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Corporate America vs. Entrepreneurship

Discussion in 'The Okie Corral' started by AA11285, Mar 28, 2010.

  1. AA11285

    AA11285

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    Graduated from college a couple years ago, been working in banking ever since. I don't mind it, in fact, it's got some perks to it, including being relatively well paying. I've come to a bit of a cross roads in my life where I feel I need to make a decision about my future. Should I continue on my path of being an employee or should I break away from the safety net of a paycheck every two weeks in favor of starting my own business. Obviously the risks in starting a new business are many, but the rewards could be endless (every billionaire I've heard of is a business owner, not an employee). If some of you more experienced gentlemen could do it all over again, would you choose a different path? A friend told me something the other day that resonated with me, he said "if you work for a company for 30 years, and they let you go, you're lucky is they give you a a years salary for a severance package. Had you been a business owner for 30 years and you decide to leave, you sell the business for a healthy sum. Sure beats a years pay." That got me thinking. What do you all think?
     
  2. mikedwood

    mikedwood

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    I have my own very small business and there is no way I could ever work as an employee again.

    Plus in these times it's better to work for 100 idiots than just 1. (my customers are great, I just read it somewhere and being in the tech field, getting laid off once a year. It had meaning for me)
     

  3. Jmcrawf1

    Jmcrawf1

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    Short answer? No. This is the worst climate to be a business owner in. Obama has made it clear that business owners and those who make a profit in general are bad. Taxes are going up, health care costs are going up, and people are spending less money as a whole. Constuction in the private sector in my state is at a near halt.

    I couldn't think of a worse time to gamble your life savings....
     
  4. HollowHead

    HollowHead Firm member

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    I disagree. This is a great time to start a business IF you have a plan, are capitalized enough to survive the first year with no income and have a service or product in demand with little or no competition. I will only agree that new construction is the worst thing to go into right now. Remodelers/renovators/restorers are making a killing right now. That out of the way, be careful of thinking that your business could be a retirement plan unless it has real property. If it's a business limited to a desktop with no hard assets, blue sky won't play much of a part. HH
     
    Last edited: Mar 28, 2010
  5. Deanster

    Deanster Cheese? CLM Millennium Member

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    So, there's a lot of misunderstanding out there about running your own business.

    Top of the list is 'you can sell it for a decent amount later'. While this certainly does occur, the majority of businesses simply shut down when the owner wants to move on. Successfully selling a business is hard, and often takes several years, and requires the existing owner to finance the sale (in effect, take payments).

    So, I have two conflicting pieces of advice. The first is that you're right in thinking that there's some hard limits to how far you can go working for other people. The second is that you need to evaluate that not based on looking at what the process looks like just for someone who is completely successful in starting, running, and eventually selling a business, but at the entire cycle, and what the chances are that you end up stuck at any of the points along the way.

    In theory, you can start a business with a $100 dollar filing fee in most states, an idea, and enough cash to buy a pizza oven, lawn mower, or whatever.

    In reality, businesses take cash to start, and you can get stuck by not having enough to even really start. You can get stuck by thinking you have enough to start, but being wrong. You can start, but not win any customers, and go out of business quickly. You can get customers quickly, but not have enough to keep going. You can have enough to keep going, but not to hire a second person, so you are stuck doing 100% of the work forever. You can create a viable business, but where there's not really enough to live on, but you've already sunk your investment money in, so you can't afford to close it, and you'll never make your initial investment back either (this is called a 'living dead' or 'zombie' startup). You can grow to have a few employees, and reach a point where you're big enough to have increased overhead, but aren't big enough to compete with larger companies for bigger/better business. You can grow big enough to attract the attention of a larger business who decides to kill you off in a pricing war that you can't match. You can get a job which turns out to be bigger than you can handle, and not get the bank to loan you enough to continue, so you have to shut the doors. You can be totally successful, but unable to find or afford anyone else who can run it profitably, so you're stuck running it forever. You can have it running great, but not find anyone to buy it. You can sell it with owner financing, and the guy who buys it does a terrible job, can't pay you, and you end up taking it back (essentially foreclosing), except that it's been irreparably damaged with both staff and customers. Etc., etc.

    None of this is an attempt to dissuade you from starting your own business, just to say that when you're thinking about retiring in 30 years and selling your business for a tidy sum, you need to look at all the above and much much more, and put a probability on each. It's not a sure thing. Neither is working for a corporation, but the chances that you'll go down in flames with all your investment funds spent is considerably lower.

    Finally, you should do some reading about starting a business, having employees, and realize that the owner is on the hook for everything. Everything from employee mistakes to unreasonable customers to burned-out light bulbs to quarterly tax filings. Best case is a couple years of little or no income and lots of sleepless nights. Worst case is total loss of everything you put in, lawsuits from customers, employees or regulators, and painful liability. Again, not a reason not to do it, just keep in mind that a lot of things that are someone else's problem when you work for a large corporation are YOUR problem as a business owner.

    By all means, go start a business - it's what America is here for. There's money to be made, empires to be founded, and comfortable retirements to be created. Just do it with open eyes, and increase your chances of success!

    Good luck!
     
  6. DowntimeLA

    DowntimeLA

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    depressing isn't it? :steamed:
     
  7. elsolo

    elsolo

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    If you have some service, a market ready to buy it in quantity, the varied skill set required to do everything yourself, a good amount to invest, and the willingness to potentially lose it all.....go for it.