I’m thinking about trying to start my own business. I don’t want to reveal my business model, but it is a service business, in a previously unknown niche. I can’t state unequivically whether or not anyone has ever tried it before. Nevertheless, I see a huge potential market, concentrated largely in the home. In other words, we’re repairmen.
The idea would be a nice, upscale, almost, appearance. I’d need a bunch of well-trained employees. No uniforms or anything.
How do I go about looking into making this work? I’ve heard you should have enough money to work at least two years before showing a profit. I believe that with judicious use of advertising I could own the market - a market I’m the first to exploit. I see a need. Still, I need money and I don’t know to runa business. Its not something I’ve done before. I don’t have tax-paying expoerience (I have paid them, just not very much and not in a formal business environment.)
I also am not sure how to set up a business organization.
Have you been an employee of a such an outfit? If not, I would highly suggest the following:
Find an existing company that is most similar to the company you want to start.
Work for them for six months.
Quit and start your own business.
Consider your time working for them as free schooling. Most importantly, you will learn how the business operates, and this knowledge will prove to be invaluable when you start on your own. (Another advantage is that after your six-month stint, you may decide not to start this kind of business. It’s would be much better to learn this while working for someone else…)
Crafter Man has some good advice there. You may also want to strongly think about why there are no companies doing what you are intending to do. Could be there is just not enough demand to sustain a going operation.
I personally have many fab ideas for real cool businesses to start. All of which would drain my bank account in about 3 months and leave me with about 4 very satisfied customers. Its really too bad, but not all good ideas are profitable.
However, you could go on to become the next Bill Gates, so go for it! Good luck!
Favorite quote from 5th grade social studies: “Oh, that Nick-o-lie Lennin! He’s a dirty-bird!”
One more thought: Minimize the payroll. Lots of employees = lots of problems and lots of expenses. If you want to succeed at your own business, be your only employee. Split the profits with no one!
Just a thought.
She told me she loved me like a brother. She was from Arkansas, hence the Joy!
Check a library for books on starting a small business. Lots of basic info and advice is available that way.
Figure out what you need to do it, and how you will get these:
>Location/building
>Equipment, including vehicles
>Supplies and materials
>Personnel
>Etc.
Find out what you need in the way of intangibles, and how to get them:
>Insurance
>Business license
>State sales tax license
>Utilities
>Etc.
Investigate any applicable government regulations and paperwork you’ll need to deal with.
Calculate your start-up expenses. Calculate your operating expenses for the first year.
Estimate your income for the first twelve months. Try to be realistic about how little business you will have starting out.
Review all of the above, and think long and hard about the feasibility of proceeding. Things to keep in mind:
>It’s not that easy having and running a business, especially a profitable one. That’s why the great majority of folks have jobs instead of their own businesses.
>While it may be that no one has thought of your idea, it’s also possible that people have thought of it, and decided it wasn’t workable.
>Ninety-plus percent of new small businesses fail within two years (I think that’s right). The supply of optimism exceeds the supply of realistic evaluation.
Now, there are many benefits to having a business. Plenty of folks make a decent living, and some make a great living. There are intangible rewards (like not having a boss), which sometimes are very important to some indiviuals. And sometimes trying and failing is still an overall positive experience. Just make sure you’re not assessing this through rose-colored glasses.
Crafter_Man’s advice is sound. Particularly valuable is experience managing a similar business. You’ll probably need some local guidance, so ask around and keep your eyes open for people who might be of help.
They do things like this (almost) literally a dozen times a day (I should know, as I work for a similarly minded non-profit). The sites above are national, but should have links to the local offices in your area, who would be more familiar with state/city/county requirements.
As another prospective business owner/starter, good luck!
I’m also currently looking at starting a new business. There are a several ways to get capital, it just depends sometimes on how well you can convince someone else (loan officer, venture capitalists, rich friends, etc) that you a) have a good idea (this is what business plans are for) and b) that you’re the right one to implement the plan. One thing they’ll look for is how much you’re willing to invest in yourself.
I think I know what you want to do, since I had a similar idea once upon a time, but really lacked the motivation or the ideas on how to implement it. My current idea is a lot more concrete, I’m just working on getting my current employer to pay me to leave. That’s turning out to be tricky right now. It would have been much easier a year or two ago, but I didn’t have the plan then. Timing is everything.
Gary T covered almost everything. . . . except a business plan. You must have a well researched, well thought out and well written business plan. If you seek funding without one, you’ll be laughed off the podium.
During MBA school, I competed in (and won) several international business plan competitions (sponsored by groups such as NASDAQ and E&Y) - netting over $25K and all expense paid trips to Palm Springs for the Entreprenteur of the Year awards, etc. These were not “academic” competitions, as the judges were all either leaders in business or venture capitalists.
Our business plan (along with other winners) is kept on file in various business school libraries across the nation. The only fewI know for sure are: UT in Austin, SDSU and UGA. You can find us under Moot Corp and/or NASDAQ/SDSU champions for 1998. If you are serious, find a good business plan and follow it’s form to learn what you need to know before going in front of the VC’s, bankers, etc.
If you are extremely serious (I only say this because I now own my own business with sales well over $750K per year and I’m extremely busy:)) but I’ll be happy to answer any in depth questions via email.
