To be an entreprenuer or not to be

[Nords]

"For the challenge"

Question - What made some of the people choose a particular business?  Was it because you knew how the business worked?  Or was it becuase you had a great idea despite little knowledge as to how the business worked?    

I chose the Navy because it seemed like an incredible challenge, far more than anything I'd encountered in high school. Plus a friend's older brother always seemed to be having a great time at home on leave-- sleeping late, covered in babes & beer, spending money like a "drunken sailor". Clearly that's the life for me.

I learned a lot more as time went on. I found out that I couldn't be a pilot with glasses, and I was darned if I was gonna sit in the backseat behind my pilot buddies and let them have all the fun. The ship drivers seemed to largely be a bunch of workaholic overreacting jerks, an initial impression that's reverified every time I meet a roving pack of them. I enjoyed parachuting out of airplanes and crawling around in the mud but the submarine job was much more intellectually stimulating (both nuclear engineering and the hunting business). Plus it paid way better and you still didn't have to shave every day.

Of course if I had any idea of how the business really worked, I never would have done it in the first place!

 

[Mr._johngalt]

I was walking down the street one morning when I
was about 18. I met the owner/Pres. of the biggest
employer in our little town (manufacturing). He said
"have you ever thought about working
in manufacturing?" I said "Nope!". He said "We have an opening in the office. Come down and apply."
I did. Got the job. That was 1963. 35 years and
about 10 companies later, I hung it up. That's how I
got into manufacturing. Met a guy on the street.

JG

 

[Beachbumz]

Question - What made some of the people choose a particular business?  Was it because you knew how the business worked?  Or was it becuase you had a great idea despite little knowledge as to how the business worked?    

I took an accounting class as an elective while in computer engineering school and got an A+.

Ended up in business for myself after not receiving an annual raise. I was his top producer, but the owner said it was a tough year. Of course, he bought the 2 tracts of land beside his building and an oceanfront condo that year! All I can say is...THANKS!

Beachbumz

 

[thebacchus]

I feel your pain because it sounds eerily like the situation I was in.  Why can't you just reduce your clientele?  I did and it made a world of difference.  I kept my no-headache clients and I’m still making good money.  I would never consider working for someone else unless I could come and go as I please, make at least my same rate, do the work the way I want to do it, not take any orders, and not have to call that person my “boss.”

Reducing Clientele isn't necessarily an option for us as our goal is to sell this company in the next 2-3 years. We have to bear in mind what life is like in the short term for the long term benefits we will be gaining. We would not be in the same financial position we are in if we were a salaried employee. Our business has also given us the means to invest in other companies and to invest in real estate deals, which is what we will most likely run after we sell company number 1. (Once bankers get that gleem in their eyes, you're set.)

I agree with you on working for someone else, it would be extremely hard to go back to. It would have to be the perfect situation. (For example, when my mind wanders in that direction, it is often a dream of being a college professor and having all of that wonderful time off. Although that usually is balanced by wondering if I could put up with the non profit mentality.)

To answer Wildcat: My first business failed as I did not know enough about the industry and running a business in general. (I was 18-20 at the time. Lasted almost two years.) After working for 10 years in finance in healthcare, I took the risk after being laid off do to a facility closing and figuring if I was going to go through that again, it would be me who laid me off next time. Our business is in an area that I have extensive knowledge in, so with all the hurdles, it made our success much easier. This is why franchises are so successful, they can fill in your lack of knowledge, at a price of course.

-TB

 

[BunsGettingFirm]

I would not have been able to semi-ER and eventually fully ER without having been an entrepreneur. Having my own business allowed me to work as much as I could to make as much money as I could. When I wanted to cut down to my hours I did. If I ever need to increase my hours I will.

The way I look at it, I’ll work hard to make myself rich, but I have no motivation to work hard for a “boss” to make him rich. Plus, it would irk me to no end even to say someone is my “boss.” I don’t know how people can go through life with a “boss” telling them what to do.

I'm like The Re-animator today, but besides this thread, I also plan to re-animate a few golden oldies by Haha, Billy, et. al.

I think there is some discussion earlier in the thread on what is an entrepreneur. The definition should probably be anyone who takes on the economic risk of starting or owning an enterprise. I would put partners in law firms and CPA firms, moms and pops in mom-and-pop grocery stores, and tech guys in Silicon Valley startups all as entrepreneurs.

The book referenced in The Illusions of Entrepreneurship says that you'd have to make 2.5 what you'd make working for yourself to be happy working for someone else. I don't have the referenced book, Job Creation and Destruction by Davis, Haltiwanger and Schuh, but I would think that author checked his references.

