Who here runs their own business?

guitars4you

Crikey - How do you put so much useful hints + info into a small paragraph  or two

Not sure what business world you wish to enter - But I dare say some start up businesses will require different skill factors - ie a plumber or a guitar teacher

However a few key points is to know your market, your opposition but make sure you back up your own belief - Work at it and be proud of it - It is your baby and give it all it deserves with time and effort

I've started from fresh 3 businesses over the years - So zero takings on day one - All did okay and sold of them - Guitars4You is my 3rd and final business

Many other good comments above from FB members

Ref loans etc - I suppose how much and for how long - Some starts ups will flop without it, so I don't support the no loan option - But I will say a positive cash flow is priority to any business - For a while you can run a business without making a profit - But without cash, you can't ever run a business for more than a few days/weeks - So a loan is fine but make sure you are cash flow positive - Cock that up and you have big issues - As it happens I have an overdraft facility, but I hate going 1p overdrawn, but it is there for any potential rainy day - Before I opened up Guitars4You, I worked for a few years with a large corporate company as part of the senior management - I had issues with my boss at the end, but for all of that, the biggest lesson I learnt from him was about positive cash flow - He had around a £1 million overdraft facility and hated going 1p overdrawn - You can recover and learn from other issues and failings of a business, but no cash and you are buggered !!!!!!!!!!!!!!!!!!!!!!! 

Final comments - Keep it fresh, exciting and fun - For you and the customers

sixstringsupplies

If it's something you want to do, best to go for it. I can imagine nothing worse then getting to old age and regret the fact you never gave it a go. (this is one reason why I started). 

I started my business for many reasons, it was/is a long time ambition to be my own boss.
However, I actually started it as I was going through extreme depression at the time, my life was absolutely all over the place. I'm highly educated (so my parents like to remind me), can speak French fluently,  but really could not hold down a job for love or money simply due to the fact I hated being bossed around, and mentally, I was struggling.

Setting up and running a business, really, I mean really, focused my mind. I wouldn't say it cured the depression, but they do say finding a project/hobby or something to focus your mind on is a big help. I've never looked back. 

I would echo everything mentioned above. Be patient and re-invest profits back into the business until it is really up and running.
Don't go to a bank for a loan. If you need money, invest it yourself or help from a family member (if you're fortunate enough to do so). Start small and grow organically. 

Also, I wouldn't worry too much about a business plan.  Do one by all means, but don't be afraid to rip it up and start again or make changes. My business plan changed 3 weeks after it was done. And then changed again a few weeks after that. 

dbphoto said:

Entrepreneurs happily work 80 hours per week for themselves so they don’t have to work 40 hours per week for someone else.

This sums my attitude up perfectly

LastMantra

What about the band?

steveledzep

mgaw said:

you would manage easily   make a plan   learn what you need to make it viable, if it is at all   do a proper business plan for your plan   then I would imagine marketing marketing marketing  be prepared to give it your all and be flexible in your approach and outlook...and for me most importantly offer value and service

A lot of good advice on here.  Make sure your marketing includes capital letters, commas and full stops.
Good luck !

tekbow

I do, well.. I'm a consultant and my accountant takes care of most things for my limited company inc billing etc, so I can be of limited assistance in terms of advice.

That being said, in terms of business accounts, I cant recommend Starling bank (online/app based) highly enough for making the money matters simple, and the ease of setting the account up.

jonnyburgo

I thought about it 15 years ago when I was making furniture from reclaimed timber and then seemingly the marketplace suddenly became saturated with the stuff. Plus the fact that I wasn't skilled enough or lacked the equipment to make things quickly enough to earn a decent wage. I would find it difficult not to work 18 hr days and would become a bit one dimensional I think.

Lestratcaster

Been running mine for 11 years, and I've made many mistakes along the way, paying financially mostly.

But as it goes on I learn more and more about it and I can relate to alot of the comments about trying not to borrow money, and working as much as you can.

