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  • Small Business Ownership

    A lot of you are, or have been, small business owners. I was presented with an opportunity last year and did some investigating, but the timing wasn't right. That opportunity still exists. If anything, it's an even bigger opportunity now than it was last year, with fewer risks. I don't really know if I want to take it or not, though.

    I don't really have an overwhelming desire to run my own business. There are a lot of things I'd like to change about how my industry handles things like training upcoming engineers. That said, I know that good ideas in theory aren't always realizable, let alone good in practice.

    I'm not looking to make a big company. It'd just be me to start with, though I'd expect to grow to 5-10 employees total (which is decent sized for what I do).



    I'd like some input from y'all on what you think it takes to succeed.
    I'm not here anymore.

  • #2
    Just know that running a business is risky, and you have to know a lot about not only the work, but about managing people (if you have employees), finances and taxes, marketing, sales, etc. - you should also incorporate if you plan on having more than just yourself in the business, or if there are any liabilities or risks for law suits.

    I was a free lance graphics/web designer for a while, basically a sole-proprietorship, not incorporated. Even that was pretty hard, because doing taxes and such was much more difficult than I thought, and I am not that great at selling and schmoozing as I thought. I spent more time trying to get business than actually doing work. So I dropped that as a business and just do it as a "favor" when friends need it.

    From what I have read, Cow Poke is a pretty good entrepreneur and has run a few businesses. His advice would probably be pretty good.

    But don't let me scare you off. Go for it!

    Comment


    • #3
      My biggest problem in running businesses dealt with employees. Usually, I would keep the head count as low as I could, and only use people I knew.

      I have had too many times where I've had to go apologize to a customer because an employee messed something up really bad. If I'm going to have to apologize, I want to be the guy who messed it up!

      On the GOOD side, there are a lot of pretty inexpensive software options for keeping track of things, because you'll need to do tax returns.

      Have you given any thought to what kind of corporation or... usually, I just operated as a DBA, sole proprietorship, and did schedule C for taxes.

      I used to OVER REPORT my income and UNDER REPORT my expenses because I was scared to death of an audit. I've only been audited for business once, and it was a breeze!

      Since that time, I've been using NEAT DESK, and scanning in all receipts, invoices, and other paperwork. A couple times a week, I'd sort, classify, and categorize stuff, so my income tax return was a BREEZE! In fact, it made me a lot bolder in claiming deductions, knowing I could support my claims.

      Enough for now.
      The first to state his case seems right until another comes and cross-examines him.

      Comment


      • #4
        Originally posted by Cow Poke View Post
        My biggest problem in running businesses dealt with employees. Usually, I would keep the head count as low as I could, and only use people I knew.

        I have had too many times where I've had to go apologize to a customer because an employee messed something up really bad. If I'm going to have to apologize, I want to be the guy who messed it up!
        I feel the same way. Hiring is a major concern of mine. I would be pretty hesitant to bring someone on unless I felt really confident I could trust them. Mistakes happen, but I've been burned too often by people who should have been capable of the tasks they were given yet proved...not.


        Originally posted by Cow Poke View Post
        Have you given any thought to what kind of corporation or... usually, I just operated as a DBA, sole proprietorship, and did schedule C for taxes.
        I need to pull out my paperwork again. It's either a S-Corp or a LLC treated as an S-Corp. For what I do, I need the additional layer of protection that a DBA or sole proprietorship can't give me. I'll also have to get another layer of insurance for errors and omissions.
        I'm not here anymore.

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        • #5
          oh and in case you are wondering, tweb is just a hobby, and not a business. I think of it as a ministry. Exposing you heathens to the gospel

          Comment


          • #6
            Reiterating....

            I think the two biggest challenges for me -- which I eventually mastered -- were record keeping and invoicing.

            Record Keeping
            I'm a big procrastinator, so I'd just pile papers on my desk, thinking EVENTUALLY I'll get around to them. Unfortunately, some of them were invoices for stuff I bought for resale, and forgot to charge the customer. By the time I find them, I'm embarrassed to invoice for something I sold 6 months ago.
            Also, the NEAT DESK thing I mentioned --- I used to be in a panic at tax time trying to come up with all the deductions to offset all the 1099's or other income forms I'd receive at the end of the year. After I started using NEAT DESK (there are other options, but that one seemed the easiest) it was really easy to print my end-of-year report to see all the "costs of goods" I could claim, as well as equipment I bought, office stuff, etc.
            As a small business owner, you have some pretty good leeway to buy stuff associated with your business - like I always had the latest computers, test equipment, toners/tracers, servers.... and deduct them as expenses.
            Being able to document that makes it downright fun.

            Invoicing
            This was a nightmare for me.
            I would be busy all week, running from client to client, but when I would sit down to invoice, I couldn't think where I had been, or for how many hours. I'm guessing your "sales" would be "hours" more than product, no?
            So, you need some good time & billing software... OR.....
            what I finally started doing was just sending myself an email when I got to a client -- I had set up an alias "time & billing" -- and I would email myself "at Carrot's place" when I got there and "all done with Carrot" when I left --- the email was automatically date/time stamped, so it was a lot easier for me to construct my "where was I" calendar, and bill accordingly.
            As I alluded to earlier, if you put if off too long, it's really embarrassing invoicing a client for something you did 6 months ago.
            The first to state his case seems right until another comes and cross-examines him.

