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ebtgrl
Posts: 37
From: None
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Starting a Business - 7/19/2004 18:14:15
Hi Guys,
I just finshed a 6 year stretch with a mom and pop isp as head web designer and systems administrator. I am now trying to make a go of it on my own and I am scared to death. Are there any tips ya'll would offer for a newbie like me? Do I need to get a LLC right now? Do you guys resell domains and hosting and if so who do you use? Any suprises ya'll have seen that I might see in the future?
I got my first client today so I am sort of doing this backwards. 
Thanks for your time!
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Giomanach
Posts: 6128
Joined: 11/19/2003
From: England
Status: offline
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RE: Starting a Business - 7/20/2004 3:38:44
Hi ETB
quote:
I am scared to death Don't be, we've all started out somewhere, it's not that bad, just a bit slow to start.
quote:
Are there any tips ya'll would offer for a newbie like me?
Be confident, don't let the client control you, but provide a professional, friendly service. And most importantly, when on a forum, show off, prove you can do things, people casually browsing may go "OoOo, I like the look of that" and contact you, it's happened to me before.
quote:
Do you guys resell domains and hosting and if so who do you use?
Working on a reseller account at http://www.crucialparadigm.com They provide a choice of 3 or four reseller account, and relatively cheaply too.
If you want one thouhg, I won't undermine Outfront, go get one of Toms Mutli-site hosting accounts. For $55 a month, for as many domains as you can fit into 1GB of HDD space is superb value.
quote:
Any suprises ya'll have seen that I might see in the future?
You could get fantastically successful and buy us all out, but I don't see that happening too soon
quote:
I got my first client today so I am sort of doing this backwards
Don't worry about that. I have four clients, and I haven't even completed my web 
Dan
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BobbyDouglas
Posts: 5470
Joined: 5/15/2003
From: Arizona
Status: offline
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RE: Starting a Business - 7/20/2004 4:10:17
Just a tip from experience, a good systems administrator is hard to find. Do you have any experience as a sys admin? What OS?
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Arizona Web Design - Mr Bobs Web Design in Arizona
The Arizona Web Hosting Challenge
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Mojo
Posts: 2441
From: Chicago
Status: offline
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RE: Starting a Business - 7/20/2004 11:19:50
Find a good CPA. I would say do that first because it is real easy to screw up your taxes.
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Split Testing
Order Fulfillment
Emergency Kits
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dpf
Posts: 7126
Joined: 11/12/2003
From: India-napolis
Status: offline
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RE: Starting a Business - 7/20/2004 12:05:22
quote:
Find a good CPA
quote:
Do I need to get a LLC right now
yes to both. The LLC protects your personal assets from any business mistakes. the cpa protects you from YOUR mistakes in the area where you presumably have no expertise - accounting and taxes.
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Dan
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paulie
Posts: 558
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RE: Starting a Business - 7/21/2004 20:27:20
quote:
Do I need to get a LLC right now?
I went the LLC route which I don't regret, put I paid an attorney to draw up and file the papers. That cost around $800, and my friend filled out some forms and filed his own for $95. 
I live in Indiana; your mileage may vary depending upon the laws and fees in your state.
To answer another question you posed, I resell domains and hosting, but would never consider it as a primary business. In my experience, the margins are just too thin given the headaches invovled. (But that's only one opinion). Some of my web development clients already have hosting, so for the few that need it, I buy and resell it to them.
quote:
most importantly, when on a forum, show off,
This may have impressed someone, but at the risk of annoying how many others? Seriously, ALL of the client relationships I have developed began because of someone I already knew - in the real world. Since you've been in the business for awhile, use your contacts. I moon-lighted for three years before leaving my full-time IT job, and I couldn't be happier. But I've only been on my own a few months. So far so good though, and best of luck to you.
< Message edited by paulie -- 7/21/2004 20:41:35 >
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ebtgrl
Posts: 37
From: None
Status: offline
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RE: Starting a Business - 7/22/2004 20:28:17
quote:
Do you have any experience as a sys admin? What OS?
The main OS I work with is Windows. I know some about Linux but I am not as expienced in that area.
