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I'm interested in starting my own business, but I'm totally freaked out about going into BIG debt to get it going.
How did you get over this?
I think I have a really good idea and have talked with some important people in my life who agree with me. I think my parents might be interested in investing in me which makes things a little easier, but they are approaching retirement age and I don't want to put any monetary pressure on them...
I need some advice!!! :confused:
Have you tested your product/service on others? Or you have several years of expertise in a certain area? Or if you don't, could you team up with a biz partner or mentor?Quote:
Originally Posted by ASammy1
Does it require you to invest money heavily in equipment, lease, etc.? Can you work from home with this biz venture?
Might be useful to write down at least a business plan for yourself which would include in 1-2 sentences your product/service purpose. Your target customers, main biz goals that you would like to achieve. Does your state offer some govn't programs/services to advise on setting up your own biz?
Do you belong to any trade/professional associations to build network of contacts, keep up on the industry? etc.
Let us know when you start up your biz blog. You can show us. :)
My partner's biz which is linked in the blog below (under ABOUT page), well I've witnessed up close what is required.
That's great you have thought of your parents' need for retirement finances. It's brutal reality, when costs of elder care come up later.
You sound excited about your idea.
That's a tough one. We started out very, very small, so we were able to fund the project through the first few vintages until the previous wines started paying for the next harvest. We're still very small and growing very slowly, but the project mostly pays for itself. The only debt we've taken on is for land, so that we can reserve our cash for establishing the vineyard (banks will loan for property far more willingly than they will loan for operations). But there again, we're taking it very slowly so it doesn't overwhelm our accounts. I would personally have a hard time going deeply into debt without first making some initial investment to get a sense of whether the project was going to fly, but then I tend to be very cautious that way.
Maybe you shouldn't' go into debt over it. Start out small, build up, pay cash as you go.
A business plan is a good idea, as is market research. I would do lots and lots of homework.
You might want to have a cash reserve of 6 months or so to 'just in case'. I'm a big Dave Ramsey fan, and going into debt to start a business is a huge no-no according to him. Even worse, funding your business through credit cards.
If you are buying a franchise or something, look for a proven track record, not just feel good platitudes.
I have had my own business since the last Wisconsin glaciation. Or so it feels. lol When I started, the best advices I was given or had found out about, and that have proven right over and over and over again - and they are all pretty basic :
1) Offer a product you know very very well, or a service that you absolutely master - to people, a niche, that you already know very very well, people whos needs and whims and desires you know intimately almost.
2) Do your homework - research like crazy what is out there, who are the products and/or services you will be competing with. One way to do so is to post an add seeking the very service you are offering. And of course, mine the web to look for them.
3) Add something in your pitch that will improve on what is already out there, wether it is a product or a service. And be extremely clear about what it is that you are selling, a CLEAR message, no confusion.
4) Easy fast money and long lasting success is not going to happen overnight. Be ready those first years to give a lot of freebies/pro bono, perks, pr, etc. That is all going to pay off in the end. Do make a sensible business plan (which is the antidote to wishful thinking of the beginner's enthusiasm).
5) Network with others in your fields. Both to find customers and to find partners, help, associates, etc. A one person act is more vulnerable then a team.
6) Never act like you have made it. Constantly improve your service/products. Keep on edge both about what you sell and to whom you can sell it too. And keep an eye on competition.
As for getting in debt, not such a good idea. It is one thing to loose your savings. But to actually mortgage your future by getting in debt, specially if you have other mouths to feed... then you can't jeopardize other people's roof over their heads. Then you really have to go for a big bubbah business plan, market research, help from pros, local business association, etc.
Depending on what you will be making/producing, you could also look to grant funding for start up costs. Look at the NIH, DOD, even private funding sources like the Bill and Melinda Gates Foundation. There is Small Business Independent Research money out there (SBIR funding). I am a scientist, and this is how science type businesses often start up. The Keck Foundation also has some good money available if you meet their qualifications. A friend of mine started a company with $400 of his own money, a couple of SBIR grants, and sold it in 7 years for 6.5 million. It can be done...
hey FOntinalis, that's great advice! thank you.
Great advice in here.
I recently quit my job, after almost 20 years practicing as a litigation attorney with various law firms to start my own mediation/dispute resolution practice. I have been building the practice up over the last 4 years, and have a good amount of work to start with, but even so the actual leap to self-employment was pretty scary.
Do you volunteer for any boards for non-profits? Granted you don't want to give away expertise free but it is soft networking. Even better for a pet passion of yours. (Sorry, forgot that it is cycling among other things. :o)Quote:
Originally Posted by maillotpois
I know one woman who has been running her own biz for nearly 15 yrs. She is one tireless self-marketing cookie and knows how to spin a casual but fun line about her biz. She's managed to get herself on local and national tv, radio and newspaper. Even international press coverage. She got burnt out for a yr. or so. Took off cycling solo somewhere in the Carribbean before returning to biz.
She runs a local walking tours company. Sometimes she does bike rides. It's not an easy biz to stay afloat.
Great ideas. I am on all of the local court volunteer panels, on the board of a local bar association ADR section and I volunteer a lot of time coaching for Team in Training. Not sure what else I can fit in just now but I will certainly keep my eyes open.Quote:
Originally Posted by shootingstar
I'm a banker...I oppose going into "big debt" as you say. I'm rushed now, but will post more later.
Thanks so much everyone for all of your words of wisdom! I certainly have a lot to think about!
Have you written up a business plan? All that research, etc, about your product/service, its niche, the competition, and the grim and gory details about the revenue streams?
I am a partner in a business but we did it in a "don't quit your day job" fashion, and then got day jobs, so it is still a *very* small business. (Doing it, though, helped with getting the good job.)
Timely post!! I got laid off on Tuesday... so been thinking about what to do next. :D :D :D
while thinking about a business plan, figure out your "burn-rate" cash you require to start up a biz. Some are non-recurring others are recurring and see how much you need month to month and over next two to three years as part of your biz. plan.
Now that I'm laid off, I spent most of yesterday looking at my burn-rate and how to change it. A very good exercise. I'm not worried too much now. :D :D :D
Being uber cheap and frugal helps.
Oh if you are starting your own biz. If it is a brick and motar, learn to do lot of the simple things your self. Setting up a POS system, computer network... multiple phones... even simple plumbing (saves a lot)... And make sure you know what permits, licenses, liability insurance (minimum is one million dollar) are required.
Have both eyes wide open when you jump in. You don't need to be blind sided by some unexpected thing.
You can find a lot of helpful information and resources at www.openforum.com
Best of luck!