My mother and father want to start a business.
A tow truck business to be exact, towing cars and shit. My grandmother has about $100k she is going to give them as a start up. They plan to move to Florida, and start their business there. Neither of them have business experience, neither of them have a degree of business studies (Or anything related).
Am I wrong to think this is a retarded plan, and will most likely fail?
Should I voice my concern? Or should I just let them to do them?
They're both early 40s, and if this fails they will most likely have nothing and will work until they die.
So they're moving to a new town where they don't know the market, the people or the competition? That is going to be a problem.
The second problem is being handed all that free money. They will certainly blow it. I could start a towing service on $8k. Having limited funds makes you work harder and spend smarter. Having free money leads to laziness and unnecessary expenses.
My ex employer did this. The tricks he had to make him successful include being a mechanic, having a garage with 3 bays to take the vehicles he started with 1 truck, and 1 bay. He had sons to drive his trucks as he got more trucks. Once you have 24/7 coverage get a AAA contract to fill your mechanic bay. The trick is to anticipate why people need a tow, and capitalize on it. He also did recovery until his kids were getting shot at (chicago). There's alot more to it if interested, I have thought about going this route and learned alot from someone who currently runs the office of his mechanic shop with no license and I tanked from 9-5 because he is the boss. Must be good to sit on your ass and run shit with a coors lite in hand.
You really should stop them. $100k isn't a trivial amount of money. If you took that, put it in a safe fund that returned 7% annually on average, you'd have a healthy $700k+ to take with you to retirement in 30 years.
That's not even the best way to use 100 grand, but it's better than what your parents are doing.
I can guarantee you they will fail. You could start up with half of that. It's also an incredibly competitive business no matter where you go. You have to try and undercut other pick-ups while speaking with a person that was likely in an accident, an accident that could have killed someone for all you know, to try and determine if they have the money or insurance for a tow. You end up in what could easily be one of the shittiest days in the clients life, and you have to play the part of a business man.
I'm just the child in their eyes, they would never listen to me. I've somewhat tried to tell them they're not going to find happiness, or the American dream, or whatever there. But do you see how there is no way they would listen to me?
If you're suggesting I go down there with them. Why would I do that? I have my shit together up here in NY. I'm not going to completely change my life just because they're having a mid life crisis and are literally being handed a free 100k to fuck off with. Besides, I'm in ROTC.
K, if you have a path you like, keep on keeping on good luck. I personally see an opportunity to create something that could be a legacy and make ALOT of money if done right. I would support family and help them, but I was raised with an emphasis on family and wanting to see them succeed. With 100k they can definitely go far if done right. If you want to see them succeed help however you can, research of the market is the first thing that comes to mind. I wish I could talk my folks into something like that. Be set for life.
Oh shit. Well that's not going to happen they could probably make 6 figures after 6 years. But if they want to do it right they need as many trucks as possible. Gl to them man, they're gonna need it.
Why Florida specifically? Has the proper research been done for selected areas? When will you break even? When do you see to make profit? If you invest a $100k and you can't calculate when and how you will break even, don't even consider doing it.
Tow trucking is meh.
Like all fields with a lot of competition, the winner will be the person with the best handle on the logistics of the business and who executes the best- works the hardest.
I have a feeling that will not be your parents op