Author Topic: Anyone own a business/ self employed?  (Read 3007 times)

Alchemisst

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Anyone own a business/ self employed?
« on: April 12, 2019, 11:55:24 PM »
How did you get started? Did you have experience in the field before you started the business? Would you recommend being a business owner to others?

Bloop Bloop

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Re: Anyone own a business/ self employed?
« Reply #1 on: April 13, 2019, 12:46:02 AM »
I do. I used to be an employee. Figured (correctly) that I could earn a lot more by doing the same thing, but independently. So now I do that.

Unlike many people who go self-employed, I didn't hate my job. I liked it just fine. Literally the only reason I became self-employed is because I wanted to earn more. My manager, co-workers etc previously were lovely.

Things I've learned:

1. When you don't have sick days any more, suddenly you're very unlikely to call in sick.

2. The vast majority of employees never work as hard as those who are self-employed. When 100% of profit goes to yourself, you have so much more motivation to succeed.

3. There is one thing worse than having no customers/clients: having shitty ones. There are some people who will actually cost you money to service. Avoid them. You will not know how to avoid them till you've been burned a few times.

4. The great thing abut being independent is that there are no meetings, OH&S regulations, or codes of conduct - other than being a decent businessman/woman and an approachable human being.

In summary, I now work about twice as hard I used to, for 1.7x the pay (gross). I'm hoping this equation improves over time. I feel like the ceiling is so much higher when you're self-employed.

skip207

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Re: Anyone own a business/ self employed?
« Reply #2 on: April 13, 2019, 02:40:57 AM »
Employee for 10 years.  Had enough, bored etc.  Wanted to run my own business.  Tried a couple of ideas over a year neither went well.  Decided the best route was to buy an existing business in retail.  Almost 15 years later now and I am still running it and it does still turn a profit.  As above very, very hard work very long hours.  Employees are a nightmare, customers the same.  Government and taxes PITA.  Costs are climbing the last few years whilst customers want everything cheaper and cheaper and expect you to be open all hours with no consideration for the staff or owners.

Looking back I would not do it again.  PAYE was easy, so easy.  At the end of the month the salary comes in and thats it... and all you want off me for that is 40 hours of my time.  If I could go back 15 years I would give myself a hard slap in the face.

Metalcat

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Re: Anyone own a business/ self employed?
« Reply #3 on: April 13, 2019, 04:50:05 AM »
I'm self employed, but I work as a contractor.
I've gone out of my way to avoid any semblance of traditional business ownership. Too much hassle for me.

Technically, I *am* a business, but I have no employees, no physical space to maintain, and very low overhead, ~7-8%.
I do essentially 3 different jobs with 2 different businesses.

For 2 jobs, I work with one business and profit share with the owner. The two of us run the business collaboratively but I have no capital tied up. I have 2 distinctly different roles that I occupy.

For the 3rd, I'm a consultant, but only have one exclusive client. By contract, I cannot consult for anyone else.
With both businesses I work autonomously and largely independently. I set my own hours and my own goals.

I work with A LOT of successful small business owners as part of my work and some of them love it but most of them don't. Most of them are stressed out of their minds even though their business is doing well.
However, that's just one industry.

You CANNOT make generalizations about business ownership because there are endless types of businesses. Owning a small web design business is nothing like owning a large restaurant is nothing like owning PR firm, is nothing like owning a dog breeding business.

The only thing I can generalize is that most employees I know would be terrible business owners. If as an employee you generally see the solving of problems to be the responsibility of the person whose job it is to solve those problems...then yeah...you probably won't enjoy owning a business.

If, however, you are one of those employees who sees every single problem as something that they can try and solve in a creative way that will overall improve the business and it's frustrating that management often gets in your way. Then yeah, you will likely be able to adapt to the endless and insane demands of ownership where literally every single problem is YOUR PROBLEM.

CoffeeAndDonuts

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Re: Anyone own a business/ self employed?
« Reply #4 on: April 13, 2019, 04:57:29 AM »
I was the first employee of a business. Eventually granted 7% and then we just kept buying out partners via profits for the next 15 years until I owned 50%. Year after year after year of effectively no distributions. Just plowing profit into the business (a small specialty it consulting company) and buying out partners. And, adjusted for inflation, basically a fixed salary for 15 years.

15 years of prime earning years for anyone but moreso in it.

When we sold at the end of 2018, I got a big raise from the new company and the equivalent of about 1.5y earnings from my new salary as equity in their much more liquid company.

It was most definitely not a windfall.

