| Author | Message | ||
| Ben Cannon (Artherd)
Intermediate Member Username: Artherd Post Number: 1117 Registered: 6-2002 |
James- a suggestion. Unless it is a very very rare type of buisness that does not require hands-on, MOVE to somewhere within 5minuites of your company's Corporate Headquarters! The answer to the age-old question "where is the best location for buisness ________" is ALWAYS "Within 5 minuites of the CEO's house" Best! Ben. | ||
| James Dunne (Audiguy)
Member Username: Audiguy Post Number: 353 Registered: 6-2003 |
Michael, This is absolutely the biggest thing I have ever attempted. I am attempting to use all the resources I can gather to make it all happen and make it open a success. I will be applying for all the grants that the State of Texas offers, working with a universitys school of business to help with the business plan development and probably still need to gather some private funds. I have done feasibility studies on the area, made visits to it since it is several hundred miles away and talked with many people who would be involved. It seems to be taking a long time but I want to make sure all my research is good. I do not want to rely on just a gut feeling. At this time, I truly believe that this business could and will be a success. But I also see the realism of hard work and a lot of effort. I am looking forward to really digging in and going for it. | ||
| Michael Davidson (Cabrio_fan)
Junior Member Username: Cabrio_fan Post Number: 96 Registered: 3-2002 |
I have to agree with Jeff on the failure rates not telling the full story. The closest I've been to a business owner was my step father who owned his own meat market and deli for a few years. Before that he worked in the meat dept of the big grocery stores. His store ~was~ successful to the best of my knowledge. I was still in high school. Anyway, long story short -- the shopping center his shop was in started losing occupants due to (so I'm told) poor management at the shopping center executive levels. This created a spiral effect wherein the center mgmt INCREASED the rent on all other retail spaces that were still occupied - Dad's included. This went on and on until the center was almost desolate. To this day, I don't understand why my Dad didn't bail/relocate earlier since the ship was sinking. Two years after filing bankruptcy, he died of a heart attack. That's the closest experience I have with business ownership. Maybe you can see why I have some reluctance to jump in with both feet and give it all I've got. I think this gets to Manu's point: make a profit. I don't know specifics about my Dad's books but I would imagine somewhere along the way his bottom line went from black to red ink. It's unfortunate that now, as I venture forth into the business ownership, that my step father isn't still around for me to ask him these questions. An analogy that I have in my mind comes from a lot of studying I've done regarding being an aircraft pilot. Many aviation accidents have occured from some tiny element in the cockpit that goes wrong which, in itself, is not enough to crash the plane. However, it is enough to take the attention from the pilot. I've heard and read MANY, MANY times from seasoned pilots that in times of crisis THE #1 thing to do is to: FLY THE AIRCRAFT. #2 is to communicate your situation, and then #3 is to work the issue in the cockpit. I think my Dad got so caught up in the politics and issues in the shopping center that he forgot to fly the business. And this ended up in his eventual bankruptcy -- and possibly his heart attack. Mike | ||
| djmonk (Davem)
Member Username: Davem Post Number: 456 Registered: 1-2002 |
Jeff. The other side of that is someone sells a biz thats not making it, instead of closing down. I think we all seen buisness's that have had a string of owners that are going nowhere. | ||
| jeff ryerson (Atheyg)
Member Username: Atheyg Post Number: 524 Registered: 8-2002 |
I think the high failure rates quoted don't reveal the real stories, many businesses owners get bored or sell/abandon them which add to the stats of failures. True business failures are due to lack of operating capital/cash flow, I think you would need to have enough $ to operate for at least a year with little or no income,the biggest mistake some make is they think they will be making $ the first month or so, which can happen depending on the type of business such as a franchise but a true start up its very rare. The first year is the hardest it seems if you can survive your chances of success are much greater from then on. | ||
| Manu (Manu)
Member Username: Manu Post Number: 865 Registered: 2-2002 |
Mike - I don't believe you can practice *BEING* a business owner. I think it is something that entrepreneurs thrust upon themselves when they take the plunge. My advice is simple: Never stop thinking about how you will make money..... - I.E. Turn a profit - THAT IS THE BOTTOM LINE - this is what a business exists to do. AND THAT'S IT. Any fulfillment/betterment in quality of life is a happy side-effect. DON'T listen to failure stats, don't listen to so-called wise old men/experts... Remember that most of the people that try to put you off are the sort of ••••••• idiots that never had the guts in the first place. | ||
| Michael Davidson (Cabrio_fan)
