very general question ...
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for those of you who've started your own business, how much have you invested (perhaps in mandays if not in USD) before you get the first pay check or transaction? I mean real business that at least break-even with reasonable return - I suppose this exclude those selling on ebay or "web-design-consulting-for-ya-mom-&-pap" (sorry I know if this question sounds to generic)
dev
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for those of you who've started your own business, how much have you invested (perhaps in mandays if not in USD) before you get the first pay check or transaction? I mean real business that at least break-even with reasonable return - I suppose this exclude those selling on ebay or "web-design-consulting-for-ya-mom-&-pap" (sorry I know if this question sounds to generic)
dev
I quit my job on January 31, 2009, moved back to the US and started doing consulting. I spent about 6 months prior to quitting making contacts, planning, doing. redoing, and refining a business plan, and generally getting ready to jump ship. I spent most of February setting up my home office and starting to make contacts. March and April, I continued with marketing, attending industry conferences to make contacts, etc. I had one short job early on, but really didn't make much at all until this month. So far in May 2009 I've made enough profit to live on. Not enough to be satisfied, but enough to survive without dipping into my savings too much more. However, I will say that my experience probably isn't representative, because I've done this before and was darn well ready when I quit. The normal rule-of-thumb is that it takes about 3 years, unless you have a ready made contract already to go when you jump ship. The first time I did it, it took about 2 years to where I was living fully off my business and during the 3rd year I started making more than when I quit my previous job. This time I suspect (and planned for) similar timing, but I was able to get a little income starting faster due to contacts I had from the last time I went on my own.
CQ de W5ALT
Walt Fair, Jr., P. E. Comport Computing Specializing in Technical Engineering Software
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I quit my job on January 31, 2009, moved back to the US and started doing consulting. I spent about 6 months prior to quitting making contacts, planning, doing. redoing, and refining a business plan, and generally getting ready to jump ship. I spent most of February setting up my home office and starting to make contacts. March and April, I continued with marketing, attending industry conferences to make contacts, etc. I had one short job early on, but really didn't make much at all until this month. So far in May 2009 I've made enough profit to live on. Not enough to be satisfied, but enough to survive without dipping into my savings too much more. However, I will say that my experience probably isn't representative, because I've done this before and was darn well ready when I quit. The normal rule-of-thumb is that it takes about 3 years, unless you have a ready made contract already to go when you jump ship. The first time I did it, it took about 2 years to where I was living fully off my business and during the 3rd year I started making more than when I quit my previous job. This time I suspect (and planned for) similar timing, but I was able to get a little income starting faster due to contacts I had from the last time I went on my own.
CQ de W5ALT
Walt Fair, Jr., P. E. Comport Computing Specializing in Technical Engineering Software
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for those of you who've started your own business, how much have you invested (perhaps in mandays if not in USD) before you get the first pay check or transaction? I mean real business that at least break-even with reasonable return - I suppose this exclude those selling on ebay or "web-design-consulting-for-ya-mom-&-pap" (sorry I know if this question sounds to generic)
dev
Unless you have some money behind you (eg: your partner works, or you have a day job, or you have substantial cash in the bank), you are crazy to go out and start your own business unless you have some clients lined up already. I started my business just over 7 years ago now, kind of by accident. I had left one job and was looking for another one, when some work came my way through word of mouth. I set up my business so that I could invoice them and never looked back!! The one thing that we all do (I suppose) is assume that once we have our business name registered, perhaps a nice website, or a nice ad in some print media somewhere, business is going to magically fall from the sky and land in our lap... I've not found this to be the case at all - well over 90% of my business comes from word of mouth.