And I am the exact opposite of the above posters. We fell into our business with no savings, no business plan, no organization what-so-ever. We’ve made it. Barely. We’ve been sued, liened against (I’m sure that’s not a word), and dead freakin’ broke, but we made it. We were so not organized our CPA fired us! If you need quasi-practical advice or hand holding, give me an email.
ps,
I would highly recommend doing everything the other posters tell you… I wish we would have started out the “right” way instead of having to backtrack…
Buy a book called “The E-Myth Revisited.” by Michael Gerber. www.e-myth.com has it and also a bunch of programs to help you out.
It is easy to read and has tons of insights into owning your business. Reader’s Digest: Is a plumber the best person to run a plumbing business? Just because you have the technical know-how doesn’t mean you know how to run a business. Learn what to work for, and more importantly, what to avoid. (Like starting a business because you want to be the boss, but then finding yourself a slave to the business).
I’ll chime in for the business plan…got to do it. Buy a book, or buy some software that helps you make a simple one. Use it, polish it, make it clear and concise.
Sorry, thats going to be the biggest expense. I need skilled young people looking for an upwardly-mobile career.
[qupte]And for God’s sake, change your name!
[/quote]
Good advice. Its going into my personal plan.
Thank you all for all the advice. I’m goin to talk it over with some my frinds and see if they agree its worth looking into. Three partners = better than me doing all the work.
Sadly, in a business like this, you absolutely have to know the technical stuff. Not absolutely down perfectly, but a good bit of it. I’ve been watching my managers. I don’t know if it will work, but I see a potential, unexploited market, and I want in it.
Define technical… there are a ton and a half of folks that are doing technical/computer based businesses, everything from “I’ll set up your home PC or LAN!” to “E-business solutions that come to you!”.
Heck, if it were local, and anywhere near my job experience, I would jump into it with you. I would love the chance to work for a fledgling business this way.
One thing that pops to mind is (not knowing what your business is) It may be something that people need/want to have done but don’t really want/trust a company to do it (would rather deal with a independant contractor who is directly accountable for his actions)
I’m not saying not to do it, actually I think it is a great idea to start your own business. Just for some reason that popped in and I thought I must share.
k2dave brings up an interesting point: if it’s an exploited niche, you can do market research to find out why. Ask people (total strangers are better than people that know you) if they would use a service like the one you plan to provide. Why or why not? Can you get them to change their perceptions? If so, how much work/effort/cost will it take to change them? Ad nauseum.
Three partners = better than me doing all the work.
Can also equal 3 people going in different directions.If money’s tight,and it will be for months if not years,it can lead to numerous squabbles/disillusionments (is that a word?
Tho you all may have a like mind going in (we know we can do this successfully),different people have different tolerance rates for things that can affect their personal life outside the biz.
The perfect world would have your partners be only investors.
AS was stated earlier,esp.when starting out,the more cooks,the more that broth is likely to be spoiled.
This from someone that had to buy out a partner who happened to be a personal friend.It was either that or go in the toilet.Something that’s hard to impress on a friend.
Everyone else has covered pretty much everything. The only other thing I can think of for now are the following generalities:
Another vote for the business plan. Miss Xanax was not kidding about that. Banks really won’t bother with you without one. And you must show them that you are putting in at least as much, if not more, than you want from them. For an untried market such as you’re suggesting, they may also require some kind of market research.
As a ten-year small business owner myself, (sales in the millions, net profits not, unfortunately LOL) I can attest that developing a relationship with a good accounting service is a very good idea. They can help you in more ways than doing your taxes once a year. Your energy needs to go into doing what you know how to do, not trying to understand arcane business tax laws and what-have-you. Try finding an accounting service that will act as part-time comptrollers for you. They take the monthly stuff off your shoulders, steer you in the right direction in general and many of them have a payroll service too if required. In essence they take ownership (in the psychological sense) of your books and even rap your knuckles when you screw something up. (This is a good thing.) Fees vary but I guarantee you it will cost you much less than hiring someone and it’s worth every penny to have someone with a clue taking care of your books. If you decide to just pay someone’s mom to do the books on the side, remember the old saying about getting what you pay for. (No offense to anyone’s bookkeeping mom!)
Umm, what else…Well, don’t waste money on fancy premises or pretty invoices or letterhead or business cards… or business accounting programs or vehicles etc. that you don’t really need. Instead, use your money to build a foundation for the future. Live by the principle of delayed gratification. You will be barraged by salespeople, charities, people wanting work, etc, etc, once it’s known you’re the owner. Learn to say NO and mean it. It’s incredible how fast you can burn through your operating cash by trying to have or do too much, too soon. This may seem obvious but with most businesses going under in the first two years, it’s a common pitfall. It’s probably second only to taking too much money out of the business for yourself, the old “entitlement” thing.
We struggled for many years and loved it when it finally got to the part where banks, suppliers and talent came knocking on our door for a change. The downside has been, the more successful we’re become, the more people have tried to take advantage of our good nature and the more we’re perceived to be amongst the hated rich. When you own your own business, people assume you’re a millionaire. Not the worst problem in the world to have, granted, but it does takes some getting used to. Here’s hoping you have the same problem in the not-too-distant future.
