Who here has started a business?

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waitforit
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Who here has started a business?

Post by waitforit » Tue Feb 01, 2011 7:48 pm

Looking for some inspiration.

I owned a business that provided the majority of my income while I was in college. I ended the business when I graduated school and have worked as an employee since. I'm starting to get the itch to start a side business again and am having trouble coming up with a good idea. My last business just sort of fell into my lap, hit you across-the-head kind of thing. It was a no-brainer.

I am not looking to replace one job with another job. The best thing about my old biz was that although it took time and love to run it, it made money without my constant attention. I did not have to be 'clocked in' to keep the income rolling. The other thing was that it not require a large capital investment - all told I think I may have started it with up to $500 and after that it was self-sustaining. In case you are dying to know what magical business can do those things it was hosting game servers for online games. The part that made it passive was that I wrote a lot of code to automate much of the ordering, setup, and customer support processes.

Is anyone doing anything cool as a side business out there? Any advice for someone looking to jump back in?

When I ask real life folks I know about this about the only thing they can come up with is 'consulting'. For many reasons including the concept of replacing a job with a job I am not interested in renting my time for money. On the other hand, I don't know anyone in 'real life' that owns a business with a passive income component.

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Kenster1
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Post by Kenster1 » Tue Feb 01, 2011 8:07 pm

My wife and good friend are in the exploratory stage of starting up a business and it has to do with selling products via the web/online/e-commerce.

I'd like to piggy-back on this and ask an additional question --- how much approximately do Lawyers charge to file a registration for an LLC that will be owned by 2 people?

Or would it be better to pay for a brief consultation with a good Small-Business Lawyer to get good legal advice on the legal structures, operating agreement, partnership and a host of other questions and then take that knowledge and just file on my own?

I believe for an additional fee they can also include an application for a Federal Tax ID --- should I also save my money here and do it myself?
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calminvestor
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Biz

Post by calminvestor » Tue Feb 01, 2011 8:15 pm

I have a biz. I trade my time for money so you may not like it.

It sounds like you were good at hosting game servers for online games. Why don't you go back and do that? Do it better. You're older now so you should have life experience to add.

I have a window cleaning, gutter cleaning, & pressure cleaning biz incase you were wondering. I normally make $70-$100/hr. To me, that is a good use of my time. Initial investment costs were low, everyone needs my services, and my monthly expenses are about $25 for my website. I also spend about $150 every other month to run postcard campaigns but most of my biz comes from referrals and Google searches.

I invest my profits in Index Funds (of course!).

waitforit
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Post by waitforit » Tue Feb 01, 2011 8:47 pm

I didn't mean to come off sounding like trading time for money is a bad thing. For me personally I would find it very hard to replace my employment income as I am fairly highly compensated. Therefore, it would take a lot of extra 'wage' to compensate for the risk I'd be taking and I don't see how I could achieve that.

I have considered going back to that business. I recognize several aspects of it that I did not manage well and decisions made regarding technology that I would not make if I were to do it again.

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Post by imagardener » Tue Feb 01, 2011 8:57 pm

You want someone to tell you what great way they have of making money without doing much or spending much time at it? Good one.
Have you thought about asking prospectors where they've located a vein of gold?

OK, I'll speak generally. The best way to make money without taking much time from your life is to get others to do the work. Become an employer. If that is too time consuming hire a manager.

Secondly, I've found that not asking people but observing them tells much more. Filter out the trust fund kids, 2nd generation take-over-the business kids and see who has a nice life with not much time spent earning a living.

I didn't do that. I owned a business and spent my career doing the thing I love, photography. Made a nice living, retired early, would do it again.
Life is too short to trade it for money only, even easy money. Following one's passion is priceless.

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Mel Lindauer
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Re: Who here has started a business?

Post by Mel Lindauer » Tue Feb 01, 2011 9:31 pm

waitforit wrote:Looking for some inspiration.

I owned a business that provided the majority of my income while I was in college. I ended the business when I graduated school and have worked as an employee since. I'm starting to get the itch to start a side business again and am having trouble coming up with a good idea. My last business just sort of fell into my lap, hit you across-the-head kind of thing. It was a no-brainer.

I am not looking to replace one job with another job. The best thing about my old biz was that although it took time and love to run it, it made money without my constant attention. I did not have to be 'clocked in' to keep the income rolling. The other thing was that it not require a large capital investment - all told I think I may have started it with up to $500 and after that it was self-sustaining. In case you are dying to know what magical business can do those things it was hosting game servers for online games. The part that made it passive was that I wrote a lot of code to automate much of the ordering, setup, and customer support processes.