Junior Member Username: Cabrio_fan Post Number: 91 Registered: 3-2002 |
Wow. James, don't take this the wrong way, but... I find comfort knowing that my initial outlay for my entrepreneurship activities won't even be close to $900k. That's a lot of $$$. Can you tell me if this is your ~first~ entrepreneurial startup? I'm planning to start my company with quite a bit less of an initial investment with hopes to grow it financially as the success of the company grows. Terry, great input on the cash-flow analysis. Can you recommend any resources (books or otherwise) to assist with this? Rich, thanks for your thoughts on "exit money." Great approach for a first time business owner to take I believe. I will apply that to my company as well. Graci. Thanks everyone else for your input. I'll keep you apprised of my new company rollout. Cheers. Mike | ||
| Ben Cannon (Artherd)
Intermediate Member Username: Artherd Post Number: 1100 Registered: 6-2002 |
James- one last bit of advice. Persue your dreams with all your heart, mind, body, and soul! Anything less is a waste of your precious time on this earth. Good luck my friend, you seem to have done your homework. Don't sweat the possibility you may fall, don't even think about it, lest you bring it on. Also, as Taek said, make sure you can take ten steps back and look at your venture from the outside, from a non-attached consumer. Look at it as though it were someone else's. Would you still buy from you? If so, you've got something buddy! Hitch yourself to a star and RIDE that mo-fo! Best! Ben. | ||
| James Dunne (Audiguy)
Member Username: Audiguy Post Number: 340 Registered: 6-2003 |
Taek-Ho, I agree with what you say. Mine is such that it will require a large monetary investment and I am working very closely with the director of the Economic Development Corp of the city involved to help acquire the needed funds. I have researched real estate locations, grant acquisition, tax abatement, true construction costs, cash flow possibilities on the low end and such. I have a Ph.D working with me through the University of Houston, School of Business in getting my business plan prepared in the best possible sense. Total outlay for a business such as this will require about $900,000. The State of Texas has available some Capital Fund grant money for putting a business into an economically depressed area and helping lower the unemployment roles. They will give $25,000 per each full-time employee hired and $25,000 for every two part-timers. I am looking at 5 full time and 11 to 12 part-timers. If I use 12, the total available grant money is $275,000 and I would have 3 years to reach those employment figures. They will also help with real-estate acquisition and improvements to the tune of $375,000. This would leave about $200,000 to be raised through outside funding. Using low cash flow forecasts of only 10% of maximum use capacity, the flow charts forecast a cash flow of $899,000 per year before taxes, payroll, insurance and misc. expenses. I have done a lot of research and am getting close to making application for the additional funds (within the next six months). Construction time is about 3 months and I would need to open in the spring to maximize use potential. Lot of work with no guarantee of success. Sort of puts your stomach in a knot thinking about it but "I just gotta do it"!!! | ||
| rich stephens (Dino2400)
Member Username: Dino2400 Post Number: 638 Registered: 10-2001 |
As one who has been around lots of start-ups, as employee, contractor, and service vendor, I think that anyone starting a new business with employees should take some money and put it away as "exit money": you know, two weeks salary for all employees, money to cover all you owe contractors and suppliers (i'm tired of getting burned!), etc. Do not touch this money. Don't even borrow from it. If you get to the point that its all you have left and you can't get more, the company is dead. Close down, pay the employees and move on. It's the right thing to do. I've been burned as an employee and have also had companies fail without paying me for services my firm has provided. No class. (of course I hope you succeed instead Mike!) | ||
| Jim Muise (Writerguy)
Junior Member Username: Writerguy Post Number: 137 Registered: 9-2003 |
As many here know I (and partner) have been in the process of launching a magazine for Texas Car guys that has taken over a year to get to the point where we can realisticly say that we are ready to roll. One of the many things that I have learned over the last year is that when it comes to raising $$$$ there are more excuses than you can count but there are also more oppertunities at the end of each excuse. I have found that the best people to ask for advice and interest is right in this forum of other people who have the scars and success of being their own boss. They apreaciate the risk and can usually see the vision if you present it properly. For the PPM that we were working we found that first generation self made business people would always take the time to listen, and advise. (ALWAYS listen to what they say they are successful for a reason) We also found that 2nd and 3rd gen money is the biggest waist of time to try and appeal to. Genetic inheritance does not make for good business people, there are exceptions but for me it is the norm. The other thing that some have said is "Publishing???" Well Damn right. If the market you are dealing in, If you know it and can quantify it and how you can realisticly affect it must be big enough that you can gain entry. The market also cannot be too mature with existing big players ie don't go in to the Motorcycle industry against Harley The stress of doing this will affect everything around you. My big mistake was that my wife had somewhat unrealistic expectations of how long this would take and how much we were going to have to sacrifice to get there. I will be dealing with that for a long time. Make sure that your external support system (family friends etc) are supportive and understanding. It takes a lot of work but it is worth it. jim | ||
