What would you do in this situation? Invest or save?

[Wexnident]

If you have plans to start a dream business that requires a capital of  $20,000 and you were able to make a savings of $15,000 which obviously isn't enough to start up the business, what would be your decision or advice?

1. Invest the $15,000 into a smaller business hoping that the returns will yield the remaining $15,000 in a short period. Note that this has the potential of failing and wasting the already-saved  $15,000.

2. Keep the $15,000 while doing other work that will yield the remaining money over a long period.

Would love to see your input or a better suggestion apart from the ones I pointed out above.

N/B
This is the typical situation a friend finds himself and we are just brainstorming in what best to do.

Context lacks a lot imo since it's for a friend. We don't exactly have their situation at hand and what said business actually is. Look in my case, my dream business would be something along the lines of a game studio, and assuming that the needed ratio (75% on hand, 25% still missing) is pretty much the same as what I need (since game studios should be a lot more expensive than $20k), I'd definitely go doing both 1 and 2 since game studios don't exactly give immediate profits, unlike say cafeterias and the like.

Ofc, this could be remedied by sorting out your finances and splitting the money you get so that you can party invest and partly store your money, but again, depends on context. If we assume we can't do both then yea, I'd go with 2 instead, especially if you consider your words "over a long period", so I'm assuming that at the very least, that $5k can take a long time to be earned, what more that $15k you can lose.

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[uneng]

Personally, I would start my business in minor scale. There is a 25% difference between desired bankroll and currently real bankroll, but that must be manageable. Do your calculations again and try cutting expenses for now, so your plan fits the 15,000$ you have. Or, you can borrow money from someone to complete the 20,000$... That involves some risk, but since we talking about investing into an asset, which will generate profit for you along the time, it might worth. Just make sure to never borrow money to invest in liabilities.

[Vaskiy]

When you think of think of the capital for the dream business, a wait is good according to me. In my case I'll risk a small part of the capital saved into some business or investment that could bring regular earning. Surely this will help me reach the capital requirements for the business. Maybe the time taken to start the business gets delayed.

The basic for all sorts of investment is through savings. When one hadn't got the ability to save, then for sure he isn't able to invest into any business. Every business have got the risk and we should have the patience to have a good study on the same. Maybe the same business can be done at a lower investment than what we've been planning.

[AmoreJaz]

Personally, I would start my business in minor scale. There is a 25% difference between desired bankroll and currently real bankroll, but that must be manageable. Do your calculations again and try cutting expenses for now, so your plan fits the 15,000$ you have. Or, you can borrow money from someone to complete the 20,000$... That involves some risk, but since we talking about investing into an asset, which will generate profit for you along the time, it might worth. Just make sure to never borrow money to invest in liabilities.

the OP and his friends should assess the real situation of their financials. and the potential of the business they want to start with. they can start with small business, but they need to see the demand of such business. study if it will truly generate revenue in the short time period that you are looking at. because once your small business is growing, you can easily expand it if the demand requires it.
but as much as possible, you should not loan money if you are not really prepared to pay for the interest that may accrued from this.

[DabsPoorVersion]

If you have plans to start a dream business that requires a capital of  $20,000 and you were able to make a savings of $15,000 which obviously isn't enough to start up the business, what would be your decision or advice?

1. Invest the $15,000 into a smaller business hoping that the returns will yield the remaining $15,000 in a short period. Note that this has the potential of failing and wasting the already-saved  $15,000.

2. Keep the $15,000 while doing other work that will yield the remaining money over a long period.

Would love to see your input or a better suggestion apart from the ones I pointed out above.

N/B
This is the typical situation a friend finds himself and we are just brainstorming in what best to do.

You better start a small business if you can't provide more than $20k for the business you are planning. You have to consider having an emergency fund and not put all your money on your business. Allocate at least 10-15% of your funds for your business, if ever that the business doesn't work, you can still have a reserved money to start a new one or to recover your business.

You can also start a loan and find a bank that offers a small interest, your money right now will be the reserve money, and your loan money will be used to run the business. The possible income will pay for your debt and if ever that it doesn't work, you can still have a reserved money.

[Texac]

You can also start a loan and find a bank that offers a small interest, your money right now will be the reserve money, and your loan money will be used to run the business. The possible income will pay for your debt and if ever that it doesn't work, you can still have a reserved money.

