Less about Skiing, more about Investing
9 posts
6 users
1k+ views
April 27, 2004
Member since 12/1/2003 🔗
1,547 posts
Since spring and summer is basically here now that has meant I have to get back to working with my business and trying to forget about that early April snow/blizzard. For me this means running my computer business here in Wardensville, working and consulting with client's and getting their computer needs taken care of.

As most of you all know this area of WV isn't known for it's wealthly folks or much income at all so for a small business like me things are tough in keeping expenses down while providing top quality service. Over the past year I have been doing some quiet research on how to expand my business to better serve the region and to generate quite a few jobs in the process for the community. My overall goal in the end is to make Wardensville-Moorefield a very I.T. friendly place where you have the technology of Northern Virginia, located in the scenic area of WV.

In order to accomplish that, that requires more funds than what my business has earned and what any bank is willing to loan. I think me being a 25 year old recently out of college grad somehow comes across as high risk to banks...? Anyway this has left me with the main alternative to seek out investors willing to invest. All investments are to goto the direct expansion of my business for buying an office building, purchasing servers, setting up ISP equipment, hiring a small staff, and so forth. After researching all of this a total investment of around $500,000 would be needed to handle the initial expenses, but within 1-2 years my business plans to bring in around $800,000-$3 million in gross revenues.

Obviously I'm not here to hit anyone up for money, but rather to find out where I can look for investors. I know that people in DC/Northern VA/Maryland areas do have money who are willing to invest in ventures that have a highly significant chance of profitable success. So I'm basically asking where would I go to find out about people looking to invest the above amounts? This isn't something that would shoot up fast, then collapse in on itself a few years later. I have been carefully and maticulously investigating on how I can make this business one that will be here 75 years from now remaining profitable, and being a cornerstone for jobs, bettering the community. Who knows maybe the afforded personal wealth would allow me to buy Tory Mtn and give all investors lifetime free passes. [Wink]

Anyway, the reason I am sure that this venture can and should be highly successfull is due to the business niche that this area of West Virginia provides. Currently major corporations, businesses, and technology hasn't reached this area of WV. Most of you know this when you loose cell service crossing into WV. Anyway with little competition, solid business reputation, and expert knowledge that my business has already it's like taking candy from a baby in setting up a solid business.

If anyone has any tips on where to go about finding investors, or if you know someone from work, from personal acquantance or such who is willing to invest minimal $25k amounts I and efinately interested. Or better yet if anyone here has experience in seeking investors and can offer advice I would greatly appreciate that.

Thanks all!
April 27, 2004
Member since 03/6/2004 🔗
175 posts
boy,does this mean we're not getting our terrain park [Confused]
April 27, 2004
Member since 12/1/2003 🔗
1,547 posts
I gotta have a way to fund the terrain park and snowcats. [Wink]
Scott - DCSki Editor
April 27, 2004
Member since 10/10/1999 🔗
1,251 posts
Hi bawalker,

It sounds like you have laudible goals and an entrepreneurial spirit.

There are really two general ways of getting money for starting a business. One way is through a small business loan from a bank, and the other is through venture capitalists.

In the case of venture capitalists, unfortunately, you probably won't even get a phone call returned if you're looking for an amount as low as $500k. (I know, that seems like a lot of money -- but venture capitalists are usually looking for high-risk, high-reward propositions, and to them $500k is usually too low of an investment for them to be bothered with. They're looking for big ideas with big impact -- something like the next Google.) And they also usually want to see a demonstration of strong earnings potential -- they often step in once the business is already kicking, and just needs an "extra boost" to take it to the next level. They tend to like business propositions that will have national or global impact, as that raises the potential earnings ceiling much higher.

You can try to knock on the doors of some venture capitalists (do a search on the Internet), but I don't think you're going to find much money there. After the dot-com days, venture capital money has really dried up and is extremely hard to get -- you have to have a killer idea and a strong team in place to get venture capital support. But, always worth a shot, especially if you can find a venture capitalist that already lives in that region and shares the same aspirations as you.

The first steps of your plan sound reasonable enough -- really, just expanding your current business by adding an employee or two, some extra equipment, etc. You ought to be able to get a small business loan from a bank to support some of that -- probably not for $500k, but you can't blame a bank for being conservative about the money they loan out. After all, I believe over half of new businesses fail within the first two or three years. You have been running a successful business so that should help you a lot, if you can document that. Getting a loan of $50k is probably reasonable, although you might have to put up something as collateral.

