Starting a Company?

[ATC Guy]

I have a few years left on my military commitment and I've been debating several options for when that time is up, from remaining on active duty to getting out and working for the government. One of my big reasons for deciding to potentially leave the military is having to move constantly and the ever present threat of deployments. Getting out and going into the FAA brings a new set of uncertainties. Unique to the FAA, you apply to two states and from there they decide (if any) what location you will be offered for a job.

Lately I have been feeling quite tired of other people telling me where I will live and for how long. My other option is getting into business. For a long time I have considered starting a small business. It would allow my wife and I to move back to our home city and be near family again which would likely otherwise be impossible with my career field. It would also allow me to work for myself and have an endless income potential.

I was hoping to hear from the forum as a whole but also small business owners past and present (and future) on their thoughts. The scary part is obviously trying to avoid failure but it is also the instability until the business gets up and running. My wife is not as risk averse as I would be in starting a small business but I think I could get her on board before I separate (if I separate) from the military. Our big thing is that we will likely be looking to have our first child probably a year prior to separation so being without health insurance would be rough.

Obviously everyone has different experiences but does life just absolutely suck for the first few years? Is it worth it, for those who have taken this leap? How have you still accomplished ER goals with this venture? Any insight into starting a small business would be great!

Thanks!

 

[Texas Proud]

I think you will get a good amount of advice from both sides of the question....

But the one question that I have is what skill or product are you going to be selling IOW, just saying you are going to start a business means nothing if you do not have a business plan... are your skills such that they apply to the business you want to start or are you 'starting over'?

Do you have enough money to live on for awhile while you build your business Most people fail in this aspect... thinking they will be making money quickly.... most businesses do not make money for awhile... you have to build up clients etc. which takes time and effort...

 

[Ed_The_Gypsy]

A small business publication once said that the three things an entrepreneur could have were:
sleep
sex
cash flow.

Pick two.

Tex gives very important points.

A friend who has his own successful engineering business told me that the first thing you need is a customer. That is, before you sink any money into your business, you have to have someone who wants to pay you for what you can supply. Know your market.

 

[samclem]

I think you've decided to separate from the military, but I'll chime in anyway with this (obvious) observation:

Going into business is a LOT easier if you retire from the military first. The medical care is taken care of, and the pension check is enough to keep food on the table and the wolf away from the door if the business fails. You'll also have more years of steady pay to save up the cash needed to get things off the ground, and to do necessary research.

I had several friends who chafed under the constraints of military life, but saw it all as a "pay now so I can have more freedom later" choice. They wanted to start businesses, and to have the freedom and opportunity that entails, but they decided to give themselves the best chance of success by doing 20 years first. I lost track of 'em, so I can't give you a report, but I know they were thinking long term and that's a good sign.

 

[SmallHouseLife]

How about an internet business you can start while still employed?

You could even blog about the military since you know it so well.

dee

 

[TargaDave]

Probably not the best forum to pose this particular question IMHO.

My only comment. You need to find out any way you can if it is "really in your blood". Most successful biz founders/owners I have met, small or large, could never work for the man. The prolonged pain is readily accepted because there is no fallback choice. Good luck!

[My particular folly in self inflicted pain was semiconductor equipment; angel investor was the A in KLA-Tencor. Three subsequent VC investors and finally sold out to a foreign public company a few years back. Despite the negatives it was an awesome experience. Even my retirement playjob is as an independent contractor, not an employee]

 

[JPatrick]

You've gotten some pretty good reality checks here already.
Had DW and I started our business without benefit of a pension and healthcare we would have had to drain our retirement savings and probably have lived in a van for the first few years. I really can't imagine adding a new born to the drama. After 15 years it was the many 18 hour days that did us in.
As stated above, you'll need a rock solid business plan and a plan to sustain the other part of your life while you suffer through the start up.

 

[Nords]

Lately I have been feeling quite tired of other people telling me where I will live and for how long. My other option is getting into business. For a long time I have considered starting a small business. It would allow my wife and I to move back to our home city and be near family again which would likely otherwise be impossible with my career field. It would also allow me to work for myself and have an endless income potential.
I was hoping to hear from the forum as a whole but also small business owners past and present (and future) on their thoughts.

ClifP and I spend a lot of time talking to entrepreneurs, and here are some observations:
- If your primary motive for starting a business is to avoid relocation, then you don't have the right motive. Not every employer asks their employees to relocate, anyway-- are you proposing to avoid ALL employers in order to minimize the risk of relocation? I'm pretty sure negotiation will be a lot less painful than entrepreneurship.
- If you're talking about starting a business when you're separated then you're behind the power curve. You could be taking community-college courses on starting a business, signing up for an MBA program (or an exec MBA) at a state school, or just going out and starting your own business (part-time) right now. Most successful entrepreneurs never even seem to think about waiting to start a business-- they can't NOT start a business.
- Frankly, the entrepreneurship bar is almost as low as the author bar. The most important characteristic is persistence, which military veterans possess in overabundance.

I recommend reading Paul Graham's website and Jessica Livingston's "Founders at Work". See if you identify with any of these stories.

Obviously everyone has different experiences but does life just absolutely suck for the first few years? Is it worth it, for those who have taken this leap? How have you still accomplished ER goals with this venture? Any insight into starting a small business would be great!

