Author Topic: Any Full-Time Business Owners?  (Read 1691 times)

nara

  • Stubble
  • **
  • Posts: 110
Any Full-Time Business Owners?
« on: July 01, 2017, 11:44:26 AM »
I'd really love to connect with other business owners who are self employed full-time (aka. people who rely on their business 100% for their livelihood--not as a side gig). I'd like to hear about what you do, what your retirement/health insurance plans are like, and if your perspective towards money and FI is different than the other MMers.

I am 7 years self-employed. My husband also works full-time for the business and we have 2 full-time and 2 part-time employees. We both have a SIMPLE IRA plan that we fully max out and a group major medical health plan for $250 a month with HSA. As business owners, I believe that we are a bit more focused on growing our income by expanding our business rather than being overly frugal. We are hoping that by growing our business we could speed up our FI, reaching our goals within 5 years rather than 10 and that our exit strategy will allow for our employees to buy-out the business giving us some passive income.

I would love to know your plans for your business and goals to reach FI!!!

Smokystache

  • Stubble
  • **
  • Posts: 202
Re: Any Full-Time Business Owners?
« Reply #1 on: July 01, 2017, 03:05:33 PM »
I'm not there yet, but these are the types of questions/topics that I'm very interested in. Following.

khizr

  • 5 O'Clock Shadow
  • *
  • Posts: 37
  • Age: 36
  • Location: Alabama
Re: Any Full-Time Business Owners?
« Reply #2 on: July 04, 2017, 12:39:25 AM »
I'd really love to connect with other business owners who are self-employed full-time (aka. people who rely on their business 100% for their livelihood--not as a side gig). I'd like to hear about what you do, what your retirement/health insurance plans are like, and if your perspective towards money and FI is different than the other MMers.

I am 7 years self-employed. My husband also works full-time for the business and we have 2 full-time and 2 part-time employees. We both have a SIMPLE IRA plan that we fully max out and a group major medical health plan for $250 a month with HSA. As business owners, I believe that we are a bit more focused on growing our income by expanding our business rather than being overly frugal. We are hoping that by growing our business we could speed up our FI, reaching our goals within 5 years rather than 10 and that our exit strategy will allow for our employees to buy-out the business giving us some passive income.

I would love to know your plans for your business and goals to reach FI!!!
FT business owner here :), in the tech/internet space.

I've had two big exits and a few smaller ones so at this point I am "retired". I work purely for love/fun/challenge rather than just the money (the money is nice too, i view it as a symptom of a job done well). I was pretty dang lucky and had my first big exit at ~26 and I had a good accountant who got me started with an IRA and the basics.

My retirement plan is a bit weird, I love what I do and plan to do it as long as I am mentally able (that could change but I doubt it). When I have a 401k program available I max that out plus any personal IRAs (but I often have to return ~70% of the money from the 401k due to my status as a share holder / controller and some of those rules). I have not had an entity where I can do the self employed IRA but maybe soon with a side gig i am doing this year. After the last exit I moved a big chunk of money to our retirement so we are set and do not have to contribute any further for FI if we wanted. We also own our house outright. The money I receive now is just to build a bigger war chest to allow me to start new businesses, try riskier things, and move faster if I want.

Medical is usually covered by the business, but I just had an exit and I am taking the rest of the year off to hang out with my family and play with some side gigs (and researching some long shot ideas). So currently I am paying ~$1400 a month for A Cobra Family health plan plus dental. It is expensive and a drain on cash flow but important given some health challenges we have. I have a pre existing condition, so my backup plan if the ACA is repealed or screwed up is to move to Costa Rica or Europe until the USA gets to single payer or similar system where it is handled by the gov and far more efficient.

My perspective on FI is that I want control of my time and not to work for anyone else, which meshes pretty well with being an entrepreneur. I grew up lower middle class, and I am not into stuff so I live pretty cheap. Not Mr. Money Moustache cheap but we aim to live on $60k to $100k while saving 20% to 30% of our income (1 child so far).  We love to travel so that is one of our big expenses beyond good food and child care. I don't want my kid to growing up wealthy and a little shit too :).

