[1013mm]

Hey, I know there's some entrepreneurs and small business owners on the board so I thought I might ask. How did you guys first start? Financially. I just want to get some ideas. Venture capitalist? Parents? Money tree? Loan? Rob a bank?

I don't have my own small business YET just trying to get a feel for everything and wanted some serious input.

Thanks!

[BTM]

Small business loan should cover you provided you aren't looking to start something with a massive outlay...since I've seen your photos I'm assuming this may have something to do with being a photographer - since it's a service rather than a product a business loan should cover property and working capital...relatively easy to secure as well since if you go defunct they just take ownership of your assets.

[Feyd]

I keep saying it when these threads come up... but find a good Small Business accountant immediately. IMO, it really should be your first priority... almost before finding money. Small businesses (and all businesses) aren't about how much you make, they are about how much you keep.

You need a good accountant to advise you on how/when to spend money and what to spend it on to minimize your tax liabilities each year, plus in your business's infancy a good CPA will help guide you through the processes of setting up the company the right way... Sole Prop/LLC/etc.


Gotta ask, but how much are you looking to get? It might help some with some suggested avenues if we know how much you are ultimately looking for. It can be general 5k/10k/100k/500k??




Side Note:
Brian, did you get a MCoupe? Nice.

[Tondtar]

I agree with Feyd but have to add not every accountant or CPA can act as a "business adviser" necessarily. You need to find one who can give you tips in business planning and financial structure of your new venture.

Secondly, in my own experience, most new small businesses start with personal savings or loans/ seed money from friends or family. I am not sure how you can secure a loan from a bank or SBA without showing any business worthiness these days. This means, you have been in business for a while and passed the rite of passage without going under and now you need extra dough to expand services, hiring, moving to bigger office, etc. However, I may be totally wrong since I am not a banker and have not dealt with one recently. I know the climate for loan qualifications have totally changed in the past two years.

Good luck ...

[xtac]

All I can say is good luck.

[MediaArtist]

Remember, funding doesn't always have to be "cash" too. You may run into someone who may offer you a service in return for what you do. Remember that service they offer can be looked at with a cash value. It's up to you to determine the value based on your needs and numbers. Always think of things in numbers, strip emotion or personal values away if possible.

For instance when I first started out, I worked with an intelligent client who had very little reserves or working capital at all. But I could sense she was legit despite this and had the skill to really move forward with her own business. So I built a prototype of "interactive media" that she commissioned from me for peanuts with certain promises attached. 2 months forward, she offered to show the prototype at a large conference, with my companies logo strategically placed on the entry screen for the software, as well as other places, and within a few weeks I had offers to license the prototype for fairly large sums of money. Additionally, I entered into a long term contract with her company, that was now properly funded. It was a gamble, but I don't think I could've found those type of high paying clients myself based simply on my advertising budget.

If it helps expand your business, and potentially adds "cash" to your pocket, don't overlook it simply because the reward isn't immediate. Patience in many cases is a virtue.

In addition to getting a good accounting system, I would also suggest investing into good legal counseling. Protecting your brand, and IP is very important, and it goes both ways, you'd like to know if you're stepping on other people's toes with what you're making or marketing.

Lastly, learn how to filter idiots and posers. Early on, you will get a lot of noise from people who want to partner with some project, or ask for your help in some random "joint venture", or even offer to help "take your business to the stars". I've gotten exceedingly good at learning how to filter wannabes from legit people. Listen to what people say carefully, if the fundamentals and numbers make sense, and most importantly if the person has a proven record of trustworthy transactions, they may be legitimate. If what they're saying is based more on dreams and "enthusiasm", avoid at all cost. I know in the U.S, this is the land of dreams and potential, but that's only a small part of the equation. Execution, and the skill and resolve to get to that point are more important IMO. Dreamers rarely have the latter, and it can waste a lot of your time (and money).

[Bobble]

Lots of good info here especially from Feyd and MediaArtist. I've been self employed for 17 years, IT field. My start up was basically from my own pocket. I would echo two points made by those listed above with slight twists.
Get a good attorney to review your business structure and setup especially if you are going LLC/Sub Chaptered Corp. Make sure it specifically lists who is involved, officers etc.. This saved my bacon 7 years ago when I got divorced. I look at artisitc skills much like intellectual property in that no one can reproduce what you do unless specifically trained for that. Make sure you get to keep your business and the assets it produces.
Second pay very close attention to anyone early on who promises or commits to funding your endeavor, they always want a peice of something for so little effort. I had a former partner I reported to at a big six firm want to underwrite my entire endeavor and luckily chose not to, years later found out he went after someone else that did that same thing and forced them to sell control of a fairly decent software company for pennies. These two points combined could save you later on. Also be careful how and when you bring employess on, might be safer to bring them in a independent contractor until the business can support them longer term.

[DougLikesBMW]

I recommend these books:

Gurbaksh Chahal - The Dream: How I Learned the Risks and Rewards of Entrepreneurship and Made Millions

(I can email this to you in pdf format if you like)



Alan Sugar - What You See is What You Get

[Baoer]

what tondtar said and if you need, i know of a good cpa. he can set up llc's and all of that for you too.

i dont know how a bank will give you a loan either w/o being in business yet...

[Comet]

good points brought up

a little off topic, but before you decide to jump into the small business world, a small piece of advice:

Why would consumers come to YOU!
This is the first and foremost point you need to figure out. And reasons like "well, I'm a nice person" or "I'll do a good job" are not sufficient. A client doesn't know that.
How can you prove to the client that "I am the person they need for the job".
What do you offer that no one else does, and how do you market it?

A good thing to remember, clients care for:
Price, speed (how fast you can deliver the product/service to them), quality and the ever forgotten your like-ability.
like-ability comes when you interact with your clients.

the key to success is to offer something others don't/can't right off the bat.
You need to find that extra ingredient that sets you apart that won't make people think "oh, another X place just opened up btw."

you want people to think "Did you hear an X opened up? He does Y! man, I've always wanted an X company to do Y!"

[MontegoGoGoGo]

I would say experience is extremely important. Even if you're super talented at whatever it is you do, work in the industry for at least 3 years and really absorb how the business runs.

I've been on my own for almost 5 years and still make mistakes to this day. I hate to sound cliche, but I definitely learn from them. I can't count how many times I've said, "Well, I'll never do it that way again."

Also, you must have discipline and be quick to return calls and beat out the next guy in line.

But most importantly TRUST YOUR GUT!!!!!

[dcgolfdr]

My wife and I started our own office 8 years ago with a loan from my parents. We went that route since it was difficult to get a loan from a bank since we were fresh out of grad school with lots of debt and no history of money making (clients). As others have said, work on your business plan, find out exactly what your niche will be, get a great accountant, not just a good one and stay true to want you want to accomplish. Being a business owner is always a little more difficult, especially in the beginning, but I wouldn't have it any other way.

[JayML]

Originally Posted by DougLikesBMW

I recommend these books:

Gurbaksh Chahal - The Dream: How I Learned the Risks and Rewards of Entrepreneurship and Made Millions

(I can email this to you in pdf format if you like)



Alan Sugar - What You See is What You Get

can you send me the pdf of these?

[double_j]

If you have a strong business idea and smart execution, the rest tends to fall into line. I echo some of the thoughts above - make sure you know exactly why people will buy what you're selling. Unless you're selling manufactured goods, you can probably figure out how to get things started with your own money just to see if your guesses about the market will play out.

No need to take on big loans, etc. until you really know you have a viable business. Once you can prove that the customers are there, getting money is the easy part. Heck, do you know how many very successful businesses were started on personal credit cards or home equity loans?