I have decided I want to start my own business. Now what?

[thoughtomator]

First step in starting a business these days is finding a country with a non-hostile business environment

 

[2young2vote]

It totally depends on what type of business you want to run. I have first hand knowledge of what is required to make a small business successful for the retail space because my dad owns one and we talk about it non-stop every time we see each other and I've worked there for several years and have heard all of his complaints. .

First of all, and most importantly, is your family. If you have young children and a wife then you might as well not even attempt to start your business. Your kids only grow up once and you don't want to miss that. My dad learned that the hard way. He was working 18 hours a day and we (the kids) never got to see him. I remember he came home one time really late and I just started crying from sadness and anger because I never got to see him anymore. He realized that you can't abandon your family for your business.

Second, you will want to have a firm grasp of accounting even if you don't plan on doing it yourself. Knowing how money flows through your business will show you places that can be improved and places that you should focus on. You don't want to be that guy who brings a shoe-box full of receipts to the tax office and walks away. Organized financial information is requirement for a successful business.

Third, and this may only apply to retail and production, you will want low overhead. That means you want your electric, plumbing, insurance and rent bills to be as low as possible. They'll kill you if you don't. Believe it or not, going green in a business can actually save you a lot of money. My dads business has tons of freezers and coolers and just putting some plastic flaps in the door reduced our electric bill by a decent amount. You will also want to look for cheap buildings. It is better to spend $80,000 on a building that is off the main stretch and needs a few thousand dollars worth of work than a $190,000 building that is on the main stretch. My dad bought a good building on a main street and is paying for it every single month.

Fourth, presentation is everything. Look at Apple. Every single one of their products looks really sleek. From the time you are holding the package in your hand until the time you have unwrapped it and are holding their awesome looking piece of technology, you get the feeling that you are holding something special. Your store should reflect the quality of product that you are selling. If you are selling cheap crappy dinner plates then maybe a $20,000 display case wouldn't be right for it. However, at the same time you don't want it to look run down. I noticed the ramp outside the building needed re-painting so I asked if I could and my dad said no. The problem is we were trying to go for an up-north feel and having a perfectly clean and well-kept business doesn't give off that feeling so we let some things get a little bit rustic.

Fifth, you need to know who you are. When you start out you need to have a vision and you need to stick to that vision. As your business grows and gets some notoriety in the area there will be opportunities that will pop up that can make you a bit of money, but you need to think about how that will affect the perception and quality of your current business. We had the opportunity to sell our product at well over 60 gas stations across the state. That would have been a HUGE undertaking for us and we could have done it, but we decided that we didn't want out brand associated with gas stations or other low-quality places due to the affect it would have on how people perceive our product (really good homemade vs crap you get at the gas station). My dad always uses the example of Krispy Kreme. They used to be known across the country as having really awesome world class donuts. People would buy tons of them to bring back to their friends and family when they visited the original location in North Carolina. Then they started wholesaling to stores and gas stations and every other place you could imagine. Now Krispy Kreme is just another name that doesn't bring any kind of high quality thoughts to the public (although they do still have a good product, its just that the image is ruined).

Sixth. I kind of touched on it above but wholesaling can be a huge undertaking, especially if you don't have a distributor and you are doing it yourself. Unless you plan on only distributing your product in your immediate city, then I wouldn't even attempt to do it in-house unless you are large enough to pay a person to only do deliveries. The problems are rising gas prices, keeping in contact with all of your customers to take orders, and the time spent simply driving from one place to another. I used to do deliveries and there were times that I would spend 8+ hours doing them, most of the time just driving from one place to another.

Seventh, being on the Ron Paul Forums i'm assuming you don't think much of the government. Well, you'll think even less of them when you start your business, especially if you hire employees. You'll spend hours and hours doing unnecessary paperwork simply because some bureaucrat wants you to. If you anger easily, i suggest you don't start your own business.

Eighth, just be smart. Don't make fast decisions that you might come to regret. You need to be realistic about what you and your business are capable of. Stick to your vision of the business (within reason) and don't imagine you are something greater than you actually are.

/list

I want all of you to read the employee handbook for this video game software company called Valve. They are simply the most forward thinking and successful (in terms of vision) company on the planet. The structure of their business is something everyone should try to emulate (within reason)If you don't want to read through the entire thing then I will give you the gist of their management structure - they don't have one. There is no boss telling people where to go and what project to work on. If you decide one day that you would benefit the company more by working on the distribution software rather than a game, then you unplug your computer and roll your desk down the hallway to that area. You don't ask for permission and they don't ask you.