Thank you guys for all of your tips!
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Website Biz
Posts: 1
Joined: 7/23/2004
Status: offline
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RE: Starting a Business - 7/23/2004 12:16:32
ebtgrl,
I'm never one to miss a chance at shameless self promotion.
Visit <snip>
Now that you are doing this on your own, you will soon realize that the website design business is less about design and more about business. Designers who understand this go on to become very successful. Those who don't spend their live working for someone else.
There is a huge market in professional website design. The Internet continues to grow at a phenomenal rate, and the demand for websites (and designers) grows with it. Competition is fierce because there are so many amateurs promoting themselves as professionals, and inexperienced clients can't tell the difference. But if you select your target market carefully, you can do very well for yourself.
Welcome to the club. I wish you well in your new business.
Mark Frank
Author
Edit by Mojo - removed ad links.
< Message edited by Mojo -- 7/23/2004 15:48:58 >
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dpf
Posts: 7126
Joined: 11/12/2003
From: India-napolis
Status: offline
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RE: Starting a Business - 7/23/2004 12:33:34
quote:
shameless self promotion.
given that your first post was test and this is your second - it appears to be exactly that
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Dan
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paulie
Posts: 558
Status: offline
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RE: Starting a Business - 7/23/2004 13:00:18
quote:
Welcome to the club.
...and which club would that be? The one where you develop websites, or the one where you "make a gazillion dollars on the Internet selling books about developing websites"???
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TicoGrande
Posts: 12
Joined: 10/28/2002
Status: offline
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RE: Starting a Business - 7/23/2004 13:41:07
You requested some hints about a new business. I have started 12 companies in my life and all have been and still are profitable. The advice I will give you calls for a lot of work, but if you do it, you'll probably succeed.
First, money!
The greatest cause of failed businesses is insufficient cash. 90% of all new businesses fail within one year (SBA). 95% of THOSE fail because they were underfunded. You should have enough cash to live on for at least 6 months and preferably one year.
Watch your expenses. There are TWO ways to increase profit in a business. One is to increase sales, the other is to decrease costs. Decreasing costs almost NEVER means you have to spend money. Increasing sales normally means you must spend money (advertising, promotion, adding new people, etc.). Negotiate everything.
Second, business plan.
You need to make a business plan. If you are like 90% of the new business owners, you will not do this. You will consider it too much work, so you will fly by the seat of your pants. Perhaps that is why so many new businessses fail. Anyway, at the end of this post is a sample. The minimal items it should contain are below, but you should absolutely do the whole plan even though you have already started your business.
1. Pre-forma (expected) financial statements for the first two years. This will tell you everything you need to know about how much money you can spend, how much you need to earn, where your break even point is, and whether you are properly financed. It is critical. (expected time 30-40 hours)
2. Evaluation of your competition. Who are your competitors and what do YOU have that they do not? How can you win new business against them and what will you need to do to build a customer base. What will you charge? What do you competitors charge? What can you offer that they do not? Be ruthless in evaluation yourself and your business. When you find you have an advantage, go for it! Expected time 10 hours
3. Sales forecasting. Setting prices. Expected sales for design, hosting or whatever else you will do. Compare what you have to what the competition has. What are you cost of sales (see 1.) How much profit will you need to make. This will be part of how you set prices.
4. Marketing, Advertising and promotion. How will you get the word out? What will be the costs? How much will you need to budget to drive enough sales to meet your financial needs (#1 again).
You get the idea. See the sample business plan below.
IMPORTANT
The really important thing is to WORK the plan!
The first two years, the plan should be reviewed once every two months and compared against what is happening in real life. It will tell you objectively how you are doing. You can then adjust your plan or adjust your business to make things work the way you want them. To make a plan and not follow it and review it is just plain dumb. It is your roadmap to success. Creating a business plan and putting ir away on a shelf drastically improves your opportunity to fail.
Below is a sample to play with. Good luck on your business.
TG
BUSINESS PLAN OUTLINE
Cover Sheet: Name(s) of principles(s); name, address and phone # of business.
