Your Own Business?

[imoldernu]

This time, a question about entrepreneurship in a business other than consulting, and one in which you, as the owner, had employees, a business location, and responsibilities to include most of the following.

Government reporting and responsibilities for employee taxes, federal and local taxes
Business insurance, employee health insurance,
Permits - Osha, Health and Welfare - subject to government or industry inspection.
Business location - outside the home- freestanding, business park, mall
Product - manufactured by you, for sale, or... a service.
Advertising
Internet presence
Vetting and Hiring employees
Equipment - for Production, Display, Tools
Location ownership or rental
Competition
Credit line
Membership trade organizations, Chamber of Commerce, Better Business Bureau
Business Plan - and Long Term Planning
Accounting - record keeping - self or hired

A long time ago, I was an advisor in an SBA program designed for people considering the entering the world of self employment, in everything from opening an auto repair garage, to restaurants, an employment agency, child care service, and another 20 to 30 embryonic ventures.

The first step was the development of a business plan, which took up the first 6 hours of classes, and where most of the drop-outs occurred. Statistically, 8 out 10 new businesses fail in the first 18 months. That number does not include those who spent time exploring the possibilities, and never took the second step. As I recall, in my classes alone, less than half of the hopefuls never followed their dreams.

This is not to suggest that opening a one person business is not requiring, but to solicit thoughts on entrepreneurship that has the added reponsibilities of employees and location.

Your thoughts on this? Ever thought to start a business? If not, why not?

 

[Papa bear]

I am 6 months into my business. I have one partner who is working full time and i am working part time until this summer. Currently in the black with very low overhead.

Home based but looking for office space.
Accounting and taxes are self completed.
Currently have general liability insurance and looking at professional liability insurance when we bring on any employees or contractors.
Will outsource payroll, employment taxes, and other withholdings to 3rd party.

 

[GrayHare]

The first step was the development of a business plan, which took up the first 6 hours of classes, and where most of the drop-outs occurred.

What % of those dropouts were still in business, say, 10 years later? How does that compare to those who did not drop out? I was one of those dropouts yet successfully ran a business for decades after. It might be that dropouts are more driven by action than planning, and that may result in greater success. Without stats we don't know.

 

[Fireup2020]

We're in this boat-and after the first 12 mos, we're already tracking to hit our 5 yr goals in our 2nd yr. Yes, we have health dept permits in different states, tax liabilities in different states, etc. Owning/operating your own business is wonderful, but having a good accounting, IT, legal, and 'employee' team is essential!

We did meet with the Veteran SBA rep, but did not attend the business owning workshops as we purchased the business from a retired couple (we're a LLC-as they were)
www.mr-mrs-jerky.com


Sent from my iPhone using Early Retirement Forum

 

[Which Roger]

Maybe it's an introvert thing, but every time I've considered the possibility, my thoughts are as follows: "Running a business would be fun, if I didn't have to deal with customers".

 

[Koogie]

Maybe it's an introvert thing, but every time I've considered the possibility, my thoughts are as follows: "Running a business would be fun, if I didn't have to deal with customers".

To true. Customers are the main source of aggravation in running our business. And ours is B2B, not the public (shudder). But of course, they are also the main source of income. So, grin and bear it. Everyday. Because ya' gotta'

Now. Don't even get me started on Employees ! Talk about your necessary evils...

 

[Walt34]

I thought about hanging out a shingle for photography, which I enjoy. But the more I read about the "running the business" side of it the less enthused I became. Too much like w*rk.

Like Which Roger, I also didn't want to deal with the customers. Dogs, flowers, and landscapes are good photography subjects but they don't pay much.

 

[chilkoot]

I never really "got" the commonly voiced opinion "I want to be my own boss". In my Megacorp career, I came into daily contact with employers of various stripes and got an earful and eyeful of the kinds of bureaucratic hoops the entrepreneur has to jump through. Never convinced me.

