What's it like to own a business?
August 3, 2009 6:09 PM
What's it like to own a business?
Hi,
I have long been interested in owning and running my own business. I have never taken any steps towards doing so, but my financial situation is pretty good and I'm interested in exploring the idea. I'd like to read accounts of "normal" people who started their own business, purchased a business, or opened a franchise. Success stories, failures, whatever. Can you suggest books, websites, or anything else that would fit the bill?
Hi,
I have long been interested in owning and running my own business. I have never taken any steps towards doing so, but my financial situation is pretty good and I'm interested in exploring the idea. I'd like to read accounts of "normal" people who started their own business, purchased a business, or opened a franchise. Success stories, failures, whatever. Can you suggest books, websites, or anything else that would fit the bill?
Well, any thought or idea of time off or a personal life? Toss it out the window. You work 24/7, you close the shop at 6, 7, 8pm, and then go home and do the books, the advertising, the billing, if you do take the kids someplace for a couple of days you do so with your cell phone glued to your ear and your laptop sprouting from your fingers. And that's even assuming you can find employees who are reliable and honest, or at least who show up eventually and don't steal too awfully much.
Your pay depends on how well the business is doing and you have to make the shops bills before you can buy that new toy for the house, or that new sink for the house, or call that plumber for the house. Medical insurance? Wuff, good luck, but it doesn't matter because you won't have time to get sick.
Your kids will grow up in the cheapest, crappiest wal mart clothes because you can't afford anything else since every penny you have is put back into the business, but it's ok, you won't be around to see how upset they are by this because you'll never be home.
Anyone who thinks it would be cool to own their own business, has never owned their own business.
posted by legotech at 6:35 PM on August 3, 2009
Your pay depends on how well the business is doing and you have to make the shops bills before you can buy that new toy for the house, or that new sink for the house, or call that plumber for the house. Medical insurance? Wuff, good luck, but it doesn't matter because you won't have time to get sick.
Your kids will grow up in the cheapest, crappiest wal mart clothes because you can't afford anything else since every penny you have is put back into the business, but it's ok, you won't be around to see how upset they are by this because you'll never be home.
Anyone who thinks it would be cool to own their own business, has never owned their own business.
posted by legotech at 6:35 PM on August 3, 2009
My experience was a demonstration of Rumsfeld's unknown unknowns speech.
Running a business is IME an exercise of running headfirst into those unknown unknowns. . .
posted by @troy at 6:50 PM on August 3, 2009
Running a business is IME an exercise of running headfirst into those unknown unknowns. . .
posted by @troy at 6:50 PM on August 3, 2009
It really depends what kind of business. Bricks-and-mortar retail is an entirely different beast than, say, manufacturing a product or designing baby clothes or building a web app or doing online retail.
Can you narrow it down a bit for us?
posted by DarlingBri at 6:55 PM on August 3, 2009
Can you narrow it down a bit for us?
posted by DarlingBri at 6:55 PM on August 3, 2009
I agree with legotech. I suppose it depends on the kind of business. I owned an independent deli type restaurant for 10 years. After I sold it I never missed one minute of having that business. I never ever was through working, nonstop. The employees would steal you blind if you did not have controls built in. And if they did not want to work that day.. they didn't. No shows, no calls. I did love the interaction with the great customers. But the work was never done. Just far more work running the business than working in one.
posted by JayRwv at 6:55 PM on August 3, 2009
posted by JayRwv at 6:55 PM on August 3, 2009
Legotech, that's harsh! That often is the case, but, seriously, that doesn't happen to everyone. It depends on the type of business and how you run it. My father ran a business for years while I was growing up, and what you say was definitely not the case.
I know you aren't asking us for advice, you are asking for stories, but I'm throwing in my two cents worth anyway.
If you are going to start a business, don't do it on a whim, because you think it would be fun. Whatever else it is, it is miles of long, hard work. There are three types of new ventures - passion based, lifestyle based, and opportunity based.
Passion based means that your business is focusing on your passion - ergo, if you love baking, you open a bakery.
Lifestyle based means that your business will allow you to do something that you do anyway. Ergo, if you like skiing, you open a business teaching people to ski.
Opportunity based means that you see a problem in how something works and you come up with an idea to fix that problem. Ergo, if your clothes smell but you don't want to wash them, you create febreeze and sell it.
Obviously very loose definitions, but workable. Each has pros and cons - with the first two, its possible that you will grow to hate what you used to enjoy, because you end up spending all your time doing it. Or, you may grow to love them even more, or in a different way, because you are spending more time doing it and sharing with others. You see what I mean, I hope.
For some stories, check out SBA and Entrepreneur Magazine. You can also google buzzwords like entrepreneur and innovation, and look into people like Richard Branson YouTube can be a great source, as well. Check out Feed Granola and a BBQ Sauce Company. Just type in entrepreneur!
(I just graduated with a degree in entrepreneurship - so while I've yet to start my busienss, I have heard plenty of stories from people who have done it! So if you have any questions, memail me!)
I hope something in there helped, and good luck if you decide to pursue it.
posted by firei at 6:57 PM on August 3, 2009
I know you aren't asking us for advice, you are asking for stories, but I'm throwing in my two cents worth anyway.
If you are going to start a business, don't do it on a whim, because you think it would be fun. Whatever else it is, it is miles of long, hard work. There are three types of new ventures - passion based, lifestyle based, and opportunity based.
Passion based means that your business is focusing on your passion - ergo, if you love baking, you open a bakery.
Lifestyle based means that your business will allow you to do something that you do anyway. Ergo, if you like skiing, you open a business teaching people to ski.
Opportunity based means that you see a problem in how something works and you come up with an idea to fix that problem. Ergo, if your clothes smell but you don't want to wash them, you create febreeze and sell it.
Obviously very loose definitions, but workable. Each has pros and cons - with the first two, its possible that you will grow to hate what you used to enjoy, because you end up spending all your time doing it. Or, you may grow to love them even more, or in a different way, because you are spending more time doing it and sharing with others. You see what I mean, I hope.
For some stories, check out SBA and Entrepreneur Magazine. You can also google buzzwords like entrepreneur and innovation, and look into people like Richard Branson YouTube can be a great source, as well. Check out Feed Granola and a BBQ Sauce Company. Just type in entrepreneur!
