[joecolombia]

I`ve been looking around the threads that have been posted regarding business stratups and whynot, but I have different ideas/objectives creating this thread.

I am a university student that wants to start a succesfull business before graduating. I mean, being independent as soon as i graduate. For that I`ve had a couple of ideas that sound pretty interesting but i have not got them started for two main reasons:

1. Fear or failure
2. Time and effort

The thing is, I know it is not that easy to succeed. Ive had good ideas, but i dont know if thats enough to hit it big, and it scares me to lose all the cash ive been saving for the last year. I want to have some confidence before investing my money in one of the business ideas that I have.

If you have succesfully started a business, how did you cope with the fear of loosing it all? And if you`re currently working/studying, how do you take time to develop your business models or ideas?

[Disco_Volante]

for me, the fear of a normal life with normal paychecks was all the motivation I needed to take the risk.

If you start a business you have maybe a 10% chance of succeeding long term. if you continue with your life not taking risks, then you are 100% guaranteed to be average (at best) your whole life. You no longer can join a company and work your way up with raises over 30 years... nowdays you will probably be layed off after a few years anyways. A normal job is just as risky as a business simply because the company you work for is also in a risky precarious position one way or another. Taking a job with a company isn't any less risky than starting your own business because the global economy changes extremely quickly these days.

it's more of a question about you and what you want out of life. probably 95% of people don't want to take risks and just want to show up at a job, do what they're told and go home. As much as people bitch about 'the rich', they wont take any risks themselves. Most Americans - especially young people are communist pussies these days.

[joecolombia]

(10-24-2015 10:39 PM)Disco_Volante Wrote:  

for me, the fear of a normal life with normal paychecks was all the motivation I needed to take the risk.

If you start a business you have maybe a 10% chance of succeeding long term. if you continue with your life not taking risks, then you are 100% guaranteed to be average (at best) your whole life. You no longer can join a company and work your way up with raises over 30 years... nowdays you will probably be layed off after a few years anyways. A normal job is just as risky as a business simply because the company you work for is also in a risky precarious position one way or another. Taking a job with a company isn't any less risky than starting your own business because the global economy changes extremely fast these days.

it's more of a question about you and what you want out of life.

When I talk about starting a business, I also mean all the lifestyle that comes with it. I want my company to be great, and as a result, to being able to have a solid income, and being capable of giving myself the luxuries that i want. I dont want to end up in a dead end 9-5 job with a shitty house and an ugly wife.

Going big or going home.

Did you sucessfully started a business? How long it took to take off and how much $$ did you have to invest?

Personally, the step of starting is the hardest part, i think after i start with something, i will commit to it thus, making it sucessful (if it is a good idea though).

[Disco_Volante]

I worked in the oilfield for 3 years after college. My first month I was already plotting my own business (maybe through greed or insanity, whatever).

At that point I was making about 82k per year and started sinking 60% of my after-tax paychecks into this programmer I hired and we created a rock imaging system which identifies certain types of rocks. I'm presently trying to sell it to a large oil service co. Obviously idk if ultimately they'll buy it or not.

All told it has cost me about $60,000 I've sunk into it. Instead of living the high life off my checks I sat on drilling rigs and drinking was my only luxury.

I quit my job summer 2014 to try and sell my imaging system. Everyone told me I was insane for quitting my high paying job....but guess what happened? 3 months later the price of oil dropped and massive layoffs hit the oil industry. Now all the oilfield workers are fucked, and I have my invention to fall back on (assuming I eventually sell it). So really my timing was perfect.

In the mean time I gamble on sports as my income (its fun and I'm fairly good at it....in fact if no one buys my business I'll consider myself a professional gambler ha).

but the point is, when you go work at a company you are vulnerable to the same market risks as if you started your own business anyways. The ideal scenario is you can have some type of part-time job in a different industry (like uber driver) then spend the rest of your time trying to sell your own product. your biggest expenses will be your personal use - food, electricity, gas, internet, etc.. you have to take care of yourself while you work on your biz that's what takes the most money.

[CleanSlate]

(10-24-2015 10:46 PM)joecolombia Wrote:  

Did you sucessfully started a business? How long it took to take off and how much $$ did you have to invest?

