Business owners

[tb001]

I know we have a number of people here who have started their own successful businesses. I’ve worked for someone else my entire life and am looking for alternatives as we move into the next phase.

Curious to hear from those who have been there. What type of business did/do you run, how did you get involved in the industry and how financially rewarding has it been for you?

[Koogie]

Quote:

Originally Posted by tb001 Curious to hear from those who have been there. What type of business did/do you run, how did you get involved in the industry and how financially rewarding has it been for you?

- overseas shipping company
- fell *ss backwards into it. I got exposed to it via exporting cars to Europe. Went to school and completed a white collar apprenticeship in it.
- quite financially rewarding. Semi retired at 42. Full ER is planned for 48/9.


If you plan on being a small business owner, be aware it can be a life consuming experience. The responsibility (and possibly the stress) never cease. Many businesses fail for a variety of reasons.

IMHO, the ones that do succeed are based on the existing skills of the founder(s). ie: you get rich exploiting your own human potential instead of allowing an employer to do it.

The "follow your passion" kind of dreamers ? Usually not.

[COcheesehead]

Started a custom packaging company over 22 years ago. Mostly for consumer products you’d find in a typical grocery store or at a cosmetic counter. I was in sales in the industry for almost 12 years so I understood it well.
It’s turned out to be very financially rewarding, enabling us to retire early and comfortably.
My only advice is make sure you have a point of difference, a competitive advantage and also know where your first order is coming from. I’ve worked with a lot of folks who think if you build it, they will come, but sadly that is not true. You need to know how to hunt down your customers.

[OldShooter]

Quote:

Originally Posted by tb001 I know we have a number of people here who have started their own successful businesses. I’ve worked for someone else my entire life and am looking for alternatives as we move into the next phase. Curious to hear from those who have been there. What type of business did/do you run, how did you get involved in the industry and how financially rewarding has it been for you?

I suggest that you go to https://www.score.org/ and contact a nearby SCORE chapter. SCORE is a free services sponsored by the SBA, run by volunteers. It offers both individual mentoring and a wide variety of training opportunities for people looking a starting or needing help running a business.

[street]

Quote:

Originally Posted by OldShooter I suggest that you go to https://www.score.org/ and contact a nearby SCORE chapter. SCORE is a free services sponsored by the SBA, run by volunteers. It offers both individual mentoring and a wide variety of training opportunities for people looking a starting or needing help running a business.

I was directed from OldShooter to SCORE also, and was a huge help in my venture. Highly recommend visiting the site.

[imoldernu]

Quote:

Originally Posted by street Highly recommend visiting the site.

+1... I counseled and taught (mentored) with the SBA back in the 1980's. Worthwhile and rewarding. One on one with the people who have been there and done that.

[aja8888]

Started my own engineering consulting company in 1994 after a California divorce, being let go by a previous employer in the energy industry, and moving to Texas. I was very experienced in the oil & gas and petrochemical industries and leveraged many contacts into clients. After a few years, I added staff I knew and trusted and set the business up a Subchapter S Corporation in 1998.

We leveraged our experience into becoming well known for assisting companies in conducting due diligence activities for the acquisition of energy assets and other businesses. During business downturns, we also worked for companies selling assets or with a bank or legal firm on a bankruptcy workout. We worked for years with Fortune 100 companies, banks, law firms and private equity firms. I/we merged the business into a competitor's company ten years later.

There were no 40 hour work weeks for many years and travel (U.S. & international) was constant. We made a lot of money and had a lot of fun, but it was very hard paced work with unbelievable deadlines and long hours. Plus, working with law firms was pure punishment at times.

We did no work for government agencies as we saw that a conflict of our client base which was 100% financial and business oriented.

