I admire entrepreneurs, I don’t feel like I have the balls or the brains to find a niche in the economy with unmet demand then find a way to provide goods and services to fill it. I admire people who do though.
For those who did (either as a primary job or as a secondary job) how did you get into it? Did you get training in what you eventually did for your small business from working for someone else or were you self taught? What was the best education you got to find your niche and keep things running smoothly?
You need some expertise. It could just be expertise in business, but usually people start a business in an field where they have experience and credibility based on their past work.
You need to be able to make money right away. It’s going to cost money to go into business, you don’t want to be in the black right off the bat. It’s difficult to sell your product or services for the first time, you need to know that your products and services are wanted, and that someone wants to buy them from you.
You need to survive. Unless you are very lucky you’ll hit a hard time before too long. If you need to take money from the business to pay your bills you’re in a very vulnerable position.
It really wasn’t a case of either balls or brains propelling me - it was more like desperation: I needed a job, so I created one. It ended up being my primary job for the following two decades. I’d say I did it on a wing and a prayer (except I’m an atheist - so I’ll go with a wing and a whole lot of hope that I wasn’t digging my own grave). As far as sustaining the endeavor for as long as I managed to: I like to think that happened because I was (am) a nice person who didn’t screw anyone over. Simple, but it worked.
Sometimes it isn’t balls or brains. In my case it was luck. When I was forced by health issues to leave teaching, I had been big into fishing and making custom tackle since I was little. Flyfishing was becoming all the rage and people were willing to pay me 6 times what I made educating their kids to help them catch fish they never intended to keep. Go figure. A cousin wanted to run a retail operation and I got scads of wholesale contracts that I could work on year round.
My business grew, I added employees, and at some point I found out I hated being the boss. If I made a wrong decision anywhere up to 27 people wouldn’t have an income or money to pay their bills. So I sold out for what I considered Big Bucks and semi-retired.
Now I work for way less than most people would consider enough, and work hard at that. And I have fun; tons of fun. Something I never did when I became a “company”.
I honestly don’t know how I’ve managed to be in business for myself (with a partner) for 15+ years.
No, I didn’t go to school for what I do. I graduated with a degree in journalism while I was setting up my web design business. I do HTML, Javascript, CSS, SQL and C# and whatever else I need to do. All self-taught…weird.
I was blessed to be able to spend the first 5 years of the business living rent-free with my parents. We had a really great run after 5 years and my business partner and I were both able to buy houses.
I spent a lot of days working hour after hour after hour. 24 hours, 36 hours, 72 hours. I spent a lot of weeks missing paychecks because there was no money.
We’re still doing it and I have zero advice for people who want to start their own business. Except maybe come in to it wealthy. You are the last person to get paid - if at all.
I’m not really an entrepreneur or small business owner, but I did get my MBA from what is by many accounts the top business schools for entrepreneurship in the country.
IMHO, I think the main thing is to get away from the mindset of stability=working for some giant megacorporation with regular raises and promotions every couple of years.
Those jobs are good for building up some equity to start your own business. But in terms of skills, I feel a lot of big company jobs are all about vigorously defending your roll as a cog in some giant machine.
Certain jobs, like sales, investment banking or management consulting are more entrepreneurial in nature. They are less about following what someone else tells you to do than they are about you figuring out how to make money.
Pretty much any idiot can open a small retail business with a few thousand dollars, and many idiots (such as myself) do (or did in my case). There isn’t really anything particularly admirable about it IMHO, and I felt that way the majority of the time I had the business.
It really boggles my mind to this day the amount of excitement people have about this sort of thing; I myself tend to have more respect for the type of person that can drag themselves to some sort of unglamorous job that pays bills, live within his or her means, and not end up being a bitter person.
When I was a small business person and knew small business people, I was amazed at how many of us were in the same boat - stressing about paying the bills every month; it is usually a very stressful life.
Of course, If your talking about entrepreneurs, that is technically a somewhat different thing than someone who just wants to open and maintain a small business.
Note the majority of small businesses are one-person businesses–the owner does everything. A lot of people sell used stuff on the internet, via flea markets etc. The standard way to start this kind of business is in your spare time. Then when you are making enough money to live on you drop your day job.
No brains here. A bit gutsy perhaps in what I did, but I just did it and took the necessary calculated risks.
I personally think a great deal of higher education is overrated for many entrepreneur types, and will probably get you more into trouble by having to pay off school loans and by probably not ending up with the job you were going to school for in the first place. I’ve seen this happen time and time again, and many get in a downward spiral which they never fully recover, some having to move back in with their parents. Don’t ever underestimate just good ole basic horse sense, and treating people decently, with fairness and kindness goes a long way. People skills can carry off to any job and are highly valued. Good employees can make or break you, one has to be careful here. For the most part, it’s just been me, but have finally starting hiring others, and proceeding with caution.
Also, I may not be what you had in mind, I didn’t seek out a niche in the economy with “unmet demand”, no, I wanted to find something that I already thought there was a demand for, and wondered if there was room for one more, me.
There are so many skills and trades one can learn along the way, and often I think you sort of just feel your way and stumble into what you were doing, realize, how this might just work, and before you know it, if you’ve hung in there and didn’t make just an half-ass effort, in just a couple of years, the demand probably becomes even greater than you ever imagined. Your old customers will seek you out again and again, and word starts to spread.
It sort of snowballs on you, although I didn’t realize initially, just how big I would end up getting, but once you find there is a demand, you can pretty much get as big as you want to. You sort of create some of the demand by being good at what you do.
Be nice to your customer, make them feel valued, be price competitive (I’m fiercely competitive here), provide for them a very good product or service, word sort of spreads, and as time passes, you put the odds in your favor that you will be rewarded many-fold.
