What business do you own/run

WOTDAH · 30-07-2009, 04:31 AM

I have noticed lately that there are alot of business owners on this forum. Just interested to know what business people own and how they come to start. I would love to start my own but have NFI of what to do or how to do it. Sick of working the same job bringing home the same wage every week. I feel like there is no light at the end of the tunnel and I need to take a risk and start my own business to hopefully make it big and get somewhere.

Or should I just keep praying that I win lotto

Lost Down Under · 30-07-2009, 07:59 AM

You'll get the same replies from people that own their own businesses.
Be prepared to:
Take home less money than youre apprentices.
Work 14 -16 hour days.
Chase money that people owe you.
Get snowed under with government red tape.
Get hammered by a thousand different taxes.

Others will add more.

But on the up side there are also benefits.

Call your own shots to a point.
Pick and choose the work that you will accept.
If you stay small you can have time out when you want to.
You can also have a real nice work ute LOL

BIGJB · 30-07-2009, 09:34 AM

Yeah have to agree with Lost Down Under.
When times are good they are good but the flip
side is when they are bad they are real bad.

My wife and myself own a few businesses.
We own a commercial cleaning company which does
everything from shops, offices, residential cow milking shed
wash dons to well anything that involves cleaning really.
As well as a car groomers and I'm in the process of opening
a performance parts business.

This quite often involves working 7 days a week and up to
19hrs a day in peak times.
Believe me when I say it's hard work for atm very little financial gain.
As much as you earn you will put back into the business.

My advertising bill alone since January this year would be in excess of
12k then there is 1600 p/m in rent for the shed plus phone, power
materials wages for staff.
The list goes on and on and on.

The plus side is that you can within reason pick and choose ya hrs.
We quite often work extra hard the week before and take a long
weekend to go away and hide from the world. Mind you as we are
growing in demand this gets harder and harder to do.

I am all for people starting out on their own but you have to give it
a red hot go and be prepared to live on nothing at all for the 1st
few years while you get your name established.

The biggest thing to remember is 1ST CLASS SERVICE goes a long way.
Our customers are very loyal to us for one major reason our service is
2nd to non.

If you decide to give business a go and start out on ya own I wish
you the best of luck and hope you have a very prosperous future.

John

IDT · 30-07-2009, 02:43 PM

Just do your research properly before going into business. These are some really simple Do’s and Don’ts
Don't's:
• Don’t see a lot of service providers so think there is a market (i.e. you see a lot of cleaning companies around so think "there must be a need". All may be on the bones of there bums.
• Don’t think "I can't find a local guy to do it so there must be a need"
• Don’t believe your mate is driving a Merc and owns a huge house so "he must be doing well"
• Don’t think I have one client/project so I should start a business.
• If possible don’t run your business from home (home is for living!!!)
• Don’t be a victim of technology. (If you go into a business that has a high turn-over in technology you will need to keep up your learning. How will you do this?)
• Don’t forget business is business
Do’s
• Know the rules, there are legal considerations for everything from what Partnerships really mean for you to throwing away unused paint
• Protect yourself, set a budget and don’t exceed it, don’t mortgage the house to start a business ever!
• Speak to your bank, they have heaps of resources (no I don’t work in one).
• Take leave from your current job. Get an ABN find a client/project and test the water (you may hate it or even find there is no return on your investment)
• Learn the difference between Sole Trader/Partnership/Pty Ltd and do what is best for you
• Find out what the REAL start up costs are
• Get your Wife’s support (or partner if you have one)
• Research rates (work out what break even is on the service you provide
• Learn the difference between fixed and variable costs
• Build a business model (go to school again if you have to)
• GET A GOOD HONEST ACCOUNTANT – If you get bad gut feelings go with them and never ever believe good gut feelings about people in charge of your money

capriv8 · 30-07-2009, 04:41 PM

I started a business from scratch and built it up quite quickly to million dollar plus turnover every year with great profit , would I do it again? never! The time and effort to grow the business was insane. You are also expected to be a babysitter a father a counselor a friend a bank manager and more to your employees and they are the good ones lets not talk about the ones that take the at every oppurtunity. Then theres the tax man. Then theres the non payers.
In my opinion money shouldnt be the main reason to start a business.
I got told when I started out that fifty percent of businesses fold at twelve months another fifty percent of that lot fold at five years, I personally found it hard at the five year mark and was completly worn out but had the absolute desire to succeed and managed to get through it, just.
My advice do a business course, find a business mentor, make sure you have a support network, have money in reserve and have a desire to suceed.
Sorry if I come across negative but working for someone else is almost as easy as going to school and there are easier ways of making money.

