Starting a business...

[CosmosMpower]

Has anyone on the board started their own business? If so how did it come about? Was it something that you liked to do and decided to turn into a business venture? How much experience did you have prior, how did you know where to begin etc?

I know there are a few shops (Miata Solutions, TrackDog etc) but I'm open to any kind of business car related or not.

[modernbeat]

I've started three businesses. One was the first company to commercially build artificial climbing walls in the USA. The next was a guide service for cross country skiers in the Canadian Rockies. The third was a short lived magazine that catered to traditional hot rodders. Every time I was early to the market and captured people's fascination with the "new" thing. The climbing business ended by being bought out for mucho $$$. The skiing was too risky and couldn't support decent insurance. The magazine was too much work.

Now I have rent houses and piddle around at Vorshlag.

[CosmosMpower]

Cool, thanks for sharing. How did you get into the climbing wall business? Did you climb for fun and decide that there was a gap in market to open some? How did you research all the requirements? (insurance, renting a place, financing the facilities). Do you think that you were successful and subsequently bought out because you were 1st to market or because you did it better than all the copycats?

[slowchildmiata]

Trying to start a Lotus oil line replacement business?

[CosmosMpower]

Trying to start a Lotus oil line replacement business?

LOL, nah that's a good way to go bankrupt. I knew you were going to say that though!

[modernbeat]

How did you get into the climbing wall business? Did you climb for fun and decide that there was a gap in market to open some?

Two friends and I were all avid climbers in the mid '80s. The cool new thing was indoor climbing - they were doing it in Europe. We started buying some of the parts to make our own, then made a larger one for a friend and decided to organize and offer it. We were organized very quickly and got contracts with the Houstonian Health Club and with a sporting goods chain store. We also built a number of private installations. I think the only advertising we did was in Outdoor magazine. IIRC, this was before Rock&Ice but about the same time as Climbing Magazine was out.

How did you research all the requirements? (insurance, renting a place, financing the facilities).

I wrote manuals on construction methods, equipment use and worker training so we could get insurance. We had no physical location. We didn't need to finance. Think of us as a construction company who's tools all fit into the bed of a single pickup truck. Everything we needed was ordered and sent to the building site. If there was construction we needed help with, we hired contractors. All the up-front cost were borne by the buyer. Today's business environment is much more difficult to start a unique small business. If you want to start a laundromat, it's easy. If you want to do something that the insurance and banks have never heard of, too bad for you.

Do you think that you were successful and subsequently bought out because you were 1st to market or because you did it better than all the copycats?

One of the partners was embezzling. The other partner and I gave him a choice to either go to court or buy us out. He took a big mortgage and bought us out. He eventually found another partner and started building and running rock climbing gyms (changed with the market) and has had some mild success. Enough to live on, but not to retire early. Had we not split up I don't think things would have been much different. Other companies doing what we did were showing up and some had better systems and designs. The big push that rock climbing had in the '80s dried up in the '90s. The only work left in that field was either guide service or gyms.

[tailchaser]

Now I have rent houses and piddle around at Vorshlag.

That's what I wanna do when I grow up! Well... other than the rent houses part.

[Rob®]

If you mean official businesses (chamber of commerce and all that), I have one under my belt. Started in NY, selling telecom equipment on my own. Before that I did various network things (designed, supported, installed), but I couldn't stand that from the beginning - got into it purely for the money when the IT bubble was just booming. The move to sales seemed like a logical step since pretty much all of my previous jobs were sales-related, but my network equipment sources soon dried up and I was getting more and more into the telecom side. I hated it, didn't put nearly as much effort into it as I should have, but it bought me an [IMHO] unbelievably gorgeous house directly on the water in upstate NY and quite a bit of toys. It was a case where I worked just hard enough to get what I wanted, then I'd disappear for a few days/weeks till I needed more money for whatever new adventure/toy. Eventually I sold the house to move to Florida to work for the company I do now.

If you mean just a business that you make most, if not all, of your income from, but not an official business, I used to do car work for people in NJ/NY at various points in my life. Custom turbo kits, general maintenance, etc. I would work whatever IT job for about 6 months, get bored, then do my car thing for a few months, then when it started to turn into a job and not something I enjoyed, I would get back into IT or sales of some sort.

[CosmosMpower]

Kind of the opposite for me. I don't dislike my job but it's just a job and I was thinking about exploring something in 2012 even in a part time capacity to see if it's something I would consider trying full time down the road just curious how you business owners got your start.

[Rob®]

So ease your way into it. Whether you go full tilt or just dip your toes in at first, it is a lot of work. Unless you happen to pick one of the very few businesses to start that make tons of cash from the first day (if you know of one, I'm all ears), expect to work long days/nights with little reward at first, especially if you only do it part time.

Eventually you get to a point where you either need to commit fully or give it up - that is where most start-ups fail, from my experience.