Personally, the step of starting is the hardest part, i think after i start with something, i will commit to it thus, making it sucessful (if it is a good idea though).

Yes, taking the first step is the hardest part of all. I'm starting a business this year and I've finally started making some cash only recently. I'm nowhere near profitable now, or even earning enough for sustenance, but I'll share what I've learned.

First, what kind of business do you want to start?

There are two kinds of businesses you can start:

1. One that requires a large capital infusion
2. One that requires little overhead and little/no capital

If you have a product or a prototype you want to sell, you'll need to patent it first. Get your intellectual property rights on it before anyone else does. Second, you'll want to test the market. The last thing you want to do is spend all of your money trying to sell a product no one wants. If the market responds positively and there is demand for your product (i.e. your product fills a pressing need), then you'll need a factory to make your products. Obviously you'll need a HUGE capital infusion to get all that started. You might go to Kickstarter to get some cash to start something up.

But I'm guessing that's not quite what you're looking for... you might be more going for the second type of business: a lifestyle / location-independent / online business such as programming, writing, software as a service or subscription, graphic design, or whatever you can do everything via online. That's the type of business I am working on currently. This type of business doesn't require much money to start up, and usually requires very little overhead. You basically need a website to market yourself, and charge clients for the services you provide. Big ticket item that may cost you the most money could be your laptop.

Some other things to consider...

Do you want to incorporate for tax reasons?

There are different types of tax classifications for your business. You could be a sole proprietor, where you are taxed for all of your income you earn through your business. It is the simplest, where you only need to fill out a 1040 and you're done.

However, you could save money and add a layer of asset protection by incorporating. If you earn more than about 20K a year, you actually save money by establishing an LLC or an S-corporation. The S-corporation is more complicated. LLC is much simpler, but also provides similar protection and tax advantages as an S-corporation classification.

By incorporating, you save on self-employment taxes that can run you 15% (think of the medicare and SS taxes that you only pay half of when you work for an employer). Another advantage to incorporating is if someone sues your business, your personal assets are protected and cannot be taken (in most cases). As a sole proprietor, ALL of your personal assets are fair game if you get sued.

What administrative tasks can you do yourself, and what can you delegate?

Starting a business is a lot of work. A LOT of work. You'll need to wear a lot of hats... the accountant cap, the secretary cap, the marketing director cap, and I haven't even gotten to the actual work you do! But the good news is you can delegate some of that work to other people who would do that work for you.

You could get a virtual assistant (VA) for menial tasks like keeping your schedule, researching the market for you, creating contact lists, etc.

You also could - and SHOULD - get a tax accountant. I'm not comfortable doing my own taxes and payroll with an LLC in the picture, so I'm not touching any of that stuff. Pay your CPA to take care of it for you. He's the expert on keeping the IRS away from you.

Also, if you incorporate, you could do it yourself, or you could get a lawyer to do it for you. Though you'd save lots of money if you did it yourself, and it's pretty easy to do.

Marketing, Getting Clients, and Invoicing

Now we get to the meat of running your business.

Marketing. THAT is the next hardest part other than taking the first step. Some people have a talent for marketing and can make 50K in the first 3 months of their business. Others, well... they struggle mightily to market their way out of a paper bag. I'll be honest with you - I'm in the latter group. I suck at marketing. But I learned so much in the past few months.

You need to find your market and niche down into it. Not just the demographics, but REALLY drill down into how they think and what makes them tick. Then tie your business services/products to the needs of your market. Take the "features" of your business and translate them into how they would "benefit" your target market.

Part of marketing is cold emailing and cold calling. I'm talking HUNDREDS of emails and phone calls and business card exchanges. Not 5, not 10, not 50, but HUNDREDS. Even THOUSANDS. In the past 2 months, I have emailed over 450 people introducing myself and my business. And you would need to follow up every once in a while, not just email or call them once and wait for them to call you back. Follow up, get yourself etched into their brains. Then when they finally need your service, you'll be the first name they think of off the top of their head.

