Ins and outs for starting a business

[RVOxonDav]

My nephew is about to inherit some of our old mans land assets in the will. The requirements he set for the lad were that he has to either have started a family and so he could build a family home+/farm or come up with a meaningful business proposition. I want to help him as much as i can as his father isn't around anymore and no one else got given requirements for any other assets, I think its just tough love and motivation for him to plan his future. I don't know much about business but I've already told him to start talking to an accountant and look into taking classes for whatever he would need to learn. Is there anything he can do ahead of his meeting to get his business plans into motion, I know a lot of the paperwork and back and fourths can take a long time! What can I look into whilst he's got all this on his mind and plate?

He' thinking of converting an old barn on the driveway into a small shop for RV parts and a little sort of community shop, whilst turning the main land into a camping grounds.

[Ray,IN]

While I know nothing of starting up a business, when considering building a CG with FHU the first requirement is location, location,location. The last I read each FHU site might cost $50,000 to construct from bare land.
We have retired owners of RV parks as members of irv2.com, they will have experience and knowledge to share.

[Tha_Rooster]

Originally Posted by RVOxonDav

My nephew is about to inherit some of our old mans land assets in the will. The requirements he set for the lad were that he has to either have started a family and so he could build a family home+/farm or come up with a meaningful business proposition. I want to help him as much as i can as his father isn't around anymore and no one else got given requirements for any other assets, I think its just tough love and motivation for him to plan his future. I don't know much about business but I've already told him to start talking to an accountant and look into taking classes for whatever he would need to learn. Is there anything he can do ahead of his meeting to get his business plans into motion, I know a lot of the paperwork and back and fourths can take a long time! What can I look into whilst he's got all this on his mind and plate?



He' thinking of converting an old barn on the driveway into a small shop for RV parts and a little sort of community shop, whilst turning the main land into a camping grounds.

Gifted or inherited land will be his and only his to do with as he wishes. Once he builds on it and house/ business has wife’s name on it then it’s no longer his it’s theirs. So be careful it can all be gone in a second.

[n2zon]

To start a business, he needs a sound business plan. It should include funding, expenses, expected revenue (goals!), and so on. Do NOT try to wing it. A high percentage of startups fail. My brother started a successful company, but he has a business degree and left a major company as a VP (having started as a branch manager) to start it so he had a lot of experience.

Some money up front to engage the *right* consultant can save his bacon...or convince him that it's not for him. Both are OK. Not everyone is cut out to open a business and make it work.

Oh, and be prepared to (a) work 80+ hour weeks and (b) understand that the business will own you as much as you own it.

[Gammel]

The Small Business Administration has a ton of good info available including worksheets and a forum/mentoring program. He needs to do his homework otherwise failure is highly likely. If it was easy anybody could do it.

[jacwjames]

Originally Posted by n2zon

To start a business, he needs a sound business plan. It should include funding, expenses, expected revenue (goals!), and so on. Do NOT try to wing it. A high percentage of startups fail. My brother started a successful company, but he has a business degree and left a major company as a VP (having started as a branch manager) to start it so he had a lot of experience.

Some money up front to engage the *right* consultant can save his bacon...or convince him that it's not for him. Both are OK. Not everyone is cut out to open a business and make it work.

Oh, and be prepared to (a) work 80+ hour weeks and (b) understand that the business will own you as much as you own it.

This is good information. I have an MBA and if you do it by the book it takes a lot of effort to develop a good business plan which you will need to go to any bank to get a loan.

I had a couple of friends that were trying to do a small manufacturing startup and I helped them write their plan. Understanding the total costs is one side of it but you also have have an understanding of the business segment. One tool that they teach in business school is a SWOT analysis, STRENGTH, WEAKNESS, OPPORTUNITY, THREATS! https://www.mindtools.com/pages/article/newTMC_05.htm
I had one class that dealt with this for a semester. Once you understand the concept and approach a business realistically it's a good tool.

[redbaron73]

Here is a simple business plan, and one that I have personally executed several times. The key difference is the startup costs are going to be $0.00


Plan Overview:

Acquire land for the purpose of future resale value. The land will be maintained in accordance with local laws and ordinances, with minimal fixed costs. The largest expense will be the annual property taxes.



