[Mariss Freimanis]

I've had the 'misfortune' of being in business for myself my entire life and I have always done very well. I have never worked for anyone else since I was 18 and in college. This means I have never had things like medical, retirement and seniority provided by an employer so many people are afraid of losing when they contemplate starting a business of their own. I have always provided those things for myself so I'm used to it; it is my 'normal'.

Like everyone else, I have a family, obligations and I crave financial security. Were I employed by someone, had a family, house and was thinking about starting a business, I'd be nervous too. That 'bird in the hand' always seems to weigh more than twice as much as those two in the bush.:-)

Still, don't let fears stop your dreams; it can work out if you are careful. Never burn bridges behind you, start part-time while you keep your day job (and security) intact. You sleep 8 hours a day. Your day job is 8-hours Monday through Friday. That leaves 8 hours weekdays and 16 hours on weekends to work on your dream. Yes, figure on doing nothing but working and sleeping. Don't bother if you are not good with that because it will take that. 72 hours every week to get you towards your dream (well, maybe 40 realistically).

You have a good idea, it stands out and you are committed to putting in the time it deserves? Your effort and the market will judge its worthiness. If it's all good, the part-time income will equal, then exceed the day job income. Dump the day job and go pro only then. If it doesn't, hone your new skills until it does or until you discover you weren't meant for this. Know yourself, learn and know what you are good at.

Two friends, three stories:

Story 1) A good friend of mine (since deceased) but 15 years older than me worked for Hughes Aircraft as a EE in the '80s. We met professionally and my wife and I became close friends with him. He was thinking about retirement and starting a franchise business. He picked something like "MailBoxes R Us", invested his savings and moved from SoCal to New Mexico to start his new venture.

The whole thing was doomed from the start. He knew nothing about mailboxes; he was a EE after all. He threw everything he had and owned into it. He added pointless stress by moving away from the familiar to the unfamiliar. The biz lasted 2 years; long enough to bankrupt him.

Moral of the story? Three: Do or start from something you know something about. Your experience, education and skills are your tools. You use your tools to make living. Replace your tools for different ones if you must but do it one tool at a time.

If you play poker, you don't bet the deed on your property unless the hand you hold cannot be beaten. Keep perspective and be cautious about your saved money. Every time you put something in, you must see a good return. Throw everything in only when you hold a royal flush.

Starting a business is hard enough. It will take all of your attention and all of your effort. Anything that distracts you subtracts from what you have to give. Make sure you are centered, your wife is behind you and everyone knows what will be required as a sacrifice.

Story 2) This person I met through Hughes as well but this time their electronics division. Same situation, same time-frame but the guy was 10 years younger than me. Again, we became family friends. He was a cracker-jack electronics draftsman and CAD programs were appearing on the scene. His idea was to start a board layout business using CAD.

He rented a very nice tilt-up office space in an exclusive high rent industrial park area near Orange County airport. He had the technical knowledge and skills to run this business. He hired a lot of people, a few which were draftsmen he intended to train in CAD.

After his shop was up and running, he invited my wife and I to see his new operation. I still remember my impressions as I was given the tour. The lobby had granite tile floors. Glass doors with gold handles separated the lobby area from several conference rooms holding enormous teak conference tables. The executive offices were furnished with Koa executive desks, the best furnishings and the finest, most tasteful wool carpets.

The shop was in the back. It took up about 25% of the total square footage. There were some ratty drafting tables and two (2) PCs. That was it. The biz folded in less than a year.

Moral of the story? Just one: Know where the money is made. Hint: It's not made in the office. The best small companies I've been invited to see have the rattiest offices. All the machinery in the shop (>75% of total area) is new. No expense is spared on laboratory and test equipment. All assemblers and technicians have the best, latest tools and great workstations. You can eat dinner of off the shop floor. You worry about catching something infectious in the office though.:-)

Your start-up is not the place to resolve your ego issues. It is not the arena to put your ego on display. Doing so misuses resources that could better be used elsewhere. The office is the place where non-direct income work gets done. Remember; buff shop, crappy office.


Last story 3) These guys were acquaintances more than friends. They were in Minnesota and they worked for a medical equipment company. They had a good idea for some medical diagnostics equipment which is how I met them. They used our drives.

They moonlighted legitimately; their idea had nothing to do with their employer's product. Because they moonlighted, they called their venture "Lunar Radiation Inc". They worked all the time and they were dedicated and they did everything right. They had a buff production area and awful offices. They were bought out by GE and their company became the Lunar division of GE Medical.

Moral of that story? There isn't any. You do it right and there are no mistakes for anyone to learn from.

For me, I cannot think of a better way to have spent my professional life. It is always better to be a hungry dog without a collar than a well-feed dog wearing one. If the collarless dog is half-way smart, he won't even ever be hungry. The biggest advantage of working for yourself is the full freedom to pursue any dream that catches you. You don't have to answer to an employer who may not see what you see.

