How to expand your business (example of renting trucks)
 

One guy, A.M., emailed me, mentioning that he had a profitable business renting out pickup trucks...

He wants to expand the business, but he doesn't have the money to expand as fast as he wants to.

How would you solve this problem?

The way I'd look at it, you have four options...

1. Get one or more investors. The investor then owns a part of the business. You use the investor's money to buy more trucks, to expand the business. (To do this, you may have to make your business a company, and you should seek the advice of an accountant who can help you with this.) Sometimes investors can cause problems down the track though. I would be sure to retain at least 51% of the business (so you can't be kicked out of your own business).

2. Get a loan. This can be from the bank, but it can also be from family and friends. You can use the loan money to expand the business. (Some people offer to pay the money back plus extra, by a certain deadline, as an incentive for people to loan you the money.)

3. Grow the business using just the profits. This way will probably be slower, though, than the other ways.

4. Go to the casino, go to the roulette wheel, and put all your money on black. (Ha, just kidding, don't do this!) :)

What would you do?

Best wishes,

Dien

Why a circular saw guide flopped with crowdfunding...
 

By the way, with many other businesses, there's also another option, which is...

Crowd Funding

I didn't mention it mainly because I'm not sure it would be suitable for a truck rental business I was talking about...

But for many other businesses - it's a great option...

Have you had any experience with crowd funding?

One friend of mine created a small device which provides many sensors for measuring the environment... humidity, temperature, and so on. He used crowd funding, which successfully funded a production run at a factory in China!

Another friend of a friend created a kind of guide for circular saws. He tried crowd funding - but unfortunately fell very short of his goal... So it didn't work out for him...

Why didn't crowd funding for the circular saw guide work out?

He was asking for a lot more money in total to fund a production run, compared to my other friend... (It was something like $80k total for the circular saw guide, vs about $5k total for the environment sensor device...)

Even if you don't consider that, the sensors crowd funding still out-raised the circular saw guide... (About $5k raised, vs. $2k for the circular saw guide...)

I think both products are "niche" products. However, the people interested in the first product are much more "tech-oriented" people, and they're more likely to participate in crowd funding sites. Most people interested in the second product are tradespeople such as carpenters - who are probably less "tech-savvy" than the first group, and less likely to participate in "crowd-funding"...

Nevertheless, for many, crowd funding really is a great option...

(It's actually a kind of "pre-selling" - you sell the product before you make it! However, if you don't end up delivering the product, you could get into legal problems if you don't refund the money...)

Best wishes,

Dien