Here is the new employee handbook: http://newcdn.flamehaus.com/Valve_Handbook_LowRes.pdf


I only have one book recommendation and that is "Why We Buy" by Paco Underhill. It is essentially the psychology behind product marketing and product placement. It will basically explain how we are all truly sheeple in the shopping center. Paco is the owner of a company that sits and watches shoppers on video cameras all day long monitoring where the go, how fast they walk, what they look at, how long they look at things and their interaction with other people. It is really interesting and it will make you self conscious every time you go into a store.

That is all I have. If I think of anything else I will add it.

 

[Seraphim]

Whatever business you chose, try to gain experience in that field before hand. Even if only for 2 or 3 years. Get a firm grasp of the basic needs of the business and, where possible, gain contacts in the industry.

If you want to start your own family farm - go to your nearest family farm and offer a helping hand. Volunteer, work for 3$ an hour - anything on the side to gain experience and knowledge in whatever venture you chose.

In short, dreams are great - but don't blow your savings on a learning curve. Learn as much as you can BEFORE opening your doors, so that you can hit the ground running right away.

Also, prepare to love to the point of pain. You will not be successful at your own business unless you are willing to take punch after punch without the ability to love your purpose right through the pain.

Self sufficiency is sacrificial in nature. The sacrifice, if pursued with relentless fervor, will be rewarded.

 

[CaptLouAlbano]

I spent most of my adult life in business for myself, and still have my hand in it today. I think the first thing to caution against is creating for yourself a business that is little more that a job for yourself. While, of course, there are some advantages to self employment, when you couple that against the downside of being self employed you may find out the headache is not worth it. What you truly want to shoot for is a business that generates income for yourself and your family without you having to work. That is the difference between the self employed and the wealthy. The self employed own a job, the wealthy own businesses.

From my own personal life, I can give you some examples. In 1958, when I was very young, I went into a 50/50 partnership with my uncle (a retired cop) on a corner bar. At the time I was driving a truck full time, and spent my days off working the bar. I put a lot of hours in behind that bar, and while the bar was a successful one by neighborhood bar standards, at the end of the day my earnings were only slightly better than what I was earning from my regular job. Essentially, I was a very well paid bartender. This was fine for my uncle (who had a pension, etc) but for myself it was not what I was striving for.

After two years of 40+ hours a week driving and truck and 40+ hours a week at the bar, I had the opportunity to buy 2 pizza shops that were operating in Atlantic City. I sold my interest in the bar back to my uncle, and used that cash - along with some additional financing to buy the pizza shops. This is where I really learned what business was all about since the pizza shops were well staffed, and essentially ran themselves. I never made a pizza, I never delivered one, I never stood behind the counter. All I did was manage the business and collect the money. I still maintained my driver job, and my wife kept tabs on the shops. After paying back the loans, we were generating an income that was 3 times my annual truck driver income from the shops. At that point, I "retired" and I was in my mid 20's.

Throughout the years moving forward I continued to acquire businesses & property down the NJ shore points. Boardwalk games, food stands, souvenir shops, parking lots, along with rental apartments made up my portfolio. In the early 80's, I was able to sell off a lot of my AC properties to the casinos, which paid off very well for me, and allowed me to acquire more property in the more southern shore points. I still own some property today, but now being in my 70's I have sold off much of which I owned over the years.

So, as you are beginning into the world of entrepreneurship, do all that you can to acquire income producing assets and businesses. As a friend of mine would often say, there are two types of people in this world - those that work and those that own. Be an owner.

 

[2young2vote]

After two years of 40+ hours a week driving and truck and 40+ hours a week at the bar, I had the opportunity to buy 2 pizza shops that were operating in Atlantic City. I sold my interest in the bar back to my uncle, and used that cash - along with some additional financing to buy the pizza shops. This is where I really learned what business was all about since the pizza shops were well staffed, and essentially ran themselves. I never made a pizza, I never delivered one, I never stood behind the counter. All I did was manage the business and collect the money. I still maintained my driver job, and my wife kept tabs on the shops. After paying back the loans, we were generating an income that was 3 times my annual truck driver income from the shops. At that point, I "retired" and I was in my mid 20's.

What was the growth in these Pizza places like? Was it challenging maintaining a level of quality that would keep attracting customers? How were they self sufficient and still making a profit? I'm asking these questions because these would be the greatest challenges we would face opening up a second store. We wouldn't be there to make sure everything is up to the standards that were set for the company.

