Small Business Owners

[Bronn]

Okay which one of you savvy business-folk are ready to take on a padawan?

[h0llywood]

1 hour ago, Bronn said:

Okay which one of you savvy business-folk are ready to take on a padawan?

How much assets do you have? :-) 

[Bronn]

18 minutes ago, h0llywood said:

How much assets do you have? :-) 

Business or personal?

I've really just been pondering business ideas over the past several years and just can't decide what I want to do. I have varied interests and multiple skill sets, most of which are either tech or general labor related. I've thought about starting everything from a technology repair/consultation/design business to a pressure washing/general handyman business. I think I could do well with real estate, but I don't have any training. I've been doing what I do now for 13 years now, and some days it just gets old, man.

I pick up most things pretty fast. I have a 2 year programming degree that is nearly 15 years old, and I haven't put it to use. I just feel like some days I am at a crossroads of what I want to do to make money and what I have been doing to make money.

[h0llywood]

29 minutes ago, Bronn said:

Business or personal?

I've really just been pondering business ideas over the past several years and just can't decide what I want to do. I have varied interests and multiple skill sets, most of which are either tech or general labor related. I've thought about starting everything from a technology repair/consultation/design business to a pressure washing/general handyman business. I think I could do well with real estate, but I don't have any training. I've been doing what I do now for 13 years now, and some days it just gets old, man.

I pick up most things pretty fast. I have a 2 year programming degree that is nearly 15 years old, and I haven't put it to use. I just feel like some days I am at a crossroads of what I want to do to make money and what I have been doing to make money.

Here is my order of things that make it difficult to start a business:

1) Finding a (VIABLE) business to start
2) Start up costs
3) Operating costs

Once you figure out what 1) is, create a business plan (SWOT Analysis, market analysis, executive summary, service or product line) as this will help you understand what you have and also help potential investors in understand if you have something viable and worth investing in. Are you providing goods or services? If you are selling goods, do you have inventory? What is your inventory method (FIFO or LIFO)?  If you are selling services, are you creating the product or are you forwarding the work? 

How will you start the business? I recommend using legalzoom's services. They do all the headache stuff that you do not want to get immersed in unless you want to do the leg work yourself. You would have to pay their service fees plus any incorporation filing fees with the state you are looking to do business in. Also look into county and city business laws as well for licensing purposes. 

Now that you spent your money on start up, how will you operate? How much cash do you have to pay your overhead and vendors? At this point, do not expect to make a profit but consider it as moving money around since cash flow should be slow in the beginning. Do not expect to get rich overnight. Have enough cash to cover 3+ months out (personally as well).

Again...it all comes down to, what kind of business do you want? Is there a need for it? What is your target market? Demographics? Who are your competitors? What is your margin?

[WilmyWood]

I agree with hollywood about legalzoom.  I started a business 15+ years ago and sold it 4 years later to start a new venture.  Legalzoom did not exist then so I had to pay a local lawyer and it cost and arm and a leg for him to do probably 20 minutes of work.  Point being, you want to do it right, so I'd avoid doing it yourself.

 

Your clients are #1, don't forget that.  You may be busy with another client, but always remember the "sundown" rule.  If someone reaches out to you, ALWAYS get back to them in one way or another prior to the sun going down...even if it is to tell them that you are tied up at the moment, but would like to schedule a time the following day to reach out to them.

[SmokinwithWilly]

On 7/6/2016 at 4:32 AM, pantherfan49 said:

Nice tips in this thread.

Don't agree with the "never let anyone be more than 20% of your revenue" statement.  Sure, I'd like to avoid that too but I'm not going to tell my bigger clients to go away.  And sometimes a small client grows to be a big one.  The way to minimize your risk is to continue growing the business to make the pie bigger.

You don't want to shove your large clients away, but I've found that there is very little loyalty to any thing other than bottom line anymore, especially where shareholders are involved. You always want to keep growing and building, but losing that large of a chunk really hurts. If you do have a client that's over that threshhold, work as hard as you can to keep them and get them back under that 20%. I chose that number because while it hurts to lose them, it won't necessarily cripple your finances if they do chose to go elsewhere. And you can lose an account for some really stupid reasons. The worst one I've had so far was the new CEO didn't like tattoos and thought they were an abomination  against God. 

[rippadonn]

On July 6, 2016 at 8:23 AM, Dex said:

You should think small business owners get tax breaks. Murica.

The tax laws are written in a way to award expansion. Our family business learned that lesson much too late.

Our competitor down the street was opening a new store every year.  He put any profit into new stores to not take a big hit on what he was really making. 

In the process he gained more market share and grew exponentially. 

The small scale equivalent would be investing in new equipment or creating DBA's like the poster said above

[stirs]

Debt is not your friend, personal nor business.

Your CPA should be able to advise you what type LLC to set up.  I operate as an S Corp

Operating from your home can help a lot.  Phones, internet, rental income, property taxes, utilities, etc, can all lower your personal outlay and offset your business income.

Biggest thing for me was to get out of debt to soften the normal dip in income that comes when you pull the trigger to start your own thing.  You should pull back even within a 2 to 4 year period depending on the type of business you are in.  Lots of work the first couple of years laying groundwork which often doesn't pay.