GT0132 · 30-07-2009, 05:20 PM

Just a few tips and pointers

Financial gain limited only by your lack of motivation, financial resources, product desirability and aversion to risk.

Be prepared to work weekends and public holidays

Ensure you establish a good relationship with your bank manager, especially important for working capital requirements when starting out and funding for expansion down the track if need be

What you make isn't what you take home. Depending on the nature of your business expect to lose around 30-40% of your turnover in overhead costs

Administrative redtape and statutory compliance issues, especially if hiring staff

When you're not at work, you'll be thinking about it. When you're not thinking about it you'll be dreaming (or having nightmares) about it. Where as an employee after 5pm work is over for the day without a care in the world

The security of a pay packet of a fixed amount each month will be a thing of the past. In business you'll have some exceptional months and some poor months.

If you intend being a sole trader with no staff, remember when you take holidays no money comes in. As an employee you get 4 weeks holiday a year and sick leave.

Gain a reputation (preferably a good one !) in your chosen industry, especially if you're currently an unknown or a novice in your chosen field. Advertise in industry publications, local papers, maybe sponsorships with junior soccer clubs etc

Differentiate yourself from your competitors, preferably on service or on a niche product rather than on cost. Competing on cost will kill you if you're new and inexperienced, especially if you're offering an inferior product or service.

Insurance takes on a whole new level of importance if you're a business owner. Don't ignore it

Don't draw all profit out of the business without thinking about your tax obligations.. A key and often forgotten area for the new businessman and a quick entry to the road to ruin. Seek out a good accountant and build a good relationship with him/her

Wally · 30-07-2009, 07:56 PM

I recommend it if you're into wealth creation. Of course there are professional directors and public company execs who earn a motsa, but for most of us the path to riches is owning a profitable business.

The rules are quite simple:- know the earning potential of a dollar and the cost of getting it. Cash is king.

The encumberances are manifold, mainly from Govt regulations and licences. Check to see if the Govt has seed capital avaialble for startup.

My main recommendation is to never borrow money and keep a positive balance in the bank or sufficient assets to cover liabilities. And the real biggy, never ever give a director's or personal guarantee. If you need a line of credit get a corporate mastercard with a modest limit.

And finally, I'm sure there are some legitimate business owners here, but I would guess there are many who say they are, but aren't really.

mad cow · 30-07-2009, 10:35 PM

its a little hard to advise if you dont know what you plan on doing yet, so you have a lot of research and planning ahead of you. the main thing is to find somthing that you enjoy doing. as its a hard enough slog as it is without hating what you are doing. i started my concreting buisiness by doing small jobs on weekends and allowing a percentage of the profits to buy more equiptment. this allowed me to build up a reputation and to get a better feel for the industry. i was fortunate enough to have a large long service payout to give a much needed financial buffer and was lucky to never need it.

the worst thing about being in buisiness is non paying customers. you will have to accept that some people are simply out to get you and have systems in place to try and prevent this from happening. being in buisiness is not for everyone but it is worth the gamble to have a shot at it, afterall the worst that can happen is that you end up back on wages again. (if you havent gone into debt)

GT0132 · 31-07-2009, 01:27 AM

[QUOTE=Wally]And the real biggy, never ever give a director's or personal guarantee. If you need a line of credit get a corporate mastercard with a modest limit.[QUOTE=Wally]

Sorry to ruin the party, but since the wild 80's no financial organisation will provide credit to a PTY Ltd company without a directors guarantee these days. Similarly no sole trader or Partnership will be offered credit without a guarantee from the owner/partners. My guess is that this has tightened up since the credit crunch. I tried to seek finance in January to fund $1.2M worth of capital expenditure on copiers and printers for the firm I run and our finance broker had to relegate the task to a 2nd tier financier such is the availability of capital these days

[QUOTE=Wally] And finally, I'm sure there are some legitimate business owners here, but I would guess there are many who say they are, but aren't really.[QUOTE=Wally]

Without wanting to infer you're referring to my post (which I'm sure you're not) but in case you are, let me set the record straight. I've never owned a business in my life and don't aspire to do so. I'm too busy running other peoples businesses, that is those who would love to run their own organisation, but don't have the skills to do so.

