Starting a business - Going to try this again

[SuzukiChopper]

First off, thank you tashdaddy for locking down the other thread. I never would have even dreamed it would go that far off track and start to turn political. I'm actually very disappointed that a couple people decided it should go that route when all I'm really asking for is some advice. I'm going to try this again but I'm going to keep this simple this time. I'm also in CANADA for those that didn't notice the first time so as far as I'm concerned at this point the American economy and politics have NO bearing on my questions.

For all intents and purposes, assume I have an idea for a business. My few questions to people who have been involved in starting a business, own a business, have had a business and possibly failed for whatever reason, or have knowledge with this... what things do you wished you had done differently when you started? How did you even get started? Did you require any funding and how did you acquire it? Finally, what tools (mentally, people, emotionally) are key to getting something started?

If this thread slides the same way the other one did and the mods feel they need to lock it as well, then I'll just drop back to the shadows of being a consistent reader. This isn't controversial and may help other people who have the same drive I do to create something. Please keep it civil.

 

[SS MAYFLOAT]

Re: Starting a business - Going to try this again

When I was married to my ex, we started a deli business. We did our foot work of doing basics such as:
customer base
visibility
access
seasonal
codes/permits
insurance
equipment cost
utility cost
taxes
working capital

My ex was in full control (my biggest costliest mistake in my life!) and ran it into the ground. Found a few investors that helped keep it going for awhile, but she just couldn't manage it correctly. After several weeks of not going into the store, I went to see how things were. Two loaves of bologna and a loaf of cheese. At that point I closed it down. Our main problem was she failed to mark down product that the shelf life was ending. She refused to lose some money on it, but it was alright to lose 100% on it.She was blond and that is the excuse I use as to why it went under......No offense to you Ladyfish

I do know if ever I build a business, I will hire a CPA at the beginning. Too much dang paperwork for me to figure out... Good Luck and find something that you enjoy doing, or it will just be work and not an enjoyment.......SS

 

[SgtMaj]

Re: Starting a business - Going to try this again

Things I would have done differently... I would have started in a traditional brick and mortar building instead of the garage.

 

[wajajaja02]

Re: Starting a business - Going to try this again

utilize resources to get things right that may float reveres too, the small business loan program, retired business association and group like that will look over your shoulder to see the pitfalls that a new entrepreneur is too eager to see. Cost accounting is a area that many fail to apply properly to priceing thier product or service.

 

[SuzukiChopper]

Re: Starting a business - Going to try this again

My ex was in full control (my biggest costliest mistake in my life!) and ran it into the ground. Found a few investors that helped keep it going for awhile, but she just couldn't manage it correctly

I would definitely be in full control of whatever I chose to do, but if I may ask, what if any, were the risks with investors? Had to pay back bad loans? or was there enough made to cover them? or were they ok with a loss at the chance of possible profit? (if this is more of a PM response, feel free)

Things I would have done differently... I would have started in a traditional brick and mortar building instead of the garage.

What were you doing at the time? Google started out in a garage and has more then succeeded. What in your mind would have been different if you had a brick and mortar store to work from?

utilize resources to get things right that may float reveres too, the small business loan program, retired business association and group like that will look over your shoulder to see the pitfalls that a new entrepreneur is too eager to see. Cost accounting is a area that many fail to apply properly to priceing thier product or service.

This is almost like what I'm after in this thread, and for the benefit for anyone else that has had an idea to start a business. A mentor is a definite asset and the one thing I do know would be beneficial to me. The cost accounting is something I have a hard time with and now that you brought it up, someone to kick my arse when I'm not inline with cost would for sure help. Thanks!

 

[Mike Robinson]

Re: Starting a business - Going to try this again

Hey Suzuki

Here in B.C. we have "Small Business BC" which is sponsored by our provincial and federal governments. I would expect your province has something similar, try looking online. Your local community college should also have programs for you. I am no expert on the subject but in the past I have pondered starting my own business and I took a small business management course. One thing that was stressed to me was to begin with a strong business plan.

Good luck!

 

[SuzukiChopper]

Re: Starting a business - Going to try this again

Hey Suzuki

Here in B.C. we have "Small Business BC" which is sponsored by our provincial and federal governments. I would expect your province has something similar, try looking online. Your local community college should also have programs for you. I am no expert on the subject but in the past I have pondered starting my own business and I took a small business management course. One thing that was stressed to me was to begin with a strong business plan.

Good luck!

Thanks, I have connections with SIAST here in my province so I will go talk to them and see what they have to say about it.