For your ambitious goal -- making your geographic area a more I.T. friendly place -- that really has to happen from the state government on down. Sections of the country that have become healthy I.T. places (e.g., around D.C., the "Research Triangle" in North Carolina, Silicon Valley and Silicon Alley, etc.) did so with strong local government support -- the local governments actively recruited companies and sweetened the deal with tax breaks and other incentives. It wouldn't hurt to contact some of your political leaders at the county and state level to get their opinion and advice. Sometimes, state or local governments will provide assistance programs (such as loans) to small businesses to encourage growth in weak areas.

In any case, before someone else (a bank, venture capitalists, etc.) will loan you a penny, you need to have a detailed business plan that outlines exactly how the money will be spent and how you think that will result in revenues, with measurable milestones.

My advice would be to try to grow your current business in smaller steps and see how that goes. Are you turning away business right now that you could otherwise pursue if you only had a second employee? Then try to add a second employee, perhaps providing them with a profit-sharing plan if you can't initially pay them a high salary. And in all cases, be careful to consult with a lawyer, especially one well versed in small business issues.

That really is the key -- whether you're turning away business right now and have a sense for what the natural demand is for the types of services you want to provide in that area. If the demand is there, the money will follow, but you might have to approach the growth in a less ambitious way. And also, be aware that big businesses will swoop in anytime they see a chance to make money, so competition is never far away.

It sounds like you're ambitious and I wish you luck -- I'm all for seeing Wardensville gain a reputation for something other than as the largest speed trap in the state of WV! [Smile]

- Scott
April 27, 2004
Member since 12/1/2003 🔗
1,547 posts

Thanks for all of the great insight. Up until this point I haven't "officially" applied for bank loans or SBA help but I have talked with various loan officers outside of work and each have given me their personal opinions on this. For the most part they all seem to agree that $500k is way too risky and most banks wouldn't loan it to a 25 year old even if I have a solid credit record, business history, etc. It would either take fancy talking or a bank willing to put their name and money on the line. Plus the last thing I want to have is numerous loan denials on my credit record by jumping into that feet first without having researched all options of funding. Or by jumping in unprepared for every possible issue that could occur.

Anyway I couldn't agree with you more that normal most agressive venture capitalists seek high risk exponetial reward companies to drop in a few million and get tens of millions back. Although 'normal' probably isn't a word that could be applied to this situation. What I am seeking to do is get modest investments that can return the amount invested along with good returns in a short amount of time. All the while having my business grow exponentially. This really is a plan for the long term, low risk when looking from the perspective of an investor. Mainly what I am trying to achieve here is offering something that hundreds of customers and passers-by have asked me time and again. For example there has been a point here recently asking me if I will offer internet service for example at a cheaper rate than the only isp in the region. That definately doesn't sound exciting or innovative but what it does is meet a need that people are asking for. Any and all plans I have aren't to be innovative at first rather they would be to catch up and fullfill a growing need in the region. Once that is accomplished then I could be innovative, seek high risk investments and step up the business a notch to not just meet needs, but make customers want to have another need. Imagine 2-3 years from now driving through Wardensville whipping out the PDA or notebook getting moment by moment wireless weather update from Timberline? You all know who you are who want that. [Wink] Seriously though as much as I can joke about it things like that aren't far from reality considering Wardensville is a *major* hub for the DCer's going west and not to take advantage of that business wise is not a smart decision.

I got off track there but this area really is prime for 'developing' in the technology work I do. When I mentioned earlier about making this area more I.T. friendly I meant that more along the lines of making regular citizens more I.T. aware of how it can work for them in the home and in the business. Obviously government help is one of the least likely scenerio's, but if local citizens are more technology proficient through my business offering classes here in town in a state of the art classroom then they can gain the ability to get a technology proficent job. Or maybe businesses use technology to better economize and streamline their own business? You get the idea. This type of scenerio is not far from being reality.

Currently I do have a business plan that is constantly being redrafted, revised, and modifed to keep pace with changing economic times. This is something I plan to give to potential investors (if there are any) and I am more than willing to exhaust myself showing every minut detail of revenues, each expense, income timelines, worst case scenerios and how to handle that as they arrive, and so forth. I admit it is a daunting task, but I thoroughly enjoy doing it and reaching successful levels rarely acheived by others with their own businesses. I know after reading the numbers time and again that this is a potential success with little risk. It's a matter of convincing someone else that it is and getting them to give me their money to prove it.