[Ronstar]

I started working for a civil engineering/ land surveying firm in 1974. Switched to a new company in 1981. Bought 15% of the company in 1992 through a note to the existing owners. It was financially rewarding. My share of profits paid my note off in the first few years. Then made yearly profits that exceeded my initial investment. Sold a little ownership in 2000 to new partners. Sold more in 2007, then sold the remainder in a 2013 in a deal where the existing shareholders bought me out in exchange for me having to work another year.

I learned that running a business can be lucrative year to year, but one must have a solid exit strategy to get maximum $ for your business at the time when you want to get out. The ‘when’ drives the whole thing. If I had set my deal up better, I would not have had to work that extra year.

[tb001]

Really interesting responses so far. I’m not at the point yet to take the next steps, but was just curious what type of businesses people were running. Most of my family are entrepreneurs of some sort and many have made very good money running businesses I just never would have thought about. Koogie and COcheesehead are perfect examples! In my family, all have kind of fallen into their business—they were working for someone else in the same industry, figured out how it worked and launched their own company.

My area of expertise is such that I could probably swing a consulting service, but I’m pretty burned out and thought about doing something totally different. I keep telling DH I’m going to open up a McDs!

[ERD50]

Interesting reading. I hope they keep coming.

Quote:

Originally Posted by COcheesehead ... My only advice is make sure you have a point of difference, a competitive advantage and also know where your first order is coming from. ...

Another way to that point, is find a business that almost no one else wants to do. You won't have much competition!

I know some people who have done very well for themselves with that approach. The business is the opposite of glamorous, but if you do it right, the money can buy glamorous things.

-ERD50

[Scrapr]

Quote:

Originally Posted by ERD50 Interesting reading. I hope they keep coming. Another way to that point, is find a business that almost no one else wants to do. You won't have much competition! I know some people who have done very well for themselves with that approach. The business is the opposite of glamorous, but if you do it right, the money can buy glamorous things. -ERD50

This, exactly. Right out of college I built a home. Right as we finished up Paul Volcker raised interest rates. They topped out at 20%. We were very very very lucky to sell that home. So bummed around looking for a way back in. Built my own home in '85 while working a trucking job. One of the things I didn't want to do was clean up the debris from the job site. Called a guy doing it & he said "I'm not taking on more work right now" Ding. ding, ding.

Couple years later I gave it a flyer. Just trying to make some vacation money and find a way back to building. I loved the Caribbean. Long way from the PNW. After 2 years working a night job & doing the site clean up during the day I had to decide. To me it looked as if I could bring some professionalism to the site clean up. I did. Got a crew together, treated them good, bought good new equipment, and was true to our promises.

But it does consume you. It is everything. Are we going to make payroll? Is someone going to get into a bad accident? Is something going to fly out of a truck & hit a car? Is one of our crew going to get hurt? Am I going to get paid? How much is in our reserve account? Do I miss dinner with the family to go to a networking dinner?

Until you are in the fog of war it is hard to explain all the things coming at you. I would not go in as a part time thing. Except maybe E bay or something. And then is the $$$ significant?

I love it and don't think I could work for someone else ever. Find something others turn up their nose at. Portable toilets son

ohh, yeah...be able to sell. Mrs Scrapr helped me a ton in that area

[W2R]

Quote:

Originally Posted by tb001 I know we have a number of people here who have started their own successful businesses. I’ve worked for someone else my entire life and am looking for alternatives as we move into the next phase. Curious to hear from those who have been there. What type of business did/do you run, how did you get involved in the industry and how financially rewarding has it been for you?

I started a kitchen-table business selling my electrical engineering senior project (a micropower data logger for environmental use under unusually harsh environmental conditions) many years ago.

My business was not one of those successful businesses to which you refer - - it was a HUGE flop! But I thought you might think my story was interesting. I had more orders than needed even at what I thought was a fairly substantial price point. So that part didn't flop.

