How easy was it? What was your background?
I’ve been thinking about going into business with a health food shop, but I know the guy i’d be in opposition with is a ruthless b*****d… Since I have virtually no business smarts except a faint recollection of profit/loss accounts etc. it looks ominous, but I know the market is absolutely ripe.
I’m currently working on starting one now (still in the very early stages). Its kind of a bitch. Every time you turn around there is something else that crops up and gums up the works. Dealing with the various state and city departments has been the biggest issues so far, but it is still very early in the process and I’m sure I haven’t even seen the “end of the beginning” of the problems.
It might not pan out at all. I very well might come to the realization that the barriers to entry are too difficult or I’m unwilling to risk too much investement.
I’m certainly not the sharpest tool in the shed, but I did a little research into rents, initial investment, costs of goods sold, sales forecasts and traffic and think I can make a real good go of a small business. Lord knows I see a lot of folks I can reason circles around become sucessfull in spite of themselves. Using conservitive estimates of sales, I think I can make pretty good coin after all expenses are met. If the business really “took off” (and similar business has), I could well be sittin’ pretty.
From what I know, you will work harder and longer at your own business than at almost any “job”, but the rewards are nicer and the boss is always right! I have no problem with hard work as long as the return is proportional.
Another thought is that if you intend to work with food, it gets the Health Dept. involved. Fun. On the plus side, most people have to eat everyday. Just because they ate yesterday and will eat again tomorrow, they will still most likely eat today also. Thats good for business if you sell food.
Good luck. Hopefully we will both make it. 
I ran my own business (video tape rental store) for seven years before selling it. I was 24 when I started out. And though I like to think of myself as being of at least reasonable intelligence, I learned a lot.
Please, please, please, do yourself a favor. Draw up a business plan. Go buy some books and invest the time to do this before your hang out your shingle. Essentially a b-plan entails every expense you will be encountering and how often. After you draw this up, go talk with someone currently running a business simlar to the one you want to start. They will double or triple the items on your list – no sh*t.
What this does is gives you realistic expectations of how much traffic you need walking through the doors to put you on track to recouping your investment and moving forward. Also gives you numbers to track against early on so you’ll realize if more advertising is needed, etc.
Also be prepared for this truth. When you open a business, a large majority of people view you as a wealthy individual who just needs a hobby to amuse themselves. Might not be an issue for you, but I didn’t appreciate being viewed that way (and told so on occassion) when I was working a regular job, and putting in countless hours to make my store work.
Good luck.
My wife and I started ours 12 years ago and are quite successful. We both have college degrees, hers in Psych (Human Dev.) and mine in App. Math/Comp. Sci./Geography. Our business is running 2 day programs for Developmentally Disabled adults - she is the program half, and I’m the fiscal half of the business.
Starting the business was more of a pain in the butt than difficult for us. Lots of laws, regulations and compliances since we contract to provide services indirectly for the State of California. “Bureaucratic redundancy” would be the two best words to describe the relationship with the state and it’s quasi-governmental agencies that we deal with. Since my wife actually worked for this same quasi-governmental agency (7 yrs.), it gave us a huge advantage on how to run a successful operation. Patience, persistence and out-documenting these agencies gave us respectability with these agencies since we’re a “Mom and Pop” operation. We are an “S” Corporation which was definitely the right move on our part. It pretty much makes my wife and I the judge, jury and executioner in all aspects of the business. Also, we are hands-on owners, not absent owners. To see most of the day to day operations yourself is a great way to see that the business and the employees stay on course. Never hurts to take courses in accounting and business law so you have a sense of staying out of trouble and to know when you need professional outside help.
Very gratifying helping those who need help the most in life.
I’m also in the very beginning stages of my business plan, and my hope is to find a place that’s selling and buy into an existing business.
Is that a possibility for you?
I’ve started a few, the longest running being what started as a speculative seismic data company that mutated into a geophysical consulting firm (10 years active, and another two years to put it to bed after I moved on to other things). My background at the beginning was that of a geophysicist at an exploration company where I’d been in charge of our dealings with spec seismic companies. I’d already had a few years experience operating my own small business, and had been a partner in a couple of others. Of my total of six ventures, mostly with a partner or partners (one sole proprietorship), only one crashed and burned, and that without screwing anybody because I detected before we made any major commitments that my partner was a flake.
Let me reiterate what rainy said: have a business plan! Figure out just how it is that your efforts are going to produce profits. Review and revise it, at least annually, but also as conditions warrant. My most successful effort, as noted above, mutated during its lifespan.