Be prepared for quiet periods depending on what trade you're in, as a tuition service summer and Christmas holidays are the worst.

But I don't miss working at a desk in an office, for 8 hours per day with people you don't share anything in common with.

hywelg

Most has been said above but,

1. A business plan is a must. You need to know what you're aiming for month on month.
2. Keep records.
   
3. Don't borrow. Cash accounting so nothing bites you in the arse. By all means raise invoices for your customers but pay all outgoings immediately even if you are offered 'terms'.  If you don't have the cash you can't afford it.
   
4. Costs. Keep them down. Do not pay an expensive accountant, do your own tax return but have an accountatn check it and provide advice about twhat you can and can't claim. Do not commit to monthly outgoings on anything you can avoid. Accounting software is a luxury, early days use a spreadsheet or Quicken (old versions are for nowt and work on Win7 fine)
   
5. Don't pay for a bank account if you can possibly avoid it. Santander Business Acc is free if you pay £1k per month in and you can pay in at Post Offices. There will be others but the big 5 will just see you as an income stream and they will try very hard to lend you money.
6. Don't get suckered into long advertising contracts, you need to be able to bail if its not working.
7. Don't pay megabucks for PR material or a website. Again they will just see you as an income stream and want you to keep giving. Business cards, letterheads etc you can do yourself. Website can be very basic to start with. You will have to pay for hosting and Domain name reg, unavoidable.
8. Put money aside to pay your tax.
9. Tell HMRC when you do go self employed. Don't be afraid to ask, they can be quite helpful.
10. Keep a record of your achievements, its your CV. If you do something that you can photograph, do it. File it. Publish it so anyone can see what you can do.
    

midlifecrisis

Ive been self employed for over 35 years now. never been rich but all mortgages paid off and living debt free and reasonable lifestyle.  Ive never employed an accountant or had a business plan (not sure if ive been disadvantaged) Ive had premises and employed people but now have downsized. work from home and dont employ anyone. Ive never been really ambitios ie tried to make a fortune and now even less so.   i dont regret being self employed, have seen many of my friends work for big banks and companies etc and earn fortunes but have suffered for it.
Only advice id give as dont take too much notice of advice, everyones journey is different. have a clear idea of what you want to achieve but be prepared to change as opportunites arise,  good luck

proggy

Last year I started my own tailoring business in London's east end. I specialise in bespoke suits for obese cockneys.
I'm making huge strides.

WiresDreamDisasters

What I wanna do is develop some software for guitarists and try to address what I've noticed is a bit of an issue in the market - more of a workflow thing rather than a sound quality thing.

I have some coding chops, but certainly not enough to build the thing I am imagining, and I only have an inkling that it would sell. No hardcore proof.

Fundamentally I think getting my coding chops up to speed with C++ and something like JUCE would be a good idea for long-term career progression and entrepreneurship.

I spoke to Tim last night and he asked me what I wanted. Best I could come up with was "to make cool shit" - which is pretty much what I have wanted since I left uni at least, but probably even since I was a kid. I've not given up on that goal, but it's getting harder to know what it really means. 

Someone asked what about the band. Fundamentally the band is a hobby that has had some low level success in the niche world of instrumental post-rock and metal. But it isn't going to pay the bills and I never thought it could. Again, make cool shit.

Selling cool shit is something I don't entirely "get" right now. But I'm getting older and have a family now. I need to really learn how to do that.

hywelg

If you have an idea for "create something once, sell it many times" good for you. It is very much more difficult if every sale requires time and effort. 

PolarityMan

Can you mock it out or wireframe it / otherwise test and refine your design without building it? Might let you gather evidence that could support a business case or persuade a partner to come on board? Is the idea patentable?

Fretwired

WiresDreamDisasters said:

What I wanna do is develop some software for guitarists and try to address what I've noticed is a bit of an issue in the market - more of a workflow thing rather than a sound quality thing.

