Author Topic: What Small Business to Start  (Read 5660 times)

jday

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What Small Business to Start
« on: November 01, 2014, 09:47:51 AM »
I am looking at a number of businesses to start. I was wondering if anyone had any experience starting a small business or had any suggestions on what kind of business to start. I would have about 10k in capital and could raise more, but I would like the business to be debt free from the start. Any ideas? Thanks!

trailrated

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Re: What Small Business to Start
« Reply #1 on: November 01, 2014, 09:50:50 AM »
What do you have experience in?

Goldielocks

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Re: What Small Business to Start
« Reply #2 on: November 01, 2014, 10:24:42 AM »
Whoa, usually you need a great idea for a business that matches your abilities and a market need where you are first.

Otherwise, you need to look into franchises or investing in another business where someone has done that work for you, or you throw away your money.

arebelspy

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Re: What Small Business to Start
« Reply #3 on: November 01, 2014, 10:52:03 AM »
The one that excites you.
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Spondulix

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Re: What Small Business to Start
« Reply #4 on: November 02, 2014, 01:40:16 AM »
Is this a side company or going to be your only job? Do you have any experience running a business? (I'm having trouble gauging if you're asking because you're inexperienced, or just looking for ideas)

What I would do (if you're new to owning a business), go take some business classes at your local community college (or find a reputable online college). Find a class in entrepreneurship, give yourself $500 to start a business tomorrow (no joke), and put the rest in some sort of savings, not to be touched by your business again.

Why I say that is because it's much more rewarding (and less risky) to start a business from the ground up - find a way to make that $500 turn into $10k. Even if your idea is a restaurant, you're smarter to cater friends parties on nights and weekends to learn what works and what doesn't, and build a client base (vs throwing all your equity into an establishment that could go to 0). If you have a product idea, sell them online out of your garage and make them yourself until you have the money to have someone else do it. Learn how the system works; don't try to buy your way into it.

Personally, my rule has been to never spend money until I have a job/order to pay for it. If people want it, they will pay for it - don't ever think of it the other way around ("if I have it, they will pay for it"). If you're just looking for profit, go be an investor (which is a form of business owner). There's a big difference between having equity in a company and running a company, though.
« Last Edit: November 02, 2014, 01:42:26 AM by act01 »

Johnez

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Re: What Small Business to Start
« Reply #5 on: November 02, 2014, 04:20:56 AM »
What is your education?
What is your skill set?
What are your interests?
What are your hobbies?
What are you curious about?
What ideas do you have?
What is terrible, too expensive, or hard for you to find?
What would make your life/other's lives easier?
What inefficiency exists in your life/other's lives?

These questions should set you up for a bit soul searching. 

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I myself would set up shop as a furniture builder.  Not any furniture builder, but a builder of sofas-hand crafted and one at a time.  I built and sold sofas for seven years and know a thing or two about the process, I know where the inefficiencies lie and what my company would do differently from competition.  Sofas are too damn boring.  But mine won't be.  I know the tricks, I know where I can be cheap and I know where it pays to invest in quality.  I won't build tables or chairs or television stands-only sofas.  Really bitchen sofas.  But that's just me.

« Last Edit: November 02, 2014, 04:22:48 AM by Johnez »

Boz86

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Re: What Small Business to Start
« Reply #6 on: November 02, 2014, 06:06:12 AM »
Based on personal experience, I'd stay away from franchises. I'd only change that if you could see a number of tax returns submitted to the IRS by franchisees. That would give you a good idea of what they're earning.

jday

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Re: What Small Business to Start
« Reply #7 on: November 02, 2014, 02:57:42 PM »
I have business experience. I have my MBA. I used to run a painting contracting business. I've helped other people run their businesses. I am just looking for ideas. It definitely comes down to needs in the marketplace. I was hoping this question would prompt someone to say, "I wish someone would produce XYZ product or service." Just kind of testing the wants and needs of this forum group.

Johnez, I really hope you do your furniture business. Would you do it online or just locally? I was in IKEA the other day and they have some really cool stuff, including the ability to pick your fabric. Could you compete against them or do something more unique that wouldn't be an actual competition? Would your price point be at the high end of the market?

Future Lazy

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Re: What Small Business to Start
« Reply #8 on: November 02, 2014, 03:23:52 PM »
... I was hoping this question would prompt someone to say, "I wish someone would produce XYZ product or service." Just kind of testing the wants and needs of this forum group.
...