The business plan I do know makes or breaks new start ups and I do know that Venture Capitalists/Angel Funders do want a strong one if they're going to invest in your idea. Has anyone ever dealt with a VC/AF at all? What do they look for? What are the keys to success with them?

 

[SgtMaj]

Re: Starting a business - Going to try this again

What were you doing at the time? Google started out in a garage and has more then succeeded. What in your mind would have been different if you had a brick and mortar store to work from?

Cellular phone repair that specialized in liquid and physically damaged out of warranty type repairs. What would have been different? I would have had a more visible presence, more room to work, and I could have immediately realized the goal to be a full service multi-carrier agent to both sell and repair phones (Sales are where the real money is).

As it was, I wasn't even looking to go into business, but after I lost my job at a large cellular carrier, several of my former customers approached me and asked me to go into business because they preferred me working on their phones. I didn't really even want to, but not doing it pretty much meant condemning them to buying new phones at full cost, since the provider's policy regarding working on out of warranty phones and my philosophy were polar opposites (hence the reason I lost my job there)... AND... if you're going to go into business, having customer's before you even start, isn't a bad way to get started. So I bought a couple tools, and ordered some parts, and got to work.

Oh, yeah, I should probably mention this part... I closed the business a few months later, because our mortgage was going into the adjustable period, and had adjusted up 4% (despite rates having fallen, and both our credit scores increasing, and not ever having missed or been late on a payment... and people say it's the customer's faults for getting those ARMS they couldn't afford... yeah, right! More like the mortgage companies charging WAY more than they should have been.) So anyway, when we went to refinance, I found out that you can't claim income from a business for a mortgage application for 2 years... so I had to go back and get a regular job just so we could refinance the house at a fixed rate. Working a full time regular job, going to school, and watching my son, just didn't leave me with enough time to work on phones... so I closed it. I do plan to reopen one day, but not for several more years... and not in this state. I have a place all picked out... but there's virtually no cellular coverage there yet, so in addition to waiting to be done with school, I'm also waiting for the providers to buildout in that area... which they probably will soon, since it's quickly becoming a decent size city. The good thing about it is, because there's no current service there to speak of, there won't be as much competition there.

Anyway, moral of the story is, if you're about to get a mortgage, wait to start the business... also, don't overcrowd your plate, there are only 24 hours in a day, no matter how much you have to get done.

 

[SuzukiChopper]

Re: Starting a business - Going to try this again

Anyway, moral of the story is, if you're about to get a mortgage, wait to start the business... also, don't overcrowd your plate, there are only 24 hours in a day, no matter how much you have to get done.

Thanks for the information. Definitely a good choice of business (and I know of a few places that you may want to get a hold of if you're curious).

As for the last part, great advice and luckily it doesn't apply to me otherwise I wouldn't even be thinking of it. And the 24 hour a day thing, like I mentioned in a PM to someone else, the extra hours don't bother me because I have been giving extra hours for OTHERS for YEARS without so much as any kind of recognition or no chance to benefit me what-so-ever so being able to work those hours and see something come from them excites me.

 

[LadyFish]

Re: Starting a business - Going to try this again

I've always been told to have at least one year's worth of working capital before you start.

 

[tashasdaddy]

Re: Starting a business - Going to try this again

to add to LadyFish's comment, you need living expenses also.

one of my neighbors, just lost his house, cars, do to a poor plan, and spending the capital money instead of saving it. they opened a resturant, took loan on house, then got 2 new cars. 3 months later the business was closed, the cars gone, house in foreclosure. now driving beat up car, living in a rental.

 

[gonfishn]

Re: Starting a business - Going to try this again

I would say have a solid business plan. Many who decide to go out on their own have all the knowledge and background to do the job. In the beginning i would suggest an accountant to get you up and running. They can get you set up in Sales Tax,Unemployment,Federal,State,Workmans Comp and all the other things that go along with running a business.

This will leave you more time to focus on you new adventure. I would suggest you go LLC which is less liability. Be prepared for some rough times and have enough capital to see you through it. It takes a year or more to get established. Having contacts is a plus. Now you have to sell yourself and prove to your clients why they should use you. Remember repeat and refferal are your best advertisment. I have a budget of 7% of my gross for advertising.

Be ready to put in long hours. If you are married your spouse needs to be be there 100%. Without that support that tunnell gets longer and harder. People skills are a must. There will be times when you would like to tell a client where to stick it. Just do your best and stay positive.

I have a rule of thumb that when a customer comes into my store i pretend they have a 100 buttons on their chest. I keep pushing it until i find one that has a postive reply. It may be a favorite team or fishing. Once you have a common ground the customer is yours. Be a good listener. Let them talk. Never put your competetion down.

