How did you get started running your own business? Would you recommend it? (borrow, insurance)
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I would love to start my own business but am pretty nervous about the whole thing.
You hear so many bad luck stories.
Is there anyone out there who could share their positive start-up stories, and give me a bit of encouragement?
I've always heard that one formula for success (I'm sure there are others) is to take a hobby or activity you know and love already, and build your business around it. It makes sense because whatever business you choose, you will spend a LOT of time doing it to become successful! Good luck!
I prefer the low start-up costs approach. A few squeegees, a scraper, a DBA at the courthouse for around $20, a sprayer + couple of magnetic vinyl signs....bam, I'm in the window cleaning business. Hot , nasty work but the retired folks in their McMansions don't want to fool with it.
Just don't get delusional like I did once. I had a printing press+ potential customer base. What I didn't have were the $300-$1000 rotary dies it took to make the product. Failed and it was a wash, selling the press payed just the startup costs. If I had it to do over again I would have aggressively sought out some private investors.
I'm a serial entrepreneur, MAT. At the same time I consult for a large number of businesses, either directly or through my clients. Starting your own business is terrifying, exhilarating, energizing, draining, and about a dozen other emotions at the very same time.
Every start-up is different, but I've come to realize that there are some broad defining principles for it to work. Let me see if I can capture those in this post:
1) You can read every book on the subject, but the first day you are in business, you realize you know nothing. There are some posters on here who've not yet taken the first step but want to pontificate to those of us who have walked the walk for years. They don't know beans about anything and don't realize it. Until you actually start doing it, you just don't understand it. So embrace that fact and look upon it as a learning process, one where you learn a lot about yourself at the same time.
2) Be prepared to work really hard. Most people understand this on an intellectual basis. But the reality is something different. The most common thing I heard when I started my first biz 23 years ago was, "Oh, that will be great. You can work your own hours." Yeah. 6 a.m. to 9 p.m. Saturdays. Sundays. Even the odd holiday. So if you don't like working, don't do it.
3) Even though you'll work really hard, it will be a labor of love. It really is the same mentality at work as being a parent. As a parent, you might carp and moan about the work load and the demands, but would you really give up your kids for anything? Of course not. And just as there's no reward for parenting quite like a kid who is out there doing wonderful things, there's quite no reward like a business that really begins to be successful. It's a giddy feeling.
4) Be prepared to be very flexible. You don't need to be an expert on accounting, marketing, or a host of other disciplines, but you need to be conversant on those subjects. In that sense, outside of your core expertise, you need to be an intelligent generalist, a person who knows who to hire for what, and what general instructions you give them to send them on their way.
5) Be a good salesperson and marketer. Right now, it's early July. Typically a dead time in my business. Do you think for a minute that I'm sitting around and goofing off (Aside from CD postings, of course)? Hell no. I have new biz meetings lined up, proposals out, and networking to be done. It really is a 365-day-a-year effort. That means you cannot go out there, land a few clients and quit selling. I have clients with whom I've worked for 10 years now, but even the best-served clients go away by sheer attrition. So you really need to hone this ability.
6) Be a good people person and a good manager. If you cannot connect to people, if you cannot be a person that people like, don't even bother. What's more, your first two employees will be your most important ones. Treat them well, pay them well, and inspire them to work their butts off. Because anyone who signs on with you rather than an established firm is taking on a major risk in their lives. Something has to be motivating them besides the paycheck. And that something will need to be you. I cannot tell you how many start-ups I've seen where the owners were such unpleasant pinchpennies and slavedrivers that they created really miserable working environments for employees, who then leave at the first possible opportunity. This is incredibly stupid. I worked for one couple like that and, after a year, I started looking for the exits. I left them and created a $5 million company out of thin air over the next six years. I'm the kind of motivated, intelligent, and hardworking person they should have been delighted to have on their staff. Instead they drove me away with a sheaf of rules, skimpy paychecks, and mercurial management. Don't be that kind of business owner. And don't make a rule that's not absolutely necessary.
7) Be a clear, precise communicator.
8) Actually have a reason for going into business besides making money. As in have a clear, core idea that separates you from the raft of competitors. This works at the most fundamental level. In our area, we have tons of nail salons. But a new nail salon opened up and is, evidently, pulling in lots of customers. Why? They serve margaritas to customers after 5 p.m. This place is packed at all times. Because if you don't have a clear differentiator, then you don't give prospects a good reason to use you instead of the company they've used all this time.
9) Be funded ahead of time. Yeah, I've heard all the heartwarming stories about somebody starting up out of his car and becoming a billionaire. For every one of those anecdotes you've heard, there are 100,000 others who sputtered and died quickly because of a lack of cash. As a business owner, you need money and oxygen in that order. No, you don't need hundreds of thousands in seed capital for most businesses, but you better be prepared to hire critical staff, fund a basic marketing effort, and lots of other things, while being able to feed you and your family. So a good plan is to start saving now for the business you want to start in another year or so. And slash your personal expenses to the bone. That will take the pressure off.
10) What to skimp on. Fancy offices, equipment, company cars, office supplies, and all the showy accoutrements of biz. Yeah, that stuff will impress the friends, family, and neighbors -- right up until you go out of business. Operate out of your house if at all practical. Keep your overhead as low as possible and still keep a decent image in the marketplace.
