We came into some money not a lot but enough to follow a dream we've had. I lost my job and we are still able to pay our bills and live off of my husband's income. I am planning on returning to school to follow my dream of becoming a teacher. My husband wants to open his own tattoo shop and keep his day job for now we have researched and researched and I have a huge list of pros and cons one of the main ones is the economy but that is also one of the main reasons for it as well, prices have dropped enough that we can afford to do all of this. I know I am crazy for asking this on here, I am just looking for more input. We have a young son under a year old. Part of me says save that money for him for college and the rest says go for it because this is a great opportunity for our family and that we can figure out a way to save money for his college a different way if we fail. I don't think we will though the market looks good and we have a strong Business plan. Only a tiny bit of me questions this, but as a Mom I have to think about everything.. so outside thoughts are always welcome. Thanks ahead of time!
Answer:I don't usually single out other people's answers but I have to completely disagree with Bavarian's answer although he did get one thing right. Most new businesses fail within the first year and it has nothing to do with the things he listed. It has everything to do with the fact that the people running the business had no idea what they were doing. They may have had the desire or the passion, known all about the product, worked really hard at it, hit all the right targets for how to engage the customer, etc. but they didn't understand what it takes to actually make money and keep your business growing. Things like cash flow, margin, velocity…those are the things you need to be concerned about. There are plenty of books available that will help lay some of these things out. One by Ram Charan ("What the CEO Wants You to Know") is a good one to start with but there are thousands of others.
Okay….I'll get off my soapbox for a minute and answer the question. First of all, congratulations. You've been handed a wonderful opportunity and I applaud your desire to follow your dream but let's try to look at this objectively. Having a business plan is a great first step but let's see how good a plan you have. Take it to a bank and ask for a loan for the same amount of money you are about to invest in your company. Banks are being very picky about loaning money right now and that's exactly what you want since it will be a good test for your plan. If you're approved then you can continue working towards opening a shop. If not, then you need to re-evaluate whether this is your best option. Either way you won't be taking out the loan but it will be a good test for your plan. Good luck and I wish you all the best.
Edit: I might as well continue to be the contrarian on this question. Joseph may make some realistic points but in my opinion it sounds a bit like new age, boiler plate "everyone's an entrepeneur and anyone can do it". Sure, it's easy to hire someone to handle the mechanics of your finances…that's what accountants are for. However, what most overlook is that the accountants cannot manufacturer money out of thin air. They don't plan your strategy, find suppliers and customers, set prices, evaluate the competition, etc. All of that is done by the small business owner. Now I'm the first to admit that the soft issues that Joseph and Bavarian mention are important but that's not why most businesses fail. They fail because the owners don't know how to run their business like a business. Afterall, if you don't take care of things that I mentioned it doesn't really matter how different your business is or how much you improve the world because you won't make it past your first year. Lastly, the question was posed for opening a tattoo shop so any discussion about changing the world, contributing to society or inventing a new product is moot.
Answer:how about selling some jerseys?
Answer:Given your situation, I believe that starting your own business may be the best way for you to expand mainly three things:
1) Develop a sense of financial independence.
2) Giving yourself a determinant of freedom.
3) Following a dream and accomplishing an adventure.
I have to say, many people whom look into starting their own business haven't the slightest idea of what it takes to make a successful business. Not to give you bad news, but statistics from the early 2000's indicated that more than 85% of small businesses failed within 2 years of opening up for operations within the public markets. This rate stays very high even today, due to the fact that most "entrepreneurs" as they call themselves, haven't the slightest idea of what it really means to be an entrepreneur. I could definitely preach to you for hours and hours of what it takes to make a successful business, but let me give you some key points to remember when you look into starting up a business:
1) You must make meaning. This means that you must be able to change the world or impact the world in a positive way for your target market. Basing your business around something that is very emotional or social in context will help you concentrate on the sole vision of the business. Never concentrate on profits, earning the extra dollar. You may be able to squeeze out more earnings this way, but you'll eventually move away from the vision of your business. The general rule of thumb is that if you can make meaning through your business, you naturally will earn much attention in the public markets, and thus make more earnings that you could possibly imagine.
