starting a small business??

[racin_38]

hey guys
heres the deal i do not think after the time i have been off work that honestly i will not have a job to return too after all the bullshit i have been thru ,so anyway heres my plan
i want to open my own hobby shop/craft store here in my local town
but i havent the slightest idea on how to go about applying for a small business grant or anything like that .
i know damn well there has to be a site out there to apply with out spending an arm or leg to do so ,if anyone has done this and can give me a link or suggestions that would be great
i love this hobby and i know there are alot of ppl around me that do as well and have to travel like 40 miles 1 way to buy stuff or have to wait till the LHS i go to feel like ordering it
they wait till they get enough for a $200 order and it doesn't matter if it takes 2 weeks you wait.
i am not going to be like that i will order right away reguardless if it costs me a few dollars i feel like you will win return customers in the long run with them know you will go the extra mile for them
so anyway if someone could please help me out with some info i would be grateful
thank you
take care
rick

 

[jetmechG550]

Rick, let me start by saying I wish you well. I'm not sure of any sites to point you towards but I've been tossing the idea of opening my own business as well. A friend of mine and racing buddy just recently started the process of what he hopes one day will be a hobby shop / track. He incorporated himself, which is cheap to do, then got a tax #. He's in the process of setting up an eBay store since he can't find a suitable location right now and eventually he'll keep the eBay store anyway. He also got set up with a few places to sell their product like RD Logics and Integy and such. What he found was that many places will not sell to him without an actual storefront. Fast Eddy is probably the best one to ask, hopefully he'll chime in.

 

[shadey26 ntc3]

I am a small business owner, and I will tell you this it is ruff. You do not have a gaurenteed paycheck. Bill come in regardness of if you make money or not.employees need to be paid. ect. Look at least having 5 to 10 grand in the bank just to get by. I am moving out of my shop to a new location just because the city decided to move the street. I came out of my pocket atleast 12 grand over 5 months to keep the doors open and to keep payrole flowing. A internet site would be a little easier because you won't need the overhead. Just make sure what you sell your vendors have in stock. Try to keep atleast two items of what you sell most in stock. Good luck in ur new field, and I will place a order for some foams if you get them . desmon

 

[FastEddy]

The best time to start a new business is when you DON'T need the income to pay your rent and buy food.

IMO.......
This kind of business should be started from the home. Don't count on the Internet for anything more them making it easy for your customers to see what you have. Time will tell if you have what it takes to be a business owner.

There are a few basic steps to take:

Go to your city hall and get a business license. nothing to it, just fill out the papers and pay them.

State resale license if your state collects sales tax. Again its just a matter of filling out the papers. Its best to tell them its a part time business and expect to sell less them $100 a month of taxable product. If you say more you may have to do the paperwork and send them money every 3 months rather then 1 time a year. If you collect more they will put you on a different schedule to pay more often. Its best to claim that you will be selling less then more to begin with.

File a Fictitious Business Name with your city or county. You will need to see how to do this in your state. The folks at city hall hill help. Its a paper stating your name DBA company name. You will need to then publish this in a newspaper.

You will be a sole proprietor so you will use your SS# as a tax ID.

Now that you have a Legal Business you will need to go to the bank and open a checking account with your company name.

Liability insurance.
You will need insurance. Basic liability for one million should be fine. It will cost from 30-300 a month depending on???? Talk to your agent. DON'T SAVE THIS FOR LATER. You a business now and according to others your rich! They will try to take your money for whatever reason they can think of. If they win, your COOKED!!! GET IT

OK $300-$500 later not including your deposit to open an account, you are now a business.

You have:
Business name
Tax ID number
Resale license
Business license
Checking account
Insurance.

Now you will need to apply to companies to be a reseller. Fill out all the paperwork and set up accounts with them as a vendor.

The rest is up to you.....

You can try to get a grant but its not likely to happen.
DO NOT GET A LOAN TO START YOUR BUSINESS!!!
90% of all business fail. If you are in this 90% you will still owe the money. I failed at my first 4 attempts till I got it right. If I had loans, I would have never been able to try again.