Is anyone doing anything cool as a side business out there? Any advice for someone looking to jump back in?

When I ask real life folks I know about this about the only thing they can come up with is 'consulting'. For many reasons including the concept of replacing a job with a job I am not interested in renting my time for money. On the other hand, I don't know anyone in 'real life' that owns a business with a passive income component.
As the founder of a business that allowed me to retire early, I think you hit the nail on the head when you said your previous business just came out of the blue and was a "no-brainer". I think your next business will likely come about the same way.

However, if you expect to make the big bucks, you're most likely going to have to devote some time to it. If it were easy making money doing basically nothing, everyone would be rich. Find a need and fill it.

Good luck!

Regards,

Mel
Best Regards - Mel | | Semper Fi

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Mel Lindauer
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Post by Mel Lindauer » Tue Feb 01, 2011 9:37 pm

Kenster1 wrote:My wife and good friend are in the exploratory stage of starting up a business and it has to do with selling products via the web/online/e-commerce.

I'd like to piggy-back on this and ask an additional question --- how much approximately do Lawyers charge to file a registration for an LLC that will be owned by 2 people?

Or would it be better to pay for a brief consultation with a good Small-Business Lawyer to get good legal advice on the legal structures, operating agreement, partnership and a host of other questions and then take that knowledge and just file on my own?

I believe for an additional fee they can also include an application for a Federal Tax ID --- should I also save my money here and do it myself?
Hi Ken:

First, even if they're the best of friends, they'll need a partnership agreement that covers all of the eventualities, including how to handle a breakup. They should also look at a buy-and-sell agreement and get the insurance to handle the buyout of the surviving partner in the event of the death of one of the partners.

Partnerships are tough on a relationship. Even the best of friends have disagreements, and the business really can't move forward if both partners don't agree on everything. And even if one partner gives in to the other partner's ideas, eventually it will wear on the relationship. A partnership is like marriage without the sex.

Finally, getting an EIN # is no big deal; anyone can fill out the paperwork for that.
Best Regards - Mel | | Semper Fi

bogglehead
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Re: Biz

Post by bogglehead » Tue Feb 01, 2011 9:50 pm

calminvestor wrote:
I have a window cleaning, gutter cleaning, & pressure cleaning biz incase you were wondering. I normally make $70-$100/hr. To me, that is a good use of my time. Initial investment costs were low, everyone needs my services, and my monthly expenses are about $25 for my website. I also spend about $150 every other month to run postcard campaigns but most of my biz comes from referrals and Google searches.
Is this your full-time business? If not, how much do you work on this and when? I've considered starting something similar but have never jumped in. I've also been thinking about trying to buy some vending machines (in established locations), but am still considering a number of things.

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Post by ObliviousInvestor » Tue Feb 01, 2011 9:56 pm

My experience with my business was the same: It basically landed in my lap. However, that happened after (and as a direct result of) trying two other (related) business ideas.

If the up-front costs aren't super high, I'd suggest just taking a stab at something that sounds like it might be in the ballpark of what you're looking for. Even if that business doesn't work out, you may learn something that allows you to create a business that does.
Mike Piper, author/blogger

waitforit
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Post by waitforit » Tue Feb 01, 2011 10:03 pm

You want someone to tell you what great way they have of making money without doing much or spending much time at it? Good one.
I shouldn't respond to this but let me just say - Did I ever say I wasn't willing to spend time at it? Its like you don't understand the basic premise of what I'm asking.

ANY business is going to require a lot of effort. I am making a distinction between a fee-for-service style business and one that can generate passive income. For example, authors and bloggers do not 'hire managers' to make them more money.
Filter out the trust fund kids, 2nd generation take-over-the business kids and see who has a nice life with not much time spent earning a living.
Massive chip on your shoulder about something I guess...

calminvestor
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yes

Post by calminvestor » Tue Feb 01, 2011 10:03 pm

Yes, it is full time. I started with window cleaning. I couldn't believe people paid me $70/hr. I now clean gutters for $70/hr. I also pressure wash homes for $100/hr. Driveways, patios, & sidewalks are nice add-ons to all the above mentioned services. I treat marketing as my business and the work as the reward for good marketing efforts. I market in different ways though. I spend my marketing dollars by doing innovative things like - I gave a multi-million dollar client the book by Daniel R. Solin "The Smartest Investment Book You'll Ever Read". It cost me about $7 on Amazon. He loved it and referred the hell out of my service. I love marketing. I clean stuff so I can do marketing. That's pretty fun, huh?
I'll be happy to help you get going. Let me know.