STATEMENT OF PURPOSE
TABLE OF CONTENTS
I. THE BUSINESS
A. Description of the Business
B. The Market
C. Competition and Feasibility Study
D. Location of Business
E. Management
F. Personnel
G. Application and Expected Effect of Loan or Investment
H. Summary
II. FINANCIAL DATA
A. Sources and Application of Funding
B. Capital Equipment and Furniture Lists
C. Projected Balance Sheet
D. Break-even Analysis
E. Projected Income Statements
* Three-year Summary
* Detail by Month, First Year
* Detail by Quarter, Second and Third Years
* Notes of Explanation
F. Cash Flow Projections
* Three-year Summary
* Detail by Month, First Year
* Detail by Quarter, Second and Third Years
* Notes of Explanation
G. For an Existing Business (also include the following documents)
* Profit/Loss Statements for Past Three Years
* Balance Sheets for Past Three Years
* Business Income Tax Returns for past Three Years
* Personal Income Tax Returns for Past Three Years
III. SUPPORTING DOCUMENTS
Personal resumeés, job descriptions, personal financial statements, credit reports, letter of reference, letters of intent, leases, contracts, other legal documents, and anything else of relevance to the plan.
STATEMENT OF PURPOSE
A brief (less than 1 page) statement of the business plan objectives.
QUESTIONS
In General:
1. What is the purpose of this plan?
Will it be used as an:
- operating guide?
- financing proposal
2. What is the business structure (i.e., sole proprietorship, general partnership, limited partnership, C corporation, or Subchapter S corporation
3. Who is (are) the principle(s)?
4. What is to be done?
5. Why will it be successful?
For A Financing Proposal:
6. Who is asking for money?
7. How much money is being requested?
8. What is the money needed for?
9. How will the funds benefit the business?
10. How will the funds be repaid?
11. Why does the loan or investment make sense?
A. DESCRIPTION OF THE BUSINESS
GENERALLY EXPLAIN:
1. What the business is (or will be):
2. What market you intend to service, the size of the market, and your expected share;
3. Why you can service what market better than your competition;
4. Why you have chosen your particular location;
5. What management and other personnel are required and available for the operation; and
6. Why your investment or someone else's money (debt/equity) will help make your business profitable.
QUESTIONS:
1. Type of business; primarily merchandising retail, manufacturing, wholesale, or service?
2. What is the nature of the product(s) or service(s)?
3. Status of business start-up, expansion of a going concern, or take-over of an existing business?
4. Business form: sole proprietorship, partnership or corporation?
5. Who are the customers or clients?
6. Why is your business going to be profitable?
7. When will (did) your business open?
8. What hours of the day and days of the week will you be (are you) in operation?
9. What have you learned about your kind of business from outside sources (trade suppliers, banks, other business people, publications)?
NOTE: If yours is a seasonal business, or if the hours will be adjusted seasonally, make sure that the seasonality is reflected in your replies to the two previous questions.
FOR A NEW BUSINESS
10. Why will you be successful in this business?
11. What is your experience in this business?
12. Have you spoken with other people in this type of business about their experience, challenges and rewards? What were their responses?
13. What will be special about your business?
14. Have you spoken with prospective trade suppliers to find out what managerial and/or technical help they will provide?
15. Have you asked about trade credit?
16. If you will be doing and contract work, what are the terms? Reference any firm contract and include it as a supporting document.
17. Do you have letters of intent from prospective suppliers or purchasers?
FOR A TAKE-OVER:
18. When and by whom was the business founded?
19. Why is the owner selling it?
20. How did you arrive at a purchase price for the business?
21. What is the trend of sales?
22. If the business is going downhill, why? How can you turn it around?
23. How will your management make the business more profitable?
B. THE MARKET
Generally explain who needs your product or service, and why.
QUESTIONS:
1. Who exactly is your market? Describe characteristics: age, sex, profession, income, etc., of your various market segments.