The problem was this:

(1) Design - - although I loved the design part, that was already done. And
(2) Assembly - - although the assembly part was tolerable, that wasn't all that needed to be done.... and
(3) Business aspects - - I found out the hard way that I absolutely despised the business aspects! And that was most of what it was all about! I didn't have any employees to help with that part because it was just a beginning business out of my home, and I was literally assembling data loggers and interfaces for them on my kitchen table. Doing taxes for my small business was enough to drive a person to drink even though I don't drink. And the red tape involved in setting up a small business of this type legally and openly and aboveboard was so complex (or seemed so to me since I am dumb as a rock about business stuff). I was just never cut out to be a business owner/operator.

Basically I thought that a company producing a very small volume of a specialized piece of scientific equipment, would be more engineering than bureaucratic tedium. It wasn't and I just hated it even though the data loggers that I sold worked just fine. Word got around and I had lots of requests to purchase more so I was in a H*ll of my own making. What to do? This was not what I wanted in life.

So I bought myself a brand new Aggie maroon Dodge Daytona with the profit, and shut my small business down for good, politely turning down all of the requests for more. I had been simultaneously finishing up my BSEE and starting grad school in EE anyway so I had more than enough irons in the fire.

Sometimes I just have to try something to discover that I hate it. What did I get out of the experience? A slick new Daytona and a story to tell to people on the internet.

[Scuba]

I haven’t started a business, but a friend who was laid off and couldn’t find a job decided to buy a franchise. The franchise provides a lot of support and this is helpful. However, watching what she is going through to build her business makes me very glad that DH and I decided not to start a business. She works 12+ hour days, partly because there is a lot involved in running a business other than just generating sales. Like W2R said, there is a lot of other stuff to be dealt with and no one else to help at least initially. Perhaps her business will eventually provide some cash flow, but right now after a year in business, she isn’t making much despite very hard work. She won a top producer award for newbies so I guess she’s doing well relative to other new franchise owners.

[davismills]

I started an apartment refurbishing business in my sophomore year of college. I promised the landlords a 48-hour turnaround between tenants and the business boomed. We painted, cleaned carpets, repaired cabinets and replaced carpets. We started with 9-inch paint rollers and advanced to airless paint sprayers. Did you know that a cut in half Budweiser beer can will fit over and shield most doorknobs from paint overspray? We could paint and steam clean a one bedroom apartment in just over one hour.

My senior year of college I wrote a paper describing my business and was given a D grade by my professor. He said it would never be profitable. I took my tax returns in and he changed the grade to an A.

I sold the business for a profit shortly after graduation from college. My only regret...I should have set up a franchise for the business model that I had stumbled in to. I loved owning my own business, but it's HARD work!

[nativenewenglander]

I started a wholesale manufacturing and distribution business in 1997. I had worked in wholesale sales on commission for 15 years, mostly selling to small retail shops and mail order houses. I wanted to strike out on my own and looked who had really been successful and it was in the wholesale end. I also wanted to be able to move my business if I decided to relocate. Then a year later I got married, my wife had been in advertising, so she jumped in and we rapidly expanded the business. We hit $500K at one point with no employees, but we worked seven days a week. After a few years we were burning out, so we moved, then rolled the business to a more manageable size. Five years ago we moved to our retirement home and rolled the business back again, so I could work just 10-15 hours a week at most. Starting a business can be exciting and rewarding, but you really need to be familiar with your market and it's direction. I grew up in wholesale as my dad had been in it for decades before I was born, it was an easy switch. I had considered other industries also when looking into what to do for a business of my own. The advice I got from a smart friend, was do what you know. I think that was sound advice.
Best of luck with your soul searching on your next move.

[bizlady]

I sold something on eBay some years ago, and somehow felt that a business could be made from that. A year later, I had a dropship business featuring home accessory items not generally found in local stores. As I added products some vendors were better, and some items sold well. Then customers started asking about personalization and bulk sales. I shifted the business focusing on this and found new vendors to work with. The business took off and I eventually hired DD and SIL to help. They did so after their day jobs, They saw the business grow and asked to buy it when I was ready to retire. Today they both do it full time and live quite comfortably..

