Starting a business

[kingofspades]

Hey Guys,

I will be done Grad school next year, and I know there are a lot of business owners on this website, so I wanted to ask a few questions.

I have grown up around business my whole life, and I have been doing sales since high school for the reason that I can control how well I want to do based on commission and incentives. I cannot possibly imagine ever working a job where I am told what to do and when to do it, not downing that by any means, its just not for me.

Now that I will be out of school soon, I really would like to try owning my own. I have been working in sales for this business I want to own for a while and my boss doesnt even realize the potential, that he could probably grow it from a 1-8 million dollar company if he just put more effort into it.

Enough rambling though, I will obviously not have the money to invest into this business after I graduate (about $300,000 start up cost), which is discouraging. How did the business owners on this site get your money to start up? should I look for government programs, venture capitalists , what is the best approach?

 

[abolish the weak]

Start small, your reputation is what will build your business, not necessarily more money. Investors and venture capitalists is a good idea, but just make sure that it's pretty simple and to the point, they are investing money for a share of the company for x amount of years or x amount of interest. There are many people out there who will be happy to fork out the $$ but they want a big piece of the pie and they want it forever. Now, it's not like your working for yourself because you have guys like this breathing down your neck all the time. Be smart about it, I would not assume this type of risk/ loan right from the start. I'd figure a way to start smaller and then build it up as I go

 

[kingofspades]

Thanks for the response. I will have to start small, it will just be hard supplementing my income, maybe work a night job? The business I want to go in sells units, I won't bother to get into it, but these units pay for themselves over a 4 month period. So I would need to live of something while im in the hole, you know?

I just wish the government helped people like me out, who have these aspirations and could potentially help the economy. Instead, I will probably get taxed the shit out of. But thanks for your input, I'll definitely be keeping my eyes open for reasonable investors and venture capitalists.

 

[abolish the weak]

Thanks for the response. I will have to start small, it will just be hard supplementing my income, maybe work a night job? The business I want to go in sells units, I won't bother to get into it, but these units pay for themselves over a 4 month period. So I would need to live of something while im in the hole, you know?

I just wish the government helped people like me out, who have these aspirations and could potentially help the economy. Instead, I will probably get taxed the shit out of. But thanks for your input, I'll definitely be keeping my eyes open for reasonable investors and venture capitalists.

The trick to getting your business going is to actually stay in debt a few years. Any income you generate put right back into the business. Your personal income will be more than it looks factoring in the tax break.

 

[kingofspades]

thats some good advice bro, thanks.

 

[Uluwatu]

Start small, your reputation is what will build your business, not necessarily more money. Investors and venture capitalists is a good idea, but just make sure that it's pretty simple and to the point, they are investing money for a share of the company for x amount of years or x amount of interest. There are many people out there who will be happy to fork out the $$ but they want a big piece of the pie and they want it forever. Now, it's not like your working for yourself because you have guys like this breathing down your neck all the time. Be smart about it, I would not assume this type of risk/ loan right from the start. I'd figure a way to start smaller and then build it up as I go

Good advice....Abolish.

King of spades, Starting a business is hard work. It is much harder then working for someone such as your boss you have now. What is your Grad school degree in? I am going to assume it is not an MBA or you probably wouldn't be asking these questions. I suggest you sit down and write up a very detailed business plan to even see if your idea will work. Sometimes an idea sounds great until you put it on paper. You will need this business plan anyway, if you go looking for investors.

Venture capital is a tricky proposal. Basically they want to see an enormous amount of return on their money, and usually only invest in "big Business". Usually only a big business can give them the return they are looking for. You might want want consider the SBA or an angel investor. Remember the only thing an investor cares about is getting their money back plus a big ROI.

The other way is to finance the start up yourself or with friends and family members, credit cards etc.

Good luck in your new venture.

 

[kingofspades]

Hey Uluwatu,

I will most definitely be writing out a fully detailed business plan (necessary for any business). The thing is, I have been working in this business for several years now, and I wont discuss particulars, but what I will say is that because of the economy, people who want this service will be forced to switch over to my product, which has no competition.

The reason I asked this question in the first place was that my boss had it relatively easy, because he had other multi-million dollar companies so he did not need to worry about sinking money into a new venture. But because of this, he has not had all of his attention on this specific business and therefore has not exploited the true potential. I might be able to work something out with him, as he is getting older and might want to sell it later on. But regardless, he did not have to worry about money, so it was much easier for him, but I do, and thats why I asked you guys to share with me what you have done.

On a different note, I am a Graduating in Sociology, I like to learn about people and human nature while getting my business education in the real world at home.

Thanks

 

[Uluwatu]

Hey Uluwatu,

I will most definitely be writing out a fully detailed business plan (necessary for any business). The thing is, I have been working in this business for several years now, and I wont discuss particulars, but what I will say is that because of the economy, people who want this service will be forced to switch over to my product, which has no competition.

The reason I asked this question in the first place was that my boss had it relatively easy, because he had other multi-million dollar companies so he did not need to worry about sinking money into a new venture. But because of this, he has not had all of his attention on this specific business and therefore has not exploited the true potential. I might be able to work something out with him, as he is getting older and might want to sell it later on. But regardless, he did not have to worry about money, so it was much easier for him, but I do, and thats why I asked you guys to share with me what you have done.

On a different note, I am a Graduating in Sociology, I like to learn about people and human nature while getting my business education in the real world at home.

Thanks

Congrats on your new sociology degree.....If I were you, I would schedule a meeting with your boss and discuss the potential for a structured buy out of the business. It can't hurt. If anything the guy will see that you have passion for the business and might promote you or make a new position for you. Who knows maybe he has lost interest and wants to unload the business. But you must have a plan together and present to him exactly what you would like to do. Before jumping into anything you must make sure that the business is as good as you think it is. Sometimes businesses can look like they are doing well, but in reality it is in the red.