Well, when you put it that way... A lot of us are writers or bloggers, and a lot of us come on here looking for support or advice on our frugal struggles. It might be an interesting notion to piggyback on that. My thought would be to set up a search engine that crawls only mustachian blogs or websites, as well as reliable investment websites etc (whatever you chose to add). That database could then be used by us to find information about what we're looking for - not only on MMM's blog, but also on the whole community's blogroll. You could include a rating system, where each person could rate articles according to their helpfulness, which would improve the search results. For example: Choose to view most relevant articles vs. highest rated articles related to your search query.

Of course, I don't know if that sort of thing would be within your realm of doability. I also don't know how it would best be monetized. I just think it would serve the community well!

PS. If anyone chooses to take off with that bit of braincrack and make it into a project, let me know! I'd be very curious to see how it goes. :)

Spondulix

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Re: What Small Business to Start
« Reply #9 on: November 02, 2014, 09:02:53 PM »
Whew ok, that makes a lot more sense! Here's a couple ideas...

1. To piggyback off of what Kayla said, I think there's a lot of people who are smart with their money, budget and save, and never get ahead. I have been devouring finance sites, books, etc for about a year and finding no sort of financial service that integrates long term financial planning with day to day decisions in a meaningful way - Mint gets into it with goals and investing, but it's very basic and not personalized (meaning, related to everything else going on in your life). So I think a service that could offer financial planning in a new way would be amazing. What I do see in the market: I pay an accountant, but he doesn't know these answers (beyond tax law, limits, etc). I was offered a "financial analysis" from a Northwest Mutual agent, but at the end of the day, I know they want to sell life insurance and their own brokerages.

Another thing is that it seems to be getting into the mainstream to take money out of managed retirement accounts (aka working with financial advisers) because of the fees. Services like Betterment seem to be doing well. I think there's a huge opportunity with people who are jumping ship from their large investment firms but not sure what to do next.

2. Another area that I'm seeing quickly growing but not quite meeting my needs (as a small business owner) is online accounting. I'm sure there's a lot of people like me who are sole proprietors and make a living without a store, employees, etc (think Uber driver or Air BnB), or who have online businesses that don't need to grow (someone who sells on Etsy). There's a huge shift to people wanting to work for themselves (especially with the cost of college and debt rising).

There's software like Quicken for small business, but that's way too expensive and involved for what that crowd needs. There's free invoicing like Wave, but that doesn't provide much. I was using Paymo, which does invoicing and time tracking, but their $5/month plan only allows for ONE invoice a month! I've been looking for another alternative, and the only options I see are free and $10-12/month. So there might be an interesting opportunity there to build an easy online service that can help micro-business owners with very basic low-cost business needs, and also offer advice to help make a business run more professionally.

Future Lazy

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Re: What Small Business to Start
« Reply #10 on: November 03, 2014, 08:11:57 AM »
+1 on both of Act01's suggestions. Especially with the first, referencing:

... I think there's a lot of people who are smart with their money, budget and save, and never get ahead. I have been devouring finance sites, books, etc for about a year and finding no sort of financial service that integrates long term financial planning with day to day decisions in a meaningful way - Mint gets into it with goals and investing, but it's very basic and not personalized (meaning, related to everything else going on in your life). So I think a service that could offer financial planning in a new way would be amazing...

I find this very true. Not only having someone to help me decide where to put my money - which I can pretty much do on my own - but having something out there to support financial goals that move a person closer to wealth, like in assisting with job hunting via resume/interview services or professional training, or breaking into a new field, or assisting with taking on rental properties, etc. Support for individuals looking for upper mobility whom may be thinking FRUGAL, when they're already as frugal as they can be, and they should be thinking CAREER MOVE or START UP BUSINESS.

Bikeguy

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Re: What Small Business to Start
« Reply #11 on: November 03, 2014, 08:43:09 AM »
Replacing broken Ipad Iphone screens in a college town.

FarmerPete

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Re: What Small Business to Start
« Reply #12 on: November 03, 2014, 02:53:10 PM »
I work in the IT world for State Gov't.  I've tried to do computer repair on the side.  My problem is that I'm just too honest and nice.  I don't charge enough.  I've always just looked at it as "spending money" so my hourly rate isn't as important as it should be.  It's a fine job, but my problem is it's way to erratic and inconsistent.  I've got some weeks where I have 3-4 people wanting my services at once, and then I'll go a month between calls.  I really want a side job where I can set my own schedule.  Where I can make money based on how much time I want to dedicate to it.  I've thought about programming, but it's been a long time since I've taken any programming classes.  The only "programming" I've had to do in the last 5 years was doing some VBScript programming.  I'm certainly open to suggestions as well for side stuff.