I have some coding chops, but certainly not enough to build the thing I am imagining, and I only have an inkling that it would sell. No hardcore proof.

Fundamentally I think getting my coding chops up to speed with C++ and something like JUCE would be a good idea for long-term career progression and entrepreneurship.

I spoke to Tim last night and he asked me what I wanted. Best I could come up with was "to make cool shit" - which is pretty much what I have wanted since I left uni at least, but probably even since I was a kid. I've not given up on that goal, but it's getting harder to know what it really means. 

Someone asked what about the band. Fundamentally the band is a hobby that has had some low level success in the niche world of instrumental post-rock and metal. But it isn't going to pay the bills and I never thought it could. Again, make cool shit.

Selling cool shit is something I don't entirely "get" right now. But I'm getting older and have a family now. I need to really learn how to do that.

I've run businesses since the early 1990s and whilst I've not been involved in the music business I have built some companies that developed software. I could write chapter and verse on what to do - I think you need to be clear that your product is either unique or addresses a problem/pain that musicians face. Why would anyone buy your product? You will need cash - you'll need to either borrow it or get investors. I'd tend to go with borrow some cash to get far enough that investors could be interested - the further you are down the line the better the deal you can negotiate and the more of your company you'll keep. The bottom line is you will need capital - you'll have to live while in the development phase - and everything takes longer than you think it will.

There is government money and advice available. You'll need a business plan and marketing plan. You'll also need to be prepared for sleepless nights and naysayers who tell you you'll fail.

Happy to help if you want a chat.

Snags

The one good thing about software dev projects is that it's precisely the kind of thing you can start to tinker with on your own time outside of normal work, without committing to a 3, 6, 9, 12 month development period with no income whatsoever.

However, you obviously can't do that if you're working every hour available in your paid employment, then coming home to a family who also need your energy and attention. If you can re-jig work to give you more personal time, and agree as a family that between 8 and 10 every night (or whenever) you're locked away working on your own stuff, it gives you some structure and some space.

Be slightly wary of sneaking in dev time during your main employment (if possible) - I haven't had to care about this for years, but there certainly used to be some interesting stuff around IPR resting with the employer even if the project wasn't directly related to work if done on company time etc.

Danny1969

I've run my own business in one form or another since 92 .... first my own building and decorating company for a few years, then started Clones UK with a partner and enjoyed the good years of the PC clone industry, then the explosion of the laptop spares market. In 2010 we started 2020 studios, by far the largest studio ever built in Portsmouth and over a five year period managed to lose a lot of money .... good times though and no regrets. 
Now I run Dr Watson, selling my own unique bits of kit. If something annoys me and I come with a solution that works then I generally think that will sell and market it. Most of these products are band related so the research and testing is quite enjoyable. 

I've never had a business plan, I know you should but everything has always gone in a linear fashion for me. I built one clone computer and sold it and with the profit built 2 more and sold them. After 6 months I was selling so many I had to get a unit and a partner to help me build them. Funny enough at that time I wrote a stupid little program in C++ called System Builder which was a simple little prog that spec'ed a PC build and wouldn't let you miss any component out. This saved us money because people were making mistakes and leaving off a NIC or a modem which at the time could be £40 or so. As a program it was the  most uncool thing ever but it was surprising how many people in the trade wanted it. Again if you code or build something that you yourself find useful then it's odds on other people will. Some guys try to sell solutions looking for a problem and that's always doomed to failure. Business wise within 3 years we were turning over half a million and employed 5 people. No money was borrowed to start the business, I don't think anybody would have lent me money at the time, certainly not the bank with my credit rating at the time. Ironically years later the bank was constantly pushing large overdrafts our way and encouraging us to borrow money ! 