I'm not against borrowing money for business, but first you need to be sure of your plan.  you should not borrow money to start a business if you do not have a clear plan and just want to try with business.  moreover, with $15k and wanting to do business, we can also start a small business without needing a bank loan because borrowing capital will create more pressure for us.  borrowing money will make us more stressed and distracted. 

I don't know what it is like in your country, but in my place with a capital of 10k-15k, we can do a small business and still leave some savings.  there are many small business models with moderate capital that we can start, limiting borrowing.

[knowngunman]

1. Invest the $15,000 into a smaller business hoping that the returns will yield the remaining $15,000 in a short period. Note that this has the potential of failing and wasting the already-saved  $15,000.

2. Keep the $15,000 while doing other work that will yield the remaining money over a long period.

Would love to see your input or a better suggestion apart from the ones I pointed out above.

A quick question to you and your friend, how did he/she raised the $15k? If someone can be patient enough to raise $15k for a dream business, why not continue to do what earn you the $15k to make additional 5k needed?

If there's any other business in his mind then he should invest the money into that particular business and see how it will goes. Every business has the potential of failing including the one he's planning to start with the $20k. Business entirely is all about taking risk, you can either succeed or failed and learn the mistake to continue again. If you are too scared of the risk involved you can never start. Keeping the money is not ideal especially knowing that it will take a longer time to realize the remaining $5k. I have read series of advice on this thread coming from different individual and different geographical location, it's based on what everyone think will work for them including mine and decision is left for you to make. Apply caution however.

[Twentyonepaylots]

This is an interesting question. I would say if you want to start a business that would cost you 20 grand, then you're not prepared for something expected, I mean businesses with no extra money, I'm not sure what it is called, but I've learned that if you want to establish a business that is worth 20 grand, then you should have at least 30 grand with you for some unexpected outcomes especially for new business owners. For OP's case, IF you have like $15k on you, you should try looking for $10k worth of business, then make your $5k a safety net for you. For now, if you really want that $20k business then try to save it instead of investing it til you reach your target.

[Learn Bitcoin]

It exclusively depends on what business you are going to start.

Right. It depends on the type of business. Also the 5000 difference is a factor haha pike if it is just the difference, you can just start right? But if there is a huge gap in fund, I think you’ll have to save first before acutally staring the business.

Well, yes. As I said, if most investment goes to the arrangement, you need that fund early to start the business. Businesses like restaurants and similar types need the most investment in decorating and improving the environment. The cost of food is not much; honestly, they have to include many maintenance charges. These charges increase the business cost.

But if you run an e-commerce business that does not have that much cost, you have to spend your money on products and advertisements. You can increase the number of products later.

[dothebeats]

Much like almost all of the replies here, I'd say it depends. It depends on how urgent you need to start the business. If you are in a rush and needs to start the business as soon as possible due to important reasons then I'd go for option one although I'll surely have to make sure that I will be prepared for any risks and loses I may get for taking that action. However, if it isn't urgent and you can take your time, go for option as it is safer and less of a risk. Additionally, with option two, you can always think of additional ways to earn more for capital.

[xSkylarx]

Personally, I would start my business in minor scale. There is a 25% difference between desired bankroll and currently real bankroll, but that must be manageable. Do your calculations again and try cutting expenses for now, so your plan fits the 15,000$ you have. Or, you can borrow money from someone to complete the 20,000$... That involves some risk, but since we talking about investing into an asset, which will generate profit for you along the time, it might worth. Just make sure to never borrow money to invest in liabilities.

the OP and his friends should assess the real situation of their financials. and the potential of the business they want to start with. they can start with small business, but they need to see the demand of such business. study if it will truly generate revenue in the short time period that you are looking at. because once your small business is growing, you can easily expand it if the demand requires it.
but as much as possible, you should not loan money if you are not really prepared to pay for the interest that may accrued from this.

We really don't know the details of his business plan all we know is the capital that they need but if they didn't assess the situation of whether the business will strive or not then that is a huge problem as they are having a huge amount of capital without a proper business plan.

The problem if OP starts a small business first to see if that business will work is that he will still spend some money on it unless his business plan is to sell shirts which he can try to sell 10 of but if it is bigger then that would be a big problem.

