Biggest Business Failure or Success
Discussion
As I am contemplating starting out on my own after years of 9-5 working for "the man", I'd be interested to hear about your business failures or successes. How did you start out? How much did you risk? How much has it worked out for you? Figures would be nice, no false modesty please...
I haven't been an employee for about the last ten years. Initially I was contracting, then I started to build more of a proper business (i.e. with permanent employees).
It's worked out fine financially, and has made possible some lifestyle choices that would otherwise have been impossible (principally being able to afford childcare whilst my wife did 4 years of full time study for a new career) but I enjoy my work less due to all the management and accounting hassles.
I think I was happiest being a contractor. Running a business can be quite lonely.
Get a good accountant.
It's worked out fine financially, and has made possible some lifestyle choices that would otherwise have been impossible (principally being able to afford childcare whilst my wife did 4 years of full time study for a new career) but I enjoy my work less due to all the management and accounting hassles.
I think I was happiest being a contractor. Running a business can be quite lonely.
Get a good accountant.
Have a look at this thread in the business forum: http://tinyurl.com/ycqzmjv
Lots of info on who has done it & how they started.
Lots of info on who has done it & how they started.
HundredthIdiot said:
Get a good accountant.
Best advice in the world, a good accountant is worth their weight in gold.
It is very, very hard work - but if you are good at what you do, and are clever and careful about how you do it, it does pay off in the end.
We started by working evenings and weekends to afford to buy the first set of carpet cleaning kit, and it spiraled out from there. Less risk as we have never taken a business loan to grow the business, but we probably have not grown as fast as we could have because of this.
The biggest thing that people don't realise is how lonely being the top boss is. When you are an employee you don't have the same concerns. At the top not only is your livelyhood in your hands but that of all the employees.
Not winning enough work...your fault
Not making the margins....your fault
Etc
Etc
But it can be rewarding...
Not winning enough work...your fault
Not making the margins....your fault
Etc
Etc
But it can be rewarding...
st_files said:
As I am contemplating starting out on my own after years of 9-5 working for "the man", I'd be interested to hear about your business failures or successes. How did you start out? How much did you risk? How much has it worked out for you? Figures would be nice, no false modesty please...
Before you even consider stepping off the ladder, you need to do a full on Business Plan and Cashflow projection for the next 12/18 months. As you say "no false modesty" you need to be totally frank with yourself. I am a self-employed accountant doing this sort of thing for clients all the time and it is very sad to see the number of people who come to me 9 to 12 months down the line who find themselves lumbered with all manner of problems, usually cashflow, VAT, Income Tax, supplier pressure etc., etc., all because they didn't think things through at the outset and didn't have a proper business plan in place before they started. Unfortunately when it gets to this stage it is very, very hard to get back on an even footing. Don't let this doom and gloom put you off, done properly there is no time like the present to start on your own, it's hard work and it sometimes get you down, but to use the old saying "you reap what you sow" and your making money for yourself, not someone-else.
Fish said:
The biggest thing that people don't realise is how lonely being the top boss is. When you are an employee you don't have the same concerns. At the top not only is your livelyhood in your hands but that of all the employees.
Not winning enough work...your fault
Not making the margins....your fault
Etc
Etc
But it can be rewarding...
Not winning enough work...your fault
Not making the margins....your fault
Etc
Etc
But it can be rewarding...
HundredthIdiot said:
I haven't been an employee for about the last ten years. Initially I was contracting, then I started to build more of a proper business (i.e. with permanent employees).
It's worked out fine financially, and has made possible some lifestyle choices that would otherwise have been impossible (principally being able to afford childcare whilst my wife did 4 years of full time study for a new career) but I enjoy my work less due to all the management and accounting hassles.
I think I was happiest being a contractor. Running a business can be quite lonely.
Get a good accountant.