Now once you've got some clients interested in your services, you'll need to have a way for them to buy your product / service. It could simply be an e-commerce store on your website, with a shopping cart. Or you'd provide an invoice for them. Make sure everything is connected to your business bank account (which I hope is different from your personal checking account), so you do get paid when people buy your product or service.

From there, it's just more marketing, more clients, and expanding your business. You want to think about scalability, too. If you can scale your business up, that could mean potentially huge revenue for you. A service-based business, however, is not very scalable, but can still be lucrative if you play your cards right and provide more value than your competition.

Hopefully I gave you a concrete step by step plan that takes away the fear of the unknown. Good luck.

PS. I started my business while I worked (and still am working) full time.

[joecolombia]

(10-24-2015 11:45 PM)CleanSlate Wrote:  

(10-24-2015 10:46 PM)joecolombia Wrote:  

Did you sucessfully started a business? How long it took to take off and how much $$ did you have to invest?

Personally, the step of starting is the hardest part, i think after i start with something, i will commit to it thus, making it sucessful (if it is a good idea though).

Yes, taking the first step is the hardest part of all. I'm starting a business this year and I've finally started making some cash only recently. I'm nowhere near profitable now, or even earning enough for sustenance, but I'll share what I've learned.

First, what kind of business do you want to start?

There are two kinds of businesses you can start:

1. One that requires a large capital infusion
2. One that requires little overhead and little/no capital

If you have a product or a prototype you want to sell, you'll need to patent it first. Get your intellectual property rights on it before anyone else does. Second, you'll want to test the market. The last thing you want to do is spend all of your money trying to sell a product no one wants. If the market responds positively and there is demand for your product (i.e. your product fills a pressing need), then you'll need a factory to make your products. Obviously you'll need a HUGE capital infusion to get all that started. You might go to Kickstarter to get some cash to start something up.

But I'm guessing that's not quite what you're looking for... you might be more going for the second type of business: a lifestyle / location-independent / online business such as programming, writing, software as a service or subscription, graphic design, or whatever you can do everything via online. That's the type of business I am working on currently. This type of business doesn't require much money to start up, and usually requires very little overhead. You basically need a website to market yourself, and charge clients for the services you provide. Big ticket item that may cost you the most money could be your laptop.

Some other things to consider...

Do you want to incorporate for tax reasons?

There are different types of tax classifications for your business. You could be a sole proprietor, where you are taxed for all of your income you earn through your business. It is the simplest, where you only need to fill out a 1040 and you're done.

However, you could save money and add a layer of asset protection by incorporating. If you earn more than about 20K a year, you actually save money by establishing an LLC or an S-corporation. The S-corporation is more complicated. LLC is much simpler, but also provides similar protection and tax advantages as an S-corporation classification.

By incorporating, you save on self-employment taxes that can run you 15% (think of the medicare and SS taxes that you only pay half of when you work for an employer). Another advantage to incorporating is if someone sues your business, your personal assets are protected and cannot be taken (in most cases). As a sole proprietor, ALL of your personal assets are fair game if you get sued.

What administrative tasks can you do yourself, and what can you delegate?

Starting a business is a lot of work. A LOT of work. You'll need to wear a lot of hats... the accountant cap, the secretary cap, the marketing director cap, and I haven't even gotten to the actual work you do! But the good news is you can delegate some of that work to other people who would do that work for you.

You could get a virtual assistant (VA) for menial tasks like keeping your schedule, researching the market for you, creating contact lists, etc.

You also could - and SHOULD - get a tax accountant. I'm not comfortable doing my own taxes and payroll with an LLC in the picture, so I'm not touching any of that stuff. Pay your CPA to take care of it for you. He's the expert on keeping the IRS away from you.

Also, if you incorporate, you could do it yourself, or you could get a lawyer to do it for you. Though you'd save lots of money if you did it yourself, and it's pretty easy to do.

Marketing, Getting Clients, and Invoicing

Now we get to the meat of running your business.

Marketing. THAT is the next hardest part other than taking the first step. Some people have a talent for marketing and can make 50K in the first 3 months of their business. Others, well... they struggle mightily to market their way out of a paper bag. I'll be honest with you - I'm in the latter group. I suck at marketing. But I learned so much in the past few months.