 

[DROPOUT]

I guess I'd be what you call a "serial entrepreneur"

Currently own 3 different types businesses, with a total of 15 employee's, several locations, and zero debt.

I always thought I would be working for someone else my entire life. Stepped in to a relatively niche market when I was 24, and with a bit of luck, I was off & running. Fast forward 6 years, and I'm still doing it.

I don't see myself ever working for someone else again. I will say ~ working for one's self has quite a few drawbacks, but overall, it's been a pleasant experience.

I'd be interested to see the details of the research that concludes that 8 in 10 businesses fail within their first 12 months. In talking to many people about starting their own business ... the #1 absolute recommendation I make is to not take out debt.

Of the several that have actually moved forward, none having taken out debt, and all are currently profitable (at least from what I have seen).

I certainly understand the need for debt, but I have a feeling, that is where most people & businesses fail.

 

[daylatedollarshort]

I certainly understand the need for debt, but I have a feeling, that is where most people & businesses fail.

Besides debt, one other thing I have noticed is some people have the logo designed and the T-shirts, stationary and coffee cups imprinted before they have made a single dollar or floated out a small test product or service.

 

[Rickt]

I have owned and operated franchised hotel for the past 20 years. Bought the 1st hotel with all our life savings as down payment and with 3 months expenses in cash as operating capital to start the business. After the 1st year we established a line of credit with the bank and did not have to keep operating capital in cash after that point. Still have a mortgage on the hotel but no other personal or business debt. Have 15 employees but the hotel requires a lot of hands on management. The money is good, hours are long but it sure beats working for someone else.

Five years ago we wanted to diversify and bought another hotel in a nearby city but had too many problems as an absentee owner and finally sold it recently.

We plan to sell the current hotel in 2017 when our daughter (2nd child) finishes college and retire (at age 57). In my opinion, freedom that you experience by self-employment is better than working for someone else even though you might work longer hours for yourself. Cheers!

 

[ERD50]

I never really "got" the commonly voiced opinion "I want to be my own boss". ...

Right, I think it is just " the grass is greener" syndrome.

If you own a company, every customer is your 'boss'. It's the rare company that can pick and choose customers to the degree that they just drop the ones that aren't a joy a to work with.

-ERD50

 

[imoldernu]

My own self employed era was relatively short... limited by a health scare, a fear that a planned expansion would leave DW in deep debt, and a decision to retire (earlier than planned).

Seems to me that personality type has a lot to do with successful entrepreneurship. My own plan, to grow first, and then to franchise, probably saved us from a bad situation. Even now... I often wonder what 'might' have happened.

The decision to strike out on my own came with conferring with my best friend and co worker in our former business (large corporation with a four year plan to close down). It was a large franchise operation with 2400 field units.

He went on (in a totally different type of business...) to become extremely successful... opening a niche food business, expanding to multiple franchises, and then selling, to go on with another successful venture as developer of a real estate franchise... and even today, embarking on another new venture at age 70. Happy in his own skin...
A case of personality matching ambition and achievement.

For me, not so much. From being a manager in a large corporation, the change to self employment lent new meaning to the words "vertically loaded". Days of intense concentration, followed by nights of worry. Weeks of self satisfaction (the good part), interspersed with moments of terror.

example:
For two years, purchasing my raw materials from a company in another state. That state, and most other states had no sales tax on the raw materials because of the type of industry. Then... one day... receiving a letter from my own state telling me that there "were state taxes"... OMG... in a low margin business finding out that nearly 2 hundred thousand dollars of materials had been subject to a 7% tax. For me... wow! Ignorance of the law, no excuse, but the end result was that the state backed down, as thousands of sole proprietors had been in the same position, and the law was eventually changed, with no retroactive enforcement.

Have never regretted the experience but have never regretted retiring... maybe not with the wealth I had anticipated but with the satisfaction of having tested my own limits.

