Starting a business: who's done it?

[AreaCode707]

Originally posted by: Alphathree33
I'm particularly interested in hearing about people who have switched from being employed by a tech company to starting their own business - whether in technology or not.

Questions include:

- How did you do it? Did you moonlight, or quit outright?
- Where did you get capital, or did you not need it?
- How long did it take to start making a profit?
- What were the biggest challenges you faced?
- Are you happy with your decision?

Not me, but husband does.
- How did you do it? Did you moonlight, or quit outright?
Quit. He worked full time at it from the beginning.

- Where did you get capital, or did you not need it?
Low overhead (tech writing), so he just got by on a shoestring for a while without additional capital.

- How long did it take to start making a profit?
About 6 months, IIRC. He and his partner have good industry reputations so they got large projects pretty quickly and just had to finish them to recognize the revenue.

- What were the biggest challenges you faced?
From my perspective as his wife? Insane working hours (all the time). From his perspective, probably having to play all the roles (writer, editor, manager, employee, sales, accountant, web designer, etc.) Never focusing on just one thing, having to learn tons of new skills quickly.

- Are you happy with your decision?
Yeah, I think he is.

[edit] Business is about 6 years old now.

 

[Hyperlite]

Azurik and Anand would be the best ones around here to comment on this.

 

[Descartes]

You can't answer your questions in a simple post. There are literally hundreds of different issues you can face. Selling something on ebay by yourself is far different than what it takes to actually build a functional business with everything that's required. Is your intention to build a marketing firm or just buying into a franchise? Those are two vastly different demographics.

I've personally grown tired of offering any advice on ATOT, because people either jump in here full of lies and ignorance or others just jump in with "Oh yeah, every ATOTer is pulling $250k/yr and driving a Ferrari." My advice to you is find another forum that's more conducive to people that actually work with businesses. If you want to PM me I can give you a few references in that regard; for my industry, there are forums where only company leaders gather and it's full of information.

If I had to list the biggest concerns of running my company:

1) Cash flow.
2) AR aging. This is related to #1.
3) Building a successful sales pipeline. Also related.
4) Building a comprehensive marketing campaign. This requires significant capital.
5) Creating repeatable processes that can be given to others to execute your internal business processes.

That's not what most people want to hear. They like things like, "Oh, you need to get capital" or something equally simple. These are the simplest issues you'll face; the real issues of business are operations, personnel, capital management, etc. etc.

Happy to help through PM if you have serious questions.

 

[scorp00]

Originally posted by: jjsole

Originally posted by: IcebergSlim

Originally posted by: jjsole

Originally posted by: IcebergSlim

Originally posted by: jjsole

Originally posted by: IcebergSlim

Originally posted by: scorp00
- How did you do it? Did you moonlight, or quit outright?
moonlight, I wish I could quit
- Where did you get capital, or did you not need it?
day job
- How long did it take to start making a profit?
just started this year, don't have a product yet
- What were the biggest challenges you faced?
finding qualified people to work with who will work for a cut of future profits
- Are you happy with your decision?
yes

I'm trying to make iphone apps/games. I could easily do an app but I don't have any great ideas or motivation for an app. A game would take months so I would like help to get it out faster and to build something bigger and better than I could do alone. A lot of friends are interested, but none want a 2nd programming job or they don't have time. I'm stuck between doing it myself or trying to find someone I don't know to work with.

no offense thats not a business. You don't have a product. A business model not even a business plan. I mean......i'm just ignorant.

fixed.

oh? how?

His business plan is to make iphone apps, which he's trying to do. That is a business if he chooses to run it as one. Neither the model nor business plan have to be on letterhead to qualify as a business, lol.

ok I'm in business too. manufacturing. I haven't actually made anything. In fact I haven't decided what I am making. I have no factory or machines or workers. But shit its a business I tell ya and I'm gonna get started as soon as someone tells me what to do lol.

Profits aren't necessary to be considered a business either. In fact, if he documents all of his expenses, perhaps opens up a checking account for sole use for this business, and perhaps gives the business a name (even if he doesn't register it with the state), he can fill out a schedule C on his next tax return and write off the expenses. He doesn't even have to turn a dime in sales or profits (altho the irs will get suspect if he never does.)

That's good to know. I'm a programmer not a businessman. I have my phone setup for scp then I ssh into it to compile the apps with some special headers. I'm still playing with the code and the phone seeing what all it can do. I am beginning to realize that I will need a graphics guy. I would have to pay him out of my pocket, but maybe I should get a business checking account and loan the business some money?

My business plan is to make an app, then I get 70% of sales from the appstore. Seems solid to me? Also I'll release a free version with ads in it for more profit.

