Owning your own business...need opinions

[CrazedClerkthe2nd]

So my current job here may not last too much longer and I am starting to think beyond this occupation (I work at a retail store).

I know the economy is rough right now but I have long wanted to go into business for myself so I would no longer have to be at the whim of inept management and clueluess supervisors.

And just so you are aware, I have a business degree and I know the financial and economic pitfalls involved (In other words the shitload of risk) in doing your own thing.

So I was looking for some input from people who have done it before and I seem to remember there are few regulars on here who do have or at one time had their own operation.

My plan was start small, maybe running something through a website where I could operate as a one-man company. The idea is I don't want to invest a huge amount of money to start so I am looking for something with modest expenses.

So to those of you who have done it/are doing it I have several questions:

1) Are/Were you successful?
2) How long did it take to build a steady income?
3) Any regrets?
4) What might you have done differently?

Thanks in advance for your input I will definitely put an update on this site if (more likely when) I decide to make the plunge myself.

[Arm]

If you'd like some help with the site, I do contract work

This message is very long! I'm sorry!

I have one friend who's been pursuing the small-business dream, and another whose business just folded and went back to teaching.

I haven't really been 'inside' on the one that folded, though I did do web-work for her now and then.

From what I've seen, though, the lead-time to become profitable depends greatly on what you're selling, who you're selling to, and how the shifts of the economy affect that.

The friend who's building up her business now does a webcomic (which probably tells some of you who I really am, but keep it under your hat ). The lead-time for a webcomic to become profitable is two to three years, depending on the popularity of the subject matter and the quality- and regularity- of its updates. But, a webcomic doesn't get hit AS hard as many businesses by shifts in the economy, because webcomics have two main advantages:
A global audience
Appeal towards a broad age range (young people living at home have 100% disposable income, and old successful people will sometimes donate more than enough to make up for the others)

Plus, most webcomic merch is pretty cheap.

The down-side to that market is, you gotta build the audience first, before you can sell squat. That means you need outside support for a long damn time.

The business that folded sold luxury desserts and baked goods.
Her business declined, and the cost of ingredients- the materials needed to be able to produce her product- skyrocketed. So she decided to close down and go back to work elsewhere.
What went wrong? I can't say for sure, but these are my suppositions:
Luxury good. When people are tightening their belts, you don't need that chocolate cake (unless you're an SC).
VERY limited market. While she COULD ship, you can only ship food like that just so far before it goes bad, and even though her marketable area encompassed a several million people, they were all affected by the *same* economic factors.
Materials costs- the real killer. Every single one of her ingredients gets shipped from somewhere, to somewhere else, even if she could walk to the store to buy it. That was absolutely not something she could control, and raising prices wouldn't have helped, because it would've torpedoed sales even more.

....

So looking at those, the main lessons I'd take away:

What are you selling?
Can you ensure that your materials costs can't be jacked up?
> Also note, if you're creating intellectual property, that's something that can be sold again and again. You can only sell one cake to one person, but you can sell the same reading experience to millions (if you sell ad-space on your website).
And, can you widen your market? If your market is limited to one area or one economic group, you're riding for a fall if something bad happens to them.

And from my own experience of setting up many small-business or micro-business or other sites... GET A DESIGNER. They are so worth the money that you will not even understand it. I've seen two versions of a site that I wouldn't have known which to choose from. The one the designer produced QUADRUPLED the popularity, and resulting ad revenue, of the site.
And by a designer, I mean a genuine, accredited designer. Ask around on this forum. We have some designers here, even. Some countries have professional organizations of them- Canada has the RGD. I don't know about others.

When someone comes to your website, it should be as comfortable as possible for them. Even if they never buy anything, if they link it to their friends, that's very likely money in your pocket. If you have ad-space, every link they send to their friends IS money in your pocket.

[RetailWorkhorse]

Dad and I have gotten out of the Construction/Remodel business and he's working on building a hot dog cart.

You read that right. A Hot Dog Cart.

Everyone's gotta eat.

Meanwhile, I'm hoping to either get into the Hotel business, the Bar business, or the hot dog business, depending on how fast I can get a job to support my book habit in New Mexico.

[Gurndigarn]

What are you selling?
Can you ensure that your materials costs can't be jacked up?

Let me modify this a bit: consider how much you would be adversely affected by various market forces. If your materials cost is a substantial portion of your outputs, then it's a rather serious consideration. If you're likely to pay far more for, say, tooling than for materials, you can ride out most fluxes in the marketplace, because tooling needs replacing far less.