You need to find your market and niche down into it. Not just the demographics, but REALLY drill down into how they think and what makes them tick. Then tie your business services/products to the needs of your market. Take the "features" of your business and translate them into how they would "benefit" your target market.

Part of marketing is cold emailing and cold calling. I'm talking HUNDREDS of emails and phone calls and business card exchanges. Not 5, not 10, not 50, but HUNDREDS. Even THOUSANDS. In the past 2 months, I have emailed over 450 people introducing myself and my business. And you would need to follow up every once in a while, not just email or call them once and wait for them to call you back. Follow up, get yourself etched into their brains. Then when they finally need your service, you'll be the first name they think of off the top of their head.

Now once you've got some clients interested in your services, you'll need to have a way for them to buy your product / service. It could simply be an e-commerce store on your website, with a shopping cart. Or you'd provide an invoice for them. Make sure everything is connected to your business bank account (which I hope is different from your personal checking account), so you do get paid when people buy your product or service.

From there, it's just more marketing, more clients, and expanding your business. You want to think about scalability, too. If you can scale your business up, that could mean potentially huge revenue for you. A service-based business, however, is not very scalable, but can still be lucrative if you play your cards right and provide more value than your competition.

Hopefully I gave you a concrete step by step plan that takes away the fear of the unknown. Good luck.

PS. I started my business while I worked (and still am working) full time.

Aparently, you`re making a pretty good damn job in starting your business. For what I`ve read, heard, listened, business always take a while to "pop".

I think I have the same issues that you do regarding maketing and whynot, that`s why I am looking around, studying and learning about advertisement, packaging, and the general niche i want to sell my product in (that is a market i am inmersed daily)

Since my business will start small, informal and I am not living in the US, the tax benefits won`t count on my case, but thanks for all that advice.

I will follow your lead and start a business in my spare time. From tomorrow onwards, im going to start that journey!

Thanks man.

[Pyrrhic victory]

I have owned several businesses all of which were startups from finance , accounting and real estate. In addition , All of which started out losing money for the first 2 to 3 years and then reaching break even. After the 4th year all three of them took off.

An entrepreneurs mindset is different than the typical 9 to 5er. I have had modes where I will work 80 to 100 hours a week for the first year or two of each business cycle barely covering expenses. However , there is a trend/ niche or vision that you may see that you feel obligated to stay the course to see through.

In addition , I dropped out of university to establish the businesses and I still have not gone back aggressixely to complete my bachelor degree. The opportunity cost of school did not make sense after the first successful venture. There was no balance for me. Leave school and focus on one thing at a time.

The majority of people who says they are multitasking big ticket items are liars. Do one thing and do the Damn thing well. And if you are Making good money continue doing it. The hell with school you can always go back later and finish.

I've also failed miserably 3 times In each of these ventures. I would get up some days after a very costly learning mistake and almost give up but never would and still push through a 15 hour work day. . If you truly believe in something you will push yourself to incredible limits.

In the end it paid off for me as I am now contemplating retirement before I have reached the age of 40.

[RichieP]

Here's my take on fear in business:

"Fear of losing it all" isn't really a thing for me; what does that mean afterall? I'm in a growth industry with an established customer base and I know how to give them what they want at a profit. What exactly is there to "lose" - sure things can go wrong operationally, technically or a contractor/employee might disappear, but they are just challenges to be solved along the way, and business is about continually solving challenges. As is life generally.

There are several competitors and we all provide slightly different things - my offer resonates with some better than others, I know who my ideal customers are, so... it doesn't really make sense to be afraid of "losing it all". Things evolve and change, and I may need to evolve/change the business (and will, if I want to grow it).

I'm not afraid of some major catastrophe - the macro demand for my offer won't suddenly dry up - that would be require a major industry to suddenly vanish. Maybe you mean something like getting sued or your premises/inventory going up in flames? Well with regard to those things you take steps to ensure they don't happen, and protect yourself appropriately. The same way you do your best to make sure your house doesn't burn down (btw, if you're the kind of person who's always worried about that... don't start a business!).