(I just graduated with a degree in entrepreneurship - so while I've yet to start my busienss, I have heard plenty of stories from people who have done it! So if you have any questions, memail me!)
I hope something in there helped, and good luck if you decide to pursue it.
posted by firei at 6:57 PM on August 3, 2009
Ooh! I also recommend reading Tim Ferris's Four Hour Work Week. It's not strictly about owning a business, although that is part of it - but it's one of the best books I've read in a long, long time. Tim Ferris is a really interesting guy, and the book really changed my perspectives.
posted by firei at 7:02 PM on August 3, 2009
posted by firei at 7:02 PM on August 3, 2009
I think this is the article southof40 remembered. It's certainly stuck with me; I'm now careful not to hog a table with my laptop when I'm at a coffee shop I like.
posted by backupjesus at 7:08 PM on August 3, 2009
posted by backupjesus at 7:08 PM on August 3, 2009
I did this for awhile. Legotech has it: it takes over your life and you don't have any non-work time anymore. I also ended up paying myself about $2 an hour... if I actually counted all the "unofficial" work time and expenses.
Employees are an enormous pain in particular (see any AskMe for 1000 examples), both in terms of personality management and paperwork hassles, and even if you try to be the best boss in the universe, you'll still be Everyone's Asshole Boss at the end of it, because there's quite a "management vs employees" culture cultivated in some parts of the world. If it's a retail or service business (i.e. low qualifications), doubly so.
A lot of folks think it would be great to "be your own boss" and "answer to nobody". The thing they don't realize is every customer becomes your boss, and you're always answering for everything: there's nobody else to defer to. And you can't quit or ask for a raise.
With the exception of professional practices (legal, medical, accounting), I never recommend it for anyone. Stick to a nice easy 9-to-5 job because it ENDS at 5pm, and you get time left to have an actual life.
posted by rokusan at 7:15 PM on August 3, 2009
Employees are an enormous pain in particular (see any AskMe for 1000 examples), both in terms of personality management and paperwork hassles, and even if you try to be the best boss in the universe, you'll still be Everyone's Asshole Boss at the end of it, because there's quite a "management vs employees" culture cultivated in some parts of the world. If it's a retail or service business (i.e. low qualifications), doubly so.
A lot of folks think it would be great to "be your own boss" and "answer to nobody". The thing they don't realize is every customer becomes your boss, and you're always answering for everything: there's nobody else to defer to. And you can't quit or ask for a raise.
With the exception of professional practices (legal, medical, accounting), I never recommend it for anyone. Stick to a nice easy 9-to-5 job because it ENDS at 5pm, and you get time left to have an actual life.
posted by rokusan at 7:15 PM on August 3, 2009
Jeez, can anyone chime in and say it's a good thing? Or fun? Or that you CAN actually have some time of your own? Or that it IS in fact kind of liberating? Please? Pretty please?
(Chiming in because I'm about to buy an existing business, FWIW . . . )
posted by CommonSense at 7:24 PM on August 3, 2009
(Chiming in because I'm about to buy an existing business, FWIW . . . )
posted by CommonSense at 7:24 PM on August 3, 2009
Running your own business is all the things above, and it's fun. You get to decide what to do, what hours to spend on tasks, and what balance of time you set for work and for family.
Some businesses, like programming/consulting, you can do from anywhere, and you may in fact have more time for non-work activities, as you can completely cut out the busywork / pointless putting in hours at the desk required at some less-enlightened employers.
posted by zippy at 7:34 PM on August 3, 2009
Some businesses, like programming/consulting, you can do from anywhere, and you may in fact have more time for non-work activities, as you can completely cut out the busywork / pointless putting in hours at the desk required at some less-enlightened employers.
posted by zippy at 7:34 PM on August 3, 2009
It can't be fun, if you do work you like. You have to be extra good at time and budget management, and the most important thing:
Keep all your receipts for everything.
It will really pay to develop a rock-solid understanding of your state/country's tax laws and how they apply to you, and/or an accountant you would trust with the lives of your future children.
These two things, understanding + accountant, will save you immense headache/heartbreak down the road.
Also, if it's not the only source of income, it's tremendously liberating. Best of luck! Don't spend money you don't have. :)
posted by smoke at 8:08 PM on August 3, 2009
Keep all your receipts for everything.
It will really pay to develop a rock-solid understanding of your state/country's tax laws and how they apply to you, and/or an accountant you would trust with the lives of your future children.
These two things, understanding + accountant, will save you immense headache/heartbreak down the road.
Also, if it's not the only source of income, it's tremendously liberating. Best of luck! Don't spend money you don't have. :)
posted by smoke at 8:08 PM on August 3, 2009
@CommonSense, my father purchased an existing business about seven years ago. He worked pretty much nonstop the first couple years, reengineering it to his satisfaction and teaching himself how to do the books at night (he didn't trust anyone else to do it until he'd learned it himself inside and out). Utimately, however, it's done so well that he was able to pay it off three years ahead of schedule. He does put in very long days, but he and my stepmother take lots of long weekends at their cabin, take ski trips every winter, travel several times a year...they make it work.
I'm not sure he would call it "fun", per se, but I do know that, professionally, he's the happiest he's been in years. He's a terrible employee and finds it really liberating to finally be his own boss.
posted by anderjen at 8:11 PM on August 3, 2009
I'm not sure he would call it "fun", per se, but I do know that, professionally, he's the happiest he's been in years. He's a terrible employee and finds it really liberating to finally be his own boss.
posted by anderjen at 8:11 PM on August 3, 2009
It is a ride. I have always loved owning my own businesses. I can tell you it all boils down to the people you hire to help you along. You have to make them believe in what you, and they, are doing has some sort of purpose. It will always be a work in progress but you have to establish the long term goal. What do you want it to become and happen to it? In the beginning I think of them as babies in need of constant care. If you do things right they will grow and take care of themselves.
Just like everyone else you are an employee of the entity called "YOUR BUSINESS". Your wallet and the business' always needs to be separate entities. If the business owes you money you have to establish a clear path of how it is going to pay you back. Make your employees owners in some respect. No wants to work to make someone else rich. Be sure they understand this clearly and make damn sure they buy into this or otherwise you are done.