And from my own experience of setting up many small-business or micro-business or other sites... GET A DESIGNER. They are so worth the money that you will not even understand it.

Yes, and no. Keep in mind that all these web sites were designed by "professionals". (I would like to know why Tampax left this list... it's not like their site was tweaked much.) I think it's more important to make an honest evaluation of your skills and abilities as a designer first. This probably will include hiring a designer, but definitely figure out first what criteria you are going to use in choosing your designer.

On a similar vein: be careful of places that offer "turnkey internet shops" or other prepackaged retail software. My father in law decided to go with one of those, and my wife had a difficult time trying to get around the built-in limitations of these to get results she was happy with.

Likewise, be very wary of companies offering to tweak your website to give it wider exposure, usually by inserting keywords that search engines pick up on. My father in law was close to going with one of these places, until my wife did a quick web search on them, and found their website about #15 on the search list. They claimed it was their detractors just trying to make them look bad... but if you can't get your own website listed above chatroom conversations, you have serious problems.

(Edit: My opinion for the worst web site is http://www.samanzerin.com/. Tell me how long it takes you to work it. For me, about 2 1/2 minutes total, two visits.)

[digilight]

Like I've said before I own a company that does CD and DVD Duplication, VHS transfer to DVD, and Black and White Copying.

My margins on the CD/DVD duplication are great, I can usually average about a 500% markup over the raw goods price on some jobs 400% is my normal goal.

VHS Transfer is a good one too, I charge $14.99 to transfer a tape to a dvd and the machine has paid for itself many times over, the only cost involved there is around 50 cents for the DVD and the Sleeve or Jewel Case.

Now the Copying isn't as good. Paper is a huge cost as is toner. You figure that you are paying between 1 and 2 cents per copy on supplies and big runs end up with a lower per copy price then smaller runs.

You want to examine the following real close:
1. What are my expenses going to be for the goods I will sell. How much will these fluctuate. If they tend to be steady then you are good here.

2. Is my item a luxury item that people will live without in a time of financial downturn. Things like over priced art, jewelry, clothes, etc will do worse then more necesities such as cheaper clothes, and the like.

3. Are you marketing towards individual consumers, government, or corporate buyers.

4. What type of cliental would you have. Consider that in my line of work we tend to have around 5% of the cliental make up 80% of the business. If you lose 1 or 2 big clients you are screwed.

5. Operating costs overall, you would have licensing, taxes, and overhead such as phones, and other things.

6. Taxes, as a business you can deduct more things then you can as a person. If you are home based you would have to dedicate an entire room to just your business to be able to right it off (take the square footage of the room and divide by the total of your place) so a 100 sqft room on a 1000 sqft place would be a 10%deduction on your rent/mortgage and all that.

7. I have uptimes and downtimes. Right now is a downtime, but I bought the business allready established and had been the manager for 10 years prior to buying.

8. You pretty much will not make a profit for about the first 18-36 months on average. If you get profitable on paper sooner you are doing good (and not deducting as well as you should either).

9. Advertising will be your biggest issue.

[Arm]

Let me modify this a bit: consider how much you would be adversely affected by various market forces. If your materials cost is a substantial portion of your outputs, then it's a rather serious consideration. If you're likely to pay far more for, say, tooling than for materials, you can ride out most fluxes in the marketplace, because tooling needs replacing far less.

A good point. Figure out which market forces will affect you and see if you can weather it or if they'll sink you.

Yes, and no. Keep in mind that all these web sites were designed by "professionals". (I would like to know why Tampax left this list... it's not like their site was tweaked much.) I think it's more important to make an honest evaluation of your skills and abilities as a designer first. This probably will include hiring a designer, but definitely figure out first what criteria you are going to use in choosing your designer.

Well, like I said, a real designer as opposed to someone who just thinks they are one. I haven't seen any of her work, but I'm pretty sure RecoveringKinkoid here is a designer, for example. She can, I'm sure, help explain the difference

On a similar vein: be careful of places that offer "turnkey internet shops" or other prepackaged retail software. My father in law decided to go with one of those, and my wife had a difficult time trying to get around the built-in limitations of these to get results she was happy with.

Likewise, be very wary of companies offering to tweak your website to give it wider exposure, usually by inserting keywords that search engines pick up on. My father in law was close to going with one of these places, until my wife did a quick web search on them, and found their website about #15 on the search list. They claimed it was their detractors just trying to make them look bad... but if you can't get your own website listed above chatroom conversations, you have serious problems.