11) What not to skimp on. A good accountant. A good business attorney. Employee salaries where practical. Because really good, self-motivated people will be like gold. And a decent salary, along with a vision where they can make really good money in the future, is what it will take to get them on board with you.
12) At all times, be brave. The first day you start your business, I guarantee it will start this way. You will spring out of bed, get in the shower and begin thinking, "What am I doing? Have I lost my mind?" This is known as Entrepreneurial Terror, and it's perfectly normal. In fact, I would argue that if you're NOT doing this, you have problems. Because this is the basic impulse that will keep you moving forward, even when nothing is going right. At the same time, you have to master that terror, not be paralyzed by it, and really be prepared to slog ahead. For, if you are a decent person, the world wants you to succeed. Just keep making smart decisions, keep banging on doors, and don't get greedy.
Hope this helps. Every few months a headhunter calls me with some job offer somewhere. And I gracefully turn them down. Because I love working for myself. With the exception of a one-year period way back, I have earned my own money for 23 years. While I have worked grueling hours and had some awful moments, the spiritual and financial rewards more than compensate for it. I am my own person, not a cubicle dweller ticking off the days until retirement like a prisoner in a cell.
Even as I write this at 8:44 a.m. on a holiday week, my phone is ringing with calls from clients around the country who value my opinion and seek me out for advice, people who I would have never known had I chosen to just pick up a paycheck from others. I work with the people I like and turn down the people I don't. And I make a very good income while still managing to pick up my kids from school and take them to soccer practice, violin, and whatever else.
Yes, doing those things requires I sometimes get up at 4 a.m. to work, or stay up past midnight. But I do those things for me and my family, not as some faceless corporate drone. It really is the best way to live, I promise you.
lol, I had to laugh when I read cpg35 statement about entrepreneurial terror. I know what you are talking about, been there. The entrepreneurial terror is short lived and if you are passionate and believe in what you are doing you will kick into high gear the same as you did every other day and it will pass.
Excellent advise cpg35
When you start a business, yes you hope to make a lot of money but remember to succeed your business must be to serve others first and if you serve others well you will be served well in return.
Believe in your service or product.
Build a team around you.
Although it is natural to try to do it all yourself, when possible outsource and 1099 independent contractors to provide ancillary services such as a bookkeeper
Understand the 3 financial statements, cash flow statement, Income Statement, Balance Sheet so you can understand how your business is doing.
A CPA to guide you with all the regulations that will be required and to do your taxes.
Understand there will be naysayers.
Find a mentor if possible but be careful with this.
Talk with other like minded people. Again be careful.
Don't forget to spend time with your family, they are very important to you.
Ok, I hate to be a doomer but I must mention this. At first you will most likely be in the red but as your business becomes more successful remember and plan for Uncle Sam who will want his share of your success, also know that if Obama is re-elected, the gov will take a bigger bite then ever before. I mentor a very young guy and and due to his persistence and hard work he is now has a very successful business. He wanted to reinvest so much of the company revenue back into the company but Uncle Sam was coming. I will never forget, after he had his taxes done, I asked how he felt knowing he was probably in shock. Without hesitation he said, I feel like I've been raped. Sorry, its reality so I had to mention it. By the way, he is 20 years old.
You will most likely have to fund your business with personal debt, you will be the guarantor. Be careful. Be as debt free as possible if not totally debt free. Your personal life and spending will have to be put on hold.
Protect your personal assets by incorporating as an LLC. Keep personal and business expenditures separate, don't pierce the corporate veil.
First business - I was working for a startup consulting firm. I copied their business model. Since it was a service oriented firm, there was little startup costs.
Second business - Saved money to buy into a franchise opportunity.
Third business - Used my reputation from the second business to buy a failing franchise (same company) below cost... and am in the process of turning it around.
The key to all my businesses was I learned from people who were already doing it. In the first business I learned by observation. In the others, I had a lot of support from corporate. They provide you everything you need other than management skills and $$.
Nothing is ez or bullet-proof. BE PREPARED, Have lots of cash. (to pull you through a couple yrs)
Do a Cash Flow analysis (Very, VERY important)
This is good advice with one MAJOR caveat.
When you deal with a SCORE mentor, make sure that person has an entrepreneurial background, as opposed to laboring away at a career in the corporate world. Otherwise, you'll get some well-intenetioned but completely wrong advice.
First, make sure that there is a market for what you want to do. And is it big enough to give you funds enough to carry the business.
My husband started a very sucessful business. He knew that there was a need for it. We borrowed 10,000 from a life insurance police and 10,000 from a friend that would get a discount on his purchases. I did the bookkeeping for free while I kept my old job. The first couple of years were tight. We would not have made it without my salary.
We kept our mark-up low until we got a good customer base. Good Service and Good Prices make a lot of difference. Be prepared to go without a paycheck until the bills are paid.
Pay any tax obligation first. Rent and Utilities come next. Your salary is last.
For those with experience, I have several ventures I would like to try. All are low cost, I think solid ideas, but all in different markets. I was thinking about pursuing each one with a partner.
Do you think I would be better off just focusing on one business, or trying multiple businesses with partners and see which one sticks the best and then focus on that one. I have a feeling most would say focus on one. I would be doing either approach while still maintaining my full time job, in yet another field that has nothing to do with any of the ideas I want to pursue.
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