Vending machines are expensive aren't they?

larry82
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Post by larry82 » Wed Feb 02, 2011 12:06 am

I also trade my time for money. i work 60h+ week but for me the trade is well worth it, i wont get into details but this is very rewarding gig. so far so good, i always been a workaholic, i plan to travel a lot and buy expensive toys in the mid-term but for now, i am surfing the wave while i can :)

The best part is that i am investing more than 90% of the income :)

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Post by GlennC » Wed Feb 02, 2011 12:35 am

I started a software business and sold my software online. It sort of worked out and sort of didn't. If I had to do it again, I wouldn't do it unless I thought I had an idea that is low risk (e.g. it has to be really obvious that the software would sell... maybe that is not possible).

My best business was reselling professional video tapes to my classmates when I was in school (I studied tv production there).
I am one of those dirty active management people.

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Post by harrychan » Wed Feb 02, 2011 2:49 am

I disagree to the notion that businesses "just happen to fall on your lap" idea. It takes time, work, dedication to run a sustainable business even if it's not your primary income.

I've done several things in the past which some made me a good amount of and some left me in the red. It's going about finding something that is profitable, sustainable, and hopefully something you enjoy.

Similar to the OP, I just want something to supplement my income and hopefully my wife and stay at home and take care of the children.

I recently started an Internet marketing business. It's a lot to learn but lots of potential. My gift is in language and very Internet savvy. I can whip up a website with its own domain in less than 5 min.

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touchdowntodd
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Post by touchdowntodd » Thu Feb 03, 2011 1:22 pm

my wife and i have been looking into a small business as well.. and want to invest 100% of any possible profits if we can make it work...

just looking for the right idea with a smaller startup cost...

i keep day dreaming while at my actual job about the possibility of something even part time that can make me even say $3-500 a month... thats all i need right now although more money is always welcome lol
tryin to do this right... thanks guys

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serbeer
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Re: yes

Post by serbeer » Thu Feb 03, 2011 1:40 pm

calminvestor wrote:Yes, it is full time. I started with window cleaning. I couldn't believe people paid me $70/hr. I now clean gutters for $70/hr. I also pressure wash homes for $100/hr. Driveways, patios, & sidewalks are nice add-ons to all the above mentioned services. I treat marketing as my business and the work as the reward for good marketing efforts.
Thank you for sharing your story Calminvestor. Out of curiosity, how do you make living in the winter?

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Re: Who here has started a business?

Post by jhd » Thu Feb 03, 2011 2:23 pm

waitforit wrote:Is anyone doing anything cool as a side business out there? Any advice for someone looking to jump back in?

When I ask real life folks I know about this about the only thing they can come up with is 'consulting'. For many reasons including the concept of replacing a job with a job I am not interested in renting my time for money. On the other hand, I don't know anyone in 'real life' that owns a business with a passive income component.
I run a software startup. It is very much a full-time job with high risk (but high reward too). In a previous life, I consulted full-time.

Both of these were/are active, full-time jobs, so I've never had a passive cash-generating side business, and I can't share any personal stories there. But it's definitely possible to do, and I have a number of friends who do it.

One of the common side businesses I see is blogging/publishing. Start a blog that reviews some sort of high-demand, high-price product (gadgets, TVs, computers, or whatever). It will take some time, but eventually you should be able to get to hundreds or thousands of dollars/month in advertising and affiliate revenue. You'll need to be a good writer and learn about search engine optimization and online advertising.

Buying and selling on Ebay used to be another common one, but I don't know if that's as lucrative now as it was 5 years ago.

If you're sufficiently technical, a lot of people are making money building mobile (iPhone, Android) applications. The money isn't as easy as it was in the beginning, but IMO that market is going to keep growing for years to come.

calminvestor
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Serbeer

Post by calminvestor » Thu Feb 03, 2011 3:17 pm

Serbeer, I live in South Carolina so I perform all 3 services year-round.

Gutters are big in the winter down here. My advice is to save during the good months to carry over during the slow ones. It will take several years to get up a good customer base so you've got to practice patience and your reading should primarily focus on marketing and retaining top-paying customers. Start it on the side and slowly phase out your regular job.