It'd probably be fair to say that I was stubbornly foolish to stick with it from a financial view point. I liked my partners, customers, and employees. I didn't want to leave them hanging. I was too easy going. Probably a poor business person on several levels.

Having my son changed things. I had better things to do than delusionally tell myself that this next business cycle would be different and we'd have a breakout. My partner and mentor, who I regard as family, and I found a way out that protected everyone at a cost of well less than maximizing our personal return.

I sound jaded. I kind of am.

But it was great! Til it wasnt. My best suggestion is to be patient but get out when you need to.

One interesting interplay is with frugality. In my experience, you should already be frugal before opening a business and the business will reinforce that. When your income is variable, having a low cost of living is huge. And then, when you have a good year, holding on to that low cost of living means really high savings rates.

Personally I developed a ton. I'm not just an it geek anymore. Ive done just about every role in our company (except actual bookkeeping). It would be hard to develop all those skills without having run a business. It's now part of who I am.

My wife left a professional career and started her own consulting business. The goal of that was just more time control. I believe my experience at a larger scale has helped that meet realistic expectations. We could grow it but don't want to.

In short...
* Consider that you really want out of starting a business.
* Start from a frugal footing.
* Be patient.
* Avoid overhead, especially employees, until you can't wait any longer.
* Dont wait too long to leave.
* Test it as a side hustle if you can at all.
* choose partners very carefully. You want them to have different skills but similar values, goals, risk tolerances. Avoid 50/50 ownership structures. Develop exit plans in advance.
* Be prepared to work harder for less per hour.
* Take pride in the skills you're developing and what you're building.
* Be very humble. And prepared to eat humble pie like it's a contest you intend to win.
* Diversify your assets so that if it crashes, you survive. My first requirement during employment negotiation was that I got to pick and set up the retirement plan. Only in hindsight do I realize how odd that probably sounded coming from a 20yo during my interview.

Hope this helps and good luck regardless of what you do!

CoffeeAndDonuts

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Re: Anyone own a business/ self employed?
« Reply #5 on: April 13, 2019, 05:03:29 AM »
You CANNOT make generalizations about business ownership because there are endless types of businesses. Owning a small web design business is nothing like owning a large restaurant is nothing like owning PR firm, is nothing like owning a dog breeding business.

The only thing I can generalize is that most employees I know would be terrible business owners. If as an employee you generally see the solving of problems to be the responsibility of the person whose job it is to solve those problems...then yeah...you probably won't enjoy owning a business.

If, however, you are one of those employees who sees every single problem as something that they can try and solve in a creative way that will overall improve the business and it's frustrating that management often gets in your way. Then yeah, you will likely be able to adapt to the endless and insane demands of ownership where literally every single problem is YOUR PROBLEM.

This is some great insight. As we're the prior posters comments.

BTDretire

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Re: Anyone own a business/ self employed?
« Reply #6 on: April 13, 2019, 06:26:07 AM »
 My wife and I were self employed for 18 years.
I would not do well self employed, my wife does extremely well.
I don't have the self drive or vision to see what needs to be done
next, or tomorrow or what needs to be done now to be prepared for next month.
My wife is constantly thinking about what's next and has the energy and drive to do it.
 Am I glad we were self employed? Yes, but I could not have done it myself.
  We had a mom and pop niche retail business that took the two of us 100 to 110
hours a week between the two of us. It probably averaged 1-1/2 hours of real work a
day, but the other 9 hours were easy.
 Not to sell myself too short I was an important part of the business doing things she
could not have done on her own.

yakamashii

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Re: Anyone own a business/ self employed?
« Reply #7 on: April 13, 2019, 07:09:02 AM »
I'm a translator. I work with several translation agencies. They do the sales, marketing, project management, editing, proofreading and client-facing. I do the translation. It's a sweet gig.

I had no experience before I started. One day, I decided I wanted to be a translator (I'd studied Japanese in school for three years and in life for five at that point). I contacted a bunch of agencies, and some of them came back with work. In a few months, I was making almost as much translating on nights and weekends as I was at my day job. I quit the day job soon after.

The freedom is the best part of the job. Agencies contact me with projects, and I accept or decline based on the pay and deadline. As long as I get the work done by the deadline, nobody bothers me. I'm free to do the work when and how I want to. If you want that kind of freedom (and responsibility) and your line of business allows that kind of self-employment, then yes, I totally recommend it.

Chuck Ditallin

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Re: Anyone own a business/ self employed?
« Reply #8 on: April 13, 2019, 07:14:33 AM »
I became progressively more fed up with the practice owner, so put my money where my mouth was and became self-employed.

