Question for small business owners...

[jen1977]

Hi everyone! My husband is contemplating opening his own business. He was let go from his job in June because he would not do some unethical things that the owner wanted him to do, so first chance the boss got, he was let go. He has been doing some side work....not nearly enough to consider it a business, but you have to start somewhere I suppose. My question is....if you own a small business, and had it to do over again, would you do it? We realize it is stressful, and a lot of work comes home with you, but what are your positives/negatives? Thanks!

 

[jen1977]

I should also say....he has almost 10 years experience, both in the field, and in management, so he knows what he's talking about and knows the good and bad about the industry. He wouldn't be going into his own business blind.

 

[monkeyboy]

There is never a good or right time so just grab the bull and go with it.

Its a risk vs reward scenario

 

[erincon23]

My DH has had a lot of bad luck with traditional jobs, so several years ago he looked into starting his own business. He's continued to get full-time jobs, but his business has helped us through periods of unemployment (like right now). You didn't say what kind of business your DH is looking to start, but I will say that while my DH finds this much more fulfilling than working for a regular company, I find it much more stressful! You have to find your own insurance, you're never sure what or when the paycheck is going to be, when he's working at home I find that it bugs me to have him home during the day .

Be sure he gets good advice --tax, legal, accounting, marketing, etc. Many community colleges have small business services -- ours offers one-time counseling at no charge for small-business start-ups and has many classes or seminars on small-biz topics. He should look at doing a LOT of networking -- both for people in his field and in the larger community, if he needs to find customers. DH is in several networking groups for finance people, has joined a couple of local Chambers of Commerce, belongs to job accountability groups, etc. Our local library has also offered programs that relate to small business, so we've taken advantage of all of those (I have my own small business, but we're not expecting it to make much money).

Be sure you can afford to be without his paycheck -- or as much as you were used to -- for at least 6 months. If he's collecting unemployment, make sure he finds out how much he can earn from the business while getting unemployment (my DH has worked as a temp/contractor and has had weeks where he doesn't file his unemployment claim because he made too much, and weeks where he does because he's not working).

I've told DH that I'm not comfortable at this point with him counting solely on his business to support our family, so he's continuing to look for a regular job while he's also trying to get clients. He doesn't like trying to do both, feeling like he's not giving either his best effort, and I understand that. But he's not the only person to consider in this. And in your family, you and your DH have to come to an agreement as well -- can you give him 6 months to see if it's possible to get a business off the ground, and if it's not going as well as you both think it should at that point, he starts sending out resumes? If you're behind it 100% and can even help in some way, he has a better chance of success. Good luck to both of you!

 

[tvguy]

A couple friends run their own businesses. One thing they both do is use tax software that warns them when they they are close to getting bumped into a higher tax bracket. Then they figure out how much additional work they would have to do to offset the higher taxes on what they have earned so far. If it's near the end of the year, they may decide to take a couple of weeks off, or to not bill until after the first of the year to lower the tax bite.
If the customer won't agree to be billed later, one guy actually has worked for free the last week of the year if a major customer has to have something small done that would push him into a higher tax bracket if he billed them.

 

[Cheshire Figment]

I would also suggest going to www.irs.gov and order the following publications which will probably help a lot.

334 - Tax Guide for Small Business (For Individuals Who Use Schedule C or C-EZ)
463 - Travel, Entertainment, Gift, and Car Expenses
535 - Business Expenses
551 - Basis of Assets
552 - Recordkeeping for Individuals
560 - Retirement Plans for Small Business (SEP, SIMPLE and Qualified Plans)
583 - Starting a Business and Keeping Records
587 - Business Use of Your Home
946 - How to Depreciate Property

And also, if the time can be spared and at and minimal cost take a first semester Principles of Accounting course at a local Community College. Not necessarily to keep the books, but to get an understanding of what the business is doing.

Note that most small business fail within the first few years not because the owner did not know his subject but because they did not understand the accounting.

Mike (CPA Retired)

 

[Buckalew11]

I've owned my own business for 18 years. Been in the business for 29 years.

I love working from home and being my own boss. The negative is that I hate paperwork. I have no employees so I know I have far less paperwork than most people but I just hate it--plus, I feel taxed to death.

 

[Art 1]

Hi everyone! My husband is contemplating opening his own business. He was let go from his job in June because he would not do some unethical things that the owner wanted him to do, so first chance the boss got, he was let go. He has been doing some side work....not nearly enough to consider it a business, but you have to start somewhere I suppose. My question is....if you own a small business, and had it to do over again, would you do it? We realize it is stressful, and a lot of work comes home with you, but what are your positives/negatives? Thanks!

Good question. It has allowed me to make a good bit of money, buy nice things, put the kids through good schools and college. Not sure if it's been worth it though. Lots of stress, risk and responsibility in what I do.

