Not long ago, I was laid off from my job at an auto repair shop. I have some tools of my own and was thinking about opening my own business. The problem is there are some tools I still need and can’t afford. Do you think I should get a small loan—maybe $15,000—to set up my shop and get into business?
Dave Says: I just can’t get behind this idea. Right now, you’re unemployed and looking at going into debt. That’s not a good plan. According to the Small Business Administration, nearly 80 percent of new businesses fail within the first five years due to debt payments. I started my business on a card table in my living room years ago, so I know it can be done without going into debt.
George, you have your own tools and the know-how. Find a place to work, do the jobs you can with the tools you have, and then save up for the other tools you need.
If you’re talented in your field and you move slowly and smart on this deal, you’ll have a thriving business on your hands and no debt to eat up the money you make.
This way, you’ll own the business instead of it owning you!