In any case, a far cry from my original career plan of being a clinical psychiatrist.


"Of all sad words of tongue or pen, the saddest are these
'It might have been''" - John Greenleaf Whittier

 

[MRG]

This time, a question about entrepreneurship in a business other than consulting, and one in which you, as the owner, had employees, a business location, and responsibilities to include most of the following.

Government reporting and responsibilities for employee taxes, federal and local taxes
Business insurance, employee health insurance,
Permits - Osha, Health and Welfare - subject to government or industry inspection.
Business location - outside the home- freestanding, business park, mall
Product - manufactured by you, for sale, or... a service.
Advertising
Internet presence
Vetting and Hiring employees
Equipment - for Production, Display, Tools
Location ownership or rental
Competition
Credit line
Membership trade organizations, Chamber of Commerce, Better Business Bureau
Business Plan - and Long Term Planning
Accounting - record keeping - self or hired

A long time ago, I was an advisor in an SBA program designed for people considering the entering the world of self employment, in everything from opening an auto repair garage, to restaurants, an employment agency, child care service, and another 20 to 30 embryonic ventures.

The first step was the development of a business plan, which took up the first 6 hours of classes, and where most of the drop-outs occurred. Statistically, 8 out 10 new businesses fail in the first 18 months. That number does not include those who spent time exploring the possibilities, and never took the second step. As I recall, in my classes alone, less than half of the hopefuls never followed their dreams.

This is not to suggest that opening a one person business is not requiring, but to solicit thoughts on entrepreneurship that has the added reponsibilities of employees and location.

Your thoughts on this? Ever thought to start a business? If not, why not?

DW did from late '80s to early '90s. She started doing nails at a small tanning salon. Small town, I fought and argued we'd lose our a$$ but did agree to it. Started as a one woman show and she did very well. Nails still had a good price. Later the tanning owners had issues and sold her the tanning side too. Three beds and the books looked good. That was great till labor day, we had no idea of the seasonality of tanning. It died every labor day, picked up in January, February peaked in May and June.

At the high point she needed help, where to find good help? There's lots of teenagers willing but who's honest; there were no computers, a card file was the system of record. We were very fortunate with the first young woman, honest and always showed up. Getting good honest help was the biggest issue we had.

Business insurance yes. The nail side was licensed by the state and inspected yearly. No employee health coverage. Member Chamber of Commerce. Since nails at that time required a lot of nasty chemicals the local FD inspected storage and the amounts stocked. We got out before it became an issue, when they toughened laws regarding meth production most of those chemicals would be illegal to have in the amounts she required.

She rented a place right next to a hair salon so both businesses drew from one another. In this small town (2500) the competition was ten miles or more away. DWs plan was to offer an experience. Nice chairs, good women's oriented magazines, women's catalogs. Kind of a tropical feel in small town MO. Tanning beds always had new bulbs, clean towels, big comfortable private areas to change. She'd stock both tanning supplies(lotions), nails art and products that other shops wouldn't due to the cost. Had no problem selling the higher cost items and a 100-150% markup.

I didn't believe the draw the shop had, folks would travel 25 miles to this little town. I guess her plan of not being the cheapest and catering to the customers worked well. Of course even in slow times we spent money on a local weekly add including a discount for new customers.

We sold out due to our desire to move 60 miles away, made a decent profits for 7 years. We were lucky on timing, tanning has diminished popularity for good reason. The price of nails has gone down 50%. There's no way she could have done that business today.

 

[Ed_The_Gypsy]

I have paid to go to a class at the local community college conducted by SCORE for starting a business. My first concern is knowing all the rules and laws to follow, esp taxes.

I am consulting just now, but I have in mind two other 'businesses': one being lawn art/sculpture, the other being a small testing lab. All will be funded with available cash, so it will be slow-going, but I am not in a hurry. There may or may not be profits, but if the lab doesn't produce cash flow, it will be closed.