 

[FayeW]

I've told DH that I'm not comfortable at this point with him counting solely on his business to support our family, so he's continuing to look for a regular job while he's also trying to get clients. He doesn't like trying to do both, feeling like he's not giving either his best effort, and I understand that. But he's not the only person to consider in this. And in your family, you and your DH have to come to an agreement as well -- can you give him 6 months to see if it's possible to get a business off the ground, and if it's not going as well as you both think it should at that point, he starts sending out resumes? If you're behind it 100% and can even help in some way, he has a better chance of success. Good luck to both of you!

So why don't you get a traditional job outside the home to help support the family, so your husband can concentrate on growing his business?? It seems rather unfair of you to demand he go out and get another job while you enjoy the perks of having your own small home-based business.

 

[padams]

Dh started his own business 15 years ago. We can't imagine life any other way. Go for it!

 

[CharlaA]

We own a small business, the last 3-4 years have been a bumpy ride. My husband gets behind on his paperwork which makes me crazy. If I had it to do all over again - I probably wouldn't.

 

[jen1977]

Thanks everyone! He's in heating/air. He has been in the office on the management side for the last several years, and loved it. He's had a great boss who was a terrible business man, and a great business man who was a terrible boss! I know that dh can be both, but it seems like a lot of stress. I guess it can't be anymore stressful than being unemployed. He is still looking for I'll time employment, but has had very few bites. It seems most aren't in his field, and pay less than unemployment. He's seriously thinking about writing his MBA, and jumping feet first into his own business, I just know that there is more to it than finding customers and doing the work. Is MBA the way to go if you want to be a business owner?

 

[Cheshire Figment]

He's seriously thinking about writing his MBA, and jumping feet first into his own business, I just know that there is more to it than finding customers and doing the work. Is MBA the way to go if you want to be a business owner?

No! No! No! No!

An MBA is for a person who is specializing in financial management. Unfortunately most MBAs I have seen outside of financial positions are great in Management Theory but don't know anything about the actual business they are in. It is just like a teacher with a degree in Education but does not understand the subject matter being taught!

 

[bjscheel]

So far so good for us. DH drove a truck (locally) for a guy for 3 years. During that time, he would occasionally think out loud about getting his own semi and doing it for himself. I would say NO and remind him how expensive semi repairs can be, self employment taxes, etc.

The time came when the boss wanted out, was having financial troubles, and it was coming down to buying our own truck or getting a different job. At that time I really felt it was time to go out on his own. We bought a truck and it has gone well.

A couple of things that helped- I work at a law office and have an accounting degree and do taxes; and we have, so far, had a 100% collection rate. Most clients are grain elevators, and unless the elevator is going under, we get paid. The main one has a check to us by Wednesday for the previous week. Now at the office where I work, if we got paid 100% we would be raking it in, but the collection rate from divorce clients is so much worse!

In addition, we had a little money saved up, and my pay is decent, so we didn't take any money out of the business for the first several weeks. That helped get that account growing.

He has never had insurance through a job, so we are used to paying for health ins for him and the kids.

There are times when DH wishes someone else were finding the loads or paying for repairs, but yes, we would do it again.

 

[kellyg403]

My dh owns his own business as well. He started in the early 90's or so. There have been times that it has hit a slump but for the most part, he has been very successful. Some basic hints would be

1. For taxes etc, get an accountant. I would never ever attempt to deal with any business/tax related item without having an accountant helping. He does our quarterly taxes and is available for any questions we might have.

2. Insurance. Expensive but a must.

3. Plan on working hard and working a lot at first and at various times throughout the life of the business. There have been times where dh has worked days and days at 18 hours a pop. Sometimes with little to no pay to keep the business going. Those times have not been many, but they have happened.

If he does decide to do it, he will work long and hard. At first he will have to be priced a little lower than most, just to get his name out there and get a good client base going. Word of mouth is an excellent way of getting new business.

For me personally, I would not do it over again. Dh would. There have been some stressful times but he has enjoyed being his own boss and really making a living on his own work ethic. He has done a great job. But, there have been months when he would leave the house at 3 am and not return until 8 at night only to eat and go straight to bed and start over the next day. Not a great way to get some family time in. The kids and I have taken several weekend trips without him because he also works 7 days a week and always has. Finally in the last year or so he has started to take a short day on Wed and Sun. His business is definitely doing well now and he has the opportunity to scale back a little.

Starting a business is a committment from the entire family really. If your dh understands how much/hard he is going to have to work with little to no pay for at least for the first year, and is still interested I would say try it!

Good luck!

Kelly

 

[codyvt]

Hi there -

I own a law firm with a business partner. We opened together in 2007 after merging solo practices. While I enjoy the freedoms associated with being the boss, the stress is overwhelming at times. I agree with the tax and bookkeeping advice. Spend the money to make sure you have quality people helping you run the financial side of things and do not forget to pay Uncle Sam. Remember to breathe and take breaks every once and a while.

