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This is all very interesting. After labor day I am going to start building a business on the side. If it goes well and I start to see $$$ come in steadily from it, I think I might try my own business route. Honestly, to me I really want to have a business if it will give make me rake in a lot of money. I am already making $75k and only 30 years old. If I am going to give that up (and I know you don't see it in the beginning) for my own company I better be making a lot more money than that salary and by a lot.
When you have your own company it is all on you to make payroll. In a large company, even if you are department head you are layers away from any concerns about that, you just run your department.
Yes I remember changing to an S-corp and finding out that although I had to pay unemployment insurance taxes, if my company failed I couldn't collect unemployment.
There is a lot of know about company entities too. First a Sole Proprietor, become more successful you change to an S-corps, a flow through entity but profits are still reported on your personal return and added to your spouses income putting you in a higher tax bracket. But some of that profit that you pay taxes on you can't use personally because it must remain in your company to pay employees and vendors in the beginning of the next year.
All the work and stress is not a problem It's all the taxes that are the disincentive.
I hate being told when I have to show up everyday, when I can eat lunch. I hate the feeling that someone else is running my life. That seems to be the biggest of being self-employed -- when you can make these basic life decisions for yourself.
That's why most small businesses fail because they think they can showup whenever they want, take 2 hours lunches, vacations etc... You still have a boss that tells you what to do just indirectly and they are your clients/customers.
I enjoyed running the business, learned a lot, and had some really good years financially in the 1990s, but I would probably have taken a really good job. When we decided to move here I needed an income so it was a job or a business, and the business came up first. Part of being happy is having a steady income, time to spend with the kids, free time for yourself, and being able to leave your work at work when you leave for the day.
I'm guessing you have a lot of independence and autonomy at your current job. If you were micro-managed you'd probably hate your whole life.
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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Originally Posted by tommy64
I'm guessing you have a lot of independence and autonomy at your current job. If you were micro-managed you'd probably hate your whole life.
Yes, probably so. I'm an exempt manager, and report to a director who is not around much and stays out of my way other than a half-hour weekly meeting. My employees are great, so I don't have to watch them like a hawk, and after 6 years I'm up to 5 weeks/year PTO. We get 11 paid holidays, and many other great benefits. When I started here in 1993 I thought it would be hard to be a follower again but had the challenge of correcting problems caused by the previous person who was fired for incompetence, and got the promotion to manager after less than two years.
There is a reason that most businesses fail within 3 years, because most people need enough cash to cover their nut and small business often have trouble generating enough in billing to cover all the necessary insurance, business permits, rent, admin expenses, and taxes.
In addition a lot of people don't realize that you may have a hard time collecting money due to you. There's no way to recoup the cost of a recovering lost money on an unpaid $200 invoice. Yes, there is small claims court, but the time spent to file the paperwork and show up is not worth it.
If enough of those pile up, it can really put a dent in your cash flow.
The Cash Flow Quadrant is awesome. We talk about it often in direct sales. You are a business owner building your own business. There is leverage in the number of people working together. As your success grows, you invest so that your money continues to grow. Our businesses are also willable.
Having a business with this set up costs so much less to get started with, removes the concerns of paying employees, hosting, inventory, etc., and you can go on vacation without your business completely shutting down because your customers and the people you work with are still building their businesses or going online and ordering their products.
I'm always surprised when people are hesitant to explore this route. I mean, I get it. I know there are a lot of scams out there. But a company that has been around for over 30 years, has an A+ rating with the BBB, and more? I'm glad I was open to the possibilities. Now to retire my husband!
What ever you do, you need to be able to duplicate it to make money. I can only work so many hours in the day. A good business plan that is duplicate able can make you rich. For years I worked as a Locksmith. It is a nice business but it is hard to duplicate. I can only be in one place at a time and to open multiple locations means having other skilled people at those locations. It is possible and it happens but it is hard to do. I would prefer a business model that is easily taught to someone else. I see people jump into a MLM because some hot shot is making $100,000 a month. If that hot shot can not teach his people how to become a hot shot then it is not duplicate able and the business will fail.
Walmart is the best example of this. They can duplicate the business and put them everywhere. We have three Walmart locations in my city. If you have to be there to make money then you just have a job. If you can duplicate what you do then you have a business.
I tend to think that the best way to be happy is to work for yourself and be your own boss. However, when you work by yourself there comes much more baggage. I want to hear your guy's personal experience in regards to this issue.
Depends upon what your definition of "happy".
Self-employment always seems to look good to those that are employees, but it comes with plenty of risks. First and foremost everything is on you; bills will keep arriving each month regardless of how much money is made or not. If you aren't self disciplined to actually "work" at whatever and instead slack off, you'll quickly find yourself broke and probably living on the street.
People forget that working for someone else brings the security of a regular paycheck and other compensation/benefits (like paid PTO, health insurance, etc....), if you think it is miserable being stuck at some job, think about being at home without two nickels to rub together and nothing on the horizon.
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