Mariss

[Geof]

WOW Mariss!
That is exactly how I feel about running my buisness!....
I have friends that make fun of me for working so much.....Nick

They are not friends if they make fun of you.

Mariss does explain what is needed very well and you touch on one of the unfortunate aspects of doing your own thing. The 'friends' who make fun of you for having a dream and working like a maniac, then when you are successful they resent it because "you are lucky and have your own business".

[NC Cams]

One small exception to point number 3 in Mariss" pints above.

THe price you charge for a product had to reflect the expectations of the buyer.

Example. Ccrarillo makes con rods for the racing pros. Their rods go for about 200 dollars each or more for the "cheap" ones. Real jewelry. Special proprietary steel, special SPS rod bots, Special SPS-Carr OPTIONAL bolts that are even more pricey. They essentially created the specialty con rod market of which there are now MANY more competitors.

DO you think for a minute that you can compete in this same market if you came up with a rod you could make profitably that was 'just as good" for say 1200?. How can you have something just as good for less money? think about it.

Sell cheap and your not respected, Yes there are price conscious buyers but een they are skeptical of "cheap". Get over consumed by price and cost, you can fall into the cusp of sacrificing quality for the former.

I could sell cheap cams, I refuse. EVERYBODY gets a NASCAR quality cam from me. Why? its is cheaper to make one quality and not have scrap than to give a crap about this guy and not the next.

I"m not disagreeing with Mariss, I"m jsut pointing out a reality alternative that exists in my industry.

[jmsrbrt]

Here's a quick question (maybe)
I've been a small (hobby) business for a few years. Cheers Jim

Don't know how it works over in Austrailia, but in the U.S, don't EVER refer to your small business as a hobby!. The I.R.S. will disallow many if not all of your deductions.

[WLee]

Not sure if this is the right place to post this but here it is. I have some metal working equipment in my garage and do some playing around as a hobbie. My question is: Is it worth starting a small part time business,or is it not worth the hassal of dealng with the taxes, Etc? I have a few people interested in having some work done and I want it to be all legal like if I were to do work for them.
Thank You

Best advice would be to get and read a book called "Small Time Operator."

[ame="http://www.amazon.com/Small-Time-Operator-Bernard-Kamoroff/dp/0917510186"]Amazon.com: Small Time Operator: Bernard B. Kamoroff: Books[/ame]


Follow the advice in that book and you can make sure you do all the paperwork (which these days is not hard) that will keep the IRS from calling you a "hobby" and negating your write-offs or causing you other problems.

Unless you have some insane/masochistic love of paperwork and bureaucracy, then the main thing you want to avoid (or delay as long as possible) is having non-family members as "employees" -- the amount of paperwork (insurance, unemployment, withholding, etc) that is necessary for even just one "employee" will drive you nearly nutso.

It is definitely wiser in terms of time (even if a bit more expensive in terms of dollars) to sub-contract any/all non-production work out to other local small businesses for as long as possible (i.e. if you or a family member is not competent at something then find some contractor to do your accounting, rather than hire an "employee" to do it; likewise, for as long as it is possible & practical, hook-up with independent sales and/or service-reps on a contract/percentage basis rather than hiring your own sales or service people, etc.)

In my experience, the only time you should hire employees is when you HAVE TO -- for your profit generating main "production" work (and even then only when you have "long term" production and/or contracts scheduled -- even paying a premium for "temps" can save you a lot of hassle if the need is to have help with some short-term "overload.")

[cob]

ok I know this post has not been updated for a while but here is a delema i would be facing .
I am working for a machine shop know how to do just about everything from start to finnish for every part that comes in. I have been having thoughts about starting a part time on the side but here is the question my boss would find out I have a shop they would fire me then they would try to take same legal action against me.
how would some of you guys go about this.

[bukky633@yahoo.]

Did you sign a no compete form with them?
Are you going to be doing work for their customers?

I think if you are doing it on the side for your own customers/contacts or if you are offering a little bit different service it is none of their buisness what you do with your own time/money.

Just my thoughts
Nick

[jmsrbrt]

I agree with the other poster, except, I see no need for a non-compete clause unless you're doing the same type of work (on the side or otherwise) as your employer. And if you ARE doing the same type of work, you'd better be looking for other employment.

[WA Toolman]

I got fired once when my boss found out I was just thinking about starting my own shop. That said, usually you won't get much hassle if you are not directly competing. In other words, if the company you work at in the day time maKes gears, and you make say, custom motorcycle parts, most bosses will be cool with it and may even help you. Assuming said boss is reasonably sane. One guy I worked with had a CNC router, my (our) boss had the guy make some signs for him. :cheers: