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 New Biz Start-ups - Gen Info

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PostSubject: New Biz Start-ups - Gen Info   Mon Feb 02, 2009 4:16 pm

I sort of co-oped another thread with my own interests so decided to make some small amends. Plus, this might be a timely thread given the current world economic climate. Currently I'm in the process of trying to start a business and don't mind sharing some general observations, but I won't go into specifics. I also get the impression that quite a few MN posters are knowledgeable on the subject. This post, however, is really directed at people who don't have much past business experience.

First off, I'd make an analogy. Haven't being in a business in the past, although self-employed previously, I'd liken the initial phase of starting up a new business to being a bit like reading a manual on how to swim but not being able to practice swimming before hand. I have a fella in the US kindly giving me advice and his last e-mail was short and sweet. Advice time is over. Just do it. You have to spend some money on whatever product/serivce strategy you've devised. Don't be afraid to fail. Easy for him. But this kind of encapsulates the process.

1. Study the market and the competition. What's their prices for products/services? Can you figure out why they're successful? Most of all can you provide a product/service that can compete in the marketplace? What is special about your product/service? I can't emphasize this enough from my limited experience. Price is nice but it will not gaurantee success alone in many cases. For example, I know of a fella, again the US, who made a couple of million from hairdressing. He took a basic course and used profits from a hot-dog stand to open his first shop. Was he a brilliant hairdresser? Was he feck. He had the patter. He told me he sold gossip and knew his market which was middle class Italian-Americans. Once he had a blueprint, he just repeated it about a dozen times. He then sold the profitable shops to make his first few million, and then he went into home improvements. Hotdogs to hairdressing to home improvements. A fairly improbable way to millions but the man knew he had to have, as he would say, "an angle" to make profits. He of course wanted the highest price for any service he rendered but he always had a long term plan in place for a given enterprise. He'd also failed at quite a few ventures; a nite-club being his biggest failure as he couldn't cope with drunks, being a pioneer himself.

2. Don't ignore govt regulations, taxes, etc. I personnaly know of a highly successful lady who lost her business because she didn't keep her taxes in order. An accountant or very good book-keeper is important. Don't be afraid to interview several accountants and tell them you are doing this. If an accoutant is taken aback by your questions or process, you can be fairly sure she/he isn't right for you. Also ask about start-up packages for new businesses as they are cheaper and don't tie you into binding agreements. Don't sign any agreement that will bind you into a two year deal, for example, where you end up paying for accounting services but your business has gone down the tubes.

Health and safety are real concerns; especially in a manufacturing context but don't ignore the rules in a service industry either. While the plethora of rules and regulations can be annoying and somewhat time consuming, they can be used to your advantage for quality control.

If you have employees, get workers compensation insurance. If you have customers coming to a premises, even if its your home and you might only get a few people in during a given year, still get liability insurance. When you're in business, people tend think of you as a business and not a person. Most of all, they think of money. For a few Euros a week, you can avoid future headaches. One fella who worked at home and had no customer visits was still sued by a workman who came to do some work on his home office.

3. KIS. Keep it simple. Whatever your enterprise is going to be try and keep the process simple at the beginning. Don't try and make your product/service so unique, for example, that it's costs quickly become uncontrollable. At the start-up phase, and I dare say later on, you're always juggling what you want with what you actually need. Simple solutions and processes are almost invariably cheaper and easier to monitor.

4. Flexibility/Research/Info. Really offshots of #3. You have to be prepared to change your plans; but once you've decided on the best way forward, it's time to spend the investment money and leap. For example, I have worked in construction in the past and know all about mitre, band, rips saws etc. However, I just couldn't find a machine that would cut full-proof 45 degree angles thus cutting down on wastage and lowering production costs. (Automation is just too expensive, to my mind and pocket, in launching a start-up product.) While sitting in the sitting room one day I just looked up at picture and saw the most perfect 45 degree angles one could wish to espy. I called the SU (spousal unit) who knew a picture frame manufacturer in Donegal who was happy to help and it now trying to purchase second hand machinery on my part.

Any and every resource that increases your knowledge is indespensible. You may have to grow a tough hide but don't be afraid to use any resource or ask any question(s) that makes your enterprise that wee bit more prone to future success. The worst that can happen, as long as your mannerly (sales ability), is that someone will tell you to feck off. Big deal. Every once and while a tidbit of info may come your way that just might pave the way to success or divert you from disaster.