AND most importantly...
Make sure you are good at marketing. If you don't have this skill then you probably want to start looking at other options. You will live or die by your ability to sell and understand what is working, what is not and why.
I could go on and on about owning a business. Don't enter into this lightly, there is nothing worse then walking down a road that is sure to be a dead end. Good luck!
posted by bkeene12 at 8:22 PM on August 3, 2009
Just like everyone else you are an employee of the entity called "YOUR BUSINESS". Your wallet and the business' always needs to be separate entities. If the business owes you money you have to establish a clear path of how it is going to pay you back. Make your employees owners in some respect. No wants to work to make someone else rich. Be sure they understand this clearly and make damn sure they buy into this or otherwise you are done.
AND most importantly...
Make sure you are good at marketing. If you don't have this skill then you probably want to start looking at other options. You will live or die by your ability to sell and understand what is working, what is not and why.
I could go on and on about owning a business. Don't enter into this lightly, there is nothing worse then walking down a road that is sure to be a dead end. Good luck!
posted by bkeene12 at 8:22 PM on August 3, 2009
My parents owned a business (an art gallery) for about 15 years; my dad is an artist himself, and so he continued to paint daily while they owned the gallery as well.
It was definitely a 7-days-a-week, 52-weeks-a-year job; aside from illnesses, I don't think they had more than a half dozen weekends off together for the whole 15-year period. For holidays, for example, my sister and I either went to visit them, or one of them would come visit us; I can only recall a single time in the entire decade I've lived in California that they both came to visit at the same time -- given where they live (Santa Fe), holidays were actually a pretty high-business time of year for them, so at least one of them always had to be there to keep the doors open, you see. Yep, even on Christmas Eve and New Year's Day.
It's stressful just beyond the hours, too; as always said, you're only as good as your current month. By that she meant that you have to start from zero every month to make enough to meet your expenses and pay yourself on top of that. One great month can be followed by a bad month -- or six bad months, for that matter. And yet, you've got to make rent and payroll and advertising and utilities just to stay in business, come rain or shine.
Having said that, my mom in particular enjoyed running the business -- she found she had a bit of a natural flair for it (particularly for the sales and marketing side of things), in a way that she hadn't felt for any of the other professional ventures she'd tried before.Her identity kind of blossomed in a way. Now that they sold the biz and retired (though my dad still paints daily), she seems kind of at sixes and sevens in terms of what to do with herself.
The one thing I have to say my folks weren't very good at was hiring the best employees to help them out. They tended to hire people who turned out to be total flakes or total nutcases or some combination of the two, largely because they seemed to base their hiring decisions on whether they liked someone when they first met them, rather than on goofy things like experience and references. This caused a lot of trouble, a good portion of which I think could have been avoided if they'd been a little more rigorous about hiring. So a word to the wise on that score.
posted by scody at 8:30 PM on August 3, 2009
It was definitely a 7-days-a-week, 52-weeks-a-year job; aside from illnesses, I don't think they had more than a half dozen weekends off together for the whole 15-year period. For holidays, for example, my sister and I either went to visit them, or one of them would come visit us; I can only recall a single time in the entire decade I've lived in California that they both came to visit at the same time -- given where they live (Santa Fe), holidays were actually a pretty high-business time of year for them, so at least one of them always had to be there to keep the doors open, you see. Yep, even on Christmas Eve and New Year's Day.
It's stressful just beyond the hours, too; as always said, you're only as good as your current month. By that she meant that you have to start from zero every month to make enough to meet your expenses and pay yourself on top of that. One great month can be followed by a bad month -- or six bad months, for that matter. And yet, you've got to make rent and payroll and advertising and utilities just to stay in business, come rain or shine.
Having said that, my mom in particular enjoyed running the business -- she found she had a bit of a natural flair for it (particularly for the sales and marketing side of things), in a way that she hadn't felt for any of the other professional ventures she'd tried before.Her identity kind of blossomed in a way. Now that they sold the biz and retired (though my dad still paints daily), she seems kind of at sixes and sevens in terms of what to do with herself.
The one thing I have to say my folks weren't very good at was hiring the best employees to help them out. They tended to hire people who turned out to be total flakes or total nutcases or some combination of the two, largely because they seemed to base their hiring decisions on whether they liked someone when they first met them, rather than on goofy things like experience and references. This caused a lot of trouble, a good portion of which I think could have been avoided if they'd been a little more rigorous about hiring. So a word to the wise on that score.
posted by scody at 8:30 PM on August 3, 2009
Jeez, can anyone chime in and say it's a good thing? Or fun? Or that you CAN actually have some time of your own? Or that it IS in fact kind of liberating? Please? Pretty please?
When I worked in the steel industry, almost all the brokerages and service centers were owned by one guy and not by a conglomerate or huge entity. Of all the companies I worked for, it was the employees who stayed late and worried about shipments being late or a truck breaking down. I can't count how many times I was at the office at six or seven o'clock trying to find out why a truck hadn't delivered yet, and the customer was on the other line panicking because his production line was about to shut down without that steel. Meanwhile, the boss was at home enjoying his dinner or at his club or whatever. We'd keep him updated by phone, but that was the level of his involvement. (Why did we work so hard while he was off enjoying himself? In most cases, in small companies like that, solving a crisis usually meant a nice bonus in your paycheck.) The owner of the service center I worked for had a bit more to worry about than the brokerage owners, as he had a plant with expensive (and dangerous) machinery and unions and factory workers who are often a lot less dedicated to their job than some of the office staff. Nevertheless, that owner never worked weekends, he drove a Mercedes and he built himself a very nice vacation home up in northern Michigan.
