When I first started my business I didn't have much money and for sure didn't have the personal financials to grant bank financing.
I wanted to start an RV rental business.
So I started reaching out to sellers that were selling RVs in my criteria on facebook marketplace with a simple proposal. Would you be willing to owner finance your unit often times with favorable terms to the seller knowing I could generate thousands of dollars a month from renting it.
Some owners were happy to owner finance the units, some preferred the consignment model and most didn't want to owner finance at all.
This is how I got started with my first few RVs before proving the business model was profitable, laying out a business plan with a full years profit & loss statement and presenting to a bank where I was able to grow further using bank financing for each unit (7 figure relationship).
Learned a lot from that process and was able to craft a proposal that worked for owners actually interested in entertaining that idea. It was not easy at first.
Wanted to share this story of an example of how you can start a business (even one that is capital heavy like this one) without money.
- cheers
How I Started A Business Without Money
byu/YesWallet inEntrepreneur
Posted by YesWallet
5 Comments
Great stuff, man. Thank you!
That’s a smart way to start a business when you don’t have much money! What key lesson would you say was most crucial in transitioning from owner financing to securing bank loans?
Bravo!
I always teach people that you can do two things to start a business.
Buy and then sell
Or
Sell and then buy
I prefer the second option, and even with capital.Now, I tend to use this option primarily. It’s a skill set. The more you utilize it, the better you get at it.
We had no hope of financing our commercial truck parts, manufacturing business in the beginning, so I had to sell and then buy. Our profit margins are very large, so we were able to sell large quantity deals at a discount and collect thirty percent up front. The balance was due at the bill of lading. With our profit margins, the thirty percent covered all the costs plus patted the order with some extra inventory for us. We then reinvested the seventy percent in a larger inventory order.
Once we had inventory, we could close smaller monthly reoccurring deals to shops all over the country.
Then, it was just managing cash flow, sales velocity, and inventory orders. It’s taken eight years to get ahead of the game, but the company has grown massively in that time. I was looking back this morning as I worked on a new project. Who were times one of five thousand dollars inventory order was massive for us, and we would stress about every penny. Now, we have multiple inventory orders running simultaneously, all in the seven figure ranges. It’s still the game, just bigger numbers.
How big is your rental business now and did you expand into other services ?
How would you do this in the lending business?