I developed a product / business as a capstone project when I was in college. Me and one of my student teammates were really serious about it and the college was extremely supportive because they loved the idea of students turning a project into a business. We were in marketing material for the college for years.
Eventually we had a lot of support from local economic development agencies, which really helped push us from ambitious kids with an idea to real entrepreneurs.
I’ve been a regular old employee for 5 years now and I’m really starting to miss working for myself. I love the idea of running a real business again, but I don’t think I have the gumption to do it again now that I have a family. I’m thinking of settling for something I can do alone or with just an employee or two.
You don’t feel that way? I guess to me the idea that a person can set up shop anywhere and find a way to self sustain themselves economically is admirable. Most people have to live where they work, and most people have to ask other people for the opportunity to support themselves. Something about being creative enough to find a way to support yourself instead of finding someone else to offer you the opportunity to do so is admirable.
There’s not really that much creativity from my perspective. The market has needs, you fulfill those needs - it really is not all that different than when you go to a job and the company, your boss etc. has needs that must be fulfilled. When I had a shop, one of the most true statements one of the product reps ever told me was, “You exist in a community. You don’t decide what to sell, they decide what you will sell.” They meaning the people in the surrounding area. I guess there is some creativity in trying to figure out where the demand will be, but for me it was not all that exciting for very long.
Of course you have stories about someone having an idea, vision etc. and it becomes really successful. Sometimes dumb luck can cause a trend to coincide with a particular person’s vision or interest - but that doesn’t translate into a 20 - 30 year career in small business. What does translate into a 20 -30 year career in small business is always trying to find what the market needs and making the right gambles. For some people that’s great, for me its not really any different than having any other job the only difference being a fickle, often harsh and irrational, somewhat abstract market is your boss and not a person with a title.
I just think it’s much better to have a more or less predictable and stable job and use your extra time and energy for creative things that you are not dependent on financially. It’s much less stressful that way. That is unless you are a born entrepreneur - but very few people are really like that.
My wife and her former boss started a small business. The other woman managed a translation bureau and my wife was one of her translators. They got tired of seeing the company keep 2/3 of what they earned and they decided to go free-lance. They both worked from home using computers they already owned. This was in the early 90s so they got their work either by fax or courier and returned the finished translation the same way. Each translated about half of what came in and the other partner revised it. There were no startup costs. Eventually the couriers disappeared as everyone got email.
My son-in-law is trying to start a small business as a web designer. He quit his job running a small imprint for a large academic publisher when he was told to fire 4 of his 6 editors so their jobs could be outsourced to India. Then he retrained (took an intensive course) as a web designer. Then he started looking for a job. Nothing. Two strikes against him. No degree in CS and he is his mid-40s. He couldn’t even get an interview for a job advertised by the New York public library for which his background would have been perfect. So he started looking for free-lance and seems to be taking off. Again, there are no startup costs since he works at his home computer and my daughter makes a good living (at a different academic publisher).
I’m seriously thinking of starting a work from home, part time gig selling drop-ship merchandise. I work full time in a corporate job with only ten years until I can retire. So the idea is that I would get this off the ground while I still have that other stable income and then when I retire I could have a fairly easy “retirement job”. I’m extremely well organized and like to do things right. Given that I’m not applying for any loans for startup capital, won’t have any building leases or anything else major like that, how much of a business plan do I need to write up?
I think these would be good for starting up:
well-defined product line to focus on
list of places to advertise (to reach out to my target demographic)
list of possible suppliers
list of startup costs (accounting software, website, etc)
competitive analysis
beginning profit and loss statement (with estimated income section)
Anything else really critical that I would kick myself for not doing up front? The Small Business organization has lots of other stuff - templates I can use. I just can’t tell what is absolutely necessary and what is fluff. (or really, must-haves versus nice-to-haves)
My husband’s small business has supported our family 100% for two years now, and is growing at a frightening pace.
It began as his hobby. He started to design and sell parts to support other hobbyists in his area. His designs got more complex as he learned more. And did I mention, he’s just a damn smart guy?
Two years ago he was frustrated with lack of upward mobility at his job. He had a couple of consumer designs ready to go by that point, and had an entrenched web presence (he runs a message board for hobbyists) so people know who he is. He asked me if he could give it a go full-time, and I said sure, if you promise to give it up if it isn’t working after two years.
None of his education supports the business, but eight years on a factory floor taught him how to work hard, and after that he did electronics lab work, which is pertinent. Most of what he knows has been self-taught, however.
His strategy has been to keep costs to a bare minimum. He has never taken out a loan for the business. He works from our home (we recently moved to a house with a workshop for him, though). He doesn’t have employees. He designs, builds, and tests every unit himself.
He works constantly, but his job is his hobby too and he loves it. Honestly his biggest source of stress now is figuring out how to keep up with demand. He hates to disappoint customers.
You don’t need to write up anything. Business plans are for investors. You sound like you may enjoy writing up a business plan, and it’s not a bad idea, but you may find that your business doesn’t resemble your plan once you get started. This really gets down to what exactly you plan to sell. I’d suggest start by trying to sell something first to scope out the terrain. Any good business planning (IMHO) should concentrate on the things you don’t know, not the readily available information.
Low barriers to entry usually mean very stiff competition and low profit margins. On the flip side if there is not much competition, it often means that there is little demand for what you are selling.
The economic term is perfect competition. What you seem to be missing in this plan is a real competitive advantage.
What exactly would you be offering that cannot be duplicated easily?
Oh, I don’t mean to imply that you don’t have a competitive advantage - I just meant I didn’t see any mention of what it was, so I have know sea how that’s all figured in to it. From my perspective, the most important thing in the long run is competitive advantage.