posted by Oriole Adams at 8:31 PM on August 3, 2009
When I worked in the steel industry, almost all the brokerages and service centers were owned by one guy and not by a conglomerate or huge entity. Of all the companies I worked for, it was the employees who stayed late and worried about shipments being late or a truck breaking down. I can't count how many times I was at the office at six or seven o'clock trying to find out why a truck hadn't delivered yet, and the customer was on the other line panicking because his production line was about to shut down without that steel. Meanwhile, the boss was at home enjoying his dinner or at his club or whatever. We'd keep him updated by phone, but that was the level of his involvement. (Why did we work so hard while he was off enjoying himself? In most cases, in small companies like that, solving a crisis usually meant a nice bonus in your paycheck.) The owner of the service center I worked for had a bit more to worry about than the brokerage owners, as he had a plant with expensive (and dangerous) machinery and unions and factory workers who are often a lot less dedicated to their job than some of the office staff. Nevertheless, that owner never worked weekends, he drove a Mercedes and he built himself a very nice vacation home up in northern Michigan.
posted by Oriole Adams at 8:31 PM on August 3, 2009
er, in the 3rd paragraph, that should be: "as my mom always said..."
posted by scody at 8:31 PM on August 3, 2009
posted by scody at 8:31 PM on August 3, 2009
There is a big difference between buying an existing business, and starting a new one. I've done both, and for the first time business person, I recommend buying a going concern. You generally have a far greater chance of making a financial success of a purchase and sale transaction involving an established business, if you are competently advised, and whatever value you can add to the business as you come to understand it, and perhaps improve it, generally drops straight to the bottom line.
Also, it's simply easier to spot a great opportunity when you have several years of actual books to look at. My first business was a staid shoe machinery business, back in the early 80s, just before the collapse of the American shoe industry. My 3 partners and I knew, when we bought it, that the bulk of the American shoe industry would be gone by 1990, due to import tariff reform, and that is exactly what occurred. So why would we buy such a beast? Cash flow, baby. Cash flow!
That business had a strong base of leased machine rental revenue, and a replacement parts business that ran an incredible 72% gross profit margin, not to mention ancillary paid service revenue that covered 90% of the employee base costs. There was so much free cash flow, that we found a bank to lend us $13 in purchase financing for every $1 we put in from our own pockets. And we were debt free 31 months after purchase.
We also went home most nights by 6:00 p.m., could pay ourselves decently from day one, and provide decent benefits to ourselves and our employees, and we knew our customers were relieved to see new ownership involved in the business from Day One. But there was nothing particularly fulfilling, or sexy about that business. It was housed in an 130 year old textile mill building in Lowell, MA. Nobody that worked there was particularly fascinating or memorable. The only media coverage we ever got, we paid for. Nothing we produced was particularly innovative, or at least hadn't been, since the 1940s, when the last basic machinery designs had been made. We did continue to produce lots of parts for 120 year old folding machines, 60 year old presses, and 40 year old infrared heaters, that couldn't be economically sourced anywhere else in the world. So, we got to charge an arm and a leg for doing so, and customers were happy to still have a source of workable spare parts, that they could get on 24 hour shipping turnaround.
What that business taught me is that getting paid well is the best thing about running your own show. Ever since, in any venture to which I've been party, cash flow has been king.
posted by paulsc at 8:49 PM on August 3, 2009
Also, it's simply easier to spot a great opportunity when you have several years of actual books to look at. My first business was a staid shoe machinery business, back in the early 80s, just before the collapse of the American shoe industry. My 3 partners and I knew, when we bought it, that the bulk of the American shoe industry would be gone by 1990, due to import tariff reform, and that is exactly what occurred. So why would we buy such a beast? Cash flow, baby. Cash flow!
That business had a strong base of leased machine rental revenue, and a replacement parts business that ran an incredible 72% gross profit margin, not to mention ancillary paid service revenue that covered 90% of the employee base costs. There was so much free cash flow, that we found a bank to lend us $13 in purchase financing for every $1 we put in from our own pockets. And we were debt free 31 months after purchase.
We also went home most nights by 6:00 p.m., could pay ourselves decently from day one, and provide decent benefits to ourselves and our employees, and we knew our customers were relieved to see new ownership involved in the business from Day One. But there was nothing particularly fulfilling, or sexy about that business. It was housed in an 130 year old textile mill building in Lowell, MA. Nobody that worked there was particularly fascinating or memorable. The only media coverage we ever got, we paid for. Nothing we produced was particularly innovative, or at least hadn't been, since the 1940s, when the last basic machinery designs had been made. We did continue to produce lots of parts for 120 year old folding machines, 60 year old presses, and 40 year old infrared heaters, that couldn't be economically sourced anywhere else in the world. So, we got to charge an arm and a leg for doing so, and customers were happy to still have a source of workable spare parts, that they could get on 24 hour shipping turnaround.
What that business taught me is that getting paid well is the best thing about running your own show. Ever since, in any venture to which I've been party, cash flow has been king.
posted by paulsc at 8:49 PM on August 3, 2009
@backupjesus - yes dead right. For some reason I often get Slate and Salon confused. It's worth a read.
posted by southof40 at 8:54 PM on August 3, 2009
posted by southof40 at 8:54 PM on August 3, 2009
I had what amounted to a short novel typed out as an answer, but decided it was too revealing. The Cliffs Notes version is that I really enjoyed owning my own business until the economy tanked.
posted by The Gooch at 11:35 PM on August 3, 2009
posted by The Gooch at 11:35 PM on August 3, 2009
I bought an existing business, which had a lot of advantages. I did a huge amount of research and analysis before I bought it. I worked very hard, long hours, seldom took vacations or holidays. I learned an incredible amount. The challenge was fun. However, the wolf is always at the door, having employees is a pain, the IRS is evil (esp. 20+ years ago). You are at the mercy of the economy, weather, and a lot of factors you can't control. I sold my business profitably. It was a big risk, and I'm so happy I did it.
posted by theora55 at 4:29 AM on August 4, 2009
posted by theora55 at 4:29 AM on August 4, 2009
Once again, there is a voice that says, "don't post", but I just want to give a different perspective - sorry I blab on and on, too.
I’m going to answer this question to give a different point of view, although I have a different type of business (freelance medical writing services). Nonetheless, my business is registered as a corporation (to be switched to an S-Corp at the start of the year) with the IRS. In addition, my business is service oriented, so there is no store, etc. Finally, I have only been in business for 7 months, so I still have a lot to learn. For all those reasons, though, my perspective is going to be different.
Let me start out by saying, though, to that me a 9-to-5 job=hell, where another person determines the tasks that I do for the day, the environment, etc. Now that I am not in such an environment I realized that I hopped from job to job most of my life because I could not accept or buy into that system, but that was just me.
