I was challenged with a similar dilemma two years ago. Was doing great with my online undertakings when a friend approached me with an investment prospect!
It was for the manufacture and packaging of Tomato Ketchup for a large International chain of Fast Food restaurants in the Indian Sub-continent.
I was initially cynical, considering the investment required. (It was close to $500k with my friend/prospective partner being able to raise $200k and the rest automatically becoming my responsibility.)
The factory location purchase, machinery imports, hiring staff, trainings, logistics (Company owned transport vehicles and then tie ups with major logistic companies for external dealings), raw material sourcing (Yes, raw material sourcing was our responsibility).
Though I was doing good, I was in no position to simply invest $300k seamlessly into a venture, that I previously had no idea about. Needless to say, I raised the money from external sources (read loans).
And then I fucked up big time. After a year of production and flawless delivery, the fast food franchisee simply didn't renew our contract (A long story attached to it) owing to certain fiscal misgivings by the partner.
Everything went from being downright awesome to being filthy ugly within a span of 1 month.
Fortunately, most of the secondary investment was profitable within the first year itself. So I wasn't completely fucked. I still owned the property, the machinery and the transport vehicles.
I leased the property + machinery to another company and floated a small transport/logistics companies to pay what we owed the bank in terms of vehicular loans.
This one year also gave me a very good chance to mingle with likeminded manufacturers and opened new avenues for going offline. I now have a clearer idea of when and how to go about doing an investment. What are the factors to be considered, the demographics involved and a lot more.
I bought a small unit in a suburb that manufactures Industrial Glue. We're working on revamping the entire unit and upgrading the machinery - so by the end of this year, we should almost have tripled our output. Finger's Crossed.
Just thought I'd relate my experience.
It was for the manufacture and packaging of Tomato Ketchup for a large International chain of Fast Food restaurants in the Indian Sub-continent.
I was initially cynical, considering the investment required. (It was close to $500k with my friend/prospective partner being able to raise $200k and the rest automatically becoming my responsibility.)
The factory location purchase, machinery imports, hiring staff, trainings, logistics (Company owned transport vehicles and then tie ups with major logistic companies for external dealings), raw material sourcing (Yes, raw material sourcing was our responsibility).
Though I was doing good, I was in no position to simply invest $300k seamlessly into a venture, that I previously had no idea about. Needless to say, I raised the money from external sources (read loans).
And then I fucked up big time. After a year of production and flawless delivery, the fast food franchisee simply didn't renew our contract (A long story attached to it) owing to certain fiscal misgivings by the partner.
Everything went from being downright awesome to being filthy ugly within a span of 1 month.
Fortunately, most of the secondary investment was profitable within the first year itself. So I wasn't completely fucked. I still owned the property, the machinery and the transport vehicles.
I leased the property + machinery to another company and floated a small transport/logistics companies to pay what we owed the bank in terms of vehicular loans.
This one year also gave me a very good chance to mingle with likeminded manufacturers and opened new avenues for going offline. I now have a clearer idea of when and how to go about doing an investment. What are the factors to be considered, the demographics involved and a lot more.
I bought a small unit in a suburb that manufactures Industrial Glue. We're working on revamping the entire unit and upgrading the machinery - so by the end of this year, we should almost have tripled our output. Finger's Crossed.
Just thought I'd relate my experience.