[goldkingcoiner]

If you have plans to start a dream business that requires a capital of  $20,000 and you were able to make a savings of $15,000 which obviously isn't enough to start up the business, what would be your decision or advice?

1. Invest the $15,000 into a smaller business hoping that the returns will yield the remaining $15,000 in a short period. Note that this has the potential of failing and wasting the already-saved  $15,000.

2. Keep the $15,000 while doing other work that will yield the remaining money over a long period.

Would love to see your input or a better suggestion apart from the ones I pointed out above.

N/B
This is the typical situation a friend finds himself and we are just brainstorming in what best to do.

This depends on whether or not I can reduce the costs or not. Instead of spending an x amount of money for marketing, you do the marketing yourself. Sure it will not be as powerful or as efficient but you will have a business with the potential of making more money. And once you have made enough money, you can grow your business. I do not believe anyone needs a specific amount of money to grow their business. But growing a business is much much harder when you have less money available.

Why does your friend want to open his own business? What makes him so certain that a $5000 gap will break or make the venture?

Just go for it, that is my recommendation. As long as you can make money, you can settle with less.

[topbitcoin]

Between investment and savings, both are very important things to do, but their roles are different. Investing in a business that we started ourselves is a good thing for us to do so that the small amount of money can continue to "spin" and make a profit. It is not important how much capital we spend, the most important thing is that it is a small step that we start to achieve great success compared to you can just plan without starting anything.
However, apart from that, we also have to pay attention to our personal savings to answer a problem (an urgent need) so that the money we invest in a business is not disturbed by this urgent need.

Investing should always be done with an eye and have a plan B. After all, often things do not go as the investor expects. And sometimes the chance to get a big profit appears when there is no money to invest, as all the money has already been invested earlier. This is the so-called mockery of fate.

Yes, of course, everything we do, especially in a business, must go through a careful planning and a maximum effort, indeed sometimes in its implementation it is often different from what we planned before because there is a problem that is beyond our previous expectations, so this is where we have to be able to play tactically to solve the problem.

Speaking of opportunities, sometimes great opportunities come when we are experiencing difficult conditions financially, but in my opinion we still have to focus on the tracks we have built to stay focused on investing in a business that we are working on. Indeed, an opportunity will not come for the second time but we must also remember that opportunities will come to people who want to try and never give up and in the end with maximum effort I am sure that we will be at the same point, namely success.

[uneng]

Personally, I would start my business in minor scale. There is a 25% difference between desired bankroll and currently real bankroll, but that must be manageable. Do your calculations again and try cutting expenses for now, so your plan fits the 15,000$ you have. Or, you can borrow money from someone to complete the 20,000$... That involves some risk, but since we talking about investing into an asset, which will generate profit for you along the time, it might worth. Just make sure to never borrow money to invest in liabilities.

the OP and his friends should assess the real situation of their financials. and the potential of the business they want to start with. they can start with small business, but they need to see the demand of such business. study if it will truly generate revenue in the short time period that you are looking at. because once your small business is growing, you can easily expand it if the demand requires it.
but as much as possible, you should not loan money if you are not really prepared to pay for the interest that may accrued from this.

It's true. What you said makes complete sense. Before launching his business, he has to investigate if the local market has demand for the kind of service he is going to dispose. He has to look for the respective target public which is going to be benefical for his business and if there are plenty of those people around. In negative case, I believe it's a risky idea to go ahead, as chances of potential losses are considerable.

Nowadays we have to be careful with entrepreneurship, because at same time it's accessible for everyone to become an entrepreneur, with so many ideas, acessible offers of new investments and machinery for sale, that we end not thinking smartly about the relationship we are going to develop with the market for real.

[Natsuu]

If you have plans to start a dream business that requires a capital of  $20,000 and you were able to make a savings of $15,000 which obviously isn't enough to start up the business, what would be your decision or advice?

1. Invest the $15,000 into a smaller business hoping that the returns will yield the remaining $15,000 in a short period. Note that this has the potential of failing and wasting the already-saved  $15,000.

2. Keep the $15,000 while doing other work that will yield the remaining money over a long period.

Would love to see your input or a better suggestion apart from the ones I pointed out above.