Knowledge is knowing that the tomato is a fruit. Wisdom is not putting it in fruit salad!! Booger Mobile - Camp Quality esCarpade 2010
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six months is half year's paycheck. Spoke to my best friend who just started early last year before the storm. He spent his whole life's saving on it. But breakeven now. Is it true, that most startup costs a person's life's saving for most guys?
dev
Well, that depends on how much you save! I had enough savings in the bank the first time to last 2 years without a pay check. About 3 years before quitting I converted to a cash only personal economy, paid off as much debt as possible, and saved everything I could. I didn't touch any of my retirement funds, so I guess that wasn't technically my life's savings. I ran a successful business for about 10 years, but just got tired and finally went to work for one of my best clients. While employed this time, I paid off ALL of my debts, so no house mortgage, car payment, etc. Finally the internal corporate issues got to be more than I liked, although the company treated me exceptionally well. Right now my expenses to survive are minimal and I can probably live 3 or 4 years with minimal income if I had to. Again, I'm not touching my retirement funds or planning on selling any assets, so I still don't think I'm using up my life's savings.
CQ de W5ALT
Walt Fair, Jr., P. E. Comport Computing Specializing in Technical Engineering Software
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Well, that depends on how much you save! I had enough savings in the bank the first time to last 2 years without a pay check. About 3 years before quitting I converted to a cash only personal economy, paid off as much debt as possible, and saved everything I could. I didn't touch any of my retirement funds, so I guess that wasn't technically my life's savings. I ran a successful business for about 10 years, but just got tired and finally went to work for one of my best clients. While employed this time, I paid off ALL of my debts, so no house mortgage, car payment, etc. Finally the internal corporate issues got to be more than I liked, although the company treated me exceptionally well. Right now my expenses to survive are minimal and I can probably live 3 or 4 years with minimal income if I had to. Again, I'm not touching my retirement funds or planning on selling any assets, so I still don't think I'm using up my life's savings.
CQ de W5ALT
Walt Fair, Jr., P. E. Comport Computing Specializing in Technical Engineering Software
Walt Fair, Jr. wrote:
I can probably live 3 or 4 years with minimal income if I had to
With that kind of financial backing you don't have a business, you have a hobby!!
Knowledge is knowing that the tomato is a fruit. Wisdom is not putting it in fruit salad!! Booger Mobile - Camp Quality esCarpade 2010
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Well, that depends on how much you save! I had enough savings in the bank the first time to last 2 years without a pay check. About 3 years before quitting I converted to a cash only personal economy, paid off as much debt as possible, and saved everything I could. I didn't touch any of my retirement funds, so I guess that wasn't technically my life's savings. I ran a successful business for about 10 years, but just got tired and finally went to work for one of my best clients. While employed this time, I paid off ALL of my debts, so no house mortgage, car payment, etc. Finally the internal corporate issues got to be more than I liked, although the company treated me exceptionally well. Right now my expenses to survive are minimal and I can probably live 3 or 4 years with minimal income if I had to. Again, I'm not touching my retirement funds or planning on selling any assets, so I still don't think I'm using up my life's savings.
CQ de W5ALT
Walt Fair, Jr., P. E. Comport Computing Specializing in Technical Engineering Software
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Unless you have some money behind you (eg: your partner works, or you have a day job, or you have substantial cash in the bank), you are crazy to go out and start your own business unless you have some clients lined up already. I started my business just over 7 years ago now, kind of by accident. I had left one job and was looking for another one, when some work came my way through word of mouth. I set up my business so that I could invoice them and never looked back!! The one thing that we all do (I suppose) is assume that once we have our business name registered, perhaps a nice website, or a nice ad in some print media somewhere, business is going to magically fall from the sky and land in our lap... I've not found this to be the case at all - well over 90% of my business comes from word of mouth.
Knowledge is knowing that the tomato is a fruit. Wisdom is not putting it in fruit salad!! Booger Mobile - Camp Quality esCarpade 2010
_Damian S_ wrote:
Unless you have some money behind you (eg: your partner works, or you have a day job, or you have substantial cash in the bank), you are crazy to go out and start your own business unless you have some clients lined up already.
I will agree that insanity certainly helps in making the jump! :-D I personally consider it unethical to be on a payroll and go looking for other work without the express consent of my employer, so I never did that. I did look around, but I never lined up any work until after I formally left employment. To do otherwise would have been in violation of my employer's confidence and also just plain unprofessional.