My "boss" called me today from New York. It's 80 degrees out. I can hear on his cellphone the wind and traffic in the background. He told me that complaining directly to his boss is in appropriate because I bypassed him. Hm...if I can actually find him on his "work at home" days, I may not have needed to bypass him. In fact, I think he takes every Friday off because I can never find the guy. Yes, my current work group is all about appropriateness. I can get get all of them fired just by letting the phone off the hook on some days.

 

[macdaddy]

I started a research project while in school...it turned into a full blown Internet startup and 2 years later we have about 25 employees. I love working "for myself" - even though in reality I answer to investors and a board. I am under constant pressure to keep them happy, as well as keep clients happy, and keep employees happy. Sometimes it feels like I work for the employees, rather than the other way around. I haven't taken more than a couple days off in two years...couldn't imagine going on vacation. But at the end of the day I love what I do and it's fun! I will need a long time to de-stress and relax once this is over though.

 

[BunsGettingFirm]

There is a BIG difference between a customer and a "boss." Who has control is key.

A customer doesn't tell you what to do and when to do it. When you have to do a job for a customer, you can do it the way YOU want to do it, not the way your "boss" tells you to do it. When you don't like one of your 100 customers, you can give him the boot and you're still in business. When you don't like your "boss" you're not going to give him the boot. If anything, he's going to give you the boot and you're out of a job.

Sinatra had plenty of customers. I doubt he would have said any one of them was his "boss."

Ah, retire@40 said it so well. The boss can basically hover over your head and tell you what to put in every cell of the spreadsheet. You object over basic facts such as nobody presents financial information from February of last year to April of this year. It's not fiscal year, and it's not calendar year, so people are going to ask why the weird 14-month financials, and he yells at you. Then when the spreadsheet sucks in a presentation, he throws you in front of the bus as if he had nothing to do with it. Nice, eh, and this guy went to Wharton? I'm glad that I didn't spend that kind of money even though my GMAT is higher than the average at Wharton.

I would gladly fall on my own bad slides and spreadsheets if I did them myself. If I had to fall for someone else's design, that's another story.

 

[TargaDave]

It doesn't seem like we have too many entrepreneurs that post. Am I wrong? Do most people feel they can get what they want in terms of wealth without the risk of being an entrepreneur? Or do most people here dabble on the side (partners in an investment) without taking on all of the risk? I know JG is a serial dabble man.

I almost get tired of saying it. This site does not tend to attract or keep most "classic" entrepreneurs. No offense to the site or the many fine posters. Yes, it gets the private practice professionals and a few IT and real estate types but not much of your classic type. The hard core types I know would never spend much time "socializing" on an internet site. Not trying to pass judgement, just the nature of the beast.

One multi-VC backed hi-tech equipment biz (pricey widgets in the $1.5M price range for semiconductor) started from zippo, somewhat capital intensive, sold ~2 years ago to a small foreign public company (modest payout). Back to working for self in "lifestyle" semi-ER mode. Like working, but could never ever work for the man.

Find the overwhelming anti-work sentiment of the hardcore posters a downside to an otherwise entertaining and helpful forum. It would make sense that a forum like this would be dominated by ER's over FI's with very few gung-ho entreprenuers hanging around compared to the corp-gov slaves. Once again, just the nature of the beast

 

[Ronstar]

I dont think the typical entrepreneur is an ER type. They seem to really enjoy their work(they dont consider it a job). They sometimes have others running their businesses so that they can do whatever they want.

 

[innova]

I've been fortunate in my young life to have done both.

I ran a successful business while a full-time student and half-time worker - 4 years in total. I decided to exit that business when I graduated and pursue the 'salaryman' path for some time.

I think at the point I'm at I would have a hard time going back to the entrepreneurial ways of life. Why?

1) I work 8-5, M-F. I generally don't take work home, and I generally do not need to make any special arrangements to leave for a weekend or a week. Contrast that to my business life, where I was on-the-hook 16 hours a day. Taking a vacation was excrutiating, because I didn't want to (excited about business), I had a hard time leaving, and a harder time coming back and catching up.

2) I make 6-figures now. Leaving this lifestyle to start and grow a business would likely set me back a decade in pursuit of my FI goals.

3) I've managed to nearly stick to nearly the same budget as I had when a student - by choosing to live within my means and aggressively invest, I should still be able to exit early when I'm ready.

The way I think of it.. Starting a business is a high-return, high-risk venture. I realized I can achieve the same goals by simply choosing to live a non-extravagant lifestyle and work on earned income. However.. that being said, once you begin to be recognized as an expert in your field, consulting offers start coming out of the woodwork - I probably won't entirely stick to the plan of 8-5 salaryman as time goes on.

