Can we open up business?
 

Hey, I'm a 19 year old dreamer. Currently working and attending college (summer is off though, so I start again during fall). I got a little bit of money saved up, but I was wondering if we are allowed to open up our own business using deferred action? I was thinking of opening up a subway, borrowing the majority of money (60%-70%) from my dad. Can we do that or not?

Re: Can we open up business?
 

If you have DACA, yes. If you don't, maybe.

Re: Can we open up business?
 

It really depends on how you can get the money to start the business and what the requirements are for your state.

You said you were getting a majority of the money from Parents. Where are you going to get the rest? If you are going to get a small business loan under your name then it is necessary that you have an ID and social security number (and credit history*). But for the sake of protecting your credit, you should put it under an LLC or corporation, so that whatever happens to your business then your personal stuff is protected.

There is an advantage with having an LLC/Corporation that you could probably start one undocumented (it all depends on the requirements of your state). I know that in my state, you don't need a social to start one.

There are also tax benefits with LLC or Corporations. You should look into this and do your homework before jumping in.

But if you just want to get a small business loan under your name, then that's all you need, an ID and a social.

Re: Can we open up business?
 

Yes you can open up a business with or without DACA. As long as you have the money, you should be fine. Now if you're trying to get a loan to start a business, that's a different story. I know people and have close family members who don't have legal status here, but have been able to start up businesses such as restaurants, tire shops, etc. All you really need is some sort of ID and an ITIN. Since you should have a state ID and SSN with DACA, you're free to open up whatever you want.

Re: Can we open up business?
 

For your kind information Subway franchise is now required to be citizen or green card holder. I would suggest you to look into new franchise and become partner with citizen or green card holder family member.

Re: Can we open up business?
 

By the way, running a franchise can be an absolute nightmare in some cases. A relative of mine ran one (that was kind of like Subway) in the late 80's early 90's and tricked us into working for him. He didn't pay us after 6 months so we quit with nowhere to turn, but I digress.

The problem was that the franchises take their 8% or whatever off the GROSS sales. That means that they don't care if you made a profit or not, they still want their money. In the early 90's, there weren't that many Sub sandwich places so it was still somewhat of a novelty but even then, we'd have to break our backs and come there 9 in the morning until 10 at night to get all the stuff ready, make sure to throw out bad food, deal with asshole customers, health department, employees who stole money (real employees were getting paid), repairs, etc.

Now days, there is a Subway or Quiznos at every corner and in the case of Subway at least, their employees are some of the lowest paid, even by fast food standards so if you do get into the business, chances are, you're going to have to be there yourself all day as margins are so low and competition is so fierce that you can't afford to hire more than a couple of employees around the lunch rush and that will become your entire life. And that is IF you're lucky enough to find a busy location.

Not wanting to be a pessimist but just know what you'd be getting into. I was around 12 when the relative mentioned above was borrowing money for his restaurant from another relative and was asked "You're an engineer, what do you know about running a restaurant?" . You'd need an answer better than "It's not that hard, the franchise gives you everything you need". Here is a nice little link on the various franchises...the one I worked at is in there too:
http://20somethingfinance.com/battle...y-jimmy-johns/

Edit, I went back to bed after writing this and had horrible horrible Blimpie nightmares.

Re: Can we open up business?
 

Franchises are a hassle. I worked at Jimmy Johns for years and I remember my boss hating all the restrictions that they had. The only good thing about it was that he was making good money and that the business had name recognition. But if you want to start a business where you are the boss and you make your own rules and your own procedures, then a franchise might not be for you. I can only speak for Jimmy Johns franchises, but about once a month they send a corporate coach to review your store and see what you're doing wrong. They give you a percentage score and if you get lower than 70 or 80% they put your on probation and threaten to shut you down if you don't correct your mistakes. When customers complain, they usually complain to corporate so the only way you find out about customer complaints are when your corporate coach sends you an email chewing you out. Then there's also the downfall of buying everything overpriced because you have to buy all your supplies and inventory from Jimmy Johns, so you're stuck paying $10 for a knife that would cost $5 or $6 at your local supply store. That's just the franchise's way of making $4 off of you.

So if you want to start a business where you want the freedom to insert your own ideas and start from scratch and are willing to be patient to build up a clientele, you're better off starting your own thing. If all you really care about is making money and want to own something that already has name recognition and you don't mind following someone else's rules and procedures, then maybe a franchise is for you.

Re: Can we open up business?
 

Oh yeah, buying through them also drove my relative mad. All of this stuff happened like 25 years ago so maybe things are different now (although given that there isn't a single one in my city now is proof we were right), but anyway, at the time, we could buy higher quality deli meats locally (Boar's Head is considered a high quality brand) but instead, it had to be overpriced and through them.

Not only that, they'd tell him "You bought x amount of meats, cheeses, tomatoes, etc. so your sales should be y amount but they are lower. Have you been cheating us?"

Subway was still the much bigger franchise then so people were more used to them, so customers would ask for pickles and we'd have to say "sorry, we don't have pickles"...so then we'd have to buy some and hide it because if the franchise would do an inspection, they'd tell us to remove it. It was just stupid things like that. There was no room for having an identity or adapting to customers' needs.

On top of that, they'd have all these stupid "buy one get one free" deals which would destroy any profit but drive up sales which meant more money for the royalty fees.

Again, not saying that there isn't money to be made, but a lot of people including one of my best friends thought he could just buy one, hire a manager and a few employees and leave it alone and it would make money for him and that's just not the case. I think it's always best to stick with your area of expertise and something you like doing - whether you're an IT guy who wants to set up computer stuff for people, photographer, mechanic, electrician, whatever.

Re: Can we open up business?
 

yes you can but opening a business can be a headache an hassle trust me i actually own one and its doing quite well for being opening for 6 mths now. before you open a business research reasearch . make sure you full funded for the slow days and the start up. the start up is the hardest part . but good luck