There have been challenges and difficulties with running my own business (more later), but despite that I am having a lot of fun, and I really prefer the stressors associated with my own business vs the 9-to-5 job. I plan to never work in a 9-to-5 job for someone else again
The highs/plusses:
• I now select the area that I will learn more about (for me, the job is a vehicle to learning and information). I’ve now reached the point that I turn away jobs that are unrelated to areas that I am not interested in learning about – I also pursue opportunities to learn more about the things that interest me, such as listen to experts in a particular field, or read the most recently published journal articles, etc. I never had this freedom at a work place. With a few clients that have access to really interesting projects – I tell them more about my previous experience – and ask for and frequently get the new project that I want.
• I do real “career development” and control my schedule – if I see a day-long lecture given by experts in the field – I schedule my life around that so I can attend. More knowledge=more information I can use for my business. I rarely got permission to even go to these events at my last workplace, or I would have someone select “obscure HR lecture for an hour with a free lunch” and then was told it was mandatory to go.
• You don’t have to deal with idiots…at a 9-to-5 job, the idiot can be your boss, your coworker, and you were forced to deal with that day in and day out. With my own business, I have found occasional idiots…but if I find that out, I work with them until the project is over (1 month), and I never work with them again. I never had that freedom in a workplace. Even if you need to work with an idiot, it is not a lot of interaction…a phone call, or at the most, a day-long meeting.
• It is about …making the product and doing this well. I like what I do (writing a scientific manuscript and writing it well plus learning about the material) – that is primarily what I focus on
• I enjoy the challenge – I am struggling to learn how to run a business (see the lows), however, I view this as something that can be learned. If I master this, I can continue this…forever. I am obsessed with how to learn this – and talk to people about this constantly and plan to go to seminars/get a mentor etc. This is a challenge unlike anything I have faced before
• I decide my lifestyle and what I learn and do next. I don’t think I have ever had this much control over my life – I see the potential to do much, much more. I really feel more free and have more control than I even did in a workplace.
The lows:
• There is a constant underlying anxiety about money. I have struggled with things such as “money flow” (ie, I finish the project but the client doesn’t pay me for a few months) I am being more selective with my clients, but the anxiety is still there. I am also placing a savings in place so the anxiety isn’t there all the time. – this is a big low because it can force me to make stupid decisions (ie, accept a project with red flags)
• I don’t know how to run a business…so I have struggled with finding work (not now, but I am sure it will happen again) At a workplace, you always got a paycheck even if you twiddled your thumbs – for my business, I have to find and get the work.
• I’ve become obsessed with $ - I now always look at my rate and think – how can I get more? Sometimes I am resentful for taking work that I think I am not being compensated adequately for (but to be honest, it may be equivalent to what I was paid as a full-time employee before – I would never have even thought about this at a workplace, though.)
OP, this is just an anecdotal story…
I would highly recommend SCORE (why not go talk to people who were successful with their business? They will give you advice, for free – they have seminars and mentors).
Here is a website that describes the lives of several successful business owners (in particular, check out the podcasts), with the caveat that they are going to tell you about the success stories, not the business people who fail. However, I find it very inspirational – you may hear about someone who had a vision of something different (ie, more time for their family, time in the outdoors, etc) – and they walk away from a job and create the businsess and life they envision.
posted by Wolfster at 6:10 AM on August 4, 2009
I’m going to answer this question to give a different point of view, although I have a different type of business (freelance medical writing services). Nonetheless, my business is registered as a corporation (to be switched to an S-Corp at the start of the year) with the IRS. In addition, my business is service oriented, so there is no store, etc. Finally, I have only been in business for 7 months, so I still have a lot to learn. For all those reasons, though, my perspective is going to be different.
Let me start out by saying, though, to that me a 9-to-5 job=hell, where another person determines the tasks that I do for the day, the environment, etc. Now that I am not in such an environment I realized that I hopped from job to job most of my life because I could not accept or buy into that system, but that was just me.
There have been challenges and difficulties with running my own business (more later), but despite that I am having a lot of fun, and I really prefer the stressors associated with my own business vs the 9-to-5 job. I plan to never work in a 9-to-5 job for someone else again
The highs/plusses:
• I now select the area that I will learn more about (for me, the job is a vehicle to learning and information). I’ve now reached the point that I turn away jobs that are unrelated to areas that I am not interested in learning about – I also pursue opportunities to learn more about the things that interest me, such as listen to experts in a particular field, or read the most recently published journal articles, etc. I never had this freedom at a work place. With a few clients that have access to really interesting projects – I tell them more about my previous experience – and ask for and frequently get the new project that I want.
• I do real “career development” and control my schedule – if I see a day-long lecture given by experts in the field – I schedule my life around that so I can attend. More knowledge=more information I can use for my business. I rarely got permission to even go to these events at my last workplace, or I would have someone select “obscure HR lecture for an hour with a free lunch” and then was told it was mandatory to go.
• You don’t have to deal with idiots…at a 9-to-5 job, the idiot can be your boss, your coworker, and you were forced to deal with that day in and day out. With my own business, I have found occasional idiots…but if I find that out, I work with them until the project is over (1 month), and I never work with them again. I never had that freedom in a workplace. Even if you need to work with an idiot, it is not a lot of interaction…a phone call, or at the most, a day-long meeting.
• It is about …making the product and doing this well. I like what I do (writing a scientific manuscript and writing it well plus learning about the material) – that is primarily what I focus on
• I enjoy the challenge – I am struggling to learn how to run a business (see the lows), however, I view this as something that can be learned. If I master this, I can continue this…forever. I am obsessed with how to learn this – and talk to people about this constantly and plan to go to seminars/get a mentor etc. This is a challenge unlike anything I have faced before
• I decide my lifestyle and what I learn and do next. I don’t think I have ever had this much control over my life – I see the potential to do much, much more. I really feel more free and have more control than I even did in a workplace.