_Damian S_ wrote:
The one thing that we all do (I suppose) is assume that once we have our business name registered, perhaps a nice website, or a nice ad in some print media somewhere, business is going to magically fall from the sky and land in our lap... I've not found this to be the case at all - well over 90% of my business comes from word of mouth.
That's certainly true! One thing I learned was that my business plans never worked out the way I thought they would, but as long as I was out and around, working and making contacts and staying in touch with clients, something always came through. The secret is getting started, staying flexible, not giving up too easily, having enough cash to survive, and keeping up the marketing efforts no matter what.
CQ de W5ALT
Walt Fair, Jr., P. E. Comport Computing Specializing in Technical Engineering Software
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but I get the impression most startup do take people's life's saving, including retirement money. Good for you you didn't
dev
devvvy wrote:
including retirement money
Not if they are sensible... That's how you end up bankrupt if something goes wrong!!
Knowledge is knowing that the tomato is a fruit. Wisdom is not putting it in fruit salad!! Booger Mobile - Camp Quality esCarpade 2010
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Heck no! I spend more on my hobby than that :laugh: !
CQ de W5ALT
Walt Fair, Jr., P. E. Comport Computing Specializing in Technical Engineering Software
:laugh: :laugh: 5
Knowledge is knowing that the tomato is a fruit. Wisdom is not putting it in fruit salad!! Booger Mobile - Camp Quality esCarpade 2010
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Walt Fair, Jr. wrote:
I can probably live 3 or 4 years with minimal income if I had to
With that kind of financial backing you don't have a business, you have a hobby!!
Knowledge is knowing that the tomato is a fruit. Wisdom is not putting it in fruit salad!! Booger Mobile - Camp Quality esCarpade 2010
Heck no! I spend more on my hobby than that :laugh: !
CQ de W5ALT
Walt Fair, Jr., P. E. Comport Computing Specializing in Technical Engineering Software
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_Damian S_ wrote:
Unless you have some money behind you (eg: your partner works, or you have a day job, or you have substantial cash in the bank), you are crazy to go out and start your own business unless you have some clients lined up already.
I will agree that insanity certainly helps in making the jump! :-D I personally consider it unethical to be on a payroll and go looking for other work without the express consent of my employer, so I never did that. I did look around, but I never lined up any work until after I formally left employment. To do otherwise would have been in violation of my employer's confidence and also just plain unprofessional.
_Damian S_ wrote:
The one thing that we all do (I suppose) is assume that once we have our business name registered, perhaps a nice website, or a nice ad in some print media somewhere, business is going to magically fall from the sky and land in our lap... I've not found this to be the case at all - well over 90% of my business comes from word of mouth.
That's certainly true! One thing I learned was that my business plans never worked out the way I thought they would, but as long as I was out and around, working and making contacts and staying in touch with clients, something always came through. The secret is getting started, staying flexible, not giving up too easily, having enough cash to survive, and keeping up the marketing efforts no matter what.
CQ de W5ALT
Walt Fair, Jr., P. E. Comport Computing Specializing in Technical Engineering Software
Walt Fair, Jr. wrote:
other work without the express consent of my employer
It depends if it presents a conflict of interest or not... if your day job is driving a delivery van while you are trying to get your software development company off the ground, I don't see how it's an issue. If you are hired out as a resource by a body shop, and you hit up the company you are working for to go direct - that would be a clear conflict of interest and highly unethical!
Knowledge is knowing that the tomato is a fruit. Wisdom is not putting it in fruit salad!! Booger Mobile - Camp Quality esCarpade 2010
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but I get the impression most startup do take people's life's saving, including retirement money. Good for you you didn't
dev
I would say that only applies to people who don't do proper planning. In my case I planned long in advance of going off on my own. The first time was 5 years in the planning stage, this time was well over 2 years of planning. When I left work, my total investment was 1 new computer and 1 chair for my office - everything else was already ready to go. Planning and patience goes a long way. Lack of planning, naivete and impatience will be extremely expensive.
