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I have a business plan. What's the best way to find an investor?

Discussion in 'Business & Tax Advice' started by connor51, Aug 27, 2014.

  1. connor51

    connor51 Newbie

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    Hey all,

    I have a Watch Company that specializes in selling pre-owned rolex watches and spent close to 100k for everything including inventory, site design, seo, etc. Originally I had 40K worth of inventory, but I ended up selling everything on eBay because my SEO marketing campaigns were not doing well. Now I have 1 year of SEO on my site which is still ranked and 5K of inventory left. I had a business plan made but I'm trying to figure out how to go about finding a solid investor. I'm located here in Los Angeles, CA. The problem with going on websites and sending them business plan's is that they all want you to sign up and pay to have your plan distributed. How can I go about just meeting directly with an investor? Does anyone live in SoCal and know of any investor groups or somewhere I can attend to talk to potential investors?

    A little about the business: Each sale on ebay makes about $1k in net profit. Each sale thru the website, you can say double that because I used to work for a larger company that was netting $60,000 to $80,000 a month. Obviously each month varies, for instance Christmas is the best month and the company i worked as an operations manager for the owner netted $150,000 in Pure profit after cost of all goods and overhead. So if we were to be conservative and say that each watch that 1 watch sales every other day on the site for 30 days that's $30,000 in profit every month and thats being on the conservative side. To sum it up, the site has a lot of potential.
     
  2. 2spoons

    2spoons Regular Member Premium Member

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    Wow sounds like an awesome business! I used to see a lot of business plans when I provided small business loans for a UK bank. Most people thought they needed investment but often the plan could be tweaked so that within a few months the business was funding itself without the need to give away a massive slice of equity to an investor.

    It sounds like you have the makings of a very strong business there and you should be able to scale up a nice rate and keep 100% of the equity.
     
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  3. Asif WILSON Khan

    Asif WILSON Khan Executive VIP Premium Member

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    There are several groups you can approach but the first question is "What do you need the investment for?"
    Not being rude but there doesn't seem to be much of a plan.
    The only thing you have said is that you think you can sell a watch every other day.

    A serious investor would look at what you have spent and be concerned.
    They will think you want the money just to prop up the business.
    They will be looking for growth and innovation.

    If you really did sell all the watches through Ebay then the website is a non starter.
    How many watches have you actually sold through the site?
    You say the site is ranked, but ranked where?
    How are you driving traffic?

    Your figures don't add up at all because you talk about profit but haven't mentioned the monthly costs.
    What is your plan?
     
  4. BassTrackerBoats

    BassTrackerBoats Moderator Staff Member Moderator Jr. VIP

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    If you have a complete business plan including an executive summary as well as a resume and information on how much skin you are going to put into the operation I would consider looking it over.

    Watches are not something I have a lot of knowledge in but I do have a watch guy who I can trust for that end of things.

    If you have those things and are not comfortable with a guy on here, place an ad in the LA Times, Chicago Tribune, Wall Street Journal or NY Times and you''ll get some interest.
     
  5. connor51

    connor51 Newbie

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    BassTracker you have PM
     
  6. connor51

    connor51 Newbie

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    If you like, I could give you additional information via PM.
    As far as the ranking, I used to be ranked for good keywords on the bottom of the first page of google. To get proper conversion and traffic you have to be on the top 3 on the first page of google. My plan is to cover all operations meaning Sales, Customer Service, Logistics, Shipping, Dealing with Vendors. The investor would recieve partnership of the business whether it be 25% of 50%. I know the market, I know the competitors for this niche in person. I used to work as an Operations Manager/CEO for one of the largest before venturing out on my own. I have a very nice e-commerce website and I can verify it from one of the forum members who goes by the nickname of DTZNL. I have a business plan and do not mind sharing it among select individuals which contains all the costs, etc. I can explain everything in detail or any underlying questions.
     
  7. Asif WILSON Khan

    Asif WILSON Khan Executive VIP Premium Member

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    I replied to your PM.
    How much investment are you after?
    Are you willing to hand over more than 50% equity?
    Apart from SEO have you tried PPC?
    Also your $40000 worth of inventory could mean 4x$10000 Rolexes or 40x$1000 Rolexes, how many watches do you have left?
    $5K of inventory could mean 1 watch.