April 28, 2004
Member since 11/28/2003 🔗
160 posts
You definitely have some neat ideas here. I am certainly no 'expert' on the matter, but since Wardensville is in a rural area (some would say very rural), I would recommend looking into USDA's rural development program. I do know that they give grants and loans to small businesses in rural areas. Go to http://www.rurdev.usda.gov/. Under State offices, at the top of the page, click on West Virginia, and you can get in touch with your state/local office. For a list of local offices in WV (the closest to you would probably be in Romney) see http://www.rurdev.usda.gov/wv/officelocal.htm. You could also check out the U.S. Small Business Admin. (SBA), but I would guess that USDA RD would be a better bet since you're in a rural state/area.

Many towns on MDs' eastern shore along Rt. 50 towards Ocean City have become gentrified over the past 5-10 years, however, OC has been popular with Baltimoreans for 40-50+ years now. The WV towns along the Corridor H route definitely have that potential as the highway gets completed, but, let's assume that Canaan Valley, for example, did get a 2nd ski area (Snowshoe caliber).

Let's say that in 10 years, there was a 2nd ski resort in CV, Corridor H was complete from WV state line to Davis, and there were a few more more modern conveniences (don't want to take away from the natural beauty, but a little more carefully planned, environmentally friendly development wouldn't be a bad thing) in the area. Once all that is in place, it could be another decade before things take off in the towns (ie Wardensville) alone the way. As you know, if for example, RE prices in CV became like DCL or Snowshoe (as much as I wish that would happen as a condo owner in CV, I don't see that happening until some event like another major ski resort gets built or the majority of CH gets completed, etc., that would prompt developers to start building their stuff in other towns. Of course, rumors of these things would also cause a RE fury, especially among the DC-area yuppie types. For example, if there was sudden groundbreaking on MPC this fall (I wish!), I bet that very same weekend the Land Rovers and WV Passats would decend on the valley and start immediate high $$$ bidding wars! I can say that while I wouldn't sell, I would love to see that kind of appreciation.

In order for a place like Wardensville to become the place that you describe, you would really have your work cut out for yourself, unless you get the backing/assistance of local governments. Your idea of development would be in everyones interest, as locals could do professional work in their home towns instead of having to relocate to nearby high-cost cities (ie Baltimore and Washington), or take WAL-MART jobs to stay in their hometowns. Of couse, living in WV and working a $8-9/hour job probably gives you the same spending power as living in the DC area and making a 'middle income' of $40-50k/year.

Sounds like you're good at bookkeeping, etc. which will only get MUCH MUCH MORE complicated if you're business grows. I have several friends that actually have me do some of their bookkeeping (and do the bargaining when they buy a new car, or the complaining if something isn't right, I LOVE that kind of stuff!) because they just can't stand doing it. Good luck with your venture. If I had the extra risk capital, I would consider investing myself, but I need to keep saving/investing like mad so I can retire at 30 and move up to WV for good!!!
April 28, 2004
Member since 11/9/2001 🔗
221 posts
The idea is very interesting, and sounds like it would fit a needed niche. As far as wireless, would the mountains cause any part of the town to be dead spots?
May 23, 2004
Member since 12/1/2003 🔗
1,547 posts
Ryan, I really do appreciate the links on that. I am going to check it out asap and see where I can go with it. The main thing is that I would need the X amount of dollars to get started. Nothing fancy, just an office, ISP servers, and all the basics and just let customers sign up. From there down the road in several years when the area would be better suited to say a wireless technology I might do that. But really those are grandios plans that can work, but not right now. I don't want to rush in, make stupid mistakes, and loose everything because I tried to do too much, too fast, without listening to the customer.

I really can see what you are talking about in comparison to having a second resort to drive traffic through this area. Personally that is what I would consider my grandios idea. That is something I wouldn't want to attempt for at least 5-10 years from now. It is about the basics and by offering locals internet service, consulting services for businesses, etc by meeting their computer needs now. Nothing fancy, nothing extravigent but giving them what they have now at a cheaper cost, faster service, and expert tech help a phone call away. Hopefully wardensville will only be a stepping stone. A place where I get started and can spread out my business back to Canaan Valley, upto Wisp, down to Winchester, and other areas. That is the best way for success and not just rely strictly on Wardensville and local customers.

lbotta - DCSki Supporter 
June 1, 2004
Member since 10/18/1999 🔗
1,535 posts
Brad, I would start by talking to the SBA or even by logging into their website, www.sba.gov. They have everything; checklists, sources of funding, links to grants, and a myriad of other resources. Give them a try. Their loan program cover several different funding sources, so it may be worth a try.

Just to the South of you, Lost River/Mathias, etc, is one of the boom places for the Hummer/Range Rover DC yuppies. There are several B&Bs in that area, new developments, etc. These folks are looking for good computer service, period...

Ski and Tell

Snowcat got your tongue?

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