What are some tips for starting? How did you start? What did you not realize until your business was actually rolling?

Any comments will be much appreciated for my own curiosity

Quote:

---

What are some tips for starting?

---

Details will vary wildly depending upon the business.
Construction? Software? Real estate? Can you be more specific?
General stuff:
What is your monthly overhead?
How will you manage cash flow/AR?
Labor requirements?
Insurance? Bonding needed? Workman's Comp?
What sort of money will be required at start up?
Where will you get the money for start up?
How much time are you willing to put into it?
Are you prepared for 60+ hrs/week in good times or bad?
Are you prepared for always ALWAYS being on call, at least initially?
What sort of return are you looking for in year 1? Year 5?
How good is your network in the industry?
How well do you really know the business you are getting into? Not fun to learn on the job when you are the one writing checks lol.
Will your business be an LLC, C Corp, S Corp, etc?

Be prepared to work a lot of hours and make sure you can wear several hats at the beginning. Cash flow is king and build that nest egg. Don't be afraid to pivot from your original business model and adapt to industry needs.

A nephew was the first Chicken Express franchisee in 1990. Owned about 20 when he started downsizing, I think he's down to 2 or 3 now. Lives on 50 acres in Acton and owns 600 acres in Granbury. Not bad for a kid with a high school education. He worked his ass off though.

Read the E-Myth Revisited by Michael Gerber. That's my favorite recommendation for folks going 0 to 1.

Just get started. All you need is something you're decent at, someone willing to pay for it, and a way to take their money.

Corps_Ag12 said:

---

LOYAL AG said:

---

- Separate yourself from the business financially. It's not your money, it's the business' money. The profit is yours. Run the business and pay yourself a salary and/or take distributions from profit. Do not live out of the company account.

---

This is really good advice and of upmost importance. I believe it only leads to disaster the longer you do it.

I have a friend who struggles with this concept because his wife doesn't work and they have two small children. He is always cash strapped, especially at the end/beginning of each month.

---

Get him a copy of Simple Numbers, Straight Talk, Big Profits by Greg Crabtree.

Traction by Gino Wickman is a great business book recommendation as well.

Agreed. More for established companies trying to break through a growth ceiling than those starting out but it is fantastic.

Side note if any of y'all are running on EOS (the system from Traction) or you're curious about it and you're on Reddit, check out r/eostraction.

Corps_Ag12 said:

---

LOYAL AG said:

---

- Separate yourself from the business financially. It's not your money, it's the business' money. The profit is yours. Run the business and pay yourself a salary and/or take distributions from profit. Do not live out of the company account.

---

This is really good advice and of upmost importance. I believe it only leads to disaster the longer you do it.

I have a friend who struggles with this concept because his wife doesn't work and they have two small children. He is always cash strapped, especially at the end/beginning of each month.

---

This. Setting up a separate bank account was the very first thing I did before I earned my first dollar. I do not touch any of the money for any non-business purpose except for a regular monthly distribution.

Advice depends on what you're getting into.

My personal experience related to a professional consulting firm in a niche industry. If I ever did it again (which I likely won't), I would suggest the following.

- avoid a partner if at all possible.
- if employees; create an infrastructure. Don't wing it regarding accounting, collections, etc. At minimum, outsource payroll and tax reporting

I was too busy building revenue and not focused on expense control and reporting. If I'd have followed those 2 points, I would have lasted more than the 10 plus years of having my own business.

Profits can be eaten up by not tracking expenses properly (sounds like basic common sense but you can easily fall into the trap if you don't build an infrastructure because you're being cheap). At some point, all the nonsense got old and I got rid of employees and the partner and just went the independent route.

A lot of good advise above.

1) get a mentor or better yet 3 or 4 for you to bounce ideas off and to give you honest, critical feedback to help you identify your blind spots
2) you need more working capital than you need because cash will go out the door a lot more than it comes in early on
3) make sure it is something you have great passion for. If you don't have a ton of passion, it will be hard to grind through the tough times and there are guaranteed to be tough times

Bag said:

---

what industry are you considering?

I have owned a small company for 6 years now, love it, hate it. I worked in corporate america for 20 years before it and the single biggest motivating factor for getting up every day is to never need to go back to the soul destroying corporate world.