    Also that member you mention is a new member, how is he involved or has he just seen your site?
    http://www.blackhatworld.com/blackhat-seo/members/795650-dtznl.html

    What I would suggest you doing is using a site like MeetUp and find any local growth hacking/business groups in your area. They can be useful for networking and helping to get in touch with the right people.

    http://www.meetup.com/
    http://lmgtfy.com/?q=venture+capital+los+angeles
    http://lmgtfy.com/?q=angel+investment+los+angeles

    Good Luck
     
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  8. Asif WILSON Khan

    Asif WILSON Khan Executive VIP Premium Member

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    Whilst I agree there IS money to be made from selling pre-owned luxury watches, I am not sure an Investor would be attracted to an online business that is primarily making it's money from Ebay.
    It doesn't really matter how much you have spent on the site, if it is not turning over any significant profit.
    I would suggest getting an expert to give you a valuation on the site.
    Reach out to meathead1234 and see what he thinks.
    http://www.blackhatworld.com/blackh...66563-what-my-site-worth-official-thread.html

    I hope I am not coming across as negative and I do wish you success.
     
  9. Trepanated

    Trepanated Supreme Member

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    If you sold $40K worth of stock on eBay why have you only got $5K of inventory left?

    Where has that $40K gone?

    If your business model worked as you describe (selling 15 watches per month) you would have reinvested the proceeds straight back into new stock.

    A few more questions:

    What is your average markup / margin per watch?

    If selling watches on your own site doubles your profit, that's $180K per year you are missing out on. How much are you paying your current SEO company per month?

    How do you replenish your inventory? Do you have a quality, regular, trusted supplier?

    How many watches did you sell this month / last month / the month before?

    How do you ensure the watches you buy in are genuine? Do you employ a watch evaluator?
     
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  10. connor51

    connor51 Newbie

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    I can answer some of these questions. The rest I PM'd you, because they are confidential.

    I'm not willing to give up more than 50% of the equity since I will be running the whole operation as in Sales, Customer Service/Retention, Logistics, Inventory Purchase,Wholesalers. All I ask in return could be a Silent Partner who can pay a certain amount $ plus take care of all funding for marketing,seo,ppc,inventory purchase and in return I will take care of all operations. I think that's a fair deal.

    I have not tried PPC. Only SEO which has landed me to the bottom of the first page of Google after 1 year. I have a business plan and executive summary which I could share. To answer all your other questions I will PM you
     
  11. connor51

    connor51 Newbie

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    I am able to answer some of your questions. The margins are high around $1,000 and in some cases higher, if you want you can PM me and I will share but all the information is nicely outlined in the business plan.

    I didn't have enough capital to continue the SEO campaign, it only lasted for a year and I got to the bottom of the first page of google which isn't sufficient enough to recieve leads. You have to be in the top 3 on the first page of google. I have trusted supplier, I was the Operations Manager for a larger company before I started my own. I have been in this business for over 5 years so I've done everything from hiring salesman, shipping all over the world, dealing with customs, rich customers, average, crazy, you name it.

    I purchase my inventory from legitimate wholesalers who only sell to people who are in the jewelry business. I am also a rolex watch evaluator and have certified watchmakers that I work with.
     
  12. Business112

    Business112 Newbie

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    use a referal system ,so can people promote your site for and get a percent in case of a sale
     
  13. Trepanated

    Trepanated Supreme Member

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    I meant percentage margin. So that $40K of inventory you sold - how many watches was it comprised of.

    You didn't answer the question 'Where has the $40K gone?'

    Nor did you answer the question 'How many watches did you sell this month, last month and the month before that?'

    I don't understand how you didn't have enough capital to continue an SEO campaign if you are selling 15 watches per month.

    I also don't understand why you would give up on promoting your own website when you indicate it would give you an extra $180K profit per year?


    You also haven't answered the most important question:

    How much investment are you asking for?
     
  14. connor51

    connor51 Newbie

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    40K of inventory was comprised of Watches, Diamonds, Gold, Watch Parts. If I go into details, than I would start mentioning Bezels, Diamond Bezels.The 40k was invested back into the business to sell on ebay so I can continue using the money to market the website. My SEO company that I chose was not very good obviously, i'm competing against some top players and the keywords im trying to rank for are Rolex Watches, Rolex Prices. Among many other keywords so it gets expensive. I didn't generate any sales through the website because i was at the bottom of Page 1 on google. Being on the bottom of page 1 does not work.

    What I needed was a good internet marketing strategist/investor to help out.

