Hello all. My soon-to-be-business-partner currently does a side business manufacturing a "widget". He does the production out of his garage and is quite limited when it comes to output. He and I want to put 30k together and buy/build a property. We estimate the property and immediate business needs would be around 100k. The new property and equipment would increase production output by approx 5 fold. He is currently bringing in $1500-$4000/week (for the past few months) in gross revenue with about a 90% gross margin. He is currently having to turn away business because of his production limitations.

Our plan is as follows: we partner together to get the building built....my 15k buys me a small percentage of the business. The simply fact of increasing his production will increase his revenue. We intend to bring me in at a later date in sales/partnership role to increase business.

That is the short and skinny on the deal. My immediate responsbililty is to write a business plan and get us some money.

I do have all his cash flow history. Please advise where I should go for money after my Business Plan is ready or anything concerning our plan. thanks

It does sound good, but I would like to challenge your primary premise to begin with. You mention the purchase/construction of a building as the core of your plan. My first question is why own when you can lease? At this stage of the game, when you are looking at a business that while profitable has been in operations for a small period of time, you could go wrong by choosing to get into a property that might soon become either too big or too small.

I know that you thinking appreciation, but acquiring the property could very well cost you 4% in financing/closing costs and an additional 5% in selling costs when it is time to dispose of it. You would need a 9% appreciation in order to break even.

If you are still thinking of buying or constructing a building to house operations then you need to talk to a banker about it. The problem is that being a startup would require the loan to be guaranteed by a government agency {think SBA or similar} to make it work at most lenders.

Do not be afraid to walk into a lender or two even before having the plan ready to find out how they would look at the request and what they would need from you in order to make it happen.

Good luck