I earned as much as I would have done working for someone else (for 20 years) but was then able to sell and clear a 7-figure profit. That was my retirement sorted (and the UK taxes business sales at 10%, so it was a big tax saving).

Of course, investing that much at once when the markets were high was slightly intimidating, but I managed it...

OtherJen

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Re: Anyone own a business/ self employed?
« Reply #9 on: April 13, 2019, 07:16:39 AM »
I'm a translator. I work with several translation agencies. They do the sales, marketing, project management, editing, proofreading and client-facing. I do the translation. It's a sweet gig.

I had no experience before I started. One day, I decided I wanted to be a translator (I'd studied Japanese in school for three years and in life for five at that point). I contacted a bunch of agencies, and some of them came back with work. In a few months, I was making almost as much translating on nights and weekends as I was at my day job. I quit the day job soon after.

The freedom is the best part of the job. Agencies contact me with projects, and I accept or decline based on the pay and deadline. As long as I get the work done by the deadline, nobody bothers me. I'm free to do the work when and how I want to. If you want that kind of freedom (and responsibility) and your line of business allows that kind of self-employment, then yes, I totally recommend it.

I’m a specialized freelance editor and probably work with some of the same companies! I love it for all the same reasons.

Smokystache

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Re: Anyone own a business/ self employed?
« Reply #10 on: April 13, 2019, 12:50:31 PM »
...
In short...
* Consider that you really want out of starting a business.
* Start from a frugal footing.
* Be patient.
* Avoid overhead, especially employees, until you can't wait any longer.
* Dont wait too long to leave.
* Test it as a side hustle if you can at all.
* choose partners very carefully. You want them to have different skills but similar values, goals, risk tolerances. Avoid 50/50 ownership structures. Develop exit plans in advance.
* Be prepared to work harder for less per hour.
* Take pride in the skills you're developing and what you're building.
* Be very humble. And prepared to eat humble pie like it's a contest you intend to win.
* Diversify your assets so that if it crashes, you survive. My first requirement during employment negotiation was that I got to pick and set up the retirement plan. Only in hindsight do I realize how odd that probably sounded coming from a 20yo during my interview.

Hope this helps and good luck regardless of what you do!

IMHO, read C&D's list over and over and over.

If you want to see some of the ideas in a longer book form, then read "Company of One" by Paul Jarvis. It is a nice counterpoint to a lot of entrepreneur books out there that unquestioningly preach growth, grow-your-team, get outside funding, etc. etc. Much, much better to stay small, keep it simple, run it cheap, etc.

Good luck!

MaaS

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Re: Anyone own a business/ self employed?
« Reply #11 on: April 13, 2019, 04:13:48 PM »
I do. I used to be an employee. Figured (correctly) that I could earn a lot more by doing the same thing, but independently. So now I do that.

Unlike many people who go self-employed, I didn't hate my job. I liked it just fine. Literally the only reason I became self-employed is because I wanted to earn more. My manager, co-workers etc previously were lovely.

Things I've learned:

1. When you don't have sick days any more, suddenly you're very unlikely to call in sick.

2. The vast majority of employees never work as hard as those who are self-employed. When 100% of profit goes to yourself, you have so much more motivation to succeed.

3. There is one thing worse than having no customers/clients: having shitty ones. There are some people who will actually cost you money to service. Avoid them. You will not know how to avoid them till you've been burned a few times.

4. The great thing abut being independent is that there are no meetings, OH&S regulations, or codes of conduct - other than being a decent businessman/woman and an approachable human being.

In summary, I now work about twice as hard I used to, for 1.7x the pay (gross). I'm hoping this equation improves over time. I feel like the ceiling is so much higher when you're self-employed.

This is my story and thoughts exactly. Great post.

Additionally, a big difference between doing task A for a company and doing task A being self-employed:

When working as a salaried employee, you generally don't have a good feel for the amount of time it takes to not only complete a task, but make it successful. Think rounds of iterations and learning from trial and error.

When you're doing the same thing being self-employed, you typically don't get the same leash. Not only do you need to understand how long something will take, you need to be able to show results quickly.

Seems obvious, but I didn't truly grasp this until I made the leap.

SwordGuy

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Re: Anyone own a business/ self employed?
« Reply #12 on: April 13, 2019, 07:28:49 PM »
My tag line has a link to the various entrepreneurial ventures I've had over the decades.   Hopefully you'll find it useful and entertaining.

BMP2CPM@gmail.com

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Re: Anyone own a business/ self employed?
« Reply #13 on: April 21, 2019, 07:51:21 AM »
Two years ago, I started a medical writing company of one as a pass through S-Corp. I had been a medical writer for about 15 years as an employee before that. I have a client that gives me 40 hours a week contract, which can potentially last for years.