It wasn’t that easy - in fact, it required huge amounts of effort and gumption. We had a decent first year, with little personal income (~$8600 for me in today’s dollars, but I’d cashed in a 401K to keep movin’). The second year was good, but whew, the contact list my partner and I were using had almost 700 people. The third year saw an unprecedented industry slump (1992) and the fourth year was miserable.
But then, along about the fifth year we saw effects from both changes we’d implemented in the business plan the year before as well as the “been around long enough to get known” factor.
It got a lot easier after that, and we stayed busy until an oil company unexpectedly offered me a much better paying job five years later.
Hope this helps! And good luck!
If you’re starting a business, you’ll need help. The best non proffit organization out there to help you is the NASE. They offer an unbelievable range of services from legal help to busisness consulting to discounts on business supplies. Check 'em out.
Yeah, he’s right. And the Small Business Administration can be a godsend for start up capital.
I’ve started two small businesses. One petered out and that other is a part-time thing that makes me a decent chunk of change each year (low five figures) these days.
I’m in the process of going for gold and trying to put together a finance package to get my own firm off the ground and go full time with it. If I can get it together sometime in the next six months I’ll be out there fighting it out with the big boys.
You’ll learn about payroll taxes, permits, licenses, etc. as you go along. One thing I’ll pass along is that we were able to get group health insurance with three warm bodies (me, my partner and one employee). And we weren’t exactly great insurance bargain hunters.
But, check out that insurance company! My first one cancelled me and refused to pay when I was hospitalized for one night ($3200) for gastroenteritis that cleared up on its own (during that first year of penury). On checking them out, I found their net worth was ~$2MM (not squat for a health insurance company - they were a paper mill in Ft. Worth).
I am also at the beginning stages (just starting to jump through hoops for the SBA) and working on my Business Plan (using a really cool off the shelf software package, it’s a fill in the blanks kinda deal). I got the crap scared out of me when my industry fell apart early last year and I suddenly had no marketable skills and at that point I decided a change was in order.
Unclviny
…as stated before-do a business plan. Cost your venture out. Then triple the figure, and thats what it will cost!!!
I ran a small scale catering company the last year or so, and am currently in the set-up stage for something a heck of lot bigger-I’ll offer some different advice…
Don’t take your work home. Currently, I’m in the office anywhere between eight to fifteen hours a day, seven days a week, but when I get time off and get home-I relax. Make sure you learn to seperate your private life and your personal life.
Make sure that whatever venture you are planning, you enjoy doing it, and the more often you are going to do it, the more passion you should have for your venture. I LOVE catering. I LOVE food, I LOVE the service industry, I LOVE teaching my co-workers, I LOVE a challenge, I LOVE doing something different. If I wasn’t so passionate about what, to be honest, is an extremely challenging industry, I’d be in a mad house right now.
Going into business can be the most stressful time in your life-in the last year I had to make decisions that affected other peoples LIVES. If you make poor choices early-they WILL affect how things happen later on. Before you go into business, think about how many other lives you may affect-if your business goes under, do you have an escape plan, or an “out” clause? What about your staff?
HAVE FUN HAVE FUN HAVE FUN!!! Yes, going into business is potentially the most stressful thing you will do in your life time. The best thing to do is focus on the rewards of the venture, not the pain in getting there. Enjoy the process, share that joy with the staff, treat them good, have a sound financial and marketing plan, spend less than you earn, pay your bills on time and don’t forget your taxes!!! You do all of that, and your HALF way there already! Best of luck mate!
All good advice thanks :).
I’ll admit i’m concerned about the legality of “going under” insofar as it might involve the complete loss of all material possessions, including shelter from the elements. Would living in a commune prevent this? As I recall, the rules are different for public/private limited companies, and again for sole traders, but I can’t remember the details offhand.
Its something I should really investigate, but the main aim here is really poaching this guys customers. I’ve given the problem some thought, and it looks to me like building a plan is useful, but balancing sales and purchases must be an art - its something that can’t be planned.
Scarf-Ace wrote
You probably want to incorporate. It’s not that expensive. You have to follow a few key rules, like keeping your personal money and your company’s money seperate. But that way, if everything goes wrong, everyone can sue your company to death, but you’ll be ok.
Well, it can (and should) be planned, but you’re right, there’s a lot of juggling (and a lot of luck) involved.
You said your competition is ruthless. Generally, being ruthless and driven is a good trait. On the other hand, perhaps your competition is creating unhappy customers that would love an alternative.
Everything everyone else said about planning is true.
Do what you can to meet and discuss this with similar shop owners, vendors and customers. Get their thoughts and experiences. There will be many things you haven’t thought of; the more of those you can figure out in advance, the better.
In general, starting a business is a very growing experience. You learn sooo much more as an owner than you’d ever see as an employee. It’s also very scary at times, because every problem is your problem.