 

[BoberFett]

I have a few failed business attempts in my past. I'll keep trying until I die.

I have an idea right now that I think will be my great success. I'm still working on the business plan, I've drummed up a bit of interest. The capital required should be minimal compared to potential revenue. the biggest concern I have is regulatory. I need to find a good law firm that's worked in the field I'm looking at entering.

 

[daveymark]

- How did you do it? Did you moonlight, or quit outright?

Moonlight. It's always better to have a backup plan. My day job was my backup plan. I moonlighted until my day job was literally costing me money. I quit my day job about a year into it, am fulltime now.

- Where did you get capital, or did you not need it?

From my day job


- How long did it take to start making a profit?

We started seeing profits immediately, however it was still a slow process as profits weren't that large. Been at it for 5 years now and am just now starting to finally see retirement on the horizon.I hope to "retire" in another 5 years or so, but retirement for me means being able to do what I want, when I want. I will still be running several businesses, I just won't be as hands on about it.

- What were the biggest challenges you faced?

Keeping up with business growth and being organized. More business means more employees, more offices, more bills etc. The above poster who touted organization is right on the money. make sure you're organized now and you will go through A LOT less strife when you expand.

Also, being willing to change and adapt within the business environment is essential. unfortunately I was "sticking with what works" for a year and a half and the business grew stagnant. We still made good money, but looking back I realize how I held myself back. Always look for ways to improve, change, and grow.

- Are you happy with your decision?

Of course. There are a few regrets, mainly that I wish I would've done certain things earlier. There are those "aha" moments that you wonder why you waited so long!

The first million is always the toughest. The equation for success is always the same, and it's simple, but not easy: work hard. You don't need to be the smartest (although it helps, I'm proof of that), and I have yet to see anyone who is not a success who worked hard in everything they do. We all have the potential to do great things, but you'd be surprised how few of us ever even give ourselves a chance to grasp that potential.

I failed at 4 businesses before I struck paydirt. perseverance always wins out

 

[AreaCode707]

Originally posted by: Descartes
You can't answer your questions in a simple post. There are literally hundreds of different issues you can face. Selling something on ebay by yourself is far different than what it takes to actually build a functional business with everything that's required. Is your intention to build a marketing firm or just buying into a franchise? Those are two vastly different demographics.

I've personally grown tired of offering any advice on ATOT, because people either jump in here full of lies and ignorance or others just jump in with "Oh yeah, every ATOTer is pulling $250k/yr and driving a Ferrari." My advice to you is find another forum that's more conducive to people that actually work with businesses. If you want to PM me I can give you a few references in that regard; for my industry, there are forums where only company leaders gather and it's full of information.

If I had to list the biggest concerns of running my company:

1) Cash flow.
2) AR aging. This is related to #1.
3) Building a successful sales pipeline. Also related.
4) Building a comprehensive marketing campaign. This requires significant capital.
5) Creating repeatable processes that can be given to others to execute your internal business processes.

That's not what most people want to hear. They like things like, "Oh, you need to get capital" or something equally simple. These are the simplest issues you'll face; the real issues of business are operations, personnel, capital management, etc. etc.

Happy to help through PM if you have serious questions.

Point 5 is a really good one. My husband's business has done really well but they've stalled at a certain point of growth because they haven't yet figured out how they can take what they do well and get other people to do it equally well consistently.

 

[alkemyst]

Originally posted by: IcebergSlim
- How did you do it? Did you moonlight, or quit outright? depends on the business. if you are opening a physical location aka a store you can't really moonlight that kind of business.

- Where did you get capital, or did you not need it? depends on the business. Service industry you might not need capital. Otherwise you need to look to friends and family for an angel. Its very difficult to get credit these days as you know.

- How long did it take to start making a profit? depends on the business. Most fail in the first year. But turning a profit is a simple matter of Revenue - Overhead.

- What were the biggest challenges you faced? depends on the business. Really thats all I can say. Its not at all easy in the beginning. Its one road block after another its a true test of sheer will and perseverance.


- Are you happy with your decision? depends on the business. I guess that would depend on if you are making a profit or not! Lets face it most people consider starting a company for 2 reasons 1) do something they love 2) become financially independent

this was an example of a thread you didn't need to reply on...

 

[Q]

Originally posted by: acheron
I dropped out of Harvard and wrote this BASIC compiler with my friend. Later we were able to acquire this program called QDOS from someone else and lucked into a great contract with IBM. It's worked out pretty well so far.

Signed, Bill G.

Daggum man I need to get me one of those

 

[alkemyst]

How did you do it? Did you moonlight, or quit outright?

I moonlight still. I had quit for 3 years, but it wasn't as profitable.

Where did you get capital, or did you not need it?

Service oriented, but if I had a buttload of capital I probably could do this full time.