Cheers

WOTDAH · 31-07-2009, 06:47 AM

Some very good info there guy's thanks very much. It's a scary thought to try and start a new business. I have had several offers of partnership in a business over the last few years but have knocked it back for reasons of not fully trusting the other partner and not knowing the product. Maybe ill stick with lotto for a little bit longer and see how I go.

Wally · 31-07-2009, 09:30 AM

[QUOTE=GT0132][QUOTE=Wally]And the real biggy, never ever give a director's or personal guarantee. If you need a line of credit get a corporate mastercard with a modest limit.[QUOTE=Wally]

Sorry to ruin the party, but since the wild 80's no financial organisation will provide credit to a PTY Ltd company without a directors guarantee these days. Similarly no sole trader or Partnership will be offered credit without a guarantee from the owner/partners. My guess is that this has tightened up since the credit crunch. I tried to seek finance in January to fund $1.2M worth of capital expenditure on copiers and printers for the firm I run and our finance broker had to relegate the task to a 2nd tier financier such is the availability of capital these days

[QUOTE=Wally] And finally, I'm sure there are some legitimate business owners here, but I would guess there are many who say they are, but aren't really.

Quote:

Originally Posted by Wally

Quote:

Originally Posted by Wally

Without wanting to infer you're referring to my post (which I'm sure you're not) but in case you are, let me set the record straight. I've never owned a business in my life and don't aspire to do so. I'm too busy running other peoples businesses, that is those who would love to run their own organisation, but don't have the skills to do so.

Cheers

No I wasn't pointing fingers (I don't know you), just warning that the internet is famous for BS and Wiki/Google experts. I'm sure you could owner operate a business very well, but as someone else pointed out, add the fear of losing everything to those that you have as a business manager. And I mean everything from minor things like money and property to major things like wife and family.

Insofar as credit, my attitude is not to have a line of credit, such as overdraft, because once accessed it spells trouble. A corp card limited to say $5,000 may or may not require guarantees. Ours are not encumbered, mainly because we keep a load of money in the company account I suspect.

Yellow_Festiva · 31-07-2009, 06:35 PM

I started and still run my own business. I sell men's ties online

www.tieland.com.au

I have gone to Sth Korea once or twice a year since 2006 to teach English and have been helping the Korean Staff with recruiting and the management of English teachers the last few times due to my experience and 'Korean-like' work ethic.

So, I thought to myself that I had always wanted to run my own business. I went to a few wholesale markets to see what was on offer and make contacts with various suppliers. If I'm going there on a regular basis I may as well make better use of my flight!

I returned and registered a business name and web site after doing my research on the competition etc. My business was never going to be my breadwinner, it was just something I wanted to do for fun to see how it went.

It has been an interesting few years since it has started. Things are pottering along nicely, but sales sure have dropped since the GFC. One day, when my ambitious travel schedule starts to slow, and I settle down etc, I may put more into it and see how far I can take it.

Quote:

Originally Posted by WAForce8

Just do your research properly before going into business. These are some really simple Do’s and Don’ts
Don't's:
• Don’t see a lot of service providers so think there is a market (i.e. you see a lot of cleaning companies around so think "there must be a need". All may be on the bones of there bums.
• Don’t think "I can't find a local guy to do it so there must be a need"
• Don’t believe your mate is driving a Merc and owns a huge house so "he must be doing well"
• Don’t think I have one client/project so I should start a business.
• If possible don’t run your business from home (home is for living!!!)
• Don’t be a victim of technology. (If you go into a business that has a high turn-over in technology you will need to keep up your learning. How will you do this?)
• Don’t forget business is business
Do’s
• Know the rules, there are legal considerations for everything from what Partnerships really mean for you to throwing away unused paint
• Protect yourself, set a budget and don’t exceed it, don’t mortgage the house to start a business ever!
• Speak to your bank, they have heaps of resources (no I don’t work in one).
• Take leave from your current job. Get an ABN find a client/project and test the water (you may hate it or even find there is no return on your investment)
• Learn the difference between Sole Trader/Partnership/Pty Ltd and do what is best for you
• Find out what the REAL start up costs are
• Get your Wife’s support (or partner if you have one)
• Research rates (work out what break even is on the service you provide
• Learn the difference between fixed and variable costs
• Build a business model (go to school again if you have to)
• GET A GOOD HONEST ACCOUNTANT – If you get bad gut feelings go with them and never ever believe good gut feelings about people in charge of your money

This is very good advice!