I worked with my tax attorney/accountant who set it all up.

Benefits are many for me. 1) only work 40 hours a week, no weekends, no nights. 2) Lowest taxes possible 3) Get to expense so many things, like MacBook Air, iPhone, Website, Business email account, Payroll, Windows, LucidChart, Office, professions license fees, continuing education fees, professional meetings, Wall Street Journal, nice pens, standing desk, ergonomic chair, and nice notebooks. If Staples sells it, I can buy anything on a whim, and feel confident I could defend any audit 4) I can mimic many employee benefits, such as paid days off, retirement plan, and annual bonus 5) Can use my newly found spare time to work on fun business projects, which might let me retire in 5 years if it’s successful.

Disadvantages: 1) probably career suicide, but I can be a contractor until I hit 65 in a high paying, low stress job. So I don’t care. 2) Half my revenue stays in my business account and I can only touch my profits once a year or sometimes longer than a year. 3) Low amount 
personal checking account and high amount business checking account. So, personally poor and business rich. But YNAB takes care of that and I can even expense YNAB.

So far, happy with my one-man business. But a smart lawyer and accountant are essential. Even in the millionaire next store they say don’t skimp on that.

CharlesBronzee

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Re: Anyone own a business/ self employed?
« Reply #14 on: July 01, 2019, 05:58:23 PM »
Realtor here.  I worked in sales in the high-tech industry for 20 years.  Had some great years (dot com years) and so-so years.  Laid off a couple of times and found it took me longer to find my next job each time, and next job wasn’t as good as the previous one.  Never was good at playing the corporate game.  I’ve always wanted to have my own business from the time I was a kid.  Tried a couple of times and failed.  Got into real estate in 2011.  Wife has a good paying job so I had luxury of not needing to make a lot of money right away.  Netted mid-five figures the first seven years.  Broke $100k net last year, should be the same this year.

I love being self-employed.  I love the autonomy.  I love being able to choose my clients. I love being able to control my time.  It almost feels like I’m cheating sometimes.  :)

I read somewhere that three things that give us happiness are mastery (in our chosen vocation), autonomy and a sense of purpose.  Being a realtor gives me the first two. 

BuddyXL

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Re: Anyone own a business/ self employed?
« Reply #15 on: July 01, 2019, 07:27:42 PM »
I was self-employed for approximately 15 years early on in my career.  The autonomy was great.

BUT, I was not disciplined enough to save enough or do anything to plan for retirement so am paying for it (regretting it) now.

So if you ever do want to be your own boss, don't forget to plan for the future!

EngagedToFIRE

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Re: Anyone own a business/ self employed?
« Reply #16 on: July 02, 2019, 07:12:00 AM »
I employ 35 people.  I started the business in my bedroom with the hopes of making a little bit extra to supplement my income at the time.  I would always recommend starting very small and don't be afraid to quit an idea that isn't working.  Continue trying different things.  And never throw a ton of money in to a business that you are starting from scratch.  Far too risky.  Unless super lucky, it takes a lot of trial and error to learn it.  A business is like any other professional skill set.  To do it and do it right, it takes practice and experience.  I failed for a long time, but at this point, I could rather easily start almost any business and make decent money.  Once you get it, you get it.

There is a big difference between being "self employed" and a "business owner."  A person who is self employed with no employees is essentially working a job.  Doctors, lawyers, realtors, programmers, etc. etc. etc.  These are totally different paths, so you need to figure out which path you are interested in.
« Last Edit: July 02, 2019, 07:14:00 AM by EngagedToFIRE »

calimom

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Re: Anyone own a business/ self employed?
« Reply #17 on: July 03, 2019, 10:25:23 PM »
I bought an existing business in 2008 from someone who was retiring/moving out of state. There was one part time employee and a nice portfolio of clients. The owner gave me favorable payment terms and I retired the loan ahead of time. Most of the clients are with me today, as is the original employee, and two more part timers were added as I tripled the business revenue. I'd had related experience but ramped up fast in a new industry, and found a couple of mentors and social media groups who cheerfully shared their expertise. I'm forever grateful to that and have done my best to pay it forward. A few years ago I was busted by my neighborhood association/HOA for running a growing home based business and moved into a location that I bought and now rent to myself.

As a single parent with a houseful of growing children, I've for the most part been able to work during school hours while still being able to attend activities, work as a classroom volunteer which has worked out supremely well for my family. In my area, no part time job would put up with that and pay what I get for running a pleasant business that I for the most part enjoy. I do feel fortunate. I outsource payroll and accounting because I'm terrified of a slip-up, and doing so allows me to do the things I'm best at, like sales and design.