5. Focus & The Plan. I think you almost have to be obsessed with what you wish to do as you begin a start-up biz. The research alone into my ideas have taken up countless hours and I've spent quite a small chunk of change at this stage. Focus also entails zeroing in on the essential. If you're only thinking about making the first million or the mercedes you're going to buy, you're only creating artifical hurdles. Even if your motives are pure, such as being able to hire employess, you're still creating artificial hurdles. Instead, you must be focused on how to make money - how to turn a profit. When you make profits on a consistent basis you can think about other factors, but even then you mustn't deviate. You must do what needs to be done not what you want to do. Having employess only the have the business fold because your business plan was ill conceived doesn't do favours for anyone. In a sense you must be ruthless in your planning and execution in order to be kind.

I've been assured by a mentor that a start-up that has a detailed buiness plan (e.g. cost projection, future income projections, mission statement, etc.) has a far better chance of success than an enterprise without one. Tbh, I though a piece of paper with makey up numbers was just plain useless. However, as I researched, I've come up with some pretty firm cost numbers. Suddenly, I know what my break-even is. I'm getting an idea what kind of profit margin I need. I have a good understanding of how to price my product against the competition. The process has made me make adjustments and come up with new ideas or angles. Enlightening stuff. I'm also going to apply for a loan I know I cannot get nor do I particularly want. Why? Because I want the bank manager to keep the business plan on record. If I can show him/her (actually someone down in Dublin) that my business plan was based on sound numbers and, even though items on the biz plan may change dramatically in the future, that I had a viable idea/plan and was able to manage the business through change. It might just give me a chance for funding in the future if I need it. It's what biz gurus call planning for success. Neutral

6. Finance - At the moment, unless you have your own sources of finance, you won't get a loan. There are very few grants available and the competition is fierce. I purposefully didn't look for outside finance and I'll be doing everything on a shoe-string budget. On the plus side, my discipline will have to be extraordinary. One bad decision could/will collapse the business plan. On the negative side, one small slip-up will cost me the business; but I won't be in debt in a big way.

Going back the swimming pool analogy. There is a shallower end to the pool but the water still covers your head. If you jump in the shallower end, like me, you might be able to bob for air for awhile as you learn to swim. Some ventures require a considerable capital investment and you're in the deep end from the get go. Either you sink or swim. In any case you'll, more than likely, you need to start treading water very quickly.

Like I said earlier, I won't go into specifics on my ideas or products but will be very happy to supply any information on the process if anyone thinks it would be helpful.

In my own case, I've completely flip-flopped several times over the last 48-72 hours. I have a slight seasonal variability in my proposed product and should have had it produced by now. So there is yet another change in plans. For example, my SU who does purchasing for her company will largely have the Christmas stock purchased by the end of this month! They may buy some items right up till October but the plan and bulk of purchases is nearly complete for the December selling season.

Good luck to anyone planning a new start-up business venture.
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PostSubject: Re: New Biz Start-ups - Gen Info   Mon Feb 02, 2009 4:32 pm

Great post, rocky. I am in the process of starting up a business too. It's very scary. I hit a low yesterday and was on the verge of packing it in but your post has told me a few home truths that I'm going to put to use. Thanks.
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PostSubject: Re: New Biz Start-ups - Gen Info   Mon Feb 02, 2009 4:55 pm

floatingingalway wrote:
Great post, rocky. I am in the process of starting up a business too. It's very scary. I hit a low yesterday and was on the verge of packing it in but your post has told me a few home truths that I'm going to put to use. Thanks.

Good luck, floatingingalway, with the business start-up. I did this last year but now, I do not have time to dedicate to it and am selling my share to my business partner, as he had first shout on it as per contract.

Surround your Unique Selling Point with sound fundamental principals, combined with Rocky's sound advice and you will succeed.

I will be spending the rest of the year (my spare time, of course) developing a company to sell it before Christmas. THis venture is unlike anything I have ever done and will be an enormous challenge. Because the company will own nothing except intellectual property. Lots of it. Should be interesting.

But back to your situation. There is a myriad of arguments against setting up a business but the sense of satisfaction when you succeed is magnificient. Go for it and may you achieve the success you deserve!!
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PostSubject: Re: New Biz Start-ups - Gen Info   Mon Feb 02, 2009 6:42 pm

Thanks for that rocky and good to hear there is some fire out there to get into the business start up scene - even enthusiasm (coupled with a business plan) is surely worth something in monetary terms for our Authorities or have all those Leader grants been cut too? Success or not, this is something banks and state funds are well worth going in for. Do you know if there are EU grants - as we're all one big happy family now then maybe there is.