The lows:
• There is a constant underlying anxiety about money. I have struggled with things such as “money flow” (ie, I finish the project but the client doesn’t pay me for a few months) I am being more selective with my clients, but the anxiety is still there. I am also placing a savings in place so the anxiety isn’t there all the time. – this is a big low because it can force me to make stupid decisions (ie, accept a project with red flags)
• I don’t know how to run a business…so I have struggled with finding work (not now, but I am sure it will happen again) At a workplace, you always got a paycheck even if you twiddled your thumbs – for my business, I have to find and get the work.
• I’ve become obsessed with $ - I now always look at my rate and think – how can I get more? Sometimes I am resentful for taking work that I think I am not being compensated adequately for (but to be honest, it may be equivalent to what I was paid as a full-time employee before – I would never have even thought about this at a workplace, though.)
OP, this is just an anecdotal story…
I would highly recommend SCORE (why not go talk to people who were successful with their business? They will give you advice, for free – they have seminars and mentors).
Here is a website that describes the lives of several successful business owners (in particular, check out the podcasts), with the caveat that they are going to tell you about the success stories, not the business people who fail. However, I find it very inspirational – you may hear about someone who had a vision of something different (ie, more time for their family, time in the outdoors, etc) – and they walk away from a job and create the businsess and life they envision.
posted by Wolfster at 6:10 AM on August 4, 2009
Jeez, can anyone chime in and say it's a good thing? Or fun? Or that you CAN actually have some time of your own? Or that it IS in fact kind of liberating? Please? Pretty please?
Okay, my contribution here is that owning your own business is a good thing, it's fun, it affords me plenty of time on my own, is liberating to the extreme, and more.
After several years as an external consultant to businesses and then a few years working "on the other side of the table", I went out on my own. The plan was hatched the year I knew precisely how much money I billed on behalf of my employer, and it was four times what I was paid. I decided right then and there that I would much rather put all of that money in my own pocket.
The key for me was to specify how I wanted my business to evolve: Running my own business was conceived as a way to employ myself. I had no interest in building an empire by hiring a large staff.
Instead, I set up shop in a spare bedroom and connect with my clients via phone, internet, and fax. I literally have clients I have never met face-to-face.
Marketing is important, but if you can establish a business that provides a recurring service, you can keep a client forever as long as you keep them happy.
Because my company is incorporated (which helps with the image and also protects my assets), the accounting can be kind of tricky. QuickBooks is a lifesaver in that regard.
My time is my own. If I'm not available to answer a client's phone call or respond to an email, the client doesn't know whether I'm involved in a high-level meeting or out clothes shopping. I return calls quickly, so no one has ever minded or even asked about it.
Yes, my clients are my bosses and I have to keep them happy. But I only have to kowtow to clients; my direct boss (myself) is incredibly understanding and supportive.
There are two downsides, though: First, there is no consistent income. If I'm not working, I'm not earning money. This is easier to take if you have a modest lifestyle and have money saved up to help see you through the lean times. Second, there are times when you work some late hours when deadlines are looming. For me, this is not nearly as often as it was when I was employed by someone other than myself, so I simply roll with the punches.
Now, after reading others' answers, it makes me think that maybe I'm doing something wrong because my business hasn't totally consumed my life and driven me crazy. But I've been at it now for over 15 happy years. Some of those years have been a bit lean, some have been ridiculously fat, but I wouldn't trade for anything!
posted by DrGail at 7:22 AM on August 4, 2009
Okay, my contribution here is that owning your own business is a good thing, it's fun, it affords me plenty of time on my own, is liberating to the extreme, and more.
After several years as an external consultant to businesses and then a few years working "on the other side of the table", I went out on my own. The plan was hatched the year I knew precisely how much money I billed on behalf of my employer, and it was four times what I was paid. I decided right then and there that I would much rather put all of that money in my own pocket.
The key for me was to specify how I wanted my business to evolve: Running my own business was conceived as a way to employ myself. I had no interest in building an empire by hiring a large staff.
Instead, I set up shop in a spare bedroom and connect with my clients via phone, internet, and fax. I literally have clients I have never met face-to-face.
Marketing is important, but if you can establish a business that provides a recurring service, you can keep a client forever as long as you keep them happy.
Because my company is incorporated (which helps with the image and also protects my assets), the accounting can be kind of tricky. QuickBooks is a lifesaver in that regard.
My time is my own. If I'm not available to answer a client's phone call or respond to an email, the client doesn't know whether I'm involved in a high-level meeting or out clothes shopping. I return calls quickly, so no one has ever minded or even asked about it.
Yes, my clients are my bosses and I have to keep them happy. But I only have to kowtow to clients; my direct boss (myself) is incredibly understanding and supportive.
There are two downsides, though: First, there is no consistent income. If I'm not working, I'm not earning money. This is easier to take if you have a modest lifestyle and have money saved up to help see you through the lean times. Second, there are times when you work some late hours when deadlines are looming. For me, this is not nearly as often as it was when I was employed by someone other than myself, so I simply roll with the punches.
Now, after reading others' answers, it makes me think that maybe I'm doing something wrong because my business hasn't totally consumed my life and driven me crazy. But I've been at it now for over 15 happy years. Some of those years have been a bit lean, some have been ridiculously fat, but I wouldn't trade for anything!
posted by DrGail at 7:22 AM on August 4, 2009
There are businesses and there are businesses. Running a coffee shop, a retail store or a cleaning service is not the same thing as running a law practice, a design agency, or a software firm. Many horror stories of how businesses take over your life, cause your kids to wear Walmart clothes, and cause bankruptcy seem to emanate from people who had an amorphous idea of "wanting to be their own boss" without any particular industry experience, expert level skill, ability to sell, or capability of distinguishing good business opportunities from low-margin slogs. Running a business can enhance your freedom and lifestyle or be a miserable slog depending on the type of business you choose.
posted by lsemel at 7:35 AM on August 4, 2009
posted by lsemel at 7:35 AM on August 4, 2009
I realize my answer above was largely unhelpful, so here is a more detailed response:
I co-own a small business in the technology sector. This has been a really bad year due to the poor economy (apparently for a lot of businesses out this way based on the sheer number of "For Lease" signs in office parks and storefronts), which has soured my taste for what has otherwise been a very positive experience. Here are some random thoughts and observations based on my experience:
- Unless you are independently wealthy, expect to struggle a bit on a personal level in the beginning. In my case, I lived without a salary for much of the first year since A) it took awhile to start landing sales and in the meantime we needed to protect what was in the bank and B) Once sales started to come in the profits were fed back into the company so we could stay in business. On the other hand, once we started bringing in a consistent flow of sales we were able to pay ourselves accordingly, including giving ourselves occasional raises in accordance with increased sales.
