23 year old with 200K inheritance. Entrepreneurial ideas? Help

**bjl584** · 08-20-2011, 03:41 AM

Do you have any idea what you would like to pursue for a business? Do you have any skills that you could put to work in a business of your own? At this time would you be better suited to sit tight until you have a more solid plan? You are 23 and have $200,000. You have a huge advantage over other people you age (financially speaking.) Is anyone managing this money? Do you have the ability to manage it yourself? If you manage it properly, then you could probably retire a millionare by the time you are 40.

**DRILLINDK** · 08-20-2011, 04:01 AM

Keep your job, improve your skillset and education.

**snafu** · 08-20-2011, 06:29 AM

I suggest making appointments to talk to the three franchisees of places you go to. Make up a list of questions and ask "if they could turn back the clock, would they still buy this particular franchise.

The latest big success in my community is 'Truck Stop.' These are big rigs serving quality fast food foods from these giant, shiny rigs. Most are ethnic based and are licensed to park at designated stops at different times of the day. For example they will be downtown for lunch, in suburbs 5 - 9 PM. different streets on different nights. I'm wondering what business will be like when the weather is ghastly.

**jpg7n16** · 08-20-2011, 06:31 AM

Do you have any debt?
What experience do you have owning/operating restaurants?
Which franchise were you considering? What are their minimums to open a franchise?
Why should they franchise with you? What do you have to offer their firm?

About the current investment:
Can you tolerate the high risk stocks?
Have you spoken with anyone about an asset allocation?
Did you inherit them in a brokerage account? or in a retirement account? (retirement account will be taxable when withdrawn)

FYI - Taco Bell requires a $1 million net worth before they'll consider you. So depending on which franchise you're looking at, $200k may not be anywhere close enough to even get your foot in the door.

Taco Bell Franchise Information

**mcfroggin** · 08-20-2011, 07:20 AM

Stay in corporate america until you find an idea/opportunity that you can't pass up.

**mcfroggin** · 08-20-2011, 07:21 AM

You could also start your own small business from home for minimal start-up capital and start a home office deduction!

**maat55** · 08-20-2011, 07:35 AM

You might want to research profitable franchises and find out how much upfront money is involved. Afterwards, I would go to work(part-time) for one of them for a couple of years to get to know the business. This may allow you time to grow your money for an initial investment while growing your knowledge of the bisiness.

**recentcollegegrad** · 08-20-2011, 08:03 AM

Thanks for the insight everyone. The money is managed by a money/asset mgt firm in very diversified mutual funds, stocks, etc. Since 2005, I have a net return of 4-4.5%, which I am happy with given the state of the economy and considering the average return of the s&p/dow since 05 (I believe in the red). Hopefully by the time I'm in my 50s and 60s the money will be well into the 7 figures, assuming the economy eventually improves and I don't touch it.

As for a start up, I don't know exactly what I would want to do but have just given thought to the idea. I realize I am lucky and have an advantage over others because should I want to start my own thing, I have funds which would help me a lot. I think my plan is to get some experience and see how I like my job for the next 5 years, save some money and keep my 'ears peeled' for entreprenuerial ideas in the meantime.

**97guns** · 08-20-2011, 02:21 PM

opening any kind of business involves risk, more so in the economy. you could easily see that 200K vanish before your eyes or see it double up in a year. look into real estate as a cash generator much less risk, renting out real estate is a business.

**DKAS** · 08-20-2011, 06:36 PM

If you're happy with your job, why not get an advance degree in the field. I don't have direct experience going through an MBA program but from what I hear, it can be a great source of networking (probably depends on the school). You might be able to team up with others in the program on a great idea and go from there. And if nothing else, extra education wouldn't hurt either.

**rj.phila** · 08-21-2011, 04:27 AM

A few bullet points from a small biz owner:

1-IF it works, indy biz will work primarily due to this fact: sweat equity. Jumping fields to start a biz just so you can be your own boss is riskier than starting a biz in a field you work in already.

2-expect to work looooong hours. "throwing away your 20's" is quite feasible. If you love what you are doing, you won't care, cause you'll love every minute of it. If NOT, I'd be surprised it will pan out well. Take the lowest rung on the ladder of your biz; if you aren't willing to do that job at any point, bad news.

**Scanner** · 08-21-2011, 04:43 AM

Small business owner here too. I am on the precipice of being "bought out" by corporate America - I may go work for "Da' Man" here shortly, and happily do so (made thru Interview 2 pretty well).

My only advice is this:

There is probably only one more expensive place to "Find Yourself" than College (although lately, with their exhorbinant fees and tuition, that may rise to first place) and that's starting a business.

It's okay you don't know if you are going to like it, be good at it, etc. . .but I guess what I fear is (and you too) is that if you want something that could drain that $200,000 more quickly than a a 5 inch hole in a bucket, it's a small business. When you are a business, let me tell you - Everyone, I mean EVERYONE, has their hand out and wants your money. Landlords, utilities, vendors, employees expect to be taken care of.

Ever wonder why you see so many commercials aimed at small businesses, romanticizing it? Because company's like BoA, AMEX, so many I can't think of, just lick their chops at small businesses. It's not that they really want to help you or care if you suceed.

You will apply a big suctioning force on that 200K.

Now. . .am I telling you not to do it? No. . .I am not. . .in fact, you are SOOOO young. . .why not take that money and set aside $20,000 (10% seems reasonable) and invest the rest for retirement? You could even, as you are working, keep adding to the 20K figure, if you feel you need a bit more for start-up.

Yeah, it may not buy you a franchise, but I think I would only recommend a franchise perhaps for a second business. Start something more simple, like an office cleaning business or something (just as an example of something simple), and see if you like the "small business culture." Sell it for something (even if $500 or something) to get the idea of that you "built a small business and sold it" to put on your resume.

(that is the purpose of any small business - to eventually be sold)

Good luck.

**red92s** · 08-21-2011, 06:19 PM

A food franchise usually requires a pretty healthy chunk of change. That's why so many are owned by former professional athletes: they have the capital, the name, and the connections to make it happen.

Honestly, the position you are in is extremely enviable. Personally, I'd sit tight with the money for a bit. Even half of that money applied towards a future home could make life significantly less stressful. Living with no mortgage (or a very small one) is a luxury most people will never see.

**Frugal** · 08-22-2011, 10:33 AM

IN my opinion (and I don't know all the details of your situation), I would definitely keep a stable, good job and not throw it away. It could be really hard to replace in times like these, with unemployment at record highs! Not a lot of people have a good, well-paying, stable job. Businesses are great, but risky to start when one is young. Plus, our friends tried to open a store recently, and I think they had trouble getting the loan. Business loans are a little tougher to come by right now, with the economy still in the tank.

23 year old with 200K inheritance. Entrepreneurial ideas? Help