Bob W

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Re: What Small Business to Start
« Reply #13 on: November 03, 2014, 02:59:58 PM »
Final Need insurance sales.  Look up the info on google.  You can be up and running with about  2 -4 K for mailers and probably net around 200K the first year for a hard worker.   


jday

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Re: What Small Business to Start
« Reply #14 on: November 03, 2014, 05:21:55 PM »
@ Kayla and Act -

Can we keep running with that idea cause I really like it and have thought about going that direction. What you are describing sounds more or less like a life coach for frugal people. Please correct me if Im headed in the wrong direction with that idea.

I can certainly assist someone in all those areas.

1. Online Accounting (Perhaps teaching accounting because it may be too expensive for a frugal small business owner to pay for a monthly service.)
2. I have held over 25 different jobs exploring a variety of industries. I can certainly help anyone makeover their resume and prep them for an interview. Also help them break into a new field.
3. As far as rental properties go the only person who can assist and actually do property management is a licensed real estate agent. I am currently going for my license, but that is a state by state thing and its hard to add value over the internet on what is already out there. I can always guide people to the appropriate info.
4. Having started my own business I can certainly advise anyone who is either trying to start their own or run their current one more successfully.

Am I on the right track? What other services could I potentially provide? What would you pay for this service?

@Act01 - Could you possibly go into more detail about this statement? " integrates long term financial planning with day to day decisions in a meaningful way" thanks!

Spondulix

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Re: What Small Business to Start
« Reply #15 on: November 03, 2014, 08:22:36 PM »
Hope you don't mind a long response... I think you're onto something with "business coach", "financial coach", etc. I'll bet you could easily start looking for clients and try out a lot of these services given your background/credentials, then just see what holds your interest, what is lucrative, people are willing to pay for, etc.

"1. Online Accounting (Perhaps teaching accounting because it may be too expensive for a frugal small business owner to pay for a monthly service.)"
Absolutely, teaching accounting/business basics for those who can't afford monthly or have time for a class/degree. Given you have an MBA, you could offer a service where you help advise business owners with how to cut costs, waste, ideas to find clients, organize time, etc. FarmerPete brings up a GREAT point about not knowing what to charge, or feeling guilty about charging for time, so having someone who could tutor/advise would have been amazing when I first started. I would have loved a business analysis (like a P&L statement, and some suggestions about how to improve).  If you're brave, you could say "no cost if I can't find anything to improve." I'm sure there's a lot of people who have questions about basics - how to separate personal from business accounting, best way to keep track for taxes, what is deductible, etc. If my accountant had offered a side service like this, I would have jumped on it, although the first couple years my business wasn't very lucrative - I was probably making $25/hr for my contractor services, and income under $10k (in addition to having another job). So even $100 might have been a lot of money for my business back then. I started taking business classes around then, which were probably $200-300 each (total of tuition and books).

If you're open to teaching classes, you could do workshops or clinics (my bank has how-to presentations on the weekend sometimes - how to buy a house, etc. The local community college has one-day classes on various topics by non-professors). That could be a great way to gain clients.

"2. I have held over 25 different jobs exploring a variety of industries. I can certainly help anyone makeover their resume and prep them for an interview. Also help them break into a new field."
I think it was on this category of the forum, but recently there was a homeless man who was asking for resume help and how to better present himself in an interview. His questions and mindset were interesting to me. I imagine there are a lot of people who need these kinds of services, i.e., practice interviews, resume assistance, etc. That could also include career counseling, goal setting (how to get from where you are into the job you want). Maybe it's figuring out how to manage time/budget to go to school while working, or deciding if it's financially worth moving closer to your job.