I used to fly a jet for the airlines. We paid everything off but the house and my wife's a nurse so we are less dependent on my income. We are frugal and live on a budget. My customer base is definitely better than it used to be so I rely on referrals from current customers and I always ask them if they know someone that could use my help TODAY. I do postcard marketing, have a basic website, and do my own SEO work. Do everything cheaply, but don't be too cheap with your current customers - give them stuff for free and always do something for free every time you perform service for them. No cut-off shorts or shirts - ha! Hope that helps.

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Post by gurujji » Fri Feb 04, 2011 10:31 am

Kenster1 wrote: how much approximately do Lawyers charge to file a registration for an LLC that will be owned by 2 people?

... should I also save my money here and do it myself?
checkout Hubco's inc-it-now, and SCORE.org (free consultation).

share if there isa boglehead alike forum to discuss small business, import/export ?

raddle
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Post by raddle » Fri Feb 04, 2011 11:53 am

I have started 3 profitable businesses and all three started the same way: by identifying a customer with a need going unfilled. All 3 times that customer was me or a close friend complaining that I'd like to buy/hire __blank__, but none was on offer. Like a previous poster said, it sort of hits you in the face. I've never met anyone who got very far with a business where the product idea didn't come first.

Essentially the process goes like this:
1) Need is identified
2) Set about figuring out how to fill that need, 1 customer at a time if necessary; learn through trial and error; profit is not crucial at this stage--all you risk is your own time and money. For me this is the fun part because I get that warm, fuzzy *helping people* feeling.
3) Use experience with first customers to standardize and streamline the production process and operations; make a comprehensive written list of duties that you perform.
4) If you have a good product, demand should grow larger and more reliable. When this happens, risk taking on employees. Draw from your list of duties the tasks you are willing to delegate and assemble them into a job description that ought to take a specific number of hours.
5) When and if the business grows to a point where the profit margin justifies it, hire a manager. The business now runs itself.

Sometimes you cannot get all the way to step 5 due to the nature of the business. For example, you're unlikely to employ a manager for a business with little or no capital investment, because then what do they need you for? Also if there's a ceiling on your growth potential, hiring management may never be profitable. My first two businesses were during my college years. The first one was profitable for about 4 years until my product was obseleted by improved technology. I employed up to 4 other students at a time, but I had no way or will to delegate management. My second business was an online business. I made money with it, but not enough to do any hiring, and I wasn't able to spare the time needed for automation. My third and most successful venture is a traditional local storefront type of operation. Because of this there is an upper limit on demand. I provided the capital outlay and brought the manager on as a partner instead of an employee. It's still humming right along. I've got many years ahead of me, so I don't expect this to be the end of the story.

Hope that helps...
Last edited by raddle on Fri Feb 04, 2011 11:59 am, edited 1 time in total.

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Post by White Coat Investor » Fri Feb 04, 2011 11:58 am

Sometimes it is better to get the training/education you need to train your time for money at a very high rate so you don't have to work much than try to find and start a side business that requires little time.

I have partners working ~ 50 hours a month and have an income twice the average in the US. Trading time for money isn't a bad way to make a living, as long as you're trading it at a pretty good rate.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

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Post by KyleAAA » Fri Feb 04, 2011 12:07 pm

There are a number of businesses that don't require much on-going time commitment, but there none I know of that don't require a big upfront commitment. For example, internet marketing can have a low on-going time commitment and doesn't require much on-going capital investment, but the upfront effort is huge. The only way to get what you want is to invest a lot of upfront capital, be it labor or money. And if you don't have money...

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Post by jbdiver » Sat Feb 05, 2011 2:25 pm

I've been involved in three startup businesses. My last business I co-founded with a partner, built it over 10 years, and successfully sold to a very large company. I've learned to love annuity-based businesses. There's nothing like making money while you sleep and not having to start from zero every month.

I learned many important lessons. Picking a business partner is no less important than picking a spouse. Cash is king -- it doesn't have to be your cash but that is preferred. Don't be afraid to take risks. There is an element of luck involved in success. You can make your own luck. The business rarely turns out the way you expect.

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Post by Bulldawg » Sat Feb 05, 2011 2:47 pm

I have started ( and sold) several small service businesses over the years...mostly in the landscape/horticulture industry. I also had a waste hauling business that was eventually sold to Wayne Huizenga's co. the same year his FL Marlins won the World Series. It wasn't a financial home run for us, but I did learn you don't necessarily have to have a profitable company to attract buyers ( we were 2 years old and just breaking even). I also learned that the small guys can compete with the Fortune 100 guys as we heard from our former clients that we provided better service.

I have also learned to avoid partnerships and debt when operating small businesses.
" IN GOD WE TRUST " ( official motto of the United States )

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