            Comment


            • #7
              Originally posted by Carrikature View Post
              I feel the same way. Hiring is a major concern of mine. I would be pretty hesitant to bring someone on unless I felt really confident I could trust them. Mistakes happen, but I've been burned too often by people who should have been capable of the tasks they were given yet proved...not.
              You might could get by with "strategic partnerships" -- I made arrangements with people who did stuff I either didn't want to do, or didn't have the knowledge/skill/expertise to do. If somebody asked me "hey, do you sell machine guns*?", I'd say, "Sure, lemme get my guy to call you". Then I'd find somebody I could trust to take care of that client, and either bill the client directly, or just do it as a referral. That (direct bill or referral) would be impacted, of course, by how much risk you wanted to assume. If it's simply a referral, the worst that happens is "hey, that guy you told me about was a jerk", rather than "YOUR employee....."

              I need to pull out my paperwork again. It's either a S-Corp or a LLC treated as an S-Corp. For what I do, I need the additional layer of protection that a DBA or sole proprietorship can't give me. I'll also have to get another layer of insurance for errors and omissions.
              Yeah, your state's laws and stuff.... sometimes, there's a Better Business or Small Business Administration office that can refer you to a mentor who will walk you through the various requirements. I've actually seen programs (can't remember when) where retired business owners will mentor you, because they don't really want to be in business themselves, but it's still in their blood.

              Are you going to be involved with sales tax, or are you just selling services for which there is no sales tax?




              *or whatever product or service - I wouldn't really sell machine guns
              The first to state his case seems right until another comes and cross-examines him.

              Comment


              • #8
                yeah sales tax was a real problem for me. Pain in the tuckus. I basically tried it for a year, then just decided to charge for labor only and not for materials (basically when doing graphic design.) I would not charge for the films and physical printouts and materials. I would either have the printing company charge the customer directly or I would just include the material for free and create a "handling charge" - I lost some markup opportunities, but the customer appreciated the "wholesale" price, and I had less of a headache to worry about.

                Comment


                • #9
                  Originally posted by Sparko View Post
                  yeah sales tax was a real problem for me. Pain in the tuckus. I basically tried it for a year, then just decided to charge for labor only and not for materials (basically when doing graphic design.) I would not charge for the films and physical printouts and materials. I would either have the printing company charge the customer directly or I would just include the material for free and create a "handling charge" - I lost some markup opportunities, but the customer appreciated the "wholesale" price, and I had less of a headache to worry about.
                  There's a guy near here who doesn't sell sand or gravel. He charges you to deliver it, but the sand or gravel is FREE!!!! Yeah, tax on materials, no tax on services, but the delivery fee was pretty high -- kinda like you were actually paying for a load of sand or gravel or something! He's been doing that for DECADES, and seems to get away with it.
                  The first to state his case seems right until another comes and cross-examines him.

                  Comment


                  • #10
                    Record keeping and invoicing are definitely something I would have to work on. The pile of papers sounds a little too accurate.

                    My sister is a CPA, and we had talked about having her help me setup a Quicken or something similar to handle invoicing, taxes and such. Invoicing can be weird since a lot of is based on % completion not actually time spent. I don't always invoice every month for my current projects, but when I do they are larger sums.


                    Originally posted by Cow Poke View Post
                    Yeah, your state's laws and stuff.... sometimes, there's a Better Business or Small Business Administration office that can refer you to a mentor who will walk you through the various requirements. I've actually seen programs (can't remember when) where retired business owners will mentor you, because they don't really want to be in business themselves, but it's still in their blood.

                    Are you going to be involved with sales tax, or are you just selling services for which there is no sales tax?
                    Oregon doesn't have sales tax. I'd be a professional service corporation, though, so it would be services only anyway. I'm pretty sure there's an SBA somewhere, and the law firm I was talking to specializes in the stuff I do. The one lawyer used to run his own architecture firm, for example.
                    I'm not here anymore.

                    Comment


                    • #11
                      I could never be a small business owner. It's not my fault I'm 6'4".



                      Edit: If you don't this post in here, I'll be happy to delete it.
                      I DENOUNCE DONALD J. TRUMP AND ALL HIS IMMORAL ACTS.

                      Comment


                      • #12
                        Originally posted by Carrikature View Post
                        Record keeping and invoicing are definitely something I would have to work on. The pile of papers sounds a little too accurate.
                        Just as I was boasting how much better I've done in invoicing I realized I have a pile of receipts and a bunch of hours at one client that I really need to invoice. (This client, when I informed him I retired, told me "no, you didn't". They're about the only client I still service.)

                        My sister is a CPA, and we had talked about having her help me setup a Quicken or something similar to handle invoicing, taxes and such. Invoicing can be weird since a lot of is based on % completion not actually time spent. I don't always invoice every month for my current projects, but when I do they are larger sums.
                        And one good thing about Quicken is that you can use Turbotax to auto-import your data. Of course, Sis might have proprietary software she uses.

                        Oregon doesn't have sales tax. I'd be a professional service corporation, though, so it would be services only anyway. I'm pretty sure there's an SBA somewhere, and the law firm I was talking to specializes in the stuff I do. The one lawyer used to run his own architecture firm, for example.
                        As I was driving from my soon-to-be former home to my new micro-home (did I mention I live in a neighborhood now?) I was thinking about this, and the subject of customer acquisition.

                        I like to watch Shark Tank, and they often ask about the cost of customer acquisition.

                        I realized that I have NEVER put an ad in the paper, or solicited customers in any way. I grew simply by word of mouth.

                        And, here are some principles I began to apply early, from advice given to me by a successful consultant.....


                        When I meet with a new prospective customer, I tell them "I want to work where I WANT to work, where I really enjoy the people. And I don't want to have to fight the customer to get paid." The feedback from that is quite enlightening.

                        I had one prospective customer tell me that "our payables are run through our home office in Minneapolis, and turn-around is about 90 days". I very politely declined.

                        There are only so many hours in a day, and I enjoyed spending mine as productively as I could.
                        The first to state his case seems right until another comes and cross-examines him.

                        Comment

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