 

[Travlyr]

I spent most of my adult life in business for myself, and still have my hand in it today. I think the first thing to caution against is creating for yourself a business that is little more that a job for yourself. While, of course, there are some advantages to self employment, when you couple that against the downside of being self employed you may find out the headache is not worth it. What you truly want to shoot for is a business that generates income for yourself and your family without you having to work. That is the difference between the self employed and the wealthy. The self employed own a job, the wealthy own businesses.

From my own personal life, I can give you some examples. In 1958, when I was very young, I went into a 50/50 partnership with my uncle (a retired cop) on a corner bar. At the time I was driving a truck full time, and spent my days off working the bar. I put a lot of hours in behind that bar, and while the bar was a successful one by neighborhood bar standards, at the end of the day my earnings were only slightly better than what I was earning from my regular job. Essentially, I was a very well paid bartender. This was fine for my uncle (who had a pension, etc) but for myself it was not what I was striving for.

After two years of 40+ hours a week driving and truck and 40+ hours a week at the bar, I had the opportunity to buy 2 pizza shops that were operating in Atlantic City. I sold my interest in the bar back to my uncle, and used that cash - along with some additional financing to buy the pizza shops. This is where I really learned what business was all about since the pizza shops were well staffed, and essentially ran themselves. I never made a pizza, I never delivered one, I never stood behind the counter. All I did was manage the business and collect the money. I still maintained my driver job, and my wife kept tabs on the shops. After paying back the loans, we were generating an income that was 3 times my annual truck driver income from the shops. At that point, I "retired" and I was in my mid 20's.

Throughout the years moving forward I continued to acquire businesses & property down the NJ shore points. Boardwalk games, food stands, souvenir shops, parking lots, along with rental apartments made up my portfolio. In the early 80's, I was able to sell off a lot of my AC properties to the casinos, which paid off very well for me, and allowed me to acquire more property in the more southern shore points. I still own some property today, but now being in my 70's I have sold off much of which I owned over the years.

So, as you are beginning into the world of entrepreneurship, do all that you can to acquire income producing assets and businesses. As a friend of mine would often say, there are two types of people in this world - those that work and those that own. Be an owner.

This is so right on. This is why I consistently argue for working diligently for sound money. CaptLouAlbano started his business and investments when money was, well sorta, sound. 90% silver was in full use. A dollar could be exchanged for 371.25 grains of pure silver at the time.

Opportunity abounds in sound money environments for anyone who wants to work hard and smart. In days of sound money, it was not necessarily "who you know but what you know." Today, success comes more easily from "who you know." Got a friend at the Fed or Goldman Sachs... nearly guaranteed success. Want to start your own business... meet nanny government rules, regulations, fees and taxes.

 

[Barrex]

https://www.coursera.org/

It is free and really good.

 

[Elwar]

I just shut down an unsuccessful business.

One thing I would suggest is, if there are already businesses out there like the one you want to run, you can probably buy someone out and take over. My wife has a shop and it is full of clothes and everything you would need to open your own boutique. But it just did not work out and now we are stuck with a bunch of stuff we will need to just store in the hopes of selling things off piece by piece. We tried to sell the whole shop full of stuff to anyone but when we did a search on craigslist for the same thing, there were plenty of other shops out there going for dirt cheap. Had I known about so many shops closing, I would have bought all of my merchandise from dying stores instead of buying from a wholesaler.

Lessons learned: Do not co-mingle funds with your own. Put all profits back into the business for most of the first year. Closing your doors, even for emergencies, kills business. China can offer anything you have for sale a lot cheaper. Even if it is patented/copyrighted/branded, they do not care. You will not make money selling things made in China. Almost everything is made in China. You need to offer a service.

 

[Elwar]

I have also seen this book recommended:
48 days to the work you love

I even have it. But have not read it.

 

[CaptLouAlbano]

What was the growth in these Pizza places like? Was it challenging maintaining a level of quality that would keep attracting customers? How were they self sufficient and still making a profit? I'm asking these questions because these would be the greatest challenges we would face opening up a second store. We wouldn't be there to make sure everything is up to the standards that were set for the company.