| Taek-Ho Kwon (Stickanddice)
Intermediate Member Username: Stickanddice Post Number: 2224 Registered: 11-2002 |
Failure rates vary very highly based on what you are thinking of doing. I echo Terry's sentiments on cash flow. Also, make sure you have a fallback plan (as in, you have money coming in even if the thing bombs). James, I agree with the due diligence, but (and I'm sure you know this) it isn't how much time you spend, but the quality of your research. Most difficult thing might be to make level headed decisions even though you are emotionally attached. Best of luck to you both in your business ventures! Cheers | ||
| James Dunne (Audiguy)
Member Username: Audiguy Post Number: 339 Registered: 6-2003 |
Mike, I am working on a business plan myself and have been researching this type business for over 18 months now. I believe doing my due diligence is required. I have heard that those who research and plan for at least six months before making the jump have a 50% better chance of succeeding than someone who goes ahead and jumps in. If you know your product or service well and there is a market for it,if you can sell the idea and are well capitalized you stand a good chance of making it work. Do not get discouraged in the early going. If you make a profit within the first 12 to 18 months, you will have beaten the norm. Go for it and enjoy the ride. | ||
| Craig Dewey (Craigfl)
Member Username: Craigfl Post Number: 701 Registered: 1-2001 |
Michael, There are those who do best at starting businesses and those who do best at running them. Some people can do both. You need to find out what kind of person you are and enter at that level. If you can run your business at the start at all levels, you will move it ahead the quickest. Paying accountants, lawyers, managers, and other overhead gets very costly and you can easily lose sight of the business. Set up measurements and goals so you can get the feel how your business is doing. I have a financial statement that I check daily that shows me the progress duing the present month as compared to previous months and years for Sales, Cost of Goods Sold and Overhead expenses. The other piece of advice is that make sure you have enough money to keep the business running and to expand it. You will need to put your heart, soul and assets into it to get going. If everytime you get a big order, want to expand or have to deal with delayed payments you need to find money to finance it, it will slow you down. | ||
| Terry Springer (Tspringer)
Member Username: Tspringer Post Number: 828 Registered: 4-2002 |
Spend less time on pure planning and more time focusing on proving cash-flow concepts. Test market you product on a small scale. Remember what Ike said "The best laid battle plans are usually worthless immediatly after the first shot is fired". All the plans in the world are trash if cash-flow is not positive. Do your best to come up with the most accurate startup costs estimates available..... then double it. Oh and did I mention.... CASH-FLOW? Before you go into spending lots of dough on fixed startup costs.... contrive a way to get some cash flow moving. Im a big believer on test marketing a product and proving a concept before sinking any real money into it. Business plans are fine and dandy... but if the numbers you use in the plan do not come from proven and tested experience, they are worthless. Go with a startup focused on your dream job. Passion is a key to success. You may end up working a 80 hour week.... you dont want to put that kind of time into something your not really fired up about. | ||
| Michael Davidson (Cabrio_fan)
Junior Member Username: Cabrio_fan Post Number: 90 Registered: 3-2002 |
PeterS, Thanks for the offer. Thanks for all the positive feedback. I do want to clarify one point however. My original question wasn't whether or not I should pursue my dream job startup. I'll definately be starting up that business. My question was more around this being my first. Does anyone suggest spending a few bucks and buying a turn-key business and being a business owner with my "non-dream job" to get a feel for the ropes? I've seen a few businesses out there that can be purchased for little money and/or risk. Is there any value from getting "practice" as a business owner? I also understand that there are differences between running a business (i.e. little growth curve) and starting a business (huge growth curve). I was thinking of getting some first hand knowledge of each before I applied them to my ideal business plan. One book I read suggested hiring on with a small company that is in your targeted industry but to make it very clear to the owner your intentions so there are no hard feelings. Anyone have experience with this path? Thanks again for the feedback. Mike | ||