My tips would be the following:

• Guard your cash like it is oxygen
• Do not accept VC and stay way from loans, there is no reason in todays world you cant get this done by bootstrapping
• recurring revenue models are gold
• You will (or at least I do) spend half my time chasing money that is owed
• Leverage AI to the Nth degree, no matter what the field or industry ChatGPT etc can super charge your productivity, they are literally terrifyingly good resources
• The only way to start a business is to be in business, stop thinking start doing
• Presentation matters
• The second mouse gets the cheese
• 90% of your initial business will come from people you know
• Be prepared to work 60 hours a week
• Be prepared to live frugally and below your means
• Stick with it, days will be extreme highs and extreme lows, sometimes within the same hour

Happy to talk offline about my journey if it helps

---

2nd on the chasing money owed.

uneedastraw said:

---

Advice depends on what you're getting into.

My personal experience related to a professional consulting firm in a niche industry. If I ever did it again (which I likely won't), I would suggest the following.

- avoid a partner if at all possible.
- if employees; create an infrastructure. Don't wing it regarding accounting, collections, etc. At minimum, outsource payroll and tax reporting

I was too busy building revenue and not focused on expense control and reporting. If I'd have followed those 2 points, I would have lasted more than the 10 plus years of having my own business.

Profits can be eaten up by not tracking expenses properly (sounds like basic common sense but you can easily fall into the trap if you don't build an infrastructure because you're being cheap). At some point, all the nonsense got old and I got rid of employees and the partner and just went the independent route.

---

Yes the expense run away gets worse when you get more successsful. It's important to force yourself to do a quarterly accounting and take an honest look at things. Especially important if you have sales reps.

I leveraged working as a jr engineer for a nationally known "character" in a niche industry for a govt agency into people calling me and asking if I could do some side gigs for them when my boss but that bug in their ear. I had met people previously at national meetings that heard from others what I was doing and leveraged that into more work for more companies as the early clients told others. Grew it from there, eventually quit the govt job and weny full time consulting until retiring and selling it.

Sometimes You Get Lucky; My biggest revenue/long term client over the years (one of the "it" companies of the 90's and early 2000's) was a result of striking up a conversation with some people about my age at a beach bar in the Carribean on vacation when one of them asked me "what do you do?" Hey...we know a group in our company with that type of a problem they are trying to find a consultant for!

Sometimes You Don't: At one point early as a one man shop things were going really well. The money was absolutely rolling in and my lack of real business training showed up. I had let one of my really good clients become 60% of my yearly revenue and didn't realize it was near that much at the time. Then they pretty much out of the blue declared bankruptcy, didn't reorganize and a few people went to jail. Huge lesson learned about risk and paying attention to the business side. Financially that was the low of the lows. For the business....not necessarlily for me personally because as others have mentioned there was a clear separation between the business and the salary/profits the business paid me.

Lone Stranger said:

---

Sometimes You Don't: At one point early as a one man shop things were going really well. The money was absolutely rolling in and my lack of real business training showed up. I had let one of my really good clients become 60% of my yearly revenue and didn't realize it was near that much at the time. Then they pretty much out of the blue declared bankruptcy, didn't reorganize and a few people went to jail. Huge lesson learned about risk and paying attention to the business side. Financially that was the low of the lows. For the business....not necessarlily for me personally because as others have mentioned there was a clear separation between the business and the salary/profits the business paid me.

---

Very good lesson here.

From VERY early on (not right out of the gate but once you've gotten established), start running your business like you want to sell it for top dollar (even if you don't have any interest in selling it).

There's a reason that buyers don't pay top dollar for companies with very high customer concentration... as Lone Stranger learned it's a big risk factor. Other big ones include high owner dependency, sloppy financials, bad process documentation, etc.

A lot of good business management is about risk management.

Most of us who have been in the game for any period of time have had to painfully learn the downsides of that stuff not being in order.

bagger05 said:

---

Lone Stranger said:

---

Sometimes You Don't: At one point early as a one man shop things were going really well. The money was absolutely rolling in and my lack of real business training showed up. I had let one of my really good clients become 60% of my yearly revenue and didn't realize it was near that much at the time. Then they pretty much out of the blue declared bankruptcy, didn't reorganize and a few people went to jail. Huge lesson learned about risk and paying attention to the business side. Financially that was the low of the lows. For the business....not necessarlily for me personally because as others have mentioned there was a clear separation between the business and the salary/profits the business paid me.