Totally agree on growing the business income, that can have such larger benefits :).

Hope that helps!

nara

  • Stubble
  • **
  • Posts: 110
Re: Any Full-Time Business Owners?
« Reply #3 on: July 04, 2017, 02:11:54 PM »
I'd really love to connect with other business owners who are self-employed full-time (aka. people who rely on their business 100% for their livelihood--not as a side gig). I'd like to hear about what you do, what your retirement/health insurance plans are like, and if your perspective towards money and FI is different than the other MMers.

I am 7 years self-employed. My husband also works full-time for the business and we have 2 full-time and 2 part-time employees. We both have a SIMPLE IRA plan that we fully max out and a group major medical health plan for $250 a month with HSA. As business owners, I believe that we are a bit more focused on growing our income by expanding our business rather than being overly frugal. We are hoping that by growing our business we could speed up our FI, reaching our goals within 5 years rather than 10 and that our exit strategy will allow for our employees to buy-out the business giving us some passive income.

I would love to know your plans for your business and goals to reach FI!!!
FT business owner here :), in the tech/internet space.

I've had two big exits and a few smaller ones so at this point I am "retired". I work purely for love/fun/challenge rather than just the money (the money is nice too, i view it as a symptom of a job done well). I was pretty dang lucky and had my first big exit at ~26 and I had a good accountant who got me started with an IRA and the basics.

My retirement plan is a bit weird, I love what I do and plan to do it as long as I am mentally able (that could change but I doubt it). When I have a 401k program available I max that out plus any personal IRAs (but I often have to return ~70% of the money from the 401k due to my status as a share holder / controller and some of those rules). I have not had an entity where I can do the self employed IRA but maybe soon with a side gig i am doing this year. After the last exit I moved a big chunk of money to our retirement so we are set and do not have to contribute any further for FI if we wanted. We also own our house outright. The money I receive now is just to build a bigger war chest to allow me to start new businesses, try riskier things, and move faster if I want.

Medical is usually covered by the business, but I just had an exit and I am taking the rest of the year off to hang out with my family and play with some side gigs (and researching some long shot ideas). So currently I am paying ~$1400 a month for A Cobra Family health plan plus dental. It is expensive and a drain on cash flow but important given some health challenges we have. I have a pre existing condition, so my backup plan if the ACA is repealed or screwed up is to move to Costa Rica or Europe until the USA gets to single payer or similar system where it is handled by the gov and far more efficient.

My perspective on FI is that I want control of my time and not to work for anyone else, which meshes pretty well with being an entrepreneur. I grew up lower middle class, and I am not into stuff so I live pretty cheap. Not Mr. Money Moustache cheap but we aim to live on $60k to $100k while saving 20% to 30% of our income (1 child so far).  We love to travel so that is one of our big expenses beyond good food and child care. I don't want my kid to growing up wealthy and a little shit too :).

Totally agree on growing the business income, that can have such larger benefits :).

Hope that helps!

Cool! Do you still have involvement in your previous businesses? Are you receiving a passive income from them?

FIREby35

  • Bristles
  • ***
  • Posts: 367
Re: Any Full-Time Business Owners?
« Reply #4 on: July 04, 2017, 02:23:34 PM »
I run a small law firm. I started with my own practice inside another firm and then lost the training wheels and have been fully in the business owner zone for 2.5 years. I love it.

We have a 401k for all employees using "Ubiquity." It is an online 401k manager. My wife and I both max 401ks but we don't do anything else special with it - besides, again, offering the same to our 4 other employees.

Can you tell me more about your group health insurance? We don't currently offer it for our team. For our family we use medical bill sharing which is not insurance but similar to it with important distinctions. No HSA.

bwall

  • Bristles
  • ***
  • Posts: 262
Re: Any Full-Time Business Owners?
« Reply #5 on: July 04, 2017, 11:30:32 PM »
I own and run my own export business. We are a world wide trading company, meaning that we buy in countries where prices are low and sell in countries where prices are high. The financial term for this is arbitrage and is most commonly done in the stock or bond market or via exchange rates. We do it in the real world with real products, not paper on exchange platforms.