The shops were established businesses that had good employees and a loyal customer base both year round and in the summer months. Keep in mind that this was back in the early 1960's so the work ethic was much better at that time, so we did not have employee issues like one might have today. Both shops moved a lot of pizza, and that is all we sold (other than drinks). So it was a no brainer for me to buy the business, because I had to do very little to maintain its profitability. All I did for the most part in the early years was deal with the vendors, contractors, etc. The day to day operations were handled by the store managers. I held onto both shops until the early 80's when I pretty much sold everything that I owned in AC.

It is tough for someone to branch out and open other locations of businesses, but you have to try not to be too emotionally connected to the businesses. It's all about the money. My philosophy was always pretty simple - when I send money out into the marketplace, I expect to get more money back in return. And one last thing, is that you cannot place enough value on finding quality people to do the work for you. When I was at my peak I had managers, accountants, lawyers, etc all working for me. My business was business - I hired people to handle the operations and I dealt primarily with looking for new opportunities and making changes to existing businesses that I owned.

Hope that helps.

 

[CaptLouAlbano]

This is so right on. This is why I consistently argue for working diligently for sound money. CaptLouAlbano started his business and investments when money was, well sorta, sound. 90% silver was in full use. A dollar could be exchanged for 371.25 grains of pure silver at the time.

I agree, it was far more easier back in the 60's when money was worth a lot more than it is today. However, the basic principle still exists today in that you want people working for you and generating income, far more than you want to be doing the work yourself. For example, my son is a barber and while he still cuts hair, his real earnings comes from that fact that he has other barbers working for him. So his shops (he has 3 in total) are open a combined 180 hours per week with at least 3 barbers on staff at any given time. That's a lot of haircuts, and in a business that is a relatively small earner per hour (a haircut costs about 12 bucks in his area) he can still turn a very nice profit annually from the volume he is able to do. If however, he was a one man shop he'd be working 80 hours a week, just to put food on the table.

 

[Tod]

So....what kind of business are you thinking of starting?

 

[presence]

What is your mission?
What is your vision?
What is your strategy?
What are your values?
SWOT analysis?

Built to Last
Good to Great
7 Habits of Highly Effective People
How to Win Friends and Influence People
The Four Obsessions
5 Levels of Leadership
Passion for Excellence
The Power of Will
Bargaining for Advantage
Negotiate to Close

Any decent modern college textbook on "business communication" is a must.

research:

organizational development
empowerment
strategic planning
"time value of money"

 

[youngbuck]

opcorn:

Seconded.

 

[Reason]

I am reading & rereading all the responses in this thread & appreciate them all!

I am not sure what type of business I would like to have.

 

[CaptLouAlbano]

I am reading & rereading all the responses in this thread & appreciate them all!

I am not sure what type of business I would like to have.

How much start up money do you have, or have access to?

 

[Tudo]

I started building the business we own 30 years ago. While it may feel like we've hit the lottery a few times along the way it sure didn't feel that way then

The real fun started when I "re-started" ( hahaha be nice to the people on the way up, cause you're gonna meet the same people on the way down "Ralph Kramden " ) the business after HAVING to go back to work, thankfully it was for the biggest in the business which then helped show me my errors and recognize why people should choose my company over the competition and it's been an upward track ever since and that was 22 years ago. Oh, and after being the top gun with the corner office for that giant "firm", I had to roll up my nickels dimes quarters etc just to get back to Fla to restart my business. I picked an area that I became very knowlegable in and turned out I was right although it took more than a decade for that fact to become known. The worlds greatest collection of these particular coins was named because of my mentorship.

Be straight, work tight, ALWAYS look to improve because if you don't your competitors will.

 

[presence]

I am not sure what type of business I would like to have.

What is your mission?
What is your vision?
What is your strategy?
What are your values?
SWOT analysis?

Give us (or yourself) answers to those five questions and you will be much further down the road.

 

[Elwar]

I am reading & rereading all the responses in this thread & appreciate them all!

I am not sure what type of business I would like to have.

If you are flexible then check out LoopNet ( http://loopnet.com ). People close their businesses all of the time for whatever reason. Some people have successful businesses that for many personal reasons (retirement,divorce,death) need to move on. A perfect opportunity to get in with everything waiting for you to take over.

 

[CaptLouAlbano]

If you are flexible then check out LoopNet ( http://loopnet.com ). People close their businesses all of the time for whatever reason. Some people have successful businesses that for many personal reasons (retirement,divorce,death) need to move on. A perfect opportunity to get in with everything waiting for you to take over.

Totally agree here. It is much easier to just buy a successful business than to start something from scratch. I think that the reason so many new businesses fail is because people think they have a really good idea, but in reality it is not a really good idea.