Self employment/business ownership is not for everyone, but for some of us it works out really well. There will be a day when I wish to move on to something different, and I have a very saleable asset, plus a commercial real estate investment. No complaints here!

What type of business are you interested in, OP?

HBFIRE

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Re: Anyone own a business/ self employed?
« Reply #18 on: July 03, 2019, 11:31:10 PM »
I own a performance marketing business (google/FB/Bing arbitrage).  Started off as a media buyer for a mid sized advertising company which was the leader in a niche segment.  I don't even have a degree and didn't technically have media buying experience when I got the job, I just faked it til I made it.  I interview really well.  Was super lucky to have a "guru" mentor who taught me how to buy media -- he was an extremely successful affiliate marketer and made millions in his early 20's.  He's one of those internet business geniuses who dropped out of high school because an internet start up in silicon valley hired him and offered a big salary.  I didn't realize at the time how valuable that was.   Pretty soon I was running our media team but at the time not realizing how much I was leaving on the table by not doing my own thing.   

My business partner approached me about starting our own thing in 2013.  I kept my job for another year, but then the business demands were too much and I left my job (we were hitting revenue numbers that companies with 30+ people hit, and we are a 2 man operation).  Plus there was a conflict of interest.  My biz partner has the opposite skillset/personality as I do.  He is extroverted, great at sales, and amazing with people/building relationships/getting what we need out of them.  He's by far the craftiest salesperson I've ever met -- he's a natural and it doesn't ever seem like he's selling something.  His ability to get what he needs out of people is scary.  He doesnt mind all the networking and biz conference BS that I absolutely can't stand -- my introverted self wants no part of it.  My expertise is strategy and operations, and I brought all the technical skills.  What I brought to the table was the technical know-how of how to make our business profitable from day 1.  I had nothing to fund the business, so my biz partner gave us 50 K to get started.  It's been an extremely lucrative partnership and allowed me to achieve FI within a few years of starting the business (I had over 100 K of debt when I started the business).  Love this business as we have almost no overhead and both work from our laptops out of our houses.  Our CPA keeps telling us we need more expenses for tax deductions.

Having the right business partner (someone with a different skillset) improves the chances of success immensely.  On the other hand, I've heard horror stories of bad partnerships -- select wisely.  You need someone who you can trust more than your spouse and someone who brings complimentary skills/traits.  The biggest takeaway for me is how important it is to network/build relationships and surround yourself with successful people, you never know who you meet that will bring a big opportunity. 

Owning your own business is amazing, I highly recommend giving it a go especially when you're young and can take more risks.  There are absolutely ups and downs, but once you get a handle on things it's immensely rewarding to create your own income.  I have almost complete freedom with my time and work from a small laptop (I don't even use a desk), so I feel like I get the benefits of retirement but get to still have something that drives my interest to work on each day.  Chose to live close to the beach and I almost never drive anywhere.  I can travel and still be productive.  I can go to several bridge tournaments a year and still run my business.  As an introvert I don't have to work closely with anyone and that alone is amazing.  I no longer need the income but still find running my business very rewarding.
« Last Edit: July 04, 2019, 12:14:13 AM by HBFIRE »

soccerluvof4

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Re: Anyone own a business/ self employed?
« Reply #19 on: July 05, 2019, 03:00:53 AM »
I have started and owned several businesses over the years and found that once you become successful at one its pretty easy or more favorable that you will succeed at another. The key is simply having a service or product that you believe in and there is a need for and it can be something that is highly competitive. I always felt I just needed to be better than some of my 2,000+ competitors. Have good employees (that can be the hard part) , Lead by example and be most of all dependable , honest and trustworthy. I had up to 50 employees at any given time so you will need to learn to manage people and give up some control. If your a control freak you will not succeed. I got my start in my first business by becoming the leading sales person for a company I worked for and they simply tried to cut my territory so I left and promised I would never do that to my sales people but encouraged them to go make as much money as they could because that would trickle up to me but reward them well and dont worry if they make more money than you. I never was one to take to much risk and go into debt. I built the company from nothing in a duplex one piece of equipment  one employee at a time and as I could afford it. To me owning your own business is really the American dream and being able to own your own house and have the toys etc.. are just perks you can chose to have or not from the rewards of your hard work. I also thought it would be my legacy and in some ways people seem to recognize or remember me through my businesses but it just got tough and after 25+ years was time to walk away.