I've had the few odd ideas myself but couldn't see them getting off the ground, largely because they were odd. Would anyone be interested in buying shares in a forest for example? Your dividend would be a trailerload of wood every Christmas plus you'd have access to a park/picnic area of partially your own for yourself and the SU/kids/etc.

I've had others too but
1) I don't imagine the funds I have are enough
2) Know that funds aren't the be all and end all and that 1) is an excuse out of fear
3) If you have fear of taking risk then is it worth kicking it around?


I think it might be even a good exercise just to kick it around even - something might come up. I've even had the idea of ...... but that's a secret ..
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PostSubject: Re: New Biz Start-ups - Gen Info   Mon Feb 02, 2009 6:50 pm

I came up with multiple ideas during my Junior Cert business classes - about 10 years ago - most of which are now real inventions.

1) Self Service Check in Machines at Airports. I suggested this in 1997.
2) Ability to enter the National Lottery by text message which deducts from your bill/credit. I came up with this in 1998 - think you can do it now.
3) I thought a good safety feature for a car would be sensors on the electric windows so they won't go up if you have ur hand out them.
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PostSubject: Re: New Biz Start-ups - Gen Info   Mon Feb 02, 2009 7:08 pm

Does anyone know if there's a minimum that can be donated from/to a paypal account online? Could I literally donate a penny to an online video or something?

If you could I think it might be an idea for any site to have a tips jar where people who create online entertainment (I'm thinking specifically of youtube uploaders) can make something for their time.

I know this is there already with wikipedia, where you can donate something in aid of the effort but I think it's something we should get used to doing do online - but it must be a completely voluntary donation and it should be I think small - literally a penny up to five pence/ten pence and people wouldn't think anything of spending a little each month by choice. Some videos get 1000, 2000 views and others a lot lot more.

Anyone know if this is the case now? Floatiningalway could be interested in making some pennies... they all add up.
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PostSubject: Re: New Biz Start-ups - Gen Info   Mon Feb 02, 2009 8:53 pm

Auditor #9 wrote:
Does anyone know if there's a minimum that can be donated from/to a paypal account online? Could I literally donate a penny to an online video or something?

If you could I think it might be an idea for any site to have a tips jar where people who create online entertainment (I'm thinking specifically of youtube uploaders) can make something for their time.

I know this is there already with wikipedia, where you can donate something in aid of the effort but I think it's something we should get used to doing do online - but it must be a completely voluntary donation and it should be I think small - literally a penny up to five pence/ten pence and people wouldn't think anything of spending a little each month by choice. Some videos get 1000, 2000 views and others a lot lot more.

Anyone know if this is the case now? Floatiningalway could be interested in making some pennies... they all add up.
That's what I love about this forum - always flowing with good ideas. Play piano
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PostSubject: Re: New Biz Start-ups - Gen Info   Mon Feb 02, 2009 10:40 pm

Business - 1% inspiration, 99% perspiration...
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PostSubject: Re: New Biz Start-ups - Gen Info   Mon Feb 02, 2009 11:01 pm

ibis wrote:
Business - 1% inspiration, 99% perspiration...
Too much perspiration for the ideas I have so pale
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PostSubject: Re: New Biz Start-ups - Gen Info   Tue Feb 03, 2009 12:09 am

Auditor #9 wrote:
Does anyone know if there's a minimum that can be donated from/to a paypal account online? Could I literally donate a penny to an online video or something?

If you could I think it might be an idea for any site to have a tips jar where people who create online entertainment (I'm thinking specifically of youtube uploaders) can make something for their time.

I know this is there already with wikipedia, where you can donate something in aid of the effort but I think it's something we should get used to doing do online - but it must be a completely voluntary donation and it should be I think small - literally a penny up to five pence/ten pence and people wouldn't think anything of spending a little each month by choice. Some videos get 1000, 2000 views and others a lot lot more.

Anyone know if this is the case now? Floatiningalway could be interested in making some pennies... they all add up.

Maybe what you need is a sharing site, where posters can buy credits and spend them as they wish. Posters can also upload their own material and therefore benefit from the donations of others. I'm sure there's a programme out there that could mind and distribute the money - if it's possible to play poker online, then it must be doable. If not, evm, our resident genius will rattle up one before breakfast.

Patent that fast, Audi.
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PostSubject: Re: New Biz Start-ups - Gen Info   Tue Feb 03, 2009 12:19 am

It exists with photographs. There are large data banks online where you can upload your photographs and people can pay to download them.
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