[MiataProtege]

I started a hot dog vendoring business. I had high hopes after buying my $10,000 hot dog cart, getting sponsored by Vienna and having them send a bunch of signs and giant umbrella to go over the stand... business picked up a lot, I started selling more and more hot dogs. I went to a few basketball games (one with Kobe and Shaq). But.... I kept having to buy "one more thing". A new bigger freezer.... a truck to pull the cart, a space to leave the cart, a new steamer for the cart, and things kept breaking... and the cart kept getting nastier and nastier no matter how hard I tried to clean it.... and simply.... the money I made... paid for the things I had to buy. I absolutely loved doing it... and if I had known more about business at the time, and could manage my own time, I think had I continued trying I could eventually have hired a fleet of people to sell the hot dogs for me and have a great source of making money through other people, which was the goal.

Though I must say... the basketball games I went to, I would go home with over $2000 worth of straight profit. The only problem there, was you had to bid in an auction to get closer and closer spots to the game, and had I not had to spend 2-3000 dollars just to park my cart at the entrance... that $2000 profit would have been $5000.

Anyways... was a great enterprise to go into, and I enjoyed every moment of it and wish I could have continued.

[goofygrin]

Be careful that you don't make a business that just becomes another job.

Fun fact, most small businesses are simply jobs for their owners, not "real" businesses if that makes sense (ie ones with lots of employees etc where the owner can kick back and collect checks).

Prepare to sacrifice. Time mostly. A lot of money typically. J would have to be on board 100% or it won't work. Kids will change the dynamic (and your goals and priority).

Prepare to learn more about anything and everything (taxes, sales tax certs, what's taxable and not, HR junk, insurance, warehousing, building codes and requirements, the web, checking accounts, payment processing, dealing with people in ways you'd never expect, etc etc etc.)

You'll never be able to work for someone else again IF you can make the leap to full time for yourself.

[gofastlookslow]

I think something else you might want to ask is that if someone once had their own business and no longer have it, why they got out of it. I have had some friends that had their own business for a period of time and decided to get out of it. Each had their own reasoning, but the majority didn't want to have the stress of running a business hanging over their head day in and day out
.

[goofygrin]

Good point above. There are 7 people that count on my (and my partners') ability to keep the business afloat so they keep getting a paycheck and benefits. Changes your perspective a touch on those days when you don't want to do anything.

[sxk122]

Jason may have had better luck, but I'm finding being a landlord isn't fun. Can't wait for the housing market to get a bit better. Not loosing moneyby renting out, but I would take a loss by selling at the moment.

[CosmosMpower]

All great points to consider. What are the best resources to learn about starting a business (applying for a tax ID, insurance, financing etc) for a first timer? I'm sure this was covered when I got my marketing degree 5+ years ago but I don't remember anything and I'm sure the tightening economy has made some things different.

[Rob®]

Good luck getting a small business loan nowadays..From the few people I know that have tried lately, they all say you need that million dollar idea or know the right people.

[Ataim]

I'll chime in. I opened my Land Surveying business after working for others for close to twenty years. I was working long hours and only received my hourly pay. After much thinking I opened in 2003. At first it was hard getting business, but after a few months time it starting picking up. The next five years was great. The type of surveying we did was very closely tied to the housing and mortgage industry. At the end of 2008 I had fifteen employees, four crews and office staff. Things were good. At that time my biggest complaint was the ever increasing cost for insurance. Health, trucks, equipment (each crew had about 60k of equipment) E&O, workers comp, General Liability. And then the taxes (I won’t even go there). With more people, we need bigger and bigger places to office out of. Money was coming in good, but it was also going out just as fast. My personal income did increase, but so did all of the headaches. You know the normal stuff, always thinking about who and what was going on the next day, did I forget something, what if the weather was bad, someone sick, bill that needed to be paid, payroll, taxes on and on…. In late 2008 when the housing market and the economy took its dive so did my business. I went from a strong company of fifteen to just three: the “original” monkey, Mrs. Money and myself. With hard work and beating the ground I did build it back up to six employees. Things were better with a smaller company. Fewer issues across the board. Money was tighter, but I was still paying the others and myself about the same as before. Flash forward to about six months ago. I was offered a job working for one my larger clients, the money would be good, but I did not want to work for them (long story). Then a month later I get contacted by my current employer. I took the job with them and love the guys and company that I work for now. The money is good, and my headaches are NONE. Not one. I no longer take work home. I enjoyed the surveying side of having my own company, BUT the headaches are a real negative. I choose to close my business, not because I had to but because I wanted to. I wanted to get back to being a surveyor, not a business man.
I know that’s a long story, but now to your question.
I would make sure that you have enough expertise, or experience that people will want to give you money for your services or knowledge.
Have at least three months of income saved before you open a FULL time business, if you can start part time even better.
Work like you get paid an hourly wage and don’t get lazy because you have employees to do most of the work. (I tried to work harder that my employees so that they would want to work hard also. Nothing is worse that a boss that is lazy and does not work)
Get with your CPA or Lawyer to help with the legal stuff.
And believe that you can do it.