5/01/2006

Advice from Nashville's leading Financial Aid Advisor Dave Ramsey

 
Dave Says
By Dave Ramsey
Author of:
Financial Peace and
The Total Money Makeover

"Small auto repair business needs equipment!"

Dear Dave,

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?

George

Dear George,

I can’t recommend that you go into debt to start this business. Don’t get me wrong, I love it when a person has the drive and talent to open their own business. But right now you’re unemployed and looking at going into debt. That’s not a good plan.

According to the Small Business Administration, 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 slow 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!

- Dave

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