I'm not in a position to offer sound business advise as I've always got on with the practical side of things and paid other people to do the VAT and returns. But to start with I would echo all the other advise of Don't borrow money ...... also don't tie yourself into any leases on business premises. I doubt you would need to in a coding scenario but if things take off it's surprising how quickly you may need a proper business address before people will deal with you. 

What I would say though is that running your own business developing your own products is a very enjoyable life .... I can't think of anything I would rather do instead.

Snags

The thing with "business plans" is that they fall into two categories: the massively over-detailed academic exercises that you end up doing in order to satisfy someone on a course, when all you're doing is selling aniseed balls down the market; or the vague mental fleshing out that you're going to need X to live on, which means doing Y sales, and the likelihood is that you will/won't be able to manage this unless you do Z thing.

Despite having developed software to help people do the first, a long time ago, I've always tended more towards the second. Anything other than the broadest forecast will turn out to be wrong, and you only need detailed financials if you're looking for a loan, which you want to avoid if you can. It does help, however, to have a rough idea as to exactly how much (or little) you can live on, and what the costs of generating that might be. Also to think through obstacles ahead of time.

That said, like @Danny1969 I've always been a line of least resistance person, so have never had any formal plan, done any formal marketing, and currently run my business all wrong - if I were consulting to myself, I'd have a fit

ESBlonde

I've not read all the replies above, I have no doubt there is much excellent advice.

For a business to be a success you have to have customers, to have customers you have to have a service or product (preferrably both) that those customers are prepared to pay for repeatedly or at least have an endless supply of new customers.

Picking your hobby (guitarering) and deciding to live on the proceeds is something that lots of people try (and fail) to do in a sustained way these days. So research your market properly, asking a bunch of guitar players on here is only a starting point.

Use the right professionals when appropriate, if you are a plumber you can invoice at say £75 per hour, why would you sit staring into space trying to get you accounts and tax return done for hours.

I had one friend who was a partially sighted 'buyer' and admin chap. His business became arranging for parts/materials to arrive for single trades people where and when they needed them and follow up all the admin/paperwork so they could earn money 5+ days a week. He made a living from home and had to turn away clients because his customers did so well out of the deal.

Lots of people make a success of self employment, just get all your ducks in a row first.

All the best.

Snap

Had a business for a long time.

Advice and info - talk to a bank about business banking, they will likely have their own guide to setting a company up. We had a good one from Lloyds. Lots of useful info in it.

There are IMO a handful of make or break principles to keeping a business healthy.

Don't get complacent, about anything.

Don't get set in your ways.

Keep on top of the admin.

VAT and tax are not your money, never have been. Take that money out, and stick it in a separate tax bill account. That is a key discipline.

If you can, test the market for your ideas - don't plow forward into developing something that people won't pay for. Just cos you think something is a good idea doesn't mean it is a good idea, not til you test it.

Always ask how yourself if you could have done something better. If you could have, do it next time.

A plan is a good thing - if you don't have a plan, how do you know if you've got there? Doesn't have to be a tome, a topline set of stages is useful.

Be straight with your customers, even if it means telling them something they don't want to hear. Under promise, over deliver, not the other way round. If something is going to be late, tell them as soon as you have a whiff it's going to be late.

and if you can't do something, don't say you can. That leads to a lot of stress and ultimately an unhappy customer.

Modulus_Amps

octatonic said:

RiftAmps said:

1. Don't borrow money

2. Don't borrow money

3. Don't borrow money

4. Don't borrow money

Just for some balance, when we started our property business we mortgaged ourselves up to the hilt and lived on credit cards for 2 years, then spent several years paying them off doing balance transfers to avoid as much interest as possible.

It was a calculated risk that paid off handsomely.
I'm not advising people necessarily do that but when borrowing is cheaper than any potential growth then you borrow.
You just have to be strategic.

For music industry business Chris's advise is good, as it is flipping hard and having a good idea is just not enough.  for other industries  you may need to invest up front, most likely with greater returns

I have used loans to grow a business that was already working and the investment was almost certain to return profits