[Koogie]

Quote:

Originally Posted by ERD50 Another way to that point, is find a business that almost no one else wants to do. You won't have much competition! I know some people who have done very well for themselves with that approach. The business is the opposite of glamorous, but if you do it right, the money can buy glamorous things. -ERD50

Agreed. Two of the richest self made people I have ever known made their money through unglamorous means.

One owned a series of scrap metal yards. He was a rough, hard s.o.b. But he lived in a waterfront mansion, his kids adored him and they all flew first class overseas.

The other did agricultural tile drainage. He could squeeze a penny so hard he turned it into copper wire. But, he was into cars and had to buy and refurbish a set of barns to hold his collection. That was quite a thing in the small farming town I come from.

Quote:

Originally Posted by Scrapr I love it and don't think I could work for someone else ever.

Agreed. I often joke that I am unemployable. The idea of having to get a job and having someone else telling me what to do now makes me laugh and shake my head.

It's probably a good thing I decided to pursue ER...

[Scrapr]

Quote:

Originally Posted by davismills I started an apartment refurbishing business in my sophomore year of college. I promised the landlords a 48-hour turnaround between tenants and the business boomed. We painted, cleaned carpets, repaired cabinets and replaced carpets. We started with 9-inch paint rollers and advanced to airless paint sprayers. Did you know that a cut in half Budweiser beer can will fit over and shield most doorknobs from paint overspray? We could paint and steam clean a one bedroom apartment in just over one hour. My senior year of college I wrote a paper describing my business and was given a D grade by my professor. He said it would never be profitable. I took my tax returns in and he changed the grade to an A. I sold the business for a profit shortly after graduation from college. My only regret...I should have set up a franchise for the business model that I had stumbled in to. I loved owning my own business, but it's HARD work!

This is awesome. Sounds like a great business. I bet someone could start that up now and be profitable

[OldShooter]

A note of caution from your friendly neighborhood SCORE mentor here:

Most small businesses fail. The published figures seem to be 50% failures within five years, but I think those numbers do not capture a lot of the really small businesses started by individuals.

Nassim Taleb writes of what he calls "silent evidence." Regardless of what the actual failure rate is, it is very important to consider this concept. Basically, it is the successful businesses that we hear about. Hardly anybody goes on a forum to describe his/her failure. This is the evidence about small businesses that we don't see -- the silent evidence. Said another way, the enjoyable success stories we are reading here should not lead to a conclusion that starting a business and succeeding is easy.

And, @tb001, do not think that starting a business is so easy that you can do it in a field or a market that you know nothing about. This adds hugely to the risk. If you want to do something new, find a job in that type of business and work for a year. Then decide.

Sorry for the cold water. It's in my job description.

[Scuba]

Quote:

Originally Posted by OldShooter A note of caution from your friendly neighborhood SCORE mentor here: Most small businesses fail. The published figures seem to be 50% failures within five years, but I think those numbers do not capture a lot of the really small businesses started by individuals. Nassim Taleb writes of what he calls "silent evidence." Regardless of what the actual failure rate is, it is very important to consider this concept. Basically, it is the successful businesses that we hear about. Hardly anybody goes on a forum to describe his/her failure. This is the evidence about small businesses that we don't see -- the silent evidence. Said another way, the enjoyable success stories we are reading here should not lead to a conclusion that starting a business and succeeding is easy. And, @tb001, do not think that starting a business is so easy that you can do it in a field or a market that you know nothing about. This adds hugely to the risk. If you want to do something new, find a job in that type of business and work for a year. Then decide. Sorry for the cold water. It's in my job description.

Great post. My friend the franchise owner has tried three other businesses that all failed. It’s hard work for sure, and for her, has yet to prove financially rewarding even though she has all the sales volume she can handle.