I have tremendous respect for those fighting it out on their own - to start and sustain a successful business is no small feat.

 

[BunsGettingFirm]

I almost get tired of saying it. This site does not tend to attract or keep most "classic" entrepreneurs. No offense to the site or the many fine posters. Yes, it gets the private practice professionals and a few IT and real estate types but not much of your classic type. The hard core types I know would never spend much time "socializing" on an internet site. Not trying to pass judgement, just the nature of the beast.

One multi-VC backed hi-tech equipment biz (pricey widgets in the $1.5M price range for semiconductor) started from zippo, somewhat capital intensive, sold ~2 years ago to a small foreign public company (modest payout). Back to working for self in "lifestyle" semi-ER mode. Like working, but could never ever work for the man.

Find the overwhelming anti-work sentiment of the hardcore posters a downside to an otherwise entertaining and helpful forum. It would make sense that a forum like this would be dominated by ER's over FI's with very few gung-ho entreprenuers hanging around compared to the corp-gov slaves. Once again, just the nature of the beast

That's true. The anti-work sentiment isn't helpful, but with that said, there is still plenty of collective wisdom on this board that you can't get anywhere else simply because of the concept of driving your own destiny whether in the form of FIRE or entrepreneurship isn't present in many public forums whether online or in person.

Why am I starting to hang out here? When I thought I was one of the driving forces behind a start up, I didn't have any time hanging out here at all. In fact, I would wake up thinking about some cool thing I could try to make the business run better and run to the office to get it done. It's only because recent disillusionment with the current set up that I started hanging here. Basically, the the bosses want you to be extraordinary, and you turn out to be -- doing everything ahead of the curve, working weekends, going beyond the call of duty, then they get scared that they are creating a potential competitor so they start cutting you out. It's sad to see that even for people who have made a couple of bucks that the old saying of "For me to be successful, my friends must fail" is still the modus operandi. If that's the case, I'm going to do my own thing.

As for whether entrepreneur actually hang out, I would say that they do but at places like Inc.com, Entrepreneur.com, or in person at the local chamber of commerce or SCORE socials. No man is an island. Occasionally some helpful advice is what one needs.

 

[Khan]

Find the overwhelming anti-work sentiment of the hardcore posters a downside to an otherwise entertaining and helpful forum.

Are you surprised to find anti-work sentiment on a forum that discusses early retirement?

 

[Bree]

I'm going to go back to the initial question here and say that if you are willing to work, then you should at least try to be an entrepreneur. If you are only an idea man, then I would say you are best to go the salary route until you have built some capital that you can then 'play with' to hire someone else to turn your dream into a reality.

If you do plan to go entrepreneur route then I would strongly suggest that you spend a good deal of time defining what you want your business to be, and what you don't want it to be.

I've personally had 3 'failed' entrepreneurial ventures, and each time I failed my definition of what kind of business I wanted to be in became more and more refined like an aged wine.

Business 4 is now going strong and expanding.

So, given my past 'failures' (some call it 'failure,' but it's probably best defined as 'experience') I would now only consider a business that fit the following guidelines:

- It has no employees (in the traditional sense of the word - outsourcing is fine)
- It has no office
- It has no need for storage of physical product
- It is scalable (automation)
- Am I personally knowledgeable of this business, or at least interested in learning more?

This is a really strict and limiting list, but there's actually a lot of things that you can do online by selling and reselling things that satisfy the above criteria.

I wish someone would have handed me this list before I started my first business 'experience' because it would have saved me about 7 years of time and I'd likely be a multimillionaire by now. But on the flip side, I'm positive that I needed those failures to gain the experience and ability to appreciate and design businesses which can fit within those tight parameters.

Cheers.

 

[BunsGettingFirm]

Bree, thanks for sharing that list. I can see why you'd want all of the items except for the one about an office. You mean that you'd object to having a small 500 sq. ft office just so that you don't feel like you're always at home? If I have to work from my home, I would get cabin fever in about 3 days.

PM me if you are willing to share what type of business you're operating. I'm looking at several now, and some definitely do not fit your description.

 

[Bree]

Hiya BGF:

You are right about the office. I would have a home office - nothing fancy - just a desk filing cabinet and a bookshelf.

What I would not have again is a proper office that I had to go into everyday - I really didn't like that about my last business. I did not have the proper team and processes built up in order to leave the office so instead the business being freeing, it was more like a prison where I had to be there or else quality would suffer and schedules would not be met. There are certainly ways to have an office that you do not need to go into, but I want to avoid this completely.

