A client comes to me with a potential business idea - Fishery. She has conducted her market research. It is a viable business. She has written down her business plan and the rest of them. Here is are the main issues:-
a) Experience - She lacks the experience in fishery. All she knows about the potential business is hearsay, her research both online and offline, and the Facebook groups she joined. She claims she's going to have a guide from a friend who has done the business in the past.
b) Funding - She has no funding or rather, she has less than 10% of the funds needed to kick-start the business. She is therefore considering debt financing.
Furthermore, according to her, this is going to be a side-hustle for the main time as he already has a job that brings in income every one. When I quizzed her on how she intends to pay the debts she said from her main job.
I want you to act as a financial analyst and provide advice to her. Should she go ahead with the business, since she said it is serving as a side hustle or should she not even venture into it considering that she has no experience and even though she may be able to pay off the debt from her main job, her lack of experience may cause the business to fail ?
I think she does not have clear thoughts about this. Business is something that can not be taken for granted just like that. It's effort, funds, roadmap, and most importantly at least a prior experience of the field in which one is going to invest.
You can't just do business in anything without experience. Many of them will say nah it doesn't work like that. You get the experience as you grow the business. That kind of motivation is really fine but in her case, she does not have funds which means she will either take the big loan or may mortgage something big (like a house, property, etc) which won't be good. In this scenario, it would be terrifying for her if she loses her business with time.
Things will escalate to complicated financials and may end up with unwanted debts.
It's far better to consult with accountant first locally. Have clear path of the whole thing.