N/B
This is the typical situation a friend finds himself and we are just brainstorming in what best to do.

If the requirement for the business to start and continually process is $20,000, and you want to start it right away because you have $15,000 then you probably are rushing. Because your business won't run smoothly if you don't have enough funds to operate on day-to-day business.

However, if you have the conviction that the best time for you to start is now, and you have a concrete plan and strategy for your venture yet you don't have enough capital, then you can borrow. Many investors out there are willing to risk their money for entrepreneurs with solid plans. It will surely require you a lot of sweat and hard work, because if it's a small business then you only have small numbers of people to hire and work with.

[kawetsriyanto]

If you have plans to start a dream business that requires a capital of  $20,000 and you were able to make a savings of $15,000 which obviously isn't enough to start up the business, what would be your decision or advice?
1. Invest the $15,000 into a smaller business hoping that the returns will yield the remaining $15,000 in a short period. Note that this has the potential of failing and wasting the already-saved  $15,000.
2. Keep the $15,000 while doing other work that will yield the remaining money over a long period.

The first option seems riskier. If you aren't really sure about investing in the smaller business, I suggest you are better to choose the second option (keep/save the money). In the current situation of bad economic, it is not easy to run small business. I already failed several time to run small business. It is not only happen to me, even some established business failed due to smaller demand on the market. So, we must be very careful to choose a business to run. I suggest you are better to keep your plan on running the ideal business you dream. If your capital isn't enough yet, it means you need to be more patient to collect more funds. Don't hurry to run smaller business or invest on it, it probably leads to waste the money only.

[Antotena]

If you have plans to start a dream business that requires a capital of  $20,000 and you were able to make a savings of $15,000 which obviously isn't enough to start up the business, what would be your decision or advice?

1. Invest the $15,000 into a smaller business hoping that the returns will yield the remaining $15,000 in a short period. Note that this has the potential of failing and wasting the already-saved  $15,000.

2. Keep the $15,000 while doing other work that will yield the remaining money over a long period.

Would love to see your input or a better suggestion apart from the ones I pointed out above.

N/B
This is the typical situation a friend finds himself and we are just brainstorming in what best to do.

Starting a business requires high wisdom because they can be easy to start but failing will happen under a minute. If I'm you in this situation, I will continue to work and get the remaining balance from the place that lockin the $15000, I will not establish another small scale business that will die and bring me back to starting point, it doesn't make because all effort will be wasted and you might have to work all through to get another capital to start another business.

[0t3p0t]

If I were the one  who has $15,000 I would love to buy a piece of land. Either residential or agricultural land. In just a couple of years I think you will earn more than $20,000 for that investment. You can also invest in a few rooms of apartments for rent, though it depends on where you are at because here in my country it is cheap and $15,000 is for me big enough for a business.

[Ever-young]

For the purpose of the things that happen which we don’t expect and the high rate of rising inflation, I will rather advice one invest that money in a very small business which he know he can carefully handle very well why he gather the other remaining balance to meet up his business start up amount.

When you have money stack in the house or in your bank account for savings, their are needs which might arise which we don’t make plan or budget for and when such thing happen you will be left with no option than to touch that money and use it to settle that problem by doing this part of that money have reduce which means you need more than you where already looking for in other to meet up the required amount target.

So the best thing is to invest it in business which, even if you are not making enough profit from the business, the little which you can be using to support family problem and keeping the money in circulation is enough why you will still be busy chasing the balance to complete what you want to open up the business.

[Dimitri94]

Personally, I would start my business in minor scale. There is a 25% difference between desired bankroll and currently real bankroll, but that must be manageable. Do your calculations again and try cutting expenses for now, so your plan fits the 15,000$ you have. Or, you can borrow money from someone to complete the 20,000$... That involves some risk, but since we talking about investing into an asset, which will generate profit for you along the time, it might worth. Just make sure to never borrow money to invest in liabilities.

In my opinion initially not buy all the necessary business related things to start the business but also buy all those which are must needed and keep other things aside for the time being. Because starting a business there will be a possibility of profit and later it will be possible to buy other things. But it is better to be able to manage the entire money to run the business fully. In this case you are saying that the problem can be solved by borrowing. If the money can be borrowed from someone then the business can be started with that money. The loan can be repaid later with the money saved from the business.