2) You must differentiate yourself. Your business must prove to market audiences that you can, in some way, provide extra or greater value than already well-established businesses that have been long operating in the markets. Always ask yourself, "Why would a target customer want to come to my business and purchase from me rather than someone who's already been selling a similar or even identical product/service for years already?"
3) You must be able to replicate your business. You have to develop your business as a system. You have to think as a business owner, rather than an employee. You have to have a system that can be repeatable every day you operate in markets, such that you can promise your target customers the same or at least similar results over and over again. You must be able to guarantee your product/service such that they will continue to either purchase from you again, or spread your name to others because of the fact you can keep a promise/guarantee of quality. If you end up doing all the work in the business that's unnecessary for a business owner (such as working the front lines all the time and not performing managerial tasks, such as payroll, value re-creation, analyzing future opportunities to capitalize upon, improving and training your employees, etc.), then you will end up working for yourself, as your own boss, way too busy and over-worked to do anything else outside of your own business (in your free-time). You cannot earn major profits without replacing yourself on the frontlines with others whom will do this type of work for you.
4) Try to jump curves. When it comes to starting a business, many people follow already-done-before business models that don't offer anything new to the table for customers. Try to think ahead of the times and develop a new product, service, or combination of both to allow yourself to acquire new, untouched market space. Most people don't have the money or time to invest in creating a new product that hasn't ever been built before. Therefore, be creative and make a combination of already existing products and services such that the combination being offered has never been done before. This, in itself, is much like creating a new product never seen before in the world, ever! This is what it means to jump curves. You have to be the inventor, the one that comes up with a new idea before anyone else.
Implement these key points into the formation of your business, and I guarantee that you'll not only survive in today's already congested, extremely aggressive and competitive market spaces, but you'll also expand/grow and become extremely profitable while helping to improve and change everyday life throughout the world in some particular, unique way.
If you wish for more advice, you can email me at hansen.jayson@texperience.us, and I'd be happy to assist you further with what info I can provide you, based off of my own entrepreneurial experience and success.
Answer:I actually agree with bavarianmotorworks, his advice is good for entrepreneurs in this day and age. It should be common sense that when you go to start a business you should know that it takes quite a lot of finance knowledge to get the business going and have it survive off of recurring, ongoing costs. This is why many business owners hire out bookkeepers or accountants to do much of this work for them. I've worked in mergers and acquisitions in Morgan Stanley for nearly 10 years now, and I have to say that before M&A with MS, I was consulting with a CPA firm for new business ventures and we helped small businesses get going from the start. The main problem was survival; not because they couldn't deal with financing aspects, and the deal of cash flows, etc., as many of these business owners are quite competent in the area, or have hired others to do this work, but it was the fact that they could not generate enough revenue to pay for ongoing expenses to stay alive. The reason they could not generate leads for revenue was that they were not able to differentiate themselves from the rest of the businesses already established in the area; many of these small business owners start a model off of something that has already been done.
These markets are already heavily saturated. Sure, you can still start up a model for a business and expect to survive, but you have to do something extraordinary for your customers. Also definitely watch your advertising and marketing; getting your name out there from the start is MOST important for new businesses. From then on, doing that extraordinary service or providing something free for example along with the original sold item or service, will create a unique experience for that customer. This will then develop great word-of-mouth marketing for your business! Definitely go for it, but I suggest keeping in mind the items bavarianmotorworks talked about; it's the best advice if you want to grow as a business and eventually become financially independent, and with more free time to yourself and your family. Unfortunately, I've talked with so many small business owners even today and their number one complaint is they have little free time for themselves, always working to do all business functions. Definitely look into avoiding this trap as soon as possible!! I guess if anything bavarianmotorworks forgot to mention that the future is heading towards mass customization; people want to be able to get what they individually want and it has to feel unique to themselves. Target this new trend, it's already being done by the big manufacturers of all the industries; take for example Toyota's Scion division with customizable, unique and trendy cars, Dell with customizable laptops over their internet store, Apple and Microsoft with the iPod and Zune with various plate covers and colors, engravings, etc. Good luck with your endeavors!