---

Very good lesson here.

From VERY early on (not right out of the gate but once you've gotten established), start running your business like you want to sell it for top dollar (even if you don't have any interest in selling it).

There's a reason that buyers don't pay top dollar for companies with very high customer concentration... as Lone Stranger learned it's a big risk factor. Other big ones include high owner dependency, sloppy financials, bad process documentation, etc.

A lot of good business management is about risk management.

Most of us who have been in the game for any period of time have had to painfully learn the downsides of that stuff not being in order.

---

Not just buyers but banks focus on concentration as well. If a client is outsized revenue or AR and the AR is collateral you'll see banks shy away from setting up lines of credit, sometimes as low as 25% and definitely at 50%.

Lone Stranger said:

---

I leveraged working as a jr engineer for a nationally known "character" in a niche industry for a govt agency into people calling me and asking if I could do some side gigs for them when my boss but that bug in their ear. I had met people previously at national meetings that heard from others what I was doing and leveraged that into more work for more companies as the early clients told others. Grew it from there, eventually quit the govt job and weny full time consulting until retiring and selling it.

Sometimes You Get Lucky; My biggest revenue/long term client over the years (one of the "it" companies of the 90's and early 2000's) was a result of striking up a conversation with some people about my age at a beach bar in the Carribean on vacation when one of them asked me "what do you do?" Hey...we know a group in our company with that type of a problem they are trying to find a consultant for!

Sometimes You Don't: At one point early as a one man shop things were going really well. The money was absolutely rolling in and my lack of real business training showed up. I had let one of my really good clients become 60% of my yearly revenue and didn't realize it was near that much at the time. Then they pretty much out of the blue declared bankruptcy, didn't reorganize and a few people went to jail. Huge lesson learned about risk and paying attention to the business side. Financially that was the low of the lows. For the business....not necessarlily for me personally because as others have mentioned there was a clear separation between the business and the salary/profits the business paid me.

---

This isn't an advertisement by any means but this is when you need someone like me. My clients know these things because that's my job. Find someone to work with that knows how to parse data and find these things for you. As the owner I don't really expect you to know that but I would expect you to make sure I'm paying attention to it.

Get Profit First by Mike Michalowicz and live by it. Best thing I ever did as a business owner.

https://www.amazon.com/Profit-First-Transform-Cash-Eating-Money-Making-ebook/dp/B01HCGYTH4

What's the name of your business?

Lots of great info in this board. I'll put in my 2 cents. I will be open 3 years in October
1) have a well thought out business strategy. Understand your target market and how you will fill your need. Understanding your overarching strategy makes the thousands of other decisions easier. Walmart and Pottery Barn both sell kitchen items. Very different markets. Therefore they hire different people, set up their business in different parts of town, have different pricing structures, everything. Must understand your strategy.
2) you will have to make decisions faster than you think. I remember thinking how fast everything was coming at me the first few months I was open. You won't make perfect decisions, but a 95% correct decision made quickly is better than a 100% decision made slowly.
3) solve the problems you have not the problems other people have. I don't waste time coming up with solutions for problems I don't have. They may be problems for the rest of the industry, but if it isn't a problem I don't have, I spend my mental calories fixing the problems I do have.
4) Have a cash flow plan. 4a) limit debt as much as possible. We had 1/2 mil in business debt when we opened. We really got lucky in that it didn't put us out of business. We had a tight cash flow plan, kept our margins up, and paid off our business and additional 200k in personal debt in 2years 1 week after opening.
5) keep learning.

Godspeed and Gig'em

KALALL said:

---

What's the name of your business?

---

Until recently we've called ourselves The Beasley Group. That entity still exists but we're creating the brand PraeVis CFO as a DBA. The first communicates exactly nothing while the new name not only communicates what we do but invariably leads to questions about how you pronounce the name and what it means. By the way it's a derivation of the Latin word praevisio which means foresight. In Latin ae is pronounced Y so it's PrY, not Pra.

Thanks for asking!