How long did it take to start making a profit?

day one, but nothing was really invested other than about a grand.

What were the biggest challenges you faced?

first job. I think I had flyers and shit out for 6 months prior to my first call...my final move was to print up about 1000 flyers a week before Christmas and walk door to door in my parent's neighborhood and stick them in. I said "New Computer Not Working, I am 10 mins away and working Christmas Day!"

That initial seed 10 years ago still has call backs today.

Are you happy with your decision?

Yes, I'd love to do nothing all day but what I'd like, but I have bills. Last year was slow and I didn't do any soliciting, I still made over $1000.

My goal is to open up a car shop one day. Once I have a full machine shop in my own garage I will teach the next generation how to spank those with more money than balls.

 

[alkemyst]

Originally posted by: Descartes
You can't answer your questions in a simple post. There are literally hundreds of different issues you can face. Selling something on ebay by yourself is far different than what it takes to actually build a functional business with everything that's required. Is your intention to build a marketing firm or just buying into a franchise? Those are two vastly different demographics.

I've personally grown tired of offering any advice on ATOT, because people either jump in here full of lies and ignorance or others just jump in with "Oh yeah, every ATOTer is pulling $250k/yr and driving a Ferrari." My advice to you is find another forum that's more conducive to people that actually work with businesses. If you want to PM me I can give you a few references in that regard; for my industry, there are forums where only company leaders gather and it's full of information.

If I had to list the biggest concerns of running my company:

1) Cash flow.
2) AR aging. This is related to #1.
3) Building a successful sales pipeline. Also related.
4) Building a comprehensive marketing campaign. This requires significant capital.
5) Creating repeatable processes that can be given to others to execute your internal business processes.

That's not what most people want to hear. They like things like, "Oh, you need to get capital" or something equally simple. These are the simplest issues you'll face; the real issues of business are operations, personnel, capital management, etc. etc.

Happy to help through PM if you have serious questions.

these are really higher level concerns. Really past those that are just moonlighting and even in there first year. I will agree though if you want to succeed and you are on your own 1-4 are really important for anyone. #5 is only important if you are turning away business or at your limit in your area and want to expand.

I will agree though I have been flamed for my ideas that have made me a decent profit. Even my wife had doubts on some things. Once I applied then she had no idea on the turnout.

Building a business can be TERRIBLY easy....it can also be TERRIBLY hard.

 

[Miramonti]

Originally posted by: scorp00

Originally posted by: jjsole

Originally posted by: IcebergSlim

Originally posted by: jjsole

Originally posted by: IcebergSlim

Originally posted by: jjsole

Originally posted by: IcebergSlim

Originally posted by: scorp00
- How did you do it? Did you moonlight, or quit outright?
moonlight, I wish I could quit
- Where did you get capital, or did you not need it?
day job
- How long did it take to start making a profit?
just started this year, don't have a product yet
- What were the biggest challenges you faced?
finding qualified people to work with who will work for a cut of future profits
- Are you happy with your decision?
yes

I'm trying to make iphone apps/games. I could easily do an app but I don't have any great ideas or motivation for an app. A game would take months so I would like help to get it out faster and to build something bigger and better than I could do alone. A lot of friends are interested, but none want a 2nd programming job or they don't have time. I'm stuck between doing it myself or trying to find someone I don't know to work with.

no offense thats not a business. You don't have a product. A business model not even a business plan. I mean......i'm just ignorant.

fixed.

oh? how?

His business plan is to make iphone apps, which he's trying to do. That is a business if he chooses to run it as one. Neither the model nor business plan have to be on letterhead to qualify as a business, lol.

ok I'm in business too. manufacturing. I haven't actually made anything. In fact I haven't decided what I am making. I have no factory or machines or workers. But shit its a business I tell ya and I'm gonna get started as soon as someone tells me what to do lol.

Profits aren't necessary to be considered a business either. In fact, if he documents all of his expenses, perhaps opens up a checking account for sole use for this business, and perhaps gives the business a name (even if he doesn't register it with the state), he can fill out a schedule C on his next tax return and write off the expenses. He doesn't even have to turn a dime in sales or profits (altho the irs will get suspect if he never does.)

That's good to know. I'm a programmer not a businessman. I have my phone setup for scp then I ssh into it to compile the apps with some special headers. I'm still playing with the code and the phone seeing what all it can do. I am beginning to realize that I will need a graphics guy. I would have to pay him out of my pocket, but maybe I should get a business checking account and loan the business some money?

My business plan is to make an app, then I get 70% of sales from the appstore. Seems solid to me? Also I'll release a free version with ads in it for more profit.

Maintaining a separate checking account is really just to show the IRS (if needed) that you are serious about the business and are being transparent by keeping its transactions together. Its harder to convince them you actually have a business if everything is muddled together in with your regular checking account. And there isn't really such a thing as loaning to the business since you aren't incorporated and don't have partners. You can transfer money in and out at will from another checking account anytime. This is all my understanding from my accountant and is the way I have always done things (except occasionally purchases cross into the wrong account, which get sorted out in quicken's categorizing when I review all transactions downloaded from my bank.)

 

[Thorny]

Originally posted by: Alphathree33
I'm particularly interested in hearing about people who have switched from being employed by a tech company to starting their own business - whether in technology or not.

Questions include:

- How did you do it? Did you moonlight, or quit outright?

I quit my last job to start this one


- Where did you get capital, or did you not need it?

Life savings was used along with existing revolving credit.

- How long did it take to start making a profit?

2 months to prep store to open and procure equipment. I was profitable almost immediatley after opening.


- What were the biggest challenges you faced?

Marital strains from working to many hours. Burn out from working to many hours. Figuring out the eating dynamics of a small farming/tourist community.


- Are you happy with your decision?

Yes 99.999% of the time. Tax time is rough, quarterly payments suck. Building something from nothing and being able to make a living doing something you love is awsome.

 

[wyvrn]

I can tell you from running several business that marketing is probably the most overlooked. It is very important. Gotta network and give face time.

 

[JS80]

I'm right in the middle of forming a startup, but i think my answers could help some

- How did you do it? Did you moonlight, or quit outright?

I still have a day job to pay the bills. I probably won't quit until even a year after company officially "launches." I enlisted a friend to be my business partner, and he's actually unemployed (ex-structured credit) which is one of the reasons why I asked him to join.

- Where did you get capital, or did you not need it?

Proof of concept funding through savings and personal loans. I will be raising angel and venture money when the proof of concept is finished. I have already solicited some individuals (people I know personally, no VCs yet) with just the idea, and received very good response.

- How long did it take to start making a profit?

My very detailed financials (I have it down to every single headcount and office expense) projects profitability in year 3.

- What were the biggest challenges you faced?

I have to say the hardest part is finding the right human capital. Someone you can trust, and someone who will work for only equity in the startup phase.

- Are you happy with your decision?

Whether or not this takes off or fails I will not have any regrets.

 

[TheoPetro]

I haven't fully started one yet as im still in the startup phase but I have worked at and grown a small company for the past 4 years.

- How did you do it? Did you moonlight, or quit outright?

I guess you could say ill be moonlighting. My current employer will be helping w/ the new business so its kind of a unique situation. It definitely depends on the type of business though.

- Where did you get capital, or did you not need it?

Startup capital was the hardest thing for me to figure out. I went through 7-9 business ideas before I found the one with the lowest startup capital requirements and the most potential. I will be financing the proof of concept and various other small expenses out of my own pocket. Once I have that down I will be courting VC funding and angel investors.

- How long did it take to start making a profit?

Once this thing gets going it will have a positive cash flow within a month of operations and will have paid for the startup costs within 3-6 months. One thing here is you need to focus on cash flow. You need your funding to take you to a point where you have a stable positive cash flow. Profitability is secondary at best to cash flow.

- What were the biggest challenges you faced?

Finding a business idea with low barriers to entry that wasn't saturated w/ competitors.

- Are you happy with your decision?

So far, yes, but ask me again in a year.

 

[Zolty]

Originally posted by: Alphathree33
I'm particularly interested in hearing about people who have switched from being employed by a tech company to starting their own business - whether in technology or not.

Questions include:

- How did you do it? Did you moonlight, or quit outright?
- Where did you get capital, or did you not need it?
- How long did it take to start making a profit?
- What were the biggest challenges you faced?
- Are you happy with your decision?

The ex GF did this quite successfully but she just went from an employed graphic designer to a contract graphic designer, she did it at night and worked her pt college job until the contract stuff was coming in at a regular rate and she quit the day job. She made a profit from day 1. Biggest challenges are finding clients, but she is really good and has excellent recommendations. She knows what the firms charge and she know she can do it for a lot less ($85/hr vs 200/hr).
She seems fairly happy.

 

[JS80]

I would like to hear experiences with angels and VCs. If you have any, speak up!

 

[IceBergSLiM]

Originally posted by: JS80
I would like to hear experiences with angels and VCs. If you have any, speak up!

The thought of selling large % and perhaps losing control of the business has always scared me away.

 

[JS80]

Originally posted by: IcebergSlim

Originally posted by: JS80
I would like to hear experiences with angels and VCs. If you have any, speak up!

The thought of selling large % and perhaps losing control of the business has always scared me away.

How else do you raise capital as a startup?