CQ de W5ALT
Walt Fair, Jr., P. E. Comport Computing Specializing in Technical Engineering Software
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I would say that only applies to people who don't do proper planning. In my case I planned long in advance of going off on my own. The first time was 5 years in the planning stage, this time was well over 2 years of planning. When I left work, my total investment was 1 new computer and 1 chair for my office - everything else was already ready to go. Planning and patience goes a long way. Lack of planning, naivete and impatience will be extremely expensive.
CQ de W5ALT
Walt Fair, Jr., P. E. Comport Computing Specializing in Technical Engineering Software
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Walt Fair, Jr. wrote:
other work without the express consent of my employer
It depends if it presents a conflict of interest or not... if your day job is driving a delivery van while you are trying to get your software development company off the ground, I don't see how it's an issue. If you are hired out as a resource by a body shop, and you hit up the company you are working for to go direct - that would be a clear conflict of interest and highly unethical!
Knowledge is knowing that the tomato is a fruit. Wisdom is not putting it in fruit salad!! Booger Mobile - Camp Quality esCarpade 2010
_Damian S_ wrote:
It depends if it presents a conflict of interest or not...
Yes, you're right. In my cases there would have been conflicts of interest, since I was being paid to do professional work. If one is not working in the same endeavors that they are planning for their business, then things might be different.
CQ de W5ALT
Walt Fair, Jr., P. E. Comport Computing Specializing in Technical Engineering Software
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yes but apart from your computer did you have to quit your job? otherwise how can you manage
dev
devvvy wrote:
how can you manage
You bite the bullet and just do it!! When I started mine, I had a massive mortgage, was married with a child and another on the way, and my wife didn't work... Talk about pressure to succeed!!
Knowledge is knowing that the tomato is a fruit. Wisdom is not putting it in fruit salad!! Booger Mobile - Camp Quality esCarpade 2010
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yes but apart from your computer did you have to quit your job? otherwise how can you manage
dev
Yes, I had to quit my job. To offer my professional services while employed to perform the same professional services would have been highly unethical. As I said, the jump was several years in the planning, mainly to ensure the market was there and I had enough savings to not starve or live too uncomfortably while getting the business up to speed. So far so good, but I'll let you know in about 2 more years whether my planning was adequate. ;P
CQ de W5ALT
Walt Fair, Jr., P. E. Comport Computing Specializing in Technical Engineering Software
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devvvy wrote:
how can you manage
You bite the bullet and just do it!! When I started mine, I had a massive mortgage, was married with a child and another on the way, and my wife didn't work... Talk about pressure to succeed!!
Knowledge is knowing that the tomato is a fruit. Wisdom is not putting it in fruit salad!! Booger Mobile - Camp Quality esCarpade 2010
No joke! The first time I was a single parent with 3 teenagers, a mortgage, etc. Talk about pressure! This time ... Piece of cake ...
CQ de W5ALT
Walt Fair, Jr., P. E. Comport Computing Specializing in Technical Engineering Software
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Yes, I had to quit my job. To offer my professional services while employed to perform the same professional services would have been highly unethical. As I said, the jump was several years in the planning, mainly to ensure the market was there and I had enough savings to not starve or live too uncomfortably while getting the business up to speed. So far so good, but I'll let you know in about 2 more years whether my planning was adequate. ;P
CQ de W5ALT
Walt Fair, Jr., P. E. Comport Computing Specializing in Technical Engineering Software
Mine is seven years old and going strong, so I must be doing something right!!
Knowledge is knowing that the tomato is a fruit. Wisdom is not putting it in fruit salad!! Booger Mobile - Camp Quality esCarpade 2010
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six months is half year's paycheck. Spoke to my best friend who just started early last year before the storm. He spent his whole life's saving on it. But breakeven now. Is it true, that most startup costs a person's life's saving for most guys?
dev