- When I was just an employee of another company, I was constantly frustrated at having little to no say/power in how the company marketed itself, what products it chose to sell, what trade shows it chose to participate in, company policies, etc. I've never stopped appreciating now being in control of those elements
- Owning my own business has allowed me to develop skills I doubt I would have been given the opportunity to otherwise. For example, I've always been interested in creative pursuits like creating marketing materials and promotional campaigns. I've found that at many companies it can be difficult to get your employer to see you as anything other than the specific thing they hired you as, making it hard to expand your skill set. So even if I do find myself back on the job hunt in the future, my resume is far stronger and broader today than it was before I became a business owner
- It is true that running a business requires hard work. Things that are par for the course at other jobs, like calling in sick because you woke up with a headache really just isn't realistic when you are responsible for running the show. On the other hand, since you don't have to fill out for PTO time or ask permission from a manager if you need time off, owning your own business allows for a flexibility that is difficult to find in other jobs. This has been especially valuable to me as the father to a special needs son who frequently needs to see various specialists.
- I suppose this could be either a positive or a negative depending on your personality and perspective: My previous job was in a fairly large office with a a strong social element. While I don't miss the office politics or petty personality conflicts, I do miss the after work happy hours and other after hour social activities that came with working in a large office environment
- There are some very unglamorous elements to running a business that you may be required to deal with, including, but not limited to, taxes, licensing, accounting, collections and legal issues
- Managing employees can be a challenge as a business owner. When much of your existence and self-worth is tied to the success of the company, it can be difficult to relate to people who just look at it as a job
- This has been the absolute toughest lesson to learn: I would imagine most people, and I definitely fall into this category, who start their own companies do so at least in part because they want to feel in control of their professional destinies. However this year has taught me there are external factors largely beyond your control that can drastically effect the fate of your business. In our case, in the beginning of the year we were hit with the American economy turning to shit, with our state feeling it particularly hard, while simultaneously having our (by far) largest vendor drop us following a merger with another company.
- At least up until recently, I actually enjoyed coming into the office every day and looked forward to Mondays, which is something I can't say about any other job I've ever had and something that you really can't put a price on.
posted by The Gooch at 11:04 AM on August 4, 2009
I co-own a small business in the technology sector. This has been a really bad year due to the poor economy (apparently for a lot of businesses out this way based on the sheer number of "For Lease" signs in office parks and storefronts), which has soured my taste for what has otherwise been a very positive experience. Here are some random thoughts and observations based on my experience:
- Unless you are independently wealthy, expect to struggle a bit on a personal level in the beginning. In my case, I lived without a salary for much of the first year since A) it took awhile to start landing sales and in the meantime we needed to protect what was in the bank and B) Once sales started to come in the profits were fed back into the company so we could stay in business. On the other hand, once we started bringing in a consistent flow of sales we were able to pay ourselves accordingly, including giving ourselves occasional raises in accordance with increased sales.
- When I was just an employee of another company, I was constantly frustrated at having little to no say/power in how the company marketed itself, what products it chose to sell, what trade shows it chose to participate in, company policies, etc. I've never stopped appreciating now being in control of those elements
- Owning my own business has allowed me to develop skills I doubt I would have been given the opportunity to otherwise. For example, I've always been interested in creative pursuits like creating marketing materials and promotional campaigns. I've found that at many companies it can be difficult to get your employer to see you as anything other than the specific thing they hired you as, making it hard to expand your skill set. So even if I do find myself back on the job hunt in the future, my resume is far stronger and broader today than it was before I became a business owner
- It is true that running a business requires hard work. Things that are par for the course at other jobs, like calling in sick because you woke up with a headache really just isn't realistic when you are responsible for running the show. On the other hand, since you don't have to fill out for PTO time or ask permission from a manager if you need time off, owning your own business allows for a flexibility that is difficult to find in other jobs. This has been especially valuable to me as the father to a special needs son who frequently needs to see various specialists.
- I suppose this could be either a positive or a negative depending on your personality and perspective: My previous job was in a fairly large office with a a strong social element. While I don't miss the office politics or petty personality conflicts, I do miss the after work happy hours and other after hour social activities that came with working in a large office environment
- There are some very unglamorous elements to running a business that you may be required to deal with, including, but not limited to, taxes, licensing, accounting, collections and legal issues
- Managing employees can be a challenge as a business owner. When much of your existence and self-worth is tied to the success of the company, it can be difficult to relate to people who just look at it as a job
- This has been the absolute toughest lesson to learn: I would imagine most people, and I definitely fall into this category, who start their own companies do so at least in part because they want to feel in control of their professional destinies. However this year has taught me there are external factors largely beyond your control that can drastically effect the fate of your business. In our case, in the beginning of the year we were hit with the American economy turning to shit, with our state feeling it particularly hard, while simultaneously having our (by far) largest vendor drop us following a merger with another company.
- At least up until recently, I actually enjoyed coming into the office every day and looked forward to Mondays, which is something I can't say about any other job I've ever had and something that you really can't put a price on.
posted by The Gooch at 11:04 AM on August 4, 2009
there is a behind-the-scenes blog from the moxie cinema in springfield, mo which goes back to before they opened in their first location.
here is a behind-the-scenes blog from a brewery opening in eagle rock, ca. they haven't opened yet.
my dad was a franchisee (burger king) and went on to start another business after he sold that. it never felt to me like it consumed his life (he certainly travelled far less after becoming a franchisee than he did working his job before that). i currently own a retail business with my wife and brother-in-law, and while it can be a drag at times, i find it tremendously more fulfilling than my primary job.
posted by jimw at 11:09 AM on August 4, 2009
here is a behind-the-scenes blog from a brewery opening in eagle rock, ca. they haven't opened yet.
my dad was a franchisee (burger king) and went on to start another business after he sold that. it never felt to me like it consumed his life (he certainly travelled far less after becoming a franchisee than he did working his job before that). i currently own a retail business with my wife and brother-in-law, and while it can be a drag at times, i find it tremendously more fulfilling than my primary job.
posted by jimw at 11:09 AM on August 4, 2009
sometime ago I read an article in salon.com about a person/couple (can't remember) starting a coffee shop in New York City.