I'm sure that a lot of entrepreneurs can relate to this work-prison situation. The E-Myth is a great book about this.

Learning from my work-prison:
I have improved my delegation skills, changed industries and found tools to simplify my process.

 

[tuixiu]

One thing I do like about being my own boss is that here I am at work, reading a message board and posting a message. Since I am not paid a wage and only earn if I bring in money, I can waste some time if I want.

Strangely I feel the same way about working for a company.

Generally speaking my paycheck will be the same whether I slack the day away or not. Obviously consistent excessive slacking would result in losing my job but it's pretty easy to lose hours here or there surfing the web, chatting, or generally screwing off... something I had always assumed I wouldn't do if it was on my own dime instead of the shareholders and the people in the upstairs corner offices.

 

[retire@40]

Strangely I feel the same way about working for a company.

Generally speaking my paycheck will be the same whether I slack the day away or not. Obviously consistent excessive slacking would result in losing my job but it's pretty easy to lose hours here or there surfing the web, chatting, or generally screwing off... something I had always assumed I wouldn't do if it was on my own dime instead of the shareholders and the people in the upstairs corner offices.

They probably allow you to do this because you are getting underpaid. So if you only produce 75% of the time, they are still getting the required minimum output from you.

 

[tuixiu]

Nah, according to most salary resources I check with I'm paid pretty well inline with my position and experience. I think it's very difficult to quantify what production is in some engineering disciplines, so measuring slack time isn't easy.

 

[Grizz]

I'm an entrepreneur, if you consider buying and growing an existing business to be entrepreneurial. I'm 39 yrs old, and FI. From the age of 30-36 I worked extremely hard, and often screwed up visits and dinners with having the cell phone ringing after hours, middle of the night, and weekends. That 5-6 year period of hard work combined with some dumb luck has paid off well. It has allowed me to work only Mon.-Thurs. now with a large (by hourly worker standards) paycheque and a growing and successful business.

In response to earlier suggestions that entrepreneurs don't hang out in forums like this, I am one, and I do. Everyone retires at some point, and in many cases it may be even tougher for entrepreneurs than employees. Entrepreneurs are used to being the one that the show revolves around. I fear that it will be very strange to be a "nobody" after a career of being the center of attention for an organization.

I find this forum to be highly entertaining, but more importantly by "hanging out" and participating in FIRE discussions, I hope to learn to think, do and act like a successful early retiree with the goal of easing the transition....whenever that is.

 

[BunsGettingFirm]

They probably allow you to do this because you are getting underpaid. So if you only produce 75% of the time, they are still getting the required minimum output from you.

That's exactly right because there are workhaholics making up the difference in work output and getting even more underpaid.

 

[BunsGettingFirm]

I'm trying to my sister to dust off her real estate expertise and go into a real estate management business with me, but she's set on starting something from scratch. I'm more inclined to doing the due diligence and research the heck of a company before you buy it. Building a client base from scratch just seems like a very painful route. Either way, you are doing research.

To illustrate my point, I also see electrical engineering companies for sale, and even though I'm an electrical engineer by practice and training, I can't say that I know exactly what the heck they are doing just by reading the prospectus. I'd still need to do a bunch research. That's why I think, in my truly limited and humble opinion on this particular matter, is that people management skills, financial management skills, sales skills, and marketing skills are the general skills you absolutely need for any business. The specifics products and methods of a business you can learn if you retain the key employees and if you're willing to put in extra time to just to learn. Of course, I'm not saying that I can become a doctor and a lawyer by following Rich in Tampa and Martha around.

 

[kcowan]

I had one period when I had a tyrant workoholic as a boss. It was when I was a self-employed entrepreneur!

 

[BunsGettingFirm]

I had one period when I had a tyrant workoholic as a boss. It was when I was a self-employed entrepreneur!

See my weekday post times. All are after 9 PM. No time to hang here during the day because of solid work and study schedule for 12 hours. Working myself hard is not a problem. I just have problems taking orders from morons.

 

[Bree]

Heh - Buns, try doing a brutal 80/20 analysis of current customers (especially if they are repeat order customers) find that 20% which generates your 80% revenue, and then focus on the characteristics of those 20% and find more like them.

Easier said than done, but upon doing a recent 80/20 analysis of my own business I was pretty enlightened.

kcowan - I love this quote about the tyrant boss - too true!

cheers.

 

[dreb]

It doesn't really matter who or what your boss is (customers or an employer). You will only ever get out what you put in. Yes 75% of the fortune 500 may be self made through business - but these people have put an extensive amount of effort into getting there. The Microsoft Millionaires, maybe luck - but those who made the money worked hard.