Have you seen the financials?
Are you sure it is making money???
Are you sure there is no other competition?
Will there be competition in the near future? Very few businesses have no competition.

These are just a couple of things out of many that you need to think about.

 

[tkav1980]

Thanks for the response. I will have to start small, it will just be hard supplementing my income, maybe work a night job? The business I want to go in sells units, I won't bother to get into it, but these units pay for themselves over a 4 month period. So I would need to live of something while im in the hole, you know?

I just wish the government helped people like me out, who have these aspirations and could potentially help the economy. Instead, I will probably get taxed the shit out of. But thanks for your input, I'll definitely be keeping my eyes open for reasonable investors and venture capitalists.

the govenrment will help you out of you know where to look. start looking into finding a grant writer. the government gives out billions of dollars a year in the form of grants. Writing one up is the tricky part, and it gets pretty technical, but there are people who do just that for a living. it cant hurt to try.

 

[pesty4077]

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the govenrment will help you out of you know where to look. start looking into finding a grant writer. the government gives out billions of dollars a year in the form of grants. Writing one up is the tricky part, and it gets pretty technical, but there are people who do just that for a living. it cant hurt to try.

Forget Grants, been there done that, wastes time. If you have a solid business plan, you get investors for your company. I got $100,000 for one of my businesses. PM me, if I can assist you. Most small businesses will fail in the first 5 years, mine almost did.

 

[tkav1980]

Isnt the failure rate usually due to the fact that most of those businesses dont have enough working capitol to even get through their first year?

 

[Uluwatu]

Isnt the failure rate usually due to the fact that most of those businesses dont have enough working capitol to even get through their first year?

Many things can cause a business to fail. But from what I have read one of the top things is not having enough capital. You would be surprised at how fast your capital reserves go. It seems that unexpected "things" just keep coming up every week that require money. I have been in business now for about 6 years and I still burn through money.

 

[trux7927]

I have owned several businesses from car lots w/ @ 4 mil in floorplan to what i'm doing now, which is auto transport w/ 4 trucks/trailers and although there are WAY TOO MANY things to consider in this thread, I'd say that #1, don't jump in too deep too fast, and keep your overhead as LOW as possible. This doesn't guarantee, but rather helps to insure you aren't robbing peter to pay paul every time bills are due. After you put together a business plan, considering EVERYTHING(this will not be something you can put together in a couple of hours), I'd say keep your monthly expenses to something you think you should be able to pay w/ a weeks worth of sales. It probably won't work out exactly like that, but you won't have 50k in credit card debt and 3 mortgages on your house either. Just my opinion.

 

[kingofspades]

K, just an update.

I had a serious talk with him last night and he was surprised that I enjoy the business so much. He told me that a 1.5 billion dollar acquisition company just offered him 2.5 mil for it. However, he said now that he knows I'm interested he wont sell, and wait to plan something out with me. He mentioned that he'd sell to me for 2 mill if I could get it.

Today we went over the raw numbers, which I hadn't seen before, and it nets $980,000 a year. I think my plan right now is to devote the next year developing a business proposal. After that is finished I will present it to the trustees at my school. The trustees are required to donate over a million dollars to reach that status, so I know most of them have the money, maybe they will have interest in what I am doing.

If anyone has anymore input that would be great.

Thanks,

KOS

 

[Pekkerwood]

King of Spades:

I am a private lender (locally), investor and own a few small businesses. Your first question: How did I get the money to start? I went to work saved $5k then quit and started. Understand this was 25 years ago.

Most advice you have here already is good. Most businesses do fail because of the aforementioned inadequate capital, and I would like to add, wishful thinking. Far too many people over project sales, market penetration timing, and underproject expenses, interest costs, etc.

The absolute number one way to be successful is to create a track record in the same or similar business to the one you want to own by doing if for/with others as you are doing. This track record of success will give relatives, friends, etc. a valid reason to invest with you.

It sounds like you may have an opportunity to do an equity earn out in your existing firm. If you truly think your efforts will double the business, the owner may create a scenario where if that happens you can get a percentage of ownership. Where is his downside?

Please abandon this notion of "Don't want anyone to tell me what to do". That is posturing and posing and of no business value. I certainly discovered that many times over the hard way. Someone will always "Tell you what to do". It may be your customers, the market, your venture capitalist, your partners. When you suddenly don't work for a "boss", you will find you acquire many other "bosses". Usually in most successful people the toughest boss you are going to acquire is yourself.

I will try to respond in greater detail in a few days. I like the way you think and admire your call to action.

Pekkerwood

 

[kingofspades]

Thanks a lot PW, it is clear that you know about business, so I wont take your post lightly. I know this is a great opportunity for me because of how long I have been working in this business and how little effort my boss has put into growing it and still had great results. I know I can put in 100 times more effort and thats what makes me excited about this. Please send me more info, I can use all the help!

Thanks,

KOS

 

[bigbuc524]

starting a business

i am currently a business student, and i always wanted to start a business as well. A senior partner for an e-commerce business approached my friend and i, and we both started our businesses for very cheap because its online. Variable costs are mainly whatever you would like them to be, and there really is no fixed cost other than your start up capital. It is a very successful and one of the best companies online, you can check out at http://www.thisbiznow.com, **broken link removed**, and also look into the Better Business Bureau. It is a simple way to get experience in owning a company, and can involve marketing and sales (which you already are involved in) and its only part time stuff. It might help you build some start up capital for your traditional business. Email me

[email protected]

dave