I have an idea for a small business I think is needed in my area. How do you feel about me keeping my current, high-paying job, and hiring a full-time manager to handle the day-to-day operations while I oversee things and handle accounting? If it doesn't break even or better, I'll just close it down. I look at it as being like buying or selling real estate while keeping a full-time job.
Really, this idea isn't a lot like real estate. Real estate will run itself, for the most part, once you find a tenant. Also, the number of hours you'd have to put into selling real estate on the side is nothing like the time you'd expend getting a new business off the ground.
To be honest, I don't think there's a high likelihood of success using this model. Unless, of course, you're willing to devote 40 to 50 hours a week to this new business, in addition to the time you spend at your current job. You'd have a better chance of making it work if you bought an existing business with a manager already in place. That way, at least you wouldn't have to be so entrepreneurial and constantly involved in things like adjusting the business model, dealing with customers and checking prices.
The secret ingredient to your small business success is you. And the problem with your plan is that you are only a small part of the equation. You are the ideas, the passion and the energy. You are the enthusiasm and the smile that greets the customers. Chains and franchises try to train this kind of stuff into people, but when something's your baby, it's really your baby. You're going do your best to grow it properly, and you're going to worry over it and treat it almost like it's your very own child.
I'm sorry, Ken. I just don't like this plan. If your idea is to swing by once in a while, eyeball things and crunch a few numbers, then you'd probably do more good just giving the money you'd invest in the venture to charity.
Dave Ramsey is America's trusted voice on money and business. He's authored four New York Times best-selling books: Financial Peace, More Than Enough, The Total Money Makeover and EntreLeadership. His newest book, written with his daughter Rachel Cruze, is titled Smart Money Smart Kids and is out now. The Dave Ramsey Show is heard by more than 6 million listeners each week on more than 500 radio stations. Follow Dave on Twitter at @DaveRamsey and on the web at daveramsey.com.