I'll add more Do's:
* Surround yourself and use people who know what they are doing. The money you save by trying to do things yourself will be wasted by the time spent researching, and the 'trial and error(s)' involved.
* Get advice from people who can show proven results, forget the advice of a person who heard from a mate of the guy down the pub etc.
* Start small and BUILD UP. Your success will create the income you need to expand, if you fail, you may lose some cash, but you will still have a roof over your head.
* Have a 'worst case scenario' and work on an answer to it.
* There is A LOT of 'free' information out there. Some councils offer small business mentoring programs, the ATO offers free seminars on Tax issues, the library is full of 'self help' books. Milk these for all they are worth!

Cheers

Jason

XA5800 · 31-07-2009, 07:24 PM

Been in business since 1988, latest venture 10 years www.pedalcar.com.au

GUTLES · 31-07-2009, 11:27 PM

Quote:

Originally Posted by XA5800

Been in business since 1988, latest venture 10 years www.pedalcar.com.au

There awesome! My sister gave my son a Red Retro Racer last Christmas, best toy I've ever seen.

Auslandau · 31-07-2009, 11:55 PM

Quote:

Originally Posted by Wally

Insofar as credit, my attitude is not to have a line of credit, such as overdraft, because once accessed it spells trouble. A corp card limited to say $5,000 may or may not require guarantees. Ours are not encumbered, mainly because we keep a load of money in the company account I suspect.

Totally agree with GT0132. Yes you do need capital behind you but with out using suppliers accounts which are unobtainable without a guarantee .... the amount of funds to start could be to prohibitive for most, even for a small business. An overdraft or loans, carefully managed is paramount to success in many new and established companies, especially if the type of work is seasonal ..... its all part of it. Without it 90% of successful business wouldn't have got off the ground

A far as owning a business ....... be prepared for high blood pressure, stress, long hours, employees making more than you, being a full time psychologist ..... but if it works, can be very rewarding. And yes, the first 5 years is hard!

| [/url] |

Geez Louise · 01-08-2009, 12:11 AM

Very wise words indeed from auslandau...but looking at this from another perspective...be prepared to do your BAS and PAYG as your company grows...and lodge it on TIME!! That is something you can not avoid! Wages, Supplier bills and taxes.. you will be up to your ears in them. Yes, owning your own business is hard work, but it can be very rewarding.

Good luck! I wish you the best

Work Horse · 01-08-2009, 02:25 PM

Quote:

Originally Posted by WOTDAH

Some very good info there guy's thanks very much. It's a scary thought to try and start a new business. I have had several offers of partnership in a business over the last few years but have knocked it back for reasons of not fully trusting the other partner and not knowing the product. Maybe ill stick with lotto for a little bit longer and see how I go.

There is excellent advice in this thread WOTDAH. Being scared of the thought is positive, if it focuses you on what is important. But don't be scared off, if it is something you really wish to do.
You can reduce your fears by getting all the information you can. Do a business course, or further education in the field you wish to set up in. Writing a business plan can be helpful to identify the amount of risk you are taking on.

The responses you have received may also be directed toward the wording of your original question.

Quote:

Originally Posted by WOTDAH

Sick of working the same job bringing home the same wage every week. I feel like there is no light at the end of the tunnel and I need to take a risk and start my own business to hopefully make it big and get somewhere.

There is nothing wrong with wanting to make it big. IMHO you will need more driving you in your own business apart from a desire for more money and a way out of a job you see little future in.

I am a bit of a worrier and a control freak. Some people seek therapy for this others are happy to go into small business:evil3:

Personally, I hung out my shingle in 1996 as a Landscape Gardener. I have since done further study in both horticulture and business management.

