I'm still a full-time salaried/commissioned employee but our company is sinking quickly... My job is very safe right now but I'm making a lot less this year than I did last year. If it stays like this or gets worse, I want to be prepared to go off on my own and take all my contacts (I don't have a non-compete).

If I left tomorrow, I can essentially have the same customers I have now with very little overhead and no employees, as I can do all the work myself and with contractors.

However, I'd like to at least get started while staying hidden in the shadows... I have already submitted Articles of Organization, received my EIN, opened a business bank account and merchant account, etc. I'm legit as far as that stuff goes.

If I was to leave tomorrow, I could go live with my website within a week and begin selling to my contacts and make exponentially more return. It's a little too scary to do right now, though, as I will need to float a good amount of cash before I get paid.

I am pretty positive that I can work 40 hours at my salaried job while staying in the shadows at first (I work like 2 hours a day and my numbers are still very good, haha). I've got a couple people that worked with me previously that can work on a contract basis to handle sales calls, logistics, etc.

I did have a couple questions for SBO's on TWW, if there are any...

1) If you work out of home, do you have a virtual office that answers and forwards your calls and receives mail? Or do you just use your home phone/cell and home address?

2) Has anyone gone through the GSA process for Government contracts?

3) Did you start your business while working full time for someone else? What were the most challenging aspects? Did they find out?

I'll have more as they come...

6/9/2009 12:27:22 PM

1. I used Vonage (so I could have an 800 number) and worked out of home. However, Vonage can get pricey. Since you are taking your contacts with you, you could probably just stick with the number that they have.
2. You won't really be eligible for government contracts until your business name is two years old. I haven't gone through the process, as I couldn't, since the corporation wasn't aged enough.
3. No, started while in school. My real problem was staying motivated and optimistic. My biggest fears were the short term debt. I couldn't focus on long term at all. Also, time management seemed to be a huge problem for me.

It seems like you have a stronger outlook/product, so these issues should not affect you at all. Best of luck to you, and I hope you get a huge payoff!

6/9/2009 1:01:22 PM

1) Can't take my phone number as it is an 800 # belonging to current employer I don't have that many close contacts so no biggie if I change it.

2) I figured as much, it's hard to discern from the GSA website or I missed it.

3) Yeah, if I left tomorrow it's possible I'd have to float 10-20K for up to 45 days until I got paid...

My biggest problem will be keeping it from my current employer until I can leave comfortably. I can't really spend that much time on it because I don't want them finding out, etc.

6/9/2009 1:42:21 PM

i own a design business here in raleigh. it's very homemade in many senses, but our deliverable has remained very professional. make good use of cheap, easy ways to look professional (printed envelope labels, business cards, website, email address, voicemail message, etc)

what kind of business do you want to start? pm me if you like.

6/9/2009 6:22:22 PM

I have been shooting around the idea of starting up a small trout farm. I just need to get some of my debt cleared up first.

6/9/2009 7:16:20 PM

this thread is relevant to my interests.

me and a buddy have talked about starting up something going on a couple years now. the only problem is i can't convince him that its not enough just to offer contract engineering services with no real goal or product. we are finally starting to solidify a few ideas, but i'm not to the point of being willing to sink a bunch of money into it.

has anyone had any success doing sbir on their own? i'm thinking this will be a good place for us to start.

6/9/2009 8:49:23 PM

Quote :

"If I was to leave tomorrow, I could go live with my website within a week and begin selling to my contacts and make exponentially more return. It's a little too scary to do right now, though, as I will need to float a good amount of cash before I get paid. "

You need to make sure you look at real overhead. If you are a non-corporation, then you only need to worry about two. If you incorporated, you are going to have to deal with payroll taxes.

http://business.uschamber.com/P07/P07_2001.asp (Federal tax obligations)
http://business.uschamber.com/P07/P07_3124.asp for SECA (Federal Self-employment tax)
http://business.uschamber.com/P07/P07_5491.asp for Personal Income Tax (NC)

You may also need liability insurance, depending on the type of business you have registered.

You will end up paying out 30-40% of your gross revenue JUST to your taxes. Also keep in mind that you will lose any and all benefits from your current employer. Paid vacation, medical insurance, sick leave, all disappear.

Not telling you not to leave, but I've heard the "I could make twice as much on my own" speech many times over the years, and it's not at all that simple. If you aren't expecting at LEAST 3x your current revenue by quitting, I wouldn't even think about it. And you need to be realistic with yourself that you will be devoting your life to the business.