"@Act01 - Could you possibly go into more detail about this statement? " integrates long term financial planning with day to day decisions in a meaningful way" thanks!"
I think you summed it up with "financial coach". Mint can help me calculate, "my student loans will be paid off xx months early if I pay xx extra." But I can't seem to figure out whether it's better to put $100/month towards that, put it all in savings and pay off the loan in cash in 10 years, or do nothing. What combination will give me the most money in 10 years? That's where this forum has been amazing. I'd definitely pay someone local for that kind of service - maybe a couple times a year having an hour conversation where someone else looks at my numbers or tax return and says, "you could gain a lot here by making this small adjustment." Or someone who could end the ongoing discussion with my husband, "Will we see a return on our money if we replace our roof now?" There was another thread recently (a case study) of a guy who was helping an older couple he knew with their financial situation, sorting out these types questions, like which car loan to pay first, or should they refinance their mortgage? Who knows if the couple will take the advice, but it's a lot easier to make those decisions when you have real numbers in front of you.

There's a great book I read called "Seven Stages of Money Maturity", which pretty much sums up what I'd love to have (I think the author calls himself a financial planner). He used to be an accountant, but said there was only so much he could do seeing his clients once a year (and not being able to dig much past what he needed to know for taxes). He works with his clients now to help establish goals, figure out the steps to get there, and then help get past hurdles relating to their relationship with money. The advantage of that kind of work is that you are probably going to find clients who are motivated, good earners, etc. That book and "Millionaire Next Door" had a huge impact on my thinking about money, and seeing a new light at the end of the tunnel other than debt (all I saw was an endless money pit - 30 years to pay off my house and student loans - not that I could feasibly retire at 45 without making a lot of life changes).

One thing to note, also - I think there's something to be said of offering services on a sliding scale. I remember when I was 24 or 25 and earning $25k a year, and going into a financial advisor's office with a $400 check from a 401k to rollover. I remember feeling like I was probably such a fly on the wall compared to the money he was dealing with, but he treated me with the same level of respect and seriousness that I'm sure he did with his high end clients. Had he not retired, I would have seriously considered keeping some of my money with him (even with the fees) because of the relationship and trust level we had built. So, the real success of this type of business may come from building one-on-one relationships, finding the right people who actually want assistance (not in denial or looking for a quick fix), and growing with them.

arebelspy

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Re: What Small Business to Start
« Reply #16 on: November 03, 2014, 08:28:41 PM »
IMO, it's much better to start a business where you aren't the product.

Have others do the work - you create and manage.
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
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Spondulix

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Re: What Small Business to Start
« Reply #17 on: November 03, 2014, 08:37:51 PM »
Yeah, it's a matter of interest and how large one wants to grow it. If you don't want to be the product, you could just be the matchmaker - like a one-stop shop resource.  As a real estate agent, you understand the process of buying, getting a home loan, refinancing, etc. So if someone came to you for help, you could say, "your taxes are getting beyond what you can handle (or your time is worth), so I recommend seeing an accountant - ABC Accountant who will give you a discount for working with me." Or, "You clearly need to refinance. You're not good with computers? Talk to XYZ lender who I have a relationship with." It could be worthwhile to everyone to come at this with a financial team (so they recommend you, too). You wouldn't just be providing analysis and guidance, but phone numbers and a to-do list for a plan of action.

resy

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Re: What Small Business to Start
« Reply #18 on: November 03, 2014, 08:58:16 PM »
What is your education?
What is your skill set?
What are your interests?
What are your hobbies?
What are you curious about?
What ideas do you have?
What is terrible, too expensive, or hard for you to find?
What would make your life/other's lives easier?
What inefficiency exists in your life/other's lives?

These questions should set you up for a bit soul searching. 

***

I myself would set up shop as a furniture builder.  Not any furniture builder, but a builder of sofas-hand crafted and one at a time.  I built and sold sofas for seven years and know a thing or two about the process, I know where the inefficiencies lie and what my company would do differently from competition.  Sofas are too damn boring.  But mine won't be.  I know the tricks, I know where I can be cheap and I know where it pays to invest in quality.  I won't build tables or chairs or television stands-only sofas.  Really bitchen sofas.  But that's just me.
can I buy one of your sofas? I have terrible luck picking out sofas lol

jday

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Re: What Small Business to Start
« Reply #19 on: November 03, 2014, 09:04:28 PM »
Thank you Act01 I appreciate all the feedback.

Im definitely with arebelspy, that its better to create a product then be the product in your business.

With that in mind I would probably lean toward creating a course, the on ramp for new small business owners.

The one stop shop is an appealing idea but it would require me to be in a local economy (also looking for location independence), and it never seems to work in the long run. You need to specialize.

On that note, I think I would like to provide online marketing for small businesses. Help with building a website, getting an email list going, managing social media accounts, writing copy, etc.