Yes, it does suck. The problem, though, is that successful entrepreneurs never really notice that (or heavily discount it) because they seem to regard the first few years as the most fascinating, compelling, and fulfilling period of their lives. And I could tell right away that it's not for me!

You should also send an e-mail or PM to Arif. He's an Army veteran and successful entrepreneur who used to post here and who's profiled in "The Military Guide". He'll have lots of suggestions on refining your ideas.

 

[Ronstar]

I cannot overstress the need for a business plan. and don't forget the SWOT analysis
SWOT analysis - Wikipedia, the free encyclopedia

If you do start a business, do it in a field you are experienced in, and have a prospective customer base ready to pay you enough for your services/products to generate a profit + your salary.

 

[marylandcrab]

I'm a small business owner. Neither hubby nor I were risk averse when we started, even though we had a house and two small kids. My thought was always, we're young and healthy and relatively intelligent, we could always make money doing something.

We went into something hubby knew A LOT about. Me, not so much, but I ran the office while he did sales and I learned over time.

We've had ups and downs. But we never quit, ever. If we made a mistake we immediately brain stormed on why it happened and to make sure it never happened again.

We grew as we could afford to grow. We have put our life savings into covering payroll before. We have not paid ourselves for months at a time. We have had to deal with employees who in no way whatsoever get what it's like to have to worry about paying salaries, rent, computers, electricity, etc Employees are absolutely the worst part of running a business.

Do not hire out anything you could reasonably do yourself. Don't bring on anyone unless it is to give skills you don't have or don't have time to do.

 

[Ronstar]

Employees are absolutely the worst part of running a business.

Unless you have partners

 

[clifp]

In my experience, there are three type of successful business owners.

1. Family business
2. Serial Entrepreneurs
3. Folks with a passion for a particular area.

I am guessing #1 is out. #2 is out because if you have not started 3 companies before you were 25, you'll probably never be a serial entrepreneur it just isn't in your blood.

The most common is for someone who has a passion for something, cabbage patch dolls, making cheesecakes, surfing, food cats and dogs, educating kids, traveling, making maps, the list goes on.

A related group is the person who is bothered by something, and has an idea for better product. One of the most successful entrepreneurs in Hawaii is young woman who invented a better backpack system for her child. She was very active and was frustrated with the existing devices not being compatible with her lifestyle. In our Hawaii angel investor group we pretty much all agreed that if she had approached our group for funding she wouldn't have gotten any, but she sold the company for near $100 million.

I don't think you can fake the passion, and I think it is necessary but nearly sufficient requirement for being successful.

Now if you want to be your own boss, than you can always look into franchises or buying existing business, some of which are pretty affordable. Although I think the comment, about sex, sleep, or cashflow, pick two is spot on. The good news is your pension gives you a lot of cushion.

 

[JPatrick]

I don't think you can fake the passion, and I think it is necessary but nearly sufficient requirement for being successful.

Certainly a +1 on the passion. Too often these days of high unemployment you hear, "if all else fails, I can always start a business." I don't hear the passion.

Now if you want to be your own boss, than you can always look into franchises or buying existing business, some of which are pretty affordable. Although I think the comment, about sex, sleep, or cashflow, pick two is spot on. The good news is your pension gives you a lot of cushion.

Buying a franchise is indeed an option. While expensive, the better ones remove most of the start up risks.
Given the controls maintained by the franchisor, the concept is often likened to "buying a job."
Years ago I looked at buying a couple of convenience stores. I quickly figured out that the only major decisions I'd be making is what color socks to wear each day.

.....

 

[ShortInSeattle]

I started my consulting business 5 years ago.

I love what I do, BUT it's far harder than being an employee.
I make a decent living BUT it took 5 years to get there. No profit years 1&2.
I have a flexible schedule, BUT I routinely work nights and weekends. There is no backup when I am sick. No one pays a match on my 401(k) or gives me paid vacation.
I have health insurance BUT it's through my spouse's employer.

I'd make more money and have an easier life as an employee. For me, the flexibility, freedom, and ability to do meaningful work trumps that. it's definitely not for everyone.

 

[FreeAtLast]

I was in the computer contract programming business for almost 20 years starting in 1980. It was profitable from day 1 as I took over customers from someone else that went out of business. There was many long hours and years without vacations.

I never seemed to be able to grow the business bigger than 5 employees as my skills were always in demand to do much of the computer programming work.
I had to deal with employee turnover & training, ever increasing group health, demanding customers. It was the early days of computers 1980 so we were trying everything like selling software, some hardware, training, buying and selling used hardware. I eventually focused on managing and staffing a few data centers on a contract basis.

I eventually closed down the business and went out and just did contract work on my own with no employees. I made almost as much money with less hours and far less risk.

 

[xmanz3]

I spent 10 years in the Air Force, got my Bachelors and MBA before I got out and started working as a contractor for 4 years. In 2007 I decided to become an entrepreneur and until this day my company is doing great and I just started another company 6 months ago. If you need any advice contact me [mod edit], I can provide you with my personal experience, checklists and even contacts.

 

[Nords]

I spent 10 years in the Air Force, got my Bachelors and MBA before I got out and started working as a contractor for 4 years. In 2007 I decided to become an entrepreneur and until this day my company is doing great and I just started another company 6 months ago. If you need any advice contact me[mod edit], I can provide you with my personal experience, checklists and even contacts.

Welcome back, X-man. How 'bout an update?