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Personally, If you think that you can make this work and you really want to cash your 401k out to fund this, I support you on that idea. I would try for a loan aswell after writing out your business plan, maybe look into someone investing into this idea. I'll reiterate: Sit down and really work out your business plan before getting into funding. I know you can get itchy thinking about everything that has to do with this considering it's an exciting venture, going into business for yourself, but always remember to build a strong foundation. Another question I should ask is, what sort of "minor" work does this truck need? Anything wrong with it's driveability or is it purely aesthetical?
With your Cadillac idea, do you have another car that you can drive? Would hate to hear that you sold your wheels and had only your food truck to drive around for personal errands :)
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If you've been out of work awhile, the taxes on the early 401k withdrawal might not impact you that much -- so I agree that's a good option (probably would have been better a few months ago, but so it goes).
What the caddy is worth and what it will sell for are two different things -- but if you could sell it, get into acceptable transportation that was cheaper, and have cash left over to work with, I'd do that, too.
I'd advise against spending too much of your total available cash to buy the truck. You'll need money for gasoline, supplies, advertising, etc. (probably 50 percent more than you're estimating, if you've never run a business like this before) -- plus your regular living expenses -- until you get things going full speed, build a customer base, and generate profits. Plan to have enough operating capital to give yourself a chance to succeed.
Your dreams and aspirations sound inspiring.1 of 1 people found this helpful
But if I could suggest something(this comes from experience), slow down and step back before you make and decisions. Consult with a SBA or SCORE counselor from your area.
Business should never be a "gung ho" go for broke venture, and I can attest from personal experience that the gung ho way of doing business will increase your chances of going broke.
I see this all the time business owners using the personal funds
to float the business and than what happens is that you end up
spending everything you got trying to sustain your business.
Yes, he's right stop and think a second here. First,
I want to say to you no! Don't do tap into your 401k leave that there
what you need to do is start building your business credit, what you need
to do is to lay the proper foundation. I gues you say what is the proper
foundation, well that is getting your company structured in a way that
the banks will lend to your business and you won't have to go spend your
life saving trying to fund this idea you have.
If you would like to discuss how we can assist you make contact with us and
we would be happy to put you on the right path..
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The truck that i want to buy cost about $14,000 and needs minor work. The problem is im out of work and im useing what i have in the bank to cover my mortgage and utilities. I do have a cadillac worth about $ 25,000 that i ouwn. Should i cash out my 401k that is loseing in the market or try for a loan. Sell my car? I know that the hot food truck can make money. What would you do !