Self-funded expansion for a typical small business owner?
I'm sure I will get made fun of for this and be called an idiot for not having such basic business knowledge.
In any case, when you hear the success story of, say, the Indian guy who now owns 50 gas stations - how the hell did he finance that? Can someone offer up some numbers, as a very basic/rough example?
For instance:
You and your Indian wife work your asses off for 15 years, scrimping and saving along the way as Indians should. You buy a gas station, or liquor store, or whatever. Even if you cobble together 90% of the cost through SBA minority-targeted loans, you only have $50k to start with. End of step 1, you own a $500k liquor store 90% saddled with debt and the annual interest exp to go along with it.
???
PROFIT. You now own 50 liquor stores, worth $25 million.
So what does #2 consist of? They must be getting a pretty impressive ROI on their first investment. What sort of EBITDA/EV is involved with little retail businesses this size?
This does not have to be specific to the retail industry. For any small business I'd be curious how this growth is funded.
First of all, Indo/Pak people save up a lot of money. They have multiple business partners. My cousin started out with a 25% interest in a gas station in a sketchy part of Houston. He started doing other things on the side, he opened up one of those gambling places (illegal) with tinted windows n all, he had a cop on his payroll so he didn't get busted. He made a lot of money this way. I think his gambling business went down hill, but he did manage to save up some serious cash. He now owns 2 gas stations worth over two million, and he's looking to expand.
I don't think they look at numbers the way an analyst would, he just straight up knew how to hustle. In Houston, we have place known as Harwin, its like the biggest black market in the state or the country (not sure). He had a lot of connections there and he made a lot of profit bringing goods from Harwin and selling them at his gas stations.
Financially, he's pretty comfortable right now. Last time I spoke to him he was looking into buying an apartment complex with some partners.
Not just any "Indian" guy can have 50 liquor stores/gas stations, you have to be a business savvy individual regardless of your race/ethnicity.
Aut voluptatum veritatis autem assumenda natus eum. Eaque eius dolorem ratione itaque dolorum sint doloremque.
Deleniti labore quos earum minus. Sunt aut ducimus est et ea consequatur. Neque qui dolorem sit reiciendis explicabo. Voluptatem maiores sed ea. Cumque dolor qui pariatur rerum magni. Commodi unde excepturi modi nulla voluptas officiis nemo. Provident odit doloremque voluptas et iste.
Voluptate consectetur aut eaque cupiditate eligendi. Saepe doloribus impedit dolorem porro accusantium quia. Dolorem non aut optio neque. Ea odio quis expedita voluptas non enim temporibus. Ducimus ratione pariatur ut et aut.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...