The goals for the business are the same every year: sell more. How to do this is always the hard part. Sometimes countries open up their markets, or the economy improves to the point we can sell there. For example, we began exporting to China in 2010. We made a couple of deals with Vietnamese customers in 2011, but that fizzled. We used to sell quite a bit to the former USSR, but since Putin decided to make the Ukraine Russia again, that market has died. One year we sold more to Angola than to Germany; mainly due to the Chinese demand in Angola. Haven't sold anything to Angola for a few years now.

Most people in my industry live the good life; 'Eat, drink and be merry, for tomorrow it will all be gone.' I try to save as much as possible so that I can get off the merry-go-round. However, this is difficult in a cash intensive business where the Factorer (if you can find one) charges 2% to 3% per month (!!!).


jooniFLORisploo

  • Handlebar Stache
  • *****
  • Posts: 2299
  • Location: on terra wateria
Re: Any Full-Time Business Owners?
« Reply #6 on: July 04, 2017, 11:35:10 PM »
Yep.

My plan is basically: Assume all the business stuff goes to shit one day, so save everything along the way :)

khizr

  • 5 O'Clock Shadow
  • *
  • Posts: 37
  • Age: 36
  • Location: Alabama
Re: Any Full-Time Business Owners?
« Reply #7 on: July 05, 2017, 01:44:55 AM »
Cool! Do you still have involvement in your previous businesses? Are you receiving a passive income from them?
Nope, fully sold and no involvement.

khizr

  • 5 O'Clock Shadow
  • *
  • Posts: 37
  • Age: 36
  • Location: Alabama
Re: Any Full-Time Business Owners?
« Reply #8 on: July 05, 2017, 01:47:18 AM »
I run a small law firm. I started with my own practice inside another firm and then lost the training wheels and have been fully in the business owner zone for 2.5 years. I love it.

We have a 401k for all employees using "Ubiquity." It is an online 401k manager. My wife and I both max 401ks but we don't do anything else special with it - besides, again, offering the same to our 4 other employees.

Can you tell me more about your group health insurance? We don't currently offer it for our team. For our family we use medical bill sharing which is not insurance but similar to it with important distinctions. No HSA.
At the last one we used guideline.com who I LOVED. Super super low fees and their online interface was FANTASTIC. Highly recommended.

For insurance I love going with a PEO setup, ie where they take care of all the Health/HR/Legal. Mostly because we hire in just about any state.

I used ADP a few back and they were just ok with unmotivated employees and a backend system that looked like geocities. They also transfer you to a newbie team if you are exiting their system and make it as hard as possible. Pretty bad company.

After that we used Trinet and they were fantastic. For insurance they give you a lot of options but we went with Aenta for the most part. We paid 100% of all health care for our team to ensure they don't have to worry about health care and all the mess we have in this country.

nara

  • Stubble
  • **
  • Posts: 110
Re: Any Full-Time Business Owners?
« Reply #9 on: July 05, 2017, 07:13:27 AM »
I run a small law firm. I started with my own practice inside another firm and then lost the training wheels and have been fully in the business owner zone for 2.5 years. I love it.

We have a 401k for all employees using "Ubiquity." It is an online 401k manager. My wife and I both max 401ks but we don't do anything else special with it - besides, again, offering the same to our 4 other employees.

Can you tell me more about your group health insurance? We don't currently offer it for our team. For our family we use medical bill sharing which is not insurance but similar to it with important distinctions. No HSA.

I'm going to look into Ubiquity! What are their fees like? Our group health plan is nothing special at all. We have been buying individual plans for ourselves through ehealthinsurance for years. When I looked at the small business plans, I realized they were slightly cheaper--so it made sense to apply for a plan as a business plus it gives us something to offer to employees.

