about starting a business

[femtoace]

I guess the hardest part is coming up with a good idea. But is there some resource I could tap into (like bogleheads.com for investing) or good books I could read to understand the basics. Thank you for your time and help.

[hicabob]

Most small biz owners I have met (and myself when I did it) started out employed in an industry then split off on their own. The "industry training" is invaluable and you get paid for it!

[dandan14]

Oddly enough, I think the "idea" is the easy part. Implementation is the hard part.

We did some brainstorming exercises in business school where we started with random words as "company names" and had to come up with that that company did. In 10 minutes, we had a whiteboard full of business ideas.

[reggiesimpson]

Look at a franchise.

[KyleAAA]

The basics of what, exactly? Every type of business is completely different so it really depends on what line of business you're in. Coming up with the idea is actually the easiest part.

[RenoJay]

As a serial entrepreneur, here are a few tips I'll offer, learned from the school of hard knocks:

1. Starting a business because you need extra money or want to work for yourself are not good reasons. The best reason is because you have an idea the world truly needs.
2. Focus on ideas with very low initial capital requirements. Usually services (such as landscaping, painting, consulting, etc.) fit into this mold. Retail and restaurant ideas do not because they usually require that you spend lots of money BEFORE you know if a single customer will walk in the door. I cannot tell you how many well-meaning people I've seen lose hundreds of thousands on retail/restaurants in my area in the past five years because they poured lots of money into beautiful shops and no one ever showed up to shop or eat.
3. Aim for profitability as soon as possible. My best businesses hit cash flow profitability on day one and total break even profitability on day two.
4. Give yourself a stop loss. For instance, if you launch your idea and spend $XXX dollars and YYY months of your time and are not profitable, pull the plug (or try to sell what assets you have) before you lose your life savings and a decade of your life. This one is very important because once you start, it will feel like, "If I just do a little more, I'll get there."
5. Right now, buying a business may be more efficient than starting one. You can check out www.bizbuysell.com. You'll note that many businesses sell for between 2x - 3x annual owner profit. Take these numbers with a bit of a grain of salt, do deep due diligence and walk away if you discover the seller is either lying or unsure of his/her financials (or renegotiate the deal.) Many sellers will offer some seller-financing and/or some partial or complete earn out where their take is dependent on your results. So it's definitely worth shopping around. Also, be wary of business brokers; they typically represent the seller, not the buyer. All that said, it still may be better to buy vs. build given the current market. If I wanted to run a business now, I'd probably buy one given that prices are at or near historical lows.

Good luck!

[femtoace]

Thanks a lot for the replies. I am interested in starting a buy-sell site for friends. I understand that there are a lot of options to begin with such as LLCs, s corps etc.., and was looking around to see how I could learn what is best for my business model and the pros and cons of each.

[RenoJay]

I'd recommend contacting your local chapter of SCORE. They often have seminars designed to take you through the start up process, help you evaluate your ideas, help you with the business plan, etc. all for free.

[davebo]

If you were somewhat ambivalent about what type of business you start, then I’d strongly consider a web-based business. I started a few back in 2005, but 90% of my time is spent on one of them that generates most of my profits. Doing it web-based allows you to generate cash pretty quickly and parlay that into more “traditional” opportunities. We started selling niche products online and had the manufacturer dropship all the orders. Then after we gained some momentum, we moved towards stocking some of the more popular products. And then we developed some of our own products that we ended up selling through alternate channels.