As many know here i opened my own furniture store here four years ago. It took me four years of planning before i opened my small factory where i now make my own bedding. I compete with all the major brands. I am the small guy competing with against the big boys. I educate the customer on whats really under the cover and not the gold the retailer wants you to believe . I encourage them to go out and compare. Retailers know that they have been to see me because they have more knowlege that saleman has. Most of the time they come back to me because i told them the truth.

Their are those who think that more expensive is better. Those i have a bridge i want to sell them. If they want to spend twice what its worth then i will be more than happy to accommodate them

These are only suggestions for you. Develope your own way. Your way is the best way or you would not be going your own way. I am only a pm away. I wish you the best of luck. For those who have failed never give up. Brush yourselve off and come up swinging again

 

[SuzukiChopper]

Re: Starting a business - Going to try this again

I've always been told to have at least one year's worth of working capital before you start.

to add to LadyFish's comment, you need living expenses also.

one of my neighbors, just lost his house, cars, do to a poor plan, and spending the capital money instead of saving it. they opened a resturant, took loan on house, then got 2 new cars. 3 months later the business was closed, the cars gone, house in foreclosure. now driving beat up car, living in a rental.

This is actually why I'm really looking for this advice right now. In December I should be able to tell the story of what happened to me, but at this point all I'm willing to share is that my house is on the market and when it sells it'll put me in a unique position. My car, boat, both bikes and everything else I have is all paid for so that helps huge. Also, the type of business I'm considering right now doesn't require anything more then an office in where ever I end up living so overhead should be minimal.

I would say have a solid business plan. Many who decide to go out on their own have all the knowledge and background to do the job. In the beginning i would suggest an accountant to get you up and running. They can get you set up in Sales Tax,Unemployment,Federal,State,Workmans Comp and all the other things that go along with running a business.

This will leave you more time to focus on you new adventure. I would suggest you go LLC which is less liability. Be prepared for some rough times and have enough capital to see you through it. It takes a year or more to get established. Having contacts is a plus. Now you have to sell yourself and prove to your clients why they should use you. Remember repeat and refferal are your best advertisment. I have a budget of 7% of my gross for advertising.

The accountant is excellent advice. My first year consulting saw me owing quite a bit of income tax that I didn't know how to account for while I was busy working. The second year, I made less because I was working less because I was doing more accounting. Double edged sword. Couldn't even charge for my time doing the accounting because I was only paid for services rendered.

In Canada LLC isn't an option. The three options are Sole Proprietorship, Incorporated, or Corporation. Right now I'm considered a Sole Proprietorship.

How did you come up with 7% as your advertising budget? What kind of advertising do you do or does that depend on your gross because it's a sliding scale? Do you include business cards in that 7%?

Be ready to put in long hours. If you are married your spouse needs to be be there 100%. Without that support that tunnell gets longer and harder. People skills are a must. There will be times when you would like to tell a client where to stick it. Just do your best and stay positive.

For me the long hours don't bother me. My ex made it VERY difficult when I was doing the consultant thing and was of zero support. My new lady is absolutely wonderful and is encouraging me to finally do this. She's also been a huge lifting force in this tough time I'm going through as well even though at the beginning there were questions on whether or not it would jeopardize her new career.

I have a rule of thumb that when a customer comes into my store i pretend they have a 100 buttons on their chest. I keep pushing it until i find one that has a postive reply. It may be a favorite team or fishing. Once you have a common ground the customer is yours. Be a good listener. Let them talk. Never put your competetion down.

Awesome advice, thanks! I'll also add what my "mentor" has told me time and time again and it's what I'm racking my brain with right now to come up with the right idea. Pain points! Identify what a person has the most trouble with and come up with a solution that removes that pain point. The trouble is finding one that affects many and trying not to toss an idea to the side because you don't think there are many.

As many know here i opened my own furniture store here four years ago. It took me four years of planning before i opened my small factory where i now make my own bedding. I compete with all the major brands. I am the small guy competing with against the big boys. I educate the customer on whats really under the cover and not the gold the retailer wants you to believe . I encourage them to go out and compare. Retailers know that they have been to see me because they have more knowlege that saleman has. Most of the time they come back to me because i told them the truth.