I am still in business, and make a profit. Most importantly I still have a passion for what I do.

mickyyyy · 01-08-2009, 03:12 PM

Great info guys keep it coming.

Ive also been thinking of openeing up a business but not sure about tax and so on so will be speaking to my tax agent as apparently u can make 70k without paying GST or something like that???

gtfpv · 01-08-2009, 04:27 PM

i'll try and keep it short WOTDAH. you dont own a business , the business owns you.
getting rich is highly unlikely. working harder then ever is a certainty, risks and uncertainty in finance and work are guaranteed.
ever looked at an ice cream shop owner, he is there serving icecream everyday, to people who are having a weekend off.
after sometime of taking all the negatives and growing your business the demand even gets harder, the wealth may appear , but trying to dodge taxes etc means you have to invest, which means debt, which means OWNED !!!!! its one of those things where you better like what your doing because its all you'll think about for years and years . good luck
employees dont have any worries in comparison , they may never get rich , but they might always be able to pay the bills , or change jobs , location, when and where they like .
trust me , i've lived on both sides . and people i know in business are doing better financially than employees , but the employee goes surfing on his days off . ( which is better ) ????
hope this helps .

xbgs351 · 01-08-2009, 06:09 PM

Quote:

Originally Posted by mickyyyy

Great info guys keep it coming.

Ive also been thinking of openeing up a business but not sure about tax and so on so will be speaking to my tax agent as apparently u can make 70k without paying GST or something like that???

A 30 second google search brings this up:
http://www.ato.gov.au/content/downlo...0141220081.pdf

Basically, if you turn over more than $75,000 in a year you need to register for GST. If you don't think you will turnover that much in a year your business idea wouldn't be worth pursuing.

As a rule of thumb, to break even for someone earning around $60,000 per year, they would have to bill out around $2500 of labour per week or sell $12000 worth of product (with a 25% mark up) per week.

Bmobile · 01-08-2009, 07:07 PM

Well I'm looking at starting my own business in 2 -3 years, so this thread has been a great help. It will be in earthmoving, very sesonal type of work which will make it risky but well worth it when times are good. I will need to outlay a lot of $'s for a truck, bobcat and Excavator. I have only just started out in this line of work, and enjoy it heaps. I was a house painter 7 months ago and had done it for years and realy just dreaded and hated it so am used to the seasonal / wet days ect and basicly being a subbie. At least with earthmoving I will be doing something I realy enjoy.

mad cow · 01-08-2009, 10:11 PM

and when you are quiet you can always pick up a bit of work painting... it always pays to have a plan B up your sleeve.

xbgs351 · 01-08-2009, 10:40 PM

I manage a couple of businesses. One of the businesses is focused on the calibration of medical and industrial equipment, and the other business which I established in 1992 focuses on nationwide sales of autoclaves (steam sterilisers).
www.autoclave.com.au

XA5800 · 01-08-2009, 11:54 PM

Quote:

Originally Posted by GUTLES

There awesome! My sister gave my son a Red Retro Racer last Christmas, best toy I've ever seen.

Thanks for the positive feed back, Let me Knwo when He is raedy to step up.

Cheers Brett

DayTE · 02-08-2009, 12:05 AM

I don't think it has been said, but, try and get involved in something your are interested in, better yet, something you are passionate about. It will make things a whole lot more enjoyable for you.

Wally · 02-08-2009, 08:57 PM

Quote:

Originally Posted by auslandau

Totally agree with GT0132. Yes you do need capital behind you but with out using suppliers accounts which are unobtainable without a guarantee .... the amount of funds to start could be to prohibitive for most, even for a small business. An overdraft or loans, carefully managed is paramount to success in many new and established companies, especially if the type of work is seasonal ..... its all part of it. Without it 90% of successful business wouldn't have got off the ground

A far as owning a business ....... be prepared for high blood pressure, stress, long hours, employees making more than you, being a full time psychologist ..... but if it works, can be very rewarding. And yes, the first 5 years is hard!

I'll take you to task over some points there:

1. I've been in business for 20 years and I do not have any guarantees in place with my suppliers/creditors. I simply strike out that section and send in the application.