Key Facts:
Capital required to purchase raw land: $0.00
Monthly maintenance required by local ordinances: $x.xx
Annual Property Tax: $x.xx
Expected unrealized rate of return: x% annually


Additional income: The land will be leased as a grain field for an amount to offset the local taxes, fees, and insurance requirements.

[Xmcdog]

I started by being laid off from a global company. Best thing that ever happened to me. Lol. The tiny two hours a week business grew for 12 years until it was turning over a million per year. If you have a dream go for it.

Decide what you want to do. In this case check to makes sure you can get all the permits you need. Funding, etc. don’t need to develope the entire place before you open. Start small and build on a little each year.
Good luck

[Bigceasar]

Originally Posted by redbaron73

Here is a simple business plan, and one that I have personally executed several times. The key difference is the startup costs are going to be $0.00


Plan Overview:

Acquire land for the purpose of future resale value. The land will be maintained in accordance with local laws and ordinances, with minimal fixed costs. The largest expense will be the annual property taxes.



Key Facts:
Capital required to purchase raw land: $0.00
Monthly maintenance required by local ordinances: $x.xx
Annual Property Tax: $x.xx
Expected unrealized rate of return: x% annually


Additional income: The land will be leased as a grain field for an amount to offset the local taxes, fees, and insurance requirements.

You left out one of the most important calculations, the opportunity costs. Selling that property and either investing the proceeds, paying off debts or starting a business the guy is actually qualified and interested in would likely be much more profitable and beneficial than holding raw land and hoping for appreciation. We have no idea how valuable the land is as farming ground. It could be very valuable irrigated bottom land or it could be grazing land only capable of supporting one pair (cow and calf) per each 50 acres. The best ground may rent for 100s of dollars an acre, grazing lands may be as low as pennies an acre. And should the need for cash arise, selling farmland doesn’t often happen overnight.
Raw land is generally a rich man’s game. Carrying costs and opportunity costs are high and the average person doesn’t want to wait decades to reap their investment gains from a very illiquid investment.
And if the will truly only allows two options, start a business on the land or live on the land and farm, the dead guy was a jerk for trying to control the heir’s future. I would be checking my legal options to break those covenants and if I couldn’t I would curse the dead and walk away. It’s my life not dear departed relative’s.

[redbaron73]

I think your missing the point...the land is his only if he has a business plan.

Keep it simple and play the silly game with the probate process. After the land transfers, do with it as you wish.

[Bigceasar]

Originally Posted by redbaron73

I think your missing the point...the land is his only if he has a business plan.

Keep it simple and play the silly game with the probate process. After the land transfers, do with it as you wish.

I agree. But there appears to be some kind of continuing restriction that forces him to either have a business or farm. Maybe he isn’t actually the heir to the land but an heir to a continuing trust of some kind. If once probate closes he isn’t free to do whatever he wants with the land I would just pass. No reason to be forced into something you can’t easily get out of or don’t want to do.

[Hpozzuoli]

How much land? Start a campground if he can get the infrastructure funded somehow. Doesn’t need to be huge. If you are near a well traveled, major highway a quick over nite campground would be best. No frills, no long term rentals, just meant for passing thru. I would want full hook ups and decent wifi for a one nite stand. You need to provide some benefit over cabelas parking lot.

[Bigceasar]

Originally Posted by Hpozzuoli

How much land? Start a campground if he can get the infrastructure funded somehow. Doesn’t need to be huge. If you are near a well traveled, major highway a quick over nite campground would be best. No frills, no long term rentals, just meant for passing thru. I would want full hook ups and decent wifi for a one nite stand. You need to provide some benefit over cabelas parking lot.

And if he doesn’t like the business, can’t get funding or it fails, do the terms of the will allow him to sell the property and use the proceeds to make himself whole? We have no idea if the property is suited for an RV park. It could be at the end of a 10 mile dirt road. “Build it and they will come” only happens if Kevin Costner builds it and James Earl Jones does the advertising.
There are some wills that have clauses that make the inheritance more curse than blessing. A famous example is the philosopher Jeremy Bentham. He left his estate to a university with the stipulation his corpse be wheeled into meetings of the trustees and he is listed as “present, not voting” in the official meeting minutes.
If the will stipulates only farming or a business run by the heirs can exist on the property and the heirs cannot ever relinquish ownership to others than it fits the curse model perfectly.

[MSHappyCampers]

Just remember that most small businesses fail in the first 12 months, for one reason or another.