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TOPIC: Initial Captial

Initial Captial 26 Jan 2003 17:12 #23742

  • j.sirles
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Myself and an associate are discouraged. You see although we work for a fantastic company, and are happy in our current working conditions we, like many others, cant help but want to own a theater. We have several years experience, and know about every aspect of this industry. Ownership in this case would be the difference in having final say and complete control since most business decision run through our hands anyway. Yet as always there is a catch. We have no money. If you don’t get rich owning a cinema, and you most certainly don’t get rich just running one. So please HELP. Some people whom post here were once in our shoes. How can we get the cash? What can we do to make ourselves more attractive to lenders?
We have good business plans, good locations, tons of experience, a very serious work ethic, educated, We've opened theaters, bought existing theaters, renovated, you name it......Our only missing piece is how to get the cash. We have looked, perhaps someone out there knows a trick? good advice? maybe knows the where abouts of buried treasure? Any advice would be appreciated.
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Re: Initial Captial 26 Jan 2003 22:14 #23743

  • BECKWITH1
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Start small with whatever you can afford by pulling together all your capital. Anything that you can borrow from friends, relatives, credit cards, home equity loans, etc. Once you have proven yourself and stayed in business for some years you may be able to borrow more substantial amounts from banks based on your business plans, but for now you probably will have to scale back your plans.

Your work in the business is very valuable but it won't be likely to convince a bank that they should let you borrow millions without you risking millions of your own money. Most of us don't have millions so we run smaller theaters. We find ways to leverage those successes into slightly larger theaters and eventually we will get what we want.
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Re: Initial Captial 27 Jan 2003 01:58 #23744

  • RoxyVaudeville
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Once upon a time in a place not that very far away I had a dream of owning and operating my very own theatre. However, that time was indeed far away, about 35 years ago when things were somewhat different yet in many ways very much the same. I too, had several years experience in theatre operations having worked for several theatre chains in many different capacities. I too had NO money. What was I to do? Well, as Beckwith said... I started small. A smalltown single screen (they were all single screen back then). The difference between starting small rather then large back then was opening one location rather then five or ten, and having 350 seats instead of 1,500, or being in a small town rather then being downtown in a city or larger town. But even then it was difficult as the motion picture industry was just starting to recover from the crush of TV. Thousands of theatres had closed during the preceding decade, and banks weren't exactly in the mood to throw money at theatre investments. As a matter of fact it was even difficult to get fire insurance for anything other then replacement as too many theatre mysteriously burnt down
. Today the industry is enjoying its best times in decades, BUT banks tend to remember all the bankruptcies that occurred within the past several years.

So starting small by leasing is the easiest way. That is what I did way back then. I then used the cash flow to aquire more theatres and eventually bought the real estate. Today a small theatre might be anything under 6 screens. Many that size are available for lease and often completely equipped. In cases like those the owner will often take a risk with someone who has only experience rather then money as they have very little to lose, but much to gain by having there property leased out rather then sitting empty.

Another way is to find an old geezer like me who is getting ready to retire who might take you under his wing and then sell you the property and hold the mortgage(sorry, but I already have someone lined up to take over mine).

At one time "Patience is a Virtue" was the norm. Today, everyone wants everything right away. Establish yourself first, whether it is while working for others or while leasing and operating yourself. It may take a little time, but eventually if you do things right your reputation will be your most valuable asset.
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Re: Initial Captial 29 Jan 2003 19:46 #23745

  • Barry Floyd
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How to get the cash??? Sacrifice... is a good start.

Tommorrow (January 30, 2003)@ 1 p.m. ... my wife and I "close" on our loan(s) to build a brand new drive-in theatre here in Tennessee.

The type of loan we got was called an SBA 504 loan, where your local banker will provide 50% of the loan, a Community Development Corporation (CDC) will provide up to 40% (in our case 35%), and we provide 15% of the total loan amount in cash. Because the appraiser considers our proposed drive-in a "Limited/Special Use" facility, the CDC and the SBA would only go to 35%. We fought hard with them for that. They wanted 20%!!

Still didn't tell you where the money came from.

We used the "Family & Home Plan".. That's right... we sold our house just to get the equity from it, and then borrowed a little from relatives. We sold our 4 bedroom 4 1/2 bath w/ full basement on 2 acres, just on the outskirts of Nashville... and moved 40 miles away to B.F.E. and bought a much smaller house in a neighborhood.

From the idea we got one night sitting in the back of our Ford truck watching "X-Files" at the former (torn down in 1998) Sumner Drive-In Theatre to this time and tommorrow... it's taken almost 5 years, 5 sites, 4 zoning meetings from hell, and dealing with hundreds of uneducated narrow-minded NIMBY'S (Not in My Back Yard).

Good luck.....

Barry Floyd
Floyd Entertainment Group
Lebanon, Tennessee

Stardust Drive-In Theatre
Watertown, Tennessee
Barry Floyd
Floyd Entertainment Group
Lebanon, Tennessee

Stardust Drive-In Theatre
Watertown, Tennessee
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Re: Initial Captial 30 Jan 2003 10:44 #23746

  • GREGBORR
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Barry,
In following your many posts over the past few years on this and other forums, congratulations on seeing your dream come true. I wish you the best of luck, seems as though you've went through an awful lot of setbacks to get to this point. Hopefully it will all pay off down the road.
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Re: Initial Captial 31 Jan 2003 17:18 #23747

  • Mike
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Let me agree with the sentiment of SACRIFICE and determination. I started my first real business with 10K my Mom mortaged her home to lend me. I've worked and worked all my adult years and I'm 52 now. One of the things you learn (or don't) is how to make things work. Once as my restaurant was almost bust I sent out 200 letters asking for loans of 100.00 from customers and friends. Working people lent me money in a snap while the rich sniffed. The bottom line is as Roxy and Barry said: you have to invest first before others will invest in you. Ideas and dreams and skills and plans don't put food on the table: M-O-N-E-Y. Family. Friends. Sell your stuff. Save. Don't go on vacation. I bootstrapped and butt broke my lil 2 screener and it was 200K baby! Why does a bank demand that you provide collateral or cash for down payments? So that you feel real terror and pain and will never say die and fight to survive. The bank wants you motivated. Nuff said.

Sometimes there are community development, etc. funds and guarantees but it all depends where they are. Never hurts to ask!

Michael Hurley
Impresario
Michael Hurley
Impresario
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