Ugh. Yeah, always, always, ALWAYS before buying any services, prepackaged or otherwise, look at the portfolio. Whether you're checking out a coder or a designer, or someone who's selling a website-in-a-can (and not ALL of those are bad...) you want to make SURE you see several examples of the finished product. Don't be afraid to ask people what they think of the product, either! If someone tells you that site X was built using their software, send a message to the owner of site X and ask them what they thought of it! The worst that can happen is that they don't answer.

(Edit: My opinion for the worst web site is http://www.samanzerin.com/. Tell me how long it takes you to work it. For me, about 2 1/2 minutes total, two visits.)

....
I gave it thirty seconds of my life that I'll never get back. I didn't figure it out, I just quit trying. Let this also be a lesson. FLASH IS BAD. Don't use it. Don't ask for it. If someone tells you it's 'cool' or 'hip' beat them with their own well-used crack-pipe. There are SOME exceptions to this, but no matter what your concept is, when you're just starting out, you aren't one of them.

[sms001]

With your degree I probably don't have to mention them, but don't forget the SBA! So unbelievably helpful in almost every aspect of starting a business that it's like dealing with the anti-government from bizarro world. Everyone I've dealt with from this agency truly wants you to succeed.

Of more "spiritual" than practical value: LOVE WHAT YOU DO. I'm sure you realize the enormous dedication a startup requires. Not caring about the product or service except monetarily compounds the work and definitely shows when you are selling it.

Good luck!

[sms001]

worst web site is http://www.samanzerin.com/

Wow. I lucked out - my cursor just HAPPENED to be right next to the "pulsing" dot that manipulates the frames. And I knew I was looking for something quirky. Otherwise I'd STILL be sitting there Bad.

[Gurndigarn]

Whether you're checking out a coder or a designer, or someone who's selling a website-in-a-can (and not ALL of those are bad...)

No, not all. All I'm saying is that part of the checklist you have should include "Does the software do everything I want now, and can it be expanded upon later?"

I gave it thirty seconds of my life that I'll never get back. I didn't figure it out, I just quit trying.

Spoiler alert! Highlight the words to see the clues! One of the "rivets" on the bottom left of the frame has the "exit" button. Once you move the cursor over it, two arrows appear on either side. Pressing either button moves you to a random page on the site. I think someone was attempting to show how mysterious the illusionist was by putting a puzzle in his website... uh, yeah, it was mysterious.

Let this also be a lesson. FLASH IS BAD. Don't use it. Don't ask for it. If someone tells you it's 'cool' or 'hip' beat them with their own well-used crack-pipe.

What he said. And then some.

[Arm]

No, not all. All I'm saying is that part of the checklist you have should include "Does the software do everything I want now, and can it be expanded upon later?"

Ah, very true, yes. I forget that not everyone can modify things themselves or afford to hire it done. Very good point there. Gotta find out how easy or hard it will be to expand it.

Spoiler alert! Highlight the words to see the clues! One of the "rivets" on the bottom left of the frame has the "exit" button. Once you move the cursor over it, two arrows appear on either side. Pressing either button moves you to a random page on the site. I think someone was attempting to show how mysterious the illusionist was by putting a puzzle in his website... uh, yeah, it was mysterious.

ahhhh! See, the rivet was blinking, so I clicked it and it closed the site... then I couldn't get back IN. I spent the whole time looking at the closed site doors.

What he said. And then some.

fo' shizzle.

[Gurndigarn]

Ah, very true, yes. I forget that not everyone can modify things themselves or afford to hire it done. Very good point there. Gotta find out how easy or hard it will be to expand it.

Well, in my father-in-law's case, the software-in-a-can that he was using was designed so that you couldn't modify it easily. They were using a templating system-- not bad if you want to use their templates and nothing else. But if you wanted to do anything else, you had to completely rewrite everything. In the end, it was more work than having done the code from scratch, because you not only had to write everything, but you had to keep stuff compatable while doing so, or suffer having the site down during reconstruction.

[Evil Queen]

I plan on owning and operating a semi-luxury business hotel. I'll be going to school for business degrees next year sometime (I hope).

I'll keep you guys updated.

[CrazedClerkthe2nd]

Well the business that stuck in my head was selling creative services over the web (for example if you need a newsletter designed I can help out with that). Now I may not be formally trained as a graphic designer but I am good with many different programs you can use to create newsletters, brochures, signs, etc and I was considering marketing to non-profit groups, churches and smaller organizations who may not have the money to hire a professional. I also think this kind of stuff doesn't really have an up time or down time since churches for example are always running events of some kind.

I was also hoping to create an eventual secondary revenue stream by having advertising on my site, though I don't want it to become an entirely ad supported site.