Both very true...I think I was happiest as a contractor too! No going home thinking about how to grow the business, did I pay everyone I was supposed to this month, when is the VAT return due, who do I need to chase up tomorrow etc etc just go and do your job, end of shift job done big smile and go do whatever you want to without worrying what needs to be done tomorrow! Mental peace outside of work is hugely underestimated IMO.It's worked out fine financially, and has made possible some lifestyle choices that would otherwise have been impossible (principally being able to afford childcare whilst my wife did 4 years of full time study for a new career) but I enjoy my work less due to all the management and accounting hassles.
I think I was happiest being a contractor. Running a business can be quite lonely.
Get a good accountant.
Early days:
On a school holiday, I bought a pack 25 of disposable cigarette lighters for £5. I thought I could sell each one for £1 to some schoolmates and make a nifty proft. Half of them didn't work, some of them leaked gas (including one resulting in a rather burnt hand), and only 6 actually functioned properly. And I only sold 1 of those, as my target audience already had lighters! That was a good lesson on product quality and market research.
More recently:
I was an employee and saw an opportunity. I remortgaged my house up to my eyeballs, used the remaining equity as collateral on a bank loan, and bought part of a break-even small business of 4 staff. 4 years later, the company is double the size, making 20% EBIT, and the loan is now almost fully settled. But by god, is it a rollercoaster of 60+hour weeks, sleepless nights and cashflow pantwetting.
On a school holiday, I bought a pack 25 of disposable cigarette lighters for £5. I thought I could sell each one for £1 to some schoolmates and make a nifty proft. Half of them didn't work, some of them leaked gas (including one resulting in a rather burnt hand), and only 6 actually functioned properly. And I only sold 1 of those, as my target audience already had lighters! That was a good lesson on product quality and market research.
More recently:
I was an employee and saw an opportunity. I remortgaged my house up to my eyeballs, used the remaining equity as collateral on a bank loan, and bought part of a break-even small business of 4 staff. 4 years later, the company is double the size, making 20% EBIT, and the loan is now almost fully settled. But by god, is it a rollercoaster of 60+hour weeks, sleepless nights and cashflow pantwetting.
A mate of mine set himself up to sell consultancy over the web before all this Skype and Webex stuff. Idea was great, but BT changed the line specs as he was about to launch and it all went pear shaped (I still have some of his web cams somewhere). Left him with a load of bespoke PC's with no other use, a network of upset consultants and a lot of disappointed clients.
He then launched an online marketing site but sadly chose a name and logo too similar to one of the big players who promptly squashed him for passing-off.
Great thread this and just reading the advice above would have saved countless people countless amounts of money. I managed to lose £30K before I was 30. I made stupid mistakes but tbh I have learned from them and am just contemplating working for myself again after getting more and more fed up with the muppets I work alongside. I think there will always be doubts initially but I am setting up something that I have thought through, won't require high set up costs and I am testing with market research before spending a penny. I am always coming up with 'great' ideas but move slow enough that I think them through properly and realise why they won't work or why they're not for me. There's a lot to be said for saying 'Ok, it's Monday morning in your new business, what are you going to do to get customers?'
Research well in the feild you want to break into!
Prior to being 22 i lost around 20k plus allot of my own time in a joint venture with 3 others, so all together lost 80k over a year in a market i was not to clued up on.
This cash was earned in a hard way with working 6-11ish each weekday and every weekend, so certainly not spoon fed by parents.
A few years later i have been working hard in a industry i know well and now turning over the millions and working with some of thr biggest developers in the world, which others dream of working with.
Its hard graft, hence why i have only been in for a hour.
I always look at what you put in you get back out in the long run.
Each time i leave the office late i get into a nice car and thats my present to myself for hard work.
Work hard and put 110% in.
Prior to being 22 i lost around 20k plus allot of my own time in a joint venture with 3 others, so all together lost 80k over a year in a market i was not to clued up on.
This cash was earned in a hard way with working 6-11ish each weekday and every weekend, so certainly not spoon fed by parents.
A few years later i have been working hard in a industry i know well and now turning over the millions and working with some of thr biggest developers in the world, which others dream of working with.
Its hard graft, hence why i have only been in for a hour.
I always look at what you put in you get back out in the long run.
Each time i leave the office late i get into a nice car and thats my present to myself for hard work.
Work hard and put 110% in.
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