My takeaway from that article is that if he had done those numbers before opening the coffee shop, he never would have bothered. Or maybe he did, and just got things wrong. It's easy to be optimistic about sales volume or to forget to include food wastage.
As mentioned above, this is an advantage of buying an existing business: you have real numbers to work with.
posted by smackfu at 6:17 AM on August 5, 2009
My takeaway from that article is that if he had done those numbers before opening the coffee shop, he never would have bothered. Or maybe he did, and just got things wrong. It's easy to be optimistic about sales volume or to forget to include food wastage.
As mentioned above, this is an advantage of buying an existing business: you have real numbers to work with.
posted by smackfu at 6:17 AM on August 5, 2009
I'm chiming in a little late here, but I wanted to share my experience with running a business. Personally speaking, I've just launched my third solo business as a LLC (a marketing and business development consultancy) and prior to this I have own two S-Corps, a record label and a web design company. I also helped someone launch an advertising agency for a number of years, but as a limited partner.
So in other words, I have lots of experience in starting and running your own business. A lot of my consulting and agency clients also happen to be business owners. My major takeaway from it all is if you're going to run a business you have to have enthusiasm. You start it because you can't stand not to. Anything less and you're unlikely (in my experience at least) to have what it takes to make it successful.
General pros and cons:
PROS
1. Flexibility. You can take a vacation whenever you want. Need to run to pick up your kids from school? You can do that too. You're the boss so you can't set your schedule any way you like... so long as everything gets completed at the end of the day.
2. If you're successful, you'll make significantly more money than if you work for someone else.
3. Exceptional tax advantages (speaking as a US citizen).
4. It's a lot of fun. I've generally found that I start businesses because I can't help not doing so. The idea consumes me. Once I start working, and I see things come together, its incredibly rewarding and interesting. But then again, I've never started a business just for money (generally speaking, I find money as a reason a terrible excuse to do anything).
5. You quickly learn new skills because you have to.
6. You get to help other people (your clients) and see it on their faces.
7. You meet tons of interesting people.
8. It doesn't have to be forever. If you like it enough to do it for a while, you'll gain fabulous new skills and meet lots of people - both of which will be helpful for you in landing a full-time position.
CONS
1. You get paid last. First is your employees (if you have any), next is your overhead, after that is Uncle Sam and then you. In other words, save as much money as you can so you have a safety next. That will make life much less anxious.
2. It can be stressful. This isn't much different than working for someone else, expect that you are the final decision maker so its quite difficult to CYA if you do something stupid.
3. Running a business takes exceptional focus and discipline. You have to be self-directed, organized, responsible and good at time management. If you can't do these things, sooner or later you'll fail.
4. If you set up your business entity incorrectly, or don't carry proper insurances, you can open yourself up to quite a bit of personal liability.
5. Hiring and managing employees is often complicated and difficult.
6. You're forced to deal with business tasks that may be boring for you (e.g. accounting, etc.).
All said, if you're a natural born entrepreneur there's nothing better in the world than working for yourself. However, if you like to clock in / clock out and then live life you'll hate it. But then again who wants to stop living for 8 - 10 (or more) hours a day making someone else rich on your hard work? I much rather take the risk and give back to the world. YMMV.
posted by tundro at 4:42 AM on August 9, 2009
So in other words, I have lots of experience in starting and running your own business. A lot of my consulting and agency clients also happen to be business owners. My major takeaway from it all is if you're going to run a business you have to have enthusiasm. You start it because you can't stand not to. Anything less and you're unlikely (in my experience at least) to have what it takes to make it successful.
General pros and cons:
PROS
1. Flexibility. You can take a vacation whenever you want. Need to run to pick up your kids from school? You can do that too. You're the boss so you can't set your schedule any way you like... so long as everything gets completed at the end of the day.
2. If you're successful, you'll make significantly more money than if you work for someone else.
3. Exceptional tax advantages (speaking as a US citizen).
4. It's a lot of fun. I've generally found that I start businesses because I can't help not doing so. The idea consumes me. Once I start working, and I see things come together, its incredibly rewarding and interesting. But then again, I've never started a business just for money (generally speaking, I find money as a reason a terrible excuse to do anything).
5. You quickly learn new skills because you have to.
6. You get to help other people (your clients) and see it on their faces.
7. You meet tons of interesting people.
8. It doesn't have to be forever. If you like it enough to do it for a while, you'll gain fabulous new skills and meet lots of people - both of which will be helpful for you in landing a full-time position.
CONS
1. You get paid last. First is your employees (if you have any), next is your overhead, after that is Uncle Sam and then you. In other words, save as much money as you can so you have a safety next. That will make life much less anxious.
2. It can be stressful. This isn't much different than working for someone else, expect that you are the final decision maker so its quite difficult to CYA if you do something stupid.
3. Running a business takes exceptional focus and discipline. You have to be self-directed, organized, responsible and good at time management. If you can't do these things, sooner or later you'll fail.
4. If you set up your business entity incorrectly, or don't carry proper insurances, you can open yourself up to quite a bit of personal liability.
5. Hiring and managing employees is often complicated and difficult.
6. You're forced to deal with business tasks that may be boring for you (e.g. accounting, etc.).
All said, if you're a natural born entrepreneur there's nothing better in the world than working for yourself. However, if you like to clock in / clock out and then live life you'll hate it. But then again who wants to stop living for 8 - 10 (or more) hours a day making someone else rich on your hard work? I much rather take the risk and give back to the world. YMMV.
posted by tundro at 4:42 AM on August 9, 2009
This thread is closed to new comments.
It was amusingly different from a great deal of material you read about starting businesses - I mean you tend to hear from those who've succeeded rather than the good number who didn't. Strangely enough I can't remember the outcome of these people but it was a good article.
Unfortunately I can't find it but I'm sure there's someone out there who's got it bookmarked.
posted by southof40 at 6:23 PM on August 3, 2009