| PeterS (Peters)
Intermediate Member Username: Peters Post Number: 1603 Registered: 1-2003 |
Mike...I emailed you my phone #. Call me and I'll spend some time with you. Yes, most startups fail. If your initial business plan is sound and your product or service is good, you should do well if you have some sales moxi. Lets talk. | ||
| djmonk (Davem)
Member Username: Davem Post Number: 449 Registered: 1-2002 |
Success is 90% persperation an 10% inspiration. | ||
| Jim Schad (Jim_schad)
Intermediate Member Username: Jim_schad Post Number: 1975 Registered: 7-2002 |
todd is right: One thing I have noticed about sucessful people is that they just do it. They take calculated risks, but they always take action and don't sweat the small stuff. | ||
| todd (Flat12)
Junior Member Username: Flat12 Post Number: 51 Registered: 7-2003 |
Don't be a Pu@@y. If it's what you want then just do it.Period..No if ands or buts...Be willing to work like a pig though | ||
| Bruce Wellington (Bws88tr)
Advanced Member Username: Bws88tr Post Number: 3310 Registered: 4-2002 |
sorry TO UPSET YOU DAN, ITS 8.00 AM IN THE EAST, AND MOST EVERYONE HERE IS NOT HERE AND DRINKING THEIR COFFEE NOW.. I GUESS YOU CAUGHT ME  NICE DAY BUDDY, BRUCE | ||
| Dan (Bobafett)
Intermediate Member Username: Bobafett Post Number: 1611 Registered: 9-2002 |
Bruce, NO CAPS?? What happened? Early in the am? It's 5 here. I agree - my father has been and continues to be a constant source of inspiration and information for me. His successes and failures taught me infinetely more than any combination of other sources I can think of. --Dan | ||
| Bruce Wellington (Bws88tr)
Advanced Member Username: Bws88tr Post Number: 3308 Registered: 4-2002 |
dan is right i watched my father for years and obtained more of an education about business in 6 months watching him ,as compared to 4 yrs of college im not saying college is a waste, but watching a succesful professional at his/her craft , cant be beat good luck, bruce | ||
| Dan (Bobafett)
Intermediate Member Username: Bobafett Post Number: 1607 Registered: 9-2002 |
Learn from others - I can tell you that watching the successes and failures (and luckily being highly involved one way or the other) has proven to be far more useful than any of my own experiences. --Dan | ||
| Mr. Doody (Doody)
Intermediate Member Username: Doody Post Number: 1948 Registered: 11-2001 |
mistakes in the course of learning are not failures. doody. | ||
| Jeff Howe (Ferrari_uk)
Member Username: Ferrari_uk Post Number: 576 Registered: 12-2002 |
Henry Ford went bust 3 times I think...? | ||
| Dan (Bobafett)
Intermediate Member Username: Bobafett Post Number: 1591 Registered: 9-2002 |
Ben put it most eloquently. Worry not about when you fail, but rather when you do not even try. --Dan | ||
| Ben Cannon (Artherd)
Intermediate Member Username: Artherd Post Number: 1082 Registered: 6-2002 |
Michael- it's certinly higher if all you think about is failing! Don't worry about it. It happens. The guy who started Round Table failed and bankrupted SIX seperate pizza joints before he hit it big. Thomas Eddision tried something around 3,000 filiment materials before he found Tungsten. He did not regard those as 'failures' but as a great body of knowlege of how NOT to build a light-bulb! Failure stats are high sure, but there is NOTHING worse than to die withought trying. Do not let the fear paralyze you, because then it will win. You may suceed, you may fail, but so f-ing what? You will at the aboslute least get to say you TRIED, which is more than many people can say in their lifetime. So worst case, you still win. And hey, you could always hit it big. Really big. Put all your heart, mind, body, soul, and love into it, and don't look back! The freedom alone is mind-altering! I can't go back! Best! Ben. | ||
| Mike B (Srt_mike)
Member Username: Srt_mike Post Number: 385 Registered: 12-2002 |
To me, that's sort of like saying "1 in 1000 people crossing the street in NYC get run over. I watched 999 people cross yesterday, so I'm thinking of staying home tomorrow in case I get run over". Ya know? | ||
| DL (Darth550)
Member Username: Darth550 Post Number: 486 Registered: 7-2003 |
Mike, Go for it!! If you don't you'll kick yourself for not trying. If it goes, so much the better! DL | ||
| Michael Davidson (Cabrio_fan)
Junior Member Username: Cabrio_fan Post Number: 89 Registered: 3-2002 |
Okay. Maybe a dumb question, but here goes. Given the following: 1) The failure rate for new business startups is as high as the published information indicates it is 2) I've been working and working on my first startup business plan which is my dream job! 3) I've never been a business owner before Then, should I ~NOT~ go into my first business venture with my dream job company for fear of it being a startup failure statistic?? Like I mentioned earlier, this may be a dumb question, but I've been working on my business plan so hard and then all of a sudden this thought hit me. Now I'm nervous about the thought of my ideal company being my first startup and being another "statistic." Thoughts? Experiences?? Mike |