Friday, October 16, 2015
Investing in Others' Dreams
I've reviewed his numbers and questioned him on his breakdown of expenses - and, I'll admit, he's done a good job. The projected income statement is thorough and well thought through with a 5 year growth plan. He'd be willing to give me a 20% stake in the future profits for a small sum to help get him started. That's what intrigues me from a business standpoint. Small town restaurants can do well; there is little competition and it is not difficult to stand out. Surrounded by farmers makes fresh, organic ingredients accessible and, again, things are cheap. In a large city, rent is high, competition is fierce, and it is difficult to differentiate yourself from others. However, more affluent people live within a city than most small towns. Would the local people go to a place that serves grass fed beef and good craft beer?
On the other hand, he is excited. This would be about 80% investment in the person and 20% investment in the business with hopes of getting something out of it. He's passionate about his plan and, besides a little seed money, he really has nothing to lose. The experience is there; he's been in the industry ever since he started working and worked his way up starting as a dishwasher. I respect that.
I hate to see how my town has deteriorated throughout the years with few businesses moving in to replace those whose owner's have retired or moved on. I wish I could do more to help. Hope springs eternal and I have always been optimistic (maybe to a fault) that my town can turn things around. One of my main goals has been to leave this world a better place than when I entered it. A small investment like this would seem a step, albeit a small one, in the right direction.
I'm still not sure of what I'll choose to do. Making an investment based on good intention is a bit out of character for me as I tend to side with logic and reason over benevolence and altruism There are plenty of better things, financially speaking, to do with that money, but the opportunity yanks at the heartstrings. While investing in the restaurant may result in a small financial loss, it may very well turn out to be profitable for the soul!
What would you do? Have you ever invested in a person to help them follow their dreams? When torn between a possible financial loss and a good deed, what way do you lean?