2. Overdrafts are high cost money. As many have pointed out, it is much better to live like on the dole for a few months and build positive equity. This is particularly important if you need to have a Govt endorsed licence to operate (QLD QBSA/ NSW Fair Trading). I have to submit an independently audited P&L and balance sheet each year to renew my licences, an active overdraft would balance to negative equity and limit the allowable turnover, it would also be a red flag if I did seek bank finance.

3. If a startup company needs large scale loans, the banks will be reluctant if they can't put a lean of personal assets as well as the company assets. This is the mistake a lot of truckies fall into, where their rigs are leveraged as well as the family home:- some business' are just too hard work and too much risk exposure.

4. I rarely lose sleep, I have idle time during the day, more often than not I take Friday off and have always had my weekends and public holidays (I think we need more public holidays). Business success at the expense of family is failure.

And seeing I'm supposed to trumpet how hard it is; well it is if you don't know what you're doing , where you're going and how to delegate. But that applies to wages people anyway, the same concerns over bills, the school fees, advancement, no guarantee you'll have an income in six months time, etc.

The fastest track to failure is fear of the fear of failure. I say if you have the fire in the belly to have a punt, take it, otherwise you'll always wonder coulda, shoulda, woulda. Just make the business model very flexible to change.

Falc'man · 05-08-2009, 08:50 PM

Quote:

Originally Posted by Lost Down Under

You'll get the same replies from people that own their own businesses.
Be prepared to:
Take home less money than youre apprentices.
Work 14 -16 hour days.
Chase money that people owe you.
Get snowed under with government red tape.
Get hammered by a thousand different taxes.

Others will add more.

But on the up side there are also benefits.

Call your own shots to a point.
Pick and choose the work that you will accept.
If you stay small you can have time out when you want to.
You can also have a real nice work ute LOL

Your post reminded me of the below...

A man owned a small farm in Scotland.

The Inland Revenue claimed he was not paying proper wages to

his staff and sent an investigator out to interview him.

'I need a list of your employees and how much you pay them,'

demanded the investigator.

'Well,' replied the farmer, 'there's my farm hand who's been with

me for 3 years. I pay him £200 a week plus free room and board.'

'The cook has been here for 18 months, and I pay her £150 per week

plus free room and board.'

'Then there's the half-wit. He works about 18 hours every day and

does about 90% of all the work around here. He makes about £10 per

week, pays his own room and board, and I buy him a bottle of whiskey

every Saturday night. He also sleeps with my wife occasionally.'

'That's the guy I want to talk to ...the half-wit,' says the agent.

'That would be me,' replied the farmer..

rodderz · 05-08-2009, 09:11 PM

Agree with everything on here. The first few years are hard, but it's better than working for a boss. You get a sense of freedom and satisfaction running something you are responsible for.

The key is to start out at your own pace, find your feet, don't get too big too quick or you will end up learning the hard way. Even though yo may of been in the industry for a while, running it by yourself is very different. It's your money you stand to lose if crap hits the fan.

I have been running my own landscaping business for over 4 years now and each year I seem to go to the next step. I did 1.5yrs by myself, then worried about hiring an apprentice in case I ran short of work. Once I did I thought I should of done it sooner. A few months later I bought a machine, again I wished I had done it sooner. This year I have put on another guy and am about to get a truck, a qualified foreman and possibly more machinery. I have enough work for it all, but human nature is to be a bit worried before you do so. I have more than enough work, the last 12 months I have been so busy it's been a struggle to keep up, particularly the last 4 or 5 months.

Take small steps, but look into the future too. Also, it's hard not to fall into the trap of overworking yourself initially. Both at work, and at home doing paperwork. I struggle to get 5hrs sleep a night as I'm up late finishing off quotes and paperwork. At times I get pretty annoyed with it all, and some other things in your life suffer because of it. You have to get that line between business and personal, otherwise it consumes you.

bingoTE50 · 05-08-2009, 09:57 PM

I owned a wholesale business for seven years then sold it to a larger company.I done quite well out of it, but did not become wealthy.
It was definitely worthwhile.
Pretty much everything is covered already ,but definitely do your research on your competitors.How will they react?How will you gain marketshare?How long could you endure/sustain discounted pricing in your market.
And one question a lot of long term business owners must ask themselves ,what is your exit strategy? Will you sell the business at its peak or when it becomes unprofitable?