Good luck!

 

[Disney Doll]

A couple of thoughts come to my mind:

1. I wouldn't want to rely on a start-up own business for my sole means of support unless I had a LOT of money in the bank to live off of while it was starting up.

2. Would you be willing to get a job to provide a stable, predictable income and health care benefits?

3. Would DH consider finding another job for a while and additionally being a consultant in his field? That way he would have the security of a job and have the opportunity to see if the consulting side takes off and could build slowly, but surely, into his full-time job?

4. Are you and your children prepared to provide the support it takes to start a business?

In reference to my #1 & #2 above - When DH & I married, he was a realtor working on commission. I am a nurse. Realtors working on commission are very similar to being self-employed. Income depended on how many transactions he was involved in and transactions were dependent upon the real estate market, mortgages and a myriad of other things over which he basically has no control. Also, healthcare benefits were not provided by his broker at a reasonable cost...you could get in on the group rate through the company, but it was not cheap because it was a relatively small group. I had a predictable weekly income and we got our health care benefits through my job @ a much more reasonable rate because I worked for a MUCH bigger entity than he did. We basically lived off my income and banked his commission checks when he got them. My point being that one of you should have a predictable income IMHO.

In reference to #4 above- You and your children have to be on board to support this effort, because it will be a family effort.

We have a friend who has been in the car business, in various capacities, for many years, always working for someone else. He decided to open his own used car dealership. His wife told him she would be on board, support him 100%, knew that it would take a number of years to establish the business etc. So off he goes, opens the dealership and within 3 months she's complaining that he hasn't brought home a paycheck, what's going on, she's sick of working and thought that when he started his own business she could stop working.

You see, his father had built up a very successful car dealership and made quite a bit of money from it. He sold it many years ago, before any of the kids would have been able to take it over. I think my friend's wife thought that he'd be making that kind of money in 3 months and she would be living like Mrs. Gotrocks. What she failed to realize is that my friend's father worked very hard for many years to be that successful, and my friend's mother and the rest oif the kids sacrificed quite a bit along the way. Well, needless to say she complained so much all the time that he decided to close up shop. And he was actually doing OK for a start-up business...he was selling cars fairly regularly. But she had this impression that he was going to be RAKING IN money from Day 1. She had the impression that she'd be living a certain lifestyle and it was happening quickly enough for her.

Perhaps he should talk to an attorney or someone who could advise him? Maybe there's a way to start small and build up to something bigger?

 

[NCRedding]

I have owned a samll business since 1995, then my husband joined me in late 1996.

It isn't glamourous, or a way to make a killing, in general.

I have done some very unglamourous things, like cleaning toilets, scrubbing floors, and picking up trash, when we couldn't afford a cleaning service. I do a lot of managerial functions because we aren't in a financial position to hire a manager, so I order supplies, reconcile checking accounts, etc. Some days, I feel as though I don't actually get to do my professional work for handling the managerial part.

With the current market, I really wish that we had just continued renting rather than buying our office building. Although we have a great interest rate, and only a few years left on the mortgage, it is still more than we would have been paying in rent, and has really eaten into our profits over the last few lean years.

Do find a good accountant. The tax issues are too difficult without professional help.

After 17 years, I can't imagine working for anyone else, but there are definitely some days when I would like to take off some, if not all, of my responsibilities.

 

[tvguy]

With the current market, I really wish that we had just continued renting rather than buying our office building. Although we have a great interest rate, and only a few years left on the mortgage, it is still more than we would have been paying in rent, and has really eaten into our profits over the last few lean years..

Wow, not knowing how long you have had your office building, your real estate market must have really crashed if you're paying more for a mortage than you would in rent. For a lot of small business owners I know, the real estate associated with their business is their retirement fund.

 

[Lilliputian]

My husband has a regular full-time job and owns his own company. His full-time job is from home, so that gives him a little extra time to run his own company. He doesn't have any employees, but he does have a lot of contractors who do various amounts of work depending on the month. Hiring contractors can be tricky, but since he hires computer programmers, and all but one work for at least a few other employers or contracts, it meets the IRS criteria. He wouldn't do it if he had to have employees.

We love it. Because both jobs are run from home, we see him more than when he had one job in an office. We use his regular job for our regular expenses, including a little toward retirement, and then his own company is all for savings and fun stuff, like vacations. We plan to be able to pay off our house within the next 3 years, so that's a huge benefit. At that point, we'll have to decide whether it's worth it for him to continue working two jobs, and if not, which one to stay with.

If you don't have more than 6 month expenses saved (and I think a year is really best), then starting your own company without another job is pretty risky. He'll be more employable right now if he starts his own company, even if he doesn't stick with it long-term. It's easier to get hired if you aren't unemployed.