FIREby35

  • Bristles
  • ***
  • Posts: 367
Re: Any Full-Time Business Owners?
« Reply #10 on: July 05, 2017, 07:04:51 PM »
Wife/Auditor/Accountant tells me it costs $345 per quarter. Is that expensive? Now that you ask me, I realize it is one of the things we did at the very beginning of opening our business when getting it done was just as important as getting it done at 100% optimization. The fee includes all the various filings to comply with federal law.

The actual investment options are Vanguard, low fee.

FIREby35

  • Bristles
  • ***
  • Posts: 367
Re: Any Full-Time Business Owners?
« Reply #11 on: July 05, 2017, 07:12:56 PM »
I run a small law firm. I started with my own practice inside another firm and then lost the training wheels and have been fully in the business owner zone for 2.5 years. I love it.

We have a 401k for all employees using "Ubiquity." It is an online 401k manager. My wife and I both max 401ks but we don't do anything else special with it - besides, again, offering the same to our 4 other employees.

Can you tell me more about your group health insurance? We don't currently offer it for our team. For our family we use medical bill sharing which is not insurance but similar to it with important distinctions. No HSA.
At the last one we used guideline.com who I LOVED. Super super low fees and their online interface was FANTASTIC. Highly recommended.

For insurance I love going with a PEO setup, ie where they take care of all the Health/HR/Legal. Mostly because we hire in just about any state.

I used ADP a few back and they were just ok with unmotivated employees and a backend system that looked like geocities. They also transfer you to a newbie team if you are exiting their system and make it as hard as possible. Pretty bad company.

After that we used Trinet and they were fantastic. For insurance they give you a lot of options but we went with Aenta for the most part. We paid 100% of all health care for our team to ensure they don't have to worry about health care and all the mess we have in this country.

Looks like Guideline.com would be half the cost of our current administrator! Ha! Business owners unite indeed! You can't get that advice talking with many other people.

CareCPA

  • Stubble
  • **
  • Posts: 220
  • Location: Northcentral PA
Re: Any Full-Time Business Owners?
« Reply #12 on: July 05, 2017, 07:16:40 PM »
Guideline is also the provider that is offered through Gusto, which has pretty low payroll fees.
Looks like $500 setup and $8 per employee per month for guideline pricing ($40 min).
Offers Vanguard funds and says no AUM fees.
Always happy to help with tax or accounting questions - feel free to private message me.

I am a licensed CPA in Pennsylvania. However, any tax advice I give should be considered general information and not used in the avoidance of tax. There is most likely information about your situation that I do not know, and thus you should do your own additional research.

Yes, in case it confuses you, I did change my forum name.

khizr

  • 5 O'Clock Shadow
  • *
  • Posts: 37
  • Age: 36
  • Location: Alabama
Re: Any Full-Time Business Owners?
« Reply #13 on: July 05, 2017, 10:30:38 PM »
I just went through the process of rolling over my 401k into an IRA with guideline and it was super easy too. Good peoples!

They did make one mistake early on, but it is a startup so things were a bit new. Since then it has worked perfectly every payroll period with Trinet etc.

Fishindude

  • Handlebar Stache
  • *****
  • Posts: 1395
Re: Any Full-Time Business Owners?
« Reply #14 on: July 06, 2017, 09:04:09 AM »
I'd really love to connect with other business owners who are self employed full-time (aka. people who rely on their business 100% for their livelihood--not as a side gig). I'd like to hear about what you do, what your retirement/health insurance plans are like, and if your perspective towards money and FI is different than the other MMers.

I am 7 years self-employed. My husband also works full-time for the business and we have 2 full-time and 2 part-time employees. We both have a SIMPLE IRA plan that we fully max out and a group major medical health plan for $250 a month with HSA. As business owners, I believe that we are a bit more focused on growing our income by expanding our business rather than being overly frugal. We are hoping that by growing our business we could speed up our FI, reaching our goals within 5 years rather than 10 and that our exit strategy will allow for our employees to buy-out the business giving us some passive income.

I would love to know your plans for your business and goals to reach FI!!!

Owned a commercial industrial construction company from 84 thru the end of last year.  Set up a buy out deal for a group of younger long term employees to keep it going.  First year did about $1.5 mil business, and best year about $30 mil.   Employed about 65 people so set up a good group health insurance plan and 401K retirement plan as well as profit sharing and bonus plans for all.  Business always was profitable, even during lean years.   Several years were extremely profitable.   We paid off the initial purchase very quickly, then rarely borrowed money again after that, did everything cash & carry, and always maintained kept a hefty sum of working capitol in the business. 

We put in lots of hours, worked hard and ran our business like a business, not our personal check book.  Our salaries were never extravagant and we never took silly perks like company cars, trips or personal purchases on the company dime, etc.   Rough rule of thumb .... keep 1/3 of profits in the business, 1/3 handed out to employees in bonus, 1/3 goes to owners at year end.    We always maxed our 401K's and all invested wisely outside of the business also to create other streams of income.

Going this route vs working for the other guy definitely allowed myself and partners to reach FI and retire early and comfortably in our mid 50's.

WoodStache

  • 5 O'Clock Shadow
  • *
  • Posts: 14
Re: Any Full-Time Business Owners?
« Reply #15 on: July 07, 2017, 10:15:05 AM »
Yep.

My plan is basically: Assume all the business stuff goes to shit one day, so save everything along the way :)

This is and will be our plan.

Spouse and I are purchasing the family business at the end of this year. It's a high risk but high reward situation, which is only tough as we're about 2-3 years away at our current rate from being FI with at least some creature comforts added in. That said, our plan isn't to RE, so the idea of working 2-3 more years and pulling the plug instead of buying didn't come into the equation. Been a long road to this point but very rewarding. Will be good to follow this thread.

Like Jooni said above we're just assuming things will be tight and planning accordingly. We've spent the last 5 years accruing savings/paying off the house. From this point our expenses remain "low" at ~35k per year while we pay off the business. After that we will, I'm sure, loosen the purse strings a bit, as I'm not nearly as hardcore on the mustachian end as some of you. However, the plan is and always will be that if the business goes belly up we can just walk away. We'll have a few years at the start where we'll be exposed but we hope to have the capital to pay it off in 4-5 years.

jooniFLORisploo

  • Handlebar Stache
  • *****
  • Posts: 2299
  • Location: on terra wateria
Re: Any Full-Time Business Owners?
« Reply #16 on: July 07, 2017, 10:46:01 AM »
:)     As it happens, my business income was shit this month (it happened!), I think the worst ever. I was disappointed, but not at all worried. It's like when stocks dip. I just stuck the money in the bank, as usual, because the amount changes nothing...because I'm not spending it. It's a very chill business approach.

Stubblestache

  • 5 O'Clock Shadow
  • *
  • Posts: 11
Re: Any Full-Time Business Owners?
« Reply #17 on: July 14, 2017, 09:06:09 AM »
Full time biz owner here. Like many on this thread, I assume it's all going to go horribly wrong (even though it's only been going better than very well for the last two years) and save/invest plenty.

I keep around an 12 month cash buffer in cash or v close equivalents and put the rest in cheap funds, but it's starting to grate on me having that much cash with such shoddy returns, so might trim to 8 month buffer. I'm only 2 years into being full time self employed so don't know the ups and downs well enough yet to go below about 8 months cash buffer.

How much of a cash/cash equivalents buffer do you other lovely FT biz owners keep?

jooniFLORisploo

  • Handlebar Stache
  • *****
  • Posts: 2299
  • Location: on terra wateria
Re: Any Full-Time Business Owners?
« Reply #18 on: July 14, 2017, 11:28:44 AM »
The business keeps enough to pay me my optimal (and very low) wage for three years. That way, if things go to crap, I maintain my livelihood and have 36 months to figure out a Plan L.

nara

  • Stubble
  • **
  • Posts: 110
Re: Any Full-Time Business Owners?
« Reply #19 on: July 15, 2017, 10:37:40 AM »
Full time biz owner here. Like many on this thread, I assume it's all going to go horribly wrong (even though it's only been going better than very well for the last two years) and save/invest plenty.

I keep around an 12 month cash buffer in cash or v close equivalents and put the rest in cheap funds, but it's starting to grate on me having that much cash with such shoddy returns, so might trim to 8 month buffer. I'm only 2 years into being full time self employed so don't know the ups and downs well enough yet to go below about 8 months cash buffer.

How much of a cash/cash equivalents buffer do you other lovely FT biz owners keep?

I keep about 3 months of expenses in cash. Anything more than that would come out of the personal emergency fund. How much you want to keep liquid would probably depend on the type of business you're in and the amount of risk. Our business is funded by insurance payments so as long as we have a steady number of clients, the income is very reliable. You could also consider how quickly you would be able to get a job if you're business was to go under.

El_Viajero

  • 5 O'Clock Shadow
  • *
  • Posts: 87
Re: Any Full-Time Business Owners?
« Reply #20 on: July 17, 2017, 06:49:50 PM »
I'd really love to connect with other business owners who are self employed full-time (aka. people who rely on their business 100% for their livelihood--not as a side gig). I'd like to hear about what you do, what your retirement/health insurance plans are like, and if your perspective towards money and FI is different than the other MMers.

I have been self-employed on a full time basis for 6 years now. I'm a copywriter and communications consultant. So my business is really just me no employees. I don't even hire contractors. I'm freelance. I keep things simple.

I'm kind of a strange case because I have basically no motivation to grow my business. My life is relatively easy and stress-free, so why change it? I'm happy with my modest, five-figure net business income and the modest condominium it affords my family. Other than that... meh.

Per your question about how my perspective on money is different from other MMMers: I think being self-employed gives me an extremely unique perspective. I do not work 40 hours a week. Since I'm self-employed, I don't have to. I could make more money if I worked more hours, but I'm not interested in making any more money than I make. Unlike many others around here, I'm actually more motivated to pay off my mortgage than enable a more imminent FIRE date because paying off the mortgage means I can work even fewer hours than I do now and sooner. If you're stuck in a 40 to 50-hour/week job, paying off your mortgage doesn't necessarily give you more immediate freedom. You still have to work 40 or 50 hours per week until FIRE. Not so if you're self-employed.

Even though I don't work 40 hours per week at my business/job/profession, I still like doing it. Mostly. I like it enough that I'm not super eager to FIRE from it like most people with "real jobs" would be. Right now, I'm pulling 30 hours per week, and it feels like way too much. After I pay off my mortgage, I can tone things down a bit and work fewer hours. More time for family. More time for hiking. More time for music, cycling, cooking...

I'm possibly the laziest entrepreneur you've ever met.
« Last Edit: July 17, 2017, 06:51:21 PM by El_Viajero »

CargoBiker

  • Bristles
  • ***
  • Posts: 301
    • Urban Tribe Cargo Bicycles
Re: Any Full-Time Business Owners?
« Reply #21 on: July 17, 2017, 10:20:20 PM »
I'm possibly the laziest entrepreneur you've ever met.

Nah, you're not lazy, you've just got your priorities straight.

You know what you want in life, and you've got it.

I could work 70-80 hours a week, and crush it.... and also destroy my family in the process.  Not worth it to me.
Owner - Urban Tribe Cargo Bicycles

🚲 The Bike for Urban Families 🚲

Kids in Front | Wooden Cargo Box with 2 Benches | Electric Assist Motor | 3 Wheels

Rediscover Your City Join the Tribe

www.urbantribecargobicycles.com

FIREby35

  • Bristles
  • ***
  • Posts: 367
Re: Any Full-Time Business Owners?
« Reply #22 on: July 18, 2017, 07:12:59 AM »
I actually agree there is no honor in working more and more hours. I have been setting up my business so I can work less and less and  so it will continue to function and be profitable without me.  The freedom I gain in time allows me to see how "busy" other people are and how proud they are of being "busy." It seems they are only "working" if they are "busy" and, for some, miserable.

Not me. I'm re-programming to let go of all that stuff and just enjoy working as little as possible. Even better - I'm making money while others work.