    I was originally asking for $100,000 for 50% equity partnership and also continued investment for marketing strategies to get the site back to page 1 and eventually to the top 3. For partnership I will do all the work and partner will collect as I do all the operational work. Partner will just take care of funding/marketing. The partner will only be responsible for initial funding/marketing strategy;SEO/PPC/Social Media and Continued Funding to keep the campaign going. I am also open to negotiations whether somebody is willing to invest a certain amount of $ plus what they can contribute to getting the site ranked, PPC/SEO/Traffic/Conversions/Sales.
     
  15. Trepanated

    Trepanated Supreme Member

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    You are still being vague.

    You must have a percentage markup you apply to items before you sell them?
    Let's say that's 50% (correct me if I am wrong, but I think that is very conservative)
    So if you sell $40K of stock, you end up with $60K.
    Which you would then reinvest in new stock ASAP (because as you have stated, you have a very profitable business model).
    So you now should have $60K worth of stock

    But...

    You had $40K worth of stock.
    You sold it on Ebay.
    You now have $5K worth of stock
    And no capital.

    This makes no sense.

    From what I can gather so far...

    In the last year your business model has turned $100K startup capital into $5K.

    But you are saying that if someone now gives you another $100K, you will turn that into $460K in the next year.

    Which makes even less sense.

    I am not being harsh here, I am being realistic - and I am basing it on the information you have provided.

    If I've missed something glaringly obvious, please let me know.
     
  16. Duffers5000

    Duffers5000 Elite Member

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    You seem to have a decent background in your industry which investors would be looking at primarily. They would also be looking at your track record...which is frankly shocking. If you have the knowledge and contacts that you claim to have and you could'nt even break even then you are doing something very wrong.

    Are you only targetting "Rolex" or "used Rolex" as your keywords or something ? You need to do do some keyword research and spread the net a lot wider.

    I know several watch dealers as I collect watches so I have a good idea of how the trade works. Most operate off of their contacts. Much like in SEO the mantra is build a list the same applies to watch dealers who will always have a good contact book of strong buyers of particular watches. The mark up in most watches is large. Vintage Rolexes would be the hardest thing in the world to make real money out of because most people want them and most people know what they are worth. Your real mark up is in selling a $35,000 Jacob with $12,000 worth of mark up in it.

    Also eBay is a shit stage to try and sell your watches. One negative or neutral feedback and your business will just stop immediately.
     
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  17. connor51

    connor51 Newbie

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    Ok there is a huge miscalculation here...

    There is a percentage mark up, lets just say per each unit that is sold on ebay. Net meaning after all cost of goods, ebay fees, comes out to 1k.

    On a website you can double that, now if you sell different watch models the margins become much higher obviously.

    Now as far as selling 40K of stock, not all 40K was watches. 40K was composed of Watches, Bracelets, Diamonds, Gold Bezels, Watch Parts. These are pre-owned watches we are talking here. I obviously had to live as well off of what I making now. Even though I spent majority of what I was making back into the business, I also spent it on living necessities as well. When you run a business, you obviously give yourself some portion of the money you make otherwise how can you survive right...

    I spent a lot of the money I made back into marketing the website, upgrading the website, content, doing changes, but mostly SEO. I did not get any ROI on the SEO part. On ebay sure, I did. But when you spend everything you made back into marketing, living, food, rent you can only have so much capital left.

    I am open to suggestions, originally i wanted $100K to be partner (50% equity). However I am open to receiving offers and also how they can contribute whether its PPC/SEO/Marketing to Grow this company. I am not saying $460K in the next year. However I do know somebody personally who grossed close to a million last year. He's had his website established for 6 years now. It is a very profitable venture and can grow exponentially but realistically I agree with you that $460K is not possible within the first year. However that's why I have a 5 year business plan and executive summary report for potential investors

    I hope that makes a little more sense/clarity.
     
  18. Trepanated

    Trepanated Supreme Member

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    You are still being vague and there is only ever one reason why people looking for investment are vague.

    When you sold that $40K of stock, what was the total value of the sales? - how much profit did you make on that $40K?

    Why do you only have $5K worth of stock left?

    How much money have you invested in new stock this year (on top of the initial $40K)?

    And again:

    How many watches did you sell this month, last month, the month before?
     
  19. IMpossible

    IMpossible Supreme Member

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    PM me and let me look through it.
     
  20. connor51

    connor51 Newbie

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    Duffers, thank you for your input. Nice to see some positive light :) Yah you pretty much hit the nail. Someone who knows what i'm talking about, but yah I was targeting pretty much rolex prices, rolex watches, rolex datejust, mens rolex watches, ladies rolex etc. I'll PM you and we can talk more