----

Just for a little reference, I've started and run several businesses. Very few people are cut out for it. It's never a 9-5 job, and you better LOVE what you do. 99 times out of a 100, at the end of the day you would make more money, have better benefits and work less by being a regular employee. Doing it for the money alone is almost a sure-fire path to failure and burnout.

[Edited on June 9, 2009 at 10:19 PM. Reason : .]

6/9/2009 10:15:34 PM

Noen, I do appreciate the advice and I think it is helpful in general.

It's gotten to the point where I want to have something ready to go in the event that our business continues its downturn. I have been the Director of Sales for this company for two years and I started here as an account manager one year prior. I have seen my sales staff cut from six people to one person in the last year. June of last year I was getting paid salary and commission on $500,000 in monthly sales... We had a good month in May and did $225,000 - $160,000 of which were my original accounts. We need to do $150,000 per month just to break even. We didn't hit that number until last month, so the owner was fronting his own reserves. I've hit $100,000k plus every month for the last three years.

They can't afford to pay me higher commissions because the overhead is so high. Our office space plus utilities is $30,000 per month and we've got seven salaried employees. These costs will not change much until this time in 2010...

The profit margin in my business is anywhere from 25% to 65%. It's really, really tough when the decision maker from my best client (who is my son's godfather) calls me with his AMEX to order $55,000 worth of services - $40,000 of which is pure profit - and I get paid $2,000 on top of my salary. I can offer the EXACT same services on my own with help from two contract employees.

If I can do 1/3 of the business on my own that I did in the past 12 months, I'd break even as far as what I was paid last year. Also, with my current employer, there's a multitude of services I cannot provide because they are "not profitable enough" and because of their core mission, which is outdated and the reason why they're failing. We have to have "x" amount of profit in the deal, ie if the revenue is $20,000 and the costs are $16,000, we will choose not to do it because there's too much work involved for "just" $4,000.

All said, what I'd really like to do is keep this on the low but have the business ready to go with a weeks notice. Best case - things will turn around for us and I can stay here for 2 more years and sock away more money. I can run a couple deals through the other company while in the shadows. If everything looks promising, I can walk away and go out on my own with a business formed two years prior.

6/10/2009 10:15:24 AM

Go ahead and learn Quickbooks if you don't already know it.

6/10/2009 2:28:40 PM

Didn't know that merchant accounts would be such a pain in the ass. Some of them are a joke (PowerPay). You submit a application and they process it by adding info. that is favorable to you getting approved - their rep said said I owned my "virtual" office and that my business had been established since 2007, then sent it to the underwriter.

I didn't know those places put a lien on your account and can take out however much for various reasons. They can jack your rate for pretty much anything, too. Ended up going through US Bank even though the rate is a little higher - they deposit funds the same day and they are available the same day. I don't think they'll be as much hassle as the 100's of other merchant services places. It's nice to know that I have the email, phone, cell, and location of my rep too.

6/29/2009 4:47:39 PM

My husband and I own SpiceCubed (http://www.spicecubed.com)

1. We got a prepaid cell phone and a UPS box. We are mainly an online business so we hardly ever get phone calls.
2. No
3. Both my husband and I work full time while running our online business. My husband is an executive chef for a big church in Cary and that actually worked to our benefit w/ our business. We package all our spices @ the church b/c the kitchen has to be inspected by both the health department and the USDA. The most challenging aspect of running our business and having full time jobs is the fact that we want to have a booth @ the Farmer's Market on weekends. My husband, being a caterer, hardly has time on the weekends to be @ the Farmer's Market. Besides not having time to actually be at the Farmer's Market, I can't package all the spices by myself that we would need @ the market b/c he works most nights.

Right now we are throwing out ideas such as renting a kiosk @ Crabtree Valley Mall but we'd have to hire staff (or I'd have to quit my job)


We got this application on our Iphone that allows us to run credit cards. I think it costs $10 for the application.

[Edited on June 29, 2009 at 5:08 PM. Reason : f]

6/29/2009 5:06:30 PM

The thing is, I have more time than anything right now... I work about an hour a day and my wife is a stay at home mom.

And the application on your Iphone is not an actual merchant account... it's just lets you access your authorize.net merchant account, which you pay additional money for. Most of the merchant accounts use authorize.net - many of the retailers are unscrupulous because the competition is pretty fierce. They're all selling the exact same services, they just have different strategies to get you to go with them vs. others.

[Edited on June 29, 2009 at 5:34 PM. Reason : a]

6/29/2009 5:18:19 PM

is this like the michael scott paper company?

6/29/2009 6:20:14 PM