All is well on the financial front, however a teacher friend came to me with a business proposition that I have mulling over for the best couple of days. I think it is an excellent idea but the downside is I will lose a big chunk of my E fund.
So my friend would like for me to partner with her and open an early childcare/daycare center. My initial investment would be $10,000 for 35% ownership. We would also have to split the title of program director and work at the center 2-3 days a week from 3pm-6pm. The business plan seems solid, location is already zoned, and she is thinking about opening sometime around junish.
My concern is putting down $10,000 for only 35% ownership. Does that not seem right to you? If I am putting down $10,000 I want at least 40% ownership. Perhaps we could negotiate something like me investing $7000 for 30% ownership.
My second concern is my money being tied up for over six months with no return. The industry average for a day care center to reach profitability is 12 months (if we are lucky 7 months), however, in Philadelphia there is a waiting list at most day care centers.
This is a big risk...but this risk can change my life. From the projected income/expense it looks like I could bring in about $14000 gross my first year and then more and more the second and third year. There is the opportunity by year five for the business to grow to 2 more new center and etc. By then it should be all about the passive income!
Any advice or ideas??
until next time, think prosperous thoughts