2. What is the present size of the market?
3. What percent of the market will you have?
4. What is the market's growth potential?
5. As the market grows, will your share increase of decrease?
6. How are you going to satisfy the market?
7. How will you attract and keep your share of the market?
8. How can you expand your market?
9. How are you going to price your service or product, to make a fair profit, and at the same time, be competitive?
10. What price do you anticipate getting for your product or service?
11. Is the price competitive?
12. Why will someone pay you price?
13. How did you arrive at the price? Is it profitable?
14. What special advantage do you offer that may justify a higher price? (You don't necessarily have to engage in direct price competition).
15. Will you offer credit to your customers (accounts receivable)? If so, is this really necessary? Can you afford to extend credit? Can you afford bad debts?
C. COMPETITION
QUESTIONS:
1. Who are your five nearest competitors? List them by name.
2. How will your operation be better than theirs?
3. How is their business: steady? increasing? decreasing? Why?
4. How are their operations similar and dissimilar to yours?
5. What are their strengths and/or weaknesses?
6. What have you learned from watching their operations?
7. How do you plan to keep an eye on the competition in the future?
D. LOCATION OF BUSINESS
1. What kind of building do you need?
2. What are the attributes and/or salient features of your present or desired business location?
3. Why is this a desirable area?
4. Why is this a desirable building?
5. Does the community around which you intend to locate the business show enthusiasm for you and your business?
6. What are the advantages and disadvantages of the site in terms of wage rates, labor unions, and labor availability?
7. How much space do you need?
8. Do you need a long-term or short-term lease?
9. Is the building accessible by public transportation?
10. Is the building close to customers or suppliers?
11. Is free or low cost parking nearby?
12. What are the state and local taxes, laws, utilities, zoning, and variables that may affect the location of you business?
13 How do you plan to keep an eye on any demographic shift in your area?
E. MANAGEMENT
QUESTIONS:
1. What is you business background?
2. How does your background/business experience help you in this business?
3. What management experience do you have?
4. Do you have managerial experience in this type of business?
5. Do you have managerial experience acquired elsewhere-whether in totally different kinds of business, or as an offshoot of club or team membership, civic or church work, etc.?
6. What weakness do you have and how will you compensate for them, i.e., will you hire employees or pay consultants who have management abilities/expertise that you don't have?
7. What education do you have (including both formal and informal learning experience) which have bearing on your managerial abilities or knowledge of the industry?
8. Personal data: age; where you live and have lived; special abilities and interests; and reasons for going into business?
9. Are you physically suited to the job? Stamina counts.
10. Why are you going to be successful at this venture?
11. Do you have direct operational experience in this type of business?
12. Who is on the management team?
13. What are the duties of each individual on the management team?
14. Are these duties clearly defined? how?
15. Who does what? Who reports to whom? Where do final decisions get made?
16. What and how will management be paid?
17. What additional resources have you arranged to have available to help you and your business (accountant, lawyer, et al.).
NOTE: A personal financial statement must be included as a supporting document in your plan if it is a proposal for financing. Also, include your resume as a supporting document.
F. PERSONNEL
QUESTIONS:
1. What are your personnel needs now? In the near future (3 years)? In five years?
2. What skills must they have?
3. Are the people you need available?
4. Will your employees be full-time or part-time?
5. Will you pay salaries or hourly wages?
6. Certain employee benefits are mandatory. Find out what they are.
7. Will you provide additional fringe benefits? If so, which ones? Have you calculated the cost of these additional fringe benefits?
8. Will you utilize overtime? If so, you may be required by law to pay time and a half, double time, and/or other extra costs.
9. Will you have to train people for both operations and management? If so, at what costs to the business?
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Charles W Davis
Posts: 1725
Joined: 3/7/2002
From: Henderson Nevada USA
Status: offline
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RE: Starting a Business - 8/7/2004 22:29:53
TicoGrande,
Your business plan advice to ebtgrl was great. My daughter (42) was about to leave a company with salary, benefits, etc. to buy a franchise for a service similar to MollyMaids. I sent a similar outline to her and saved her from the third biggest mistake of her life (husbands #1 and #2 were first and second). She had worked her way down about 1/4 of the way through the list and realized that franchise wasn't for her.
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Enjoy! It' s your endeavor!
http://www.anthemwebs.com
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