Their are those who think that more expensive is better. Those i have a bridge i want to sell them. If they want to spend twice what its worth then i will be more than happy to accommodate them

These are only suggestions for you. Develope your own way. Your way is the best way or you would not be going your own way. I am only a pm away. I wish you the best of luck. For those who have failed never give up. Brush yourselve off and come up swinging again

Consumers definitely aren't stupid and honesty wins hands down most of the time. I also noticed that during my time in retail that customers generally go for a few things. Familiarity and convenience are the big two I saw. I worked in a convenience store with competition pretty close to us. What I did for both the business I worked for and for the customers was I paid attention to the people that came in frequently. I would remember their brand of cigarette, I would remember what they usually always purchased. When I saw these people walk in I would have their cigarettes ready and in some cases had their other purchases already put into the till by the time they got there (the later when it was slow). At first this may just seem like a convenience thing for them, but after a while they'd actually just stop and chat for a few minutes and later most started purchasing more things.

Sorry for the long response, I'm just trying to relate what I do know to what is being said and sharing some of my past experiences. It's really helping me connect the experience I do have to wanting to start my own venture and making it all make sense. These little rules of thumb help huge as well. I wouldn't have once thought 1 year. In my mind it seemed like 6 months would be enough. Thanks again and keep it coming!

 

[eeboater]

Re: Starting a business - Going to try this again

I've started two businesses in my life, one succeeded and one failed. What was the difference? Planning.

It looks like you are already a step ahead because you're asking the important questions prior to proceeding.

Oddly enough, the business that succeeded was my Mortgage Company. From that business we spun off a secondary business, under the same group name - a realty business. And, despite the doomsday stuff you hear in the news, we're actually making money and we're succeeding.

With this business, the three most important things were a plan, cash and a person at the helm that had gumption. We put together a solid business plan detailing what happens when we both succeed AND fail. The plan on what to do when we fail has helped aid in making better decisions allowing us to succeed. The cash was huge as well. Mainly, the money paid our salaries. Basically, we all "paid in" to the company to start the company. Part of that money was used for startup costs (paper, pens, office) but the rest was distributed back to us as a salary. So, basically it was more of a savings account than a buy-in for the company.

As for my company that failed, that was a computer consulting company. I had no problem getting the business. By the time I called it off, I had customers coming out of my ears.

What I had a problem with was people PAYING me for my services. I had too much confidence in people's honesty and trustworthyness. Remember, if you are providing a service for other companies and/or people, they are only interested in themselves. If they're bank accounts get low, they could give a crap about what they owe you, and they won't feel an ounce of guilt stiffing you.

My mistake: not accepting cash/credit in advance. If I would go back and change something, that would be it. And, chances are I would still be in business today.

Sean

 

[gonfishn]

Re: Starting a business - Going to try this again

In God we trust everyone else pays in cash.........

 

[aspeck]

Re: Starting a business - Going to try this again

Suzuki, it kind of hard with the advice when you don't know what your are really giving advice for. We had a car dealership that we sold to a gentleman that was never in the car business before. He made the brash statement that "Business is Business and I have successfully run 7 different businesses, so the car business will be no different!" 5 years of toil and $500,000 in losses later he sold the business. This was a very profitable business when he bought it.

So what I am saying is, one business or industry might need 7% allocated for advert. while another might be 2% and another 20%. You need to KNOW your industry ... not just the pieces of the industry, but the whole. How does it work, what are the normal margins, etc. You can find a lot of that info out on the net or through different industry groups, but learn your industry.

Next, never feel that you know it all. Listen to ALL advice that comes your way and be careful how you dismiss it. Make sure you look at it from all angles before saying if it should or should not be implemented.

Is your business labor or materials intensive? This will have a HUGE effect on your start-up capital.

Do you have customers already, or are you really starting from scratch?

i don't know Canadian law, but we had a sole proprietership. It served the family great for 42 years ... that is how long the business was in the family. But if I started out TODAY from nothing, I would have the protection of a corporation, or some other legal way to seperate my assests from the business ... to many sue happy people. (Along with that, don't forget insurance costs ... lot's of liability insurance!).

There are some things to chew on for now ... time to get the daughter bathed and in bed!

 

[SuzukiChopper]

Re: Starting a business - Going to try this again

Suzuki, it kind of hard with the advice when you don't know what your are really giving advice for.

You seemed to have done an awesome job either way Gives me more to digest and I certainly will be researching thoroughly the industry I chose to pursue. I also like the advice on knowing you can't know everything. I recognized that years ago and am always looking to surround myself with experts in the different fields I may utilize. Can't say I have seen too many successful businesses run by one single person.

All this information has been wonderful and it's got me reading about the different aspects mentioned. I want to go into this educated and want to be the kind of person a young entrepreneur can turn to in 10, 20, 30 years for advice on how to make it on their own. It's actually kind of funny because my middle sister and her friend are looking at starting their own company but are VERY green. I will be sharing all your wisdom with her as well.