM
Running your own business is a labor of love. Your heart really has to be in it if you want to be successful. You're going to be putting in a lot more time than if you worked a regular full time job, and the stakes are a lot higher. That being said, if you're confident in your business idea go for it. Use the experience that you have gained from the hotel business and hit the ground running. I wish you the best of luck.

PaulCargo
10-27-2014, 08:28 AM
For setting a business you have to do a proper marketing of your business. You have to set a financial base for your business, keep a absolute liabilities with you to overcome from loss from the business. Apply for a loan at a minimized interest.

TitleloanSC
11-01-2019, 12:29 AM
Yes, I agree with your plans Businessman. thanks