A good business should actually be very predictable - you know who your ideal customers are, you know there is overall market growth and demand, you welcome competition (because it validates strong and consistent demand), and you know you offer something different/special.


I think it's the fear that stops you starting or taking action that's waaaay more of an issue actually. This is the fear you want to get over - do whatever you can to get into a calm, focused, "realistic optimist" state. Also, try and resolve as many uncertainties as possible before you commit time/effort/resources. Ask yourself questions like:

-Does demand for this product/service already exist? (THE most important question)
-What can you realistically charge? (what's the high and low end of competitors' prices? where will you position yourself relative to them?)
-What are your expected costs? Marketing ("customer acquisition") will likely be your biggest cost
Is the market growing year-on-year? (A rising tide lifts all boats)
-Will there still be demand in 3 years for your service/product, or at least something very similar, or is it a fly-by-night opportunity?
-What are the general trends in the industry, etc? What actual kinds of people are paying money for this product/service already?

Positive answers to these mitigate alot of uncertainty. Then it's just down to you to walk the path.

[nek]

My biggest fear about going out on my own: Healthcare/insurance

Those of you not in the U.S. may not understand, but even a minor incident that lands you in the hospital can completely flatten you here, halting all finance progress and wiping out your savings. Without employer assistance, insurance can be quite expensive. I don't mind losing money, I just don't want to end up in a hole I have to dig out of due to debts that may incur

[RichieP]

(10-25-2015 11:32 PM)nek Wrote:  

My biggest fear about going out on my own: Healthcare/insurance

Those of you not in the U.S. may not understand, but even a minor incident that lands you in the hospital can completely flatten you here, halting all finance progress and wiping out your savings. Without employer assistance, insurance can be quite expensive. I don't mind losing money, I just don't want to end up in a hole I have to dig out of due to debts that may incur

Good point. What does it cost to self-insure there, to cover medical stuff?

Also, how about travel insurance? For me, travel insurance for a few months comes to like $100 (I'm not a US citizen though). That covers up to like $10mm in medical care abroad. How much does travel insurance cost for US citizens? If your biz is online, could it ever be economical to take out travel insurance and build your biz outside the US (!?)

[joecolombia]

(10-25-2015 11:42 PM)RichieP Wrote:  

(10-25-2015 11:32 PM)nek Wrote:  

My biggest fear about going out on my own: Healthcare/insurance

Those of you not in the U.S. may not understand, but even a minor incident that lands you in the hospital can completely flatten you here, halting all finance progress and wiping out your savings. Without employer assistance, insurance can be quite expensive. I don't mind losing money, I just don't want to end up in a hole I have to dig out of due to debts that may incur

Good point. What does it cost to self-insure there, to cover medical stuff?

Also, how about travel insurance? For me, travel insurance for a few months comes to like $100 (I'm not a US citizen though). That covers up to like $10mm in medical care abroad. How much does travel insurance cost for US citizens? If your biz is online, could it ever be economical to take out travel insurance and build your biz outside the US (!?)

My medical insurance is about 120 USD per month, and it is really good, so I wouldnt worry about that. A lot of the guys from the forum are talking about internet related business, such as podcasts and ecommerce, but i personally think that those markets are bloated and it will be really hard to be successful on them.

When i say I want to start a business, I mean start small but with a big goal, and it will be a medium term project that would (hopefuly) end up in a sucessful, profit making project. Its something physical, with a steadly growing market and an appealing cost.

I dont know about how much time it would take, but since i live in latin america, theres a lot to be done, and it is not that hard to be sucessful.

[Saweeep]

See, it was the fear of having to actually get a job and work for a living that made me start my first business at 18.

[jamaicabound]

It's always a risk and always scary starting a business however with you being in college you don't have as much to lose as someone leaving a career so keep that in mind. It's the perfect time to start a business, you probably don't have a ton of expenses, you probably have lots of freetime, many businesses are ideal for a college student because your young and see your friends all the time and have so many connections where as once you hit your late 20's you lose touch and have so many fewer friends.

Give it a go, do it on a small scale so your not goig to lose a ton of money if it fails. You are in an ideal situation to start a business, hopefully it will grow and maybe you can do that instead of getting a "real job" out of college.