Most citys will have a list of all the steps you need to take and licenses you will need. Most of the time the list has all the names and numbers you will need. If the city doesn't have one then check with your local chamber of commerce.

If you want to open a store, use the list above and an additional 30k-100k to get going and an other 50k-100k in the bank to keep you floating for a year or two to see if you are going to make it. after that you may have a few dollars left over to start paying yourself back and buy some food.

What did I forget?

 

[racin_38]

thank you eddy ,i know this isnt goingto be easy and my wife is working and for the time being i will be collecting short term disablity thru my employer which i hired a lawyer to help me out with the rest of it ,
long story getting screwed thats why the lawyer
but anyway i have been thinking of this for some time and i have the time to make it happen right now so i will follow your direction and goto the court house and find out what i need to do there to publish a name in the newspaper and tax id number and so on and so forth
thanx again
rick

 

[FastEddy]

You will be a sole proprietor so you will use your SS# for a tax number.

It will either be the best or worse thing you ever did.
For me, I never learned how to make money until I went into business for myself. I have friends that hated it and are glad to be working for another person or corporation.

 

[4u2nv]

When I 1st started my own buisness it was called "The Wash" where we did detailing, vinyl graphics andauto accessories. It was a PAIN IN THE ASS to get going to be honest. When I did the books on what I thought Itd cost to get going, I ended up spending a little more than $8 grand than what I predicted. Fast Eddy is right though with the loans part. Doing a loan is a big no no when trying to start out. And I also agree bigtime that a Hobby shop/craft store is something your not going to want to rush into, and Id also suggest starting from home 1st. I know alot of my vendors that I ordered from (For Rims, Tires and other accessories) made me do a buy in. Each company would charge me anywhere from $500 to $2500 to sell there products and supply my inventory and displays and if I sold a certain amount within a certain amount of time, Id get that money back. If not, it was theres. The reason "The wash" had to shut its doors was because the guy I was leasing the building from decided to sell his building (Without notice to me) and I ended up getting the shaft. (Dealed in court with that for over a year for a broken lease) and after it all, I ended up losing just over 5 grand of my 18 invested, and honestly I was happy that it wasn't more. The really bad part was, I didnt have time to look for a new location, and move everything to there, so I was just OUT. I had 4 full time employees and 3 part timers I also had to let go which was the worst part for me. And to top it all off, this was the same exact time my lease was up in my apt. so that was icing on the cake. Anyway, it takes ALOT of ching to get a buisness started. Id say plan on it being almost triple of what ya think youll have to put in it. Now I have Andys Graphix which 60% of my buisness is on the net, and my shop is my garage. (Well I built the garage for it, so its pretty sweet actually, just the location kinda blows. But I have a office, a bathroom, and all that junk) But am still saving so I can build. (No more renting poop after my last experiance. (Denny Heckers a butthead). But yeah, I think if ya are just starting out and plan to use the net as your main source (Which is a good start) I think the only thing youd have to do is get a Tax Id number and register the name of your buisness with the state. Thats all I have to do now (But thats abiding by Mn.'s laws) I to wish ya the best luck, and warn ya that it is a EXTREME large amount of work.. Also the new buisness moto is dont plan on any profit for at least 4 years. Oh, and theres no such thing as to much advertising. And man is that poop expensive!!! (Keep in mind Radio Advertising doesn't work. At least it didnt for me.) Anyway Good luck bro!!!

For me, I never learned how to make money until I went into business for myself.

EXACT same for me. I THOUGHT I was good at managing money until I started my own buisness. Now I know where every dime is. Buisness wise and just personally wise. There isnt to many, so that might be why I know where they both are, but before it was like, if it wasn't in my pocket or in my wallet, I didnt know where it was and what it was spent on. Running my own buisness has helped out alot for that.

 

[Monkey Wrench]

The only advice or suggestion I would add is to either incorporate or establish yourself as a LLC. I am not saying that Fast Eddy's suggestions are wrong (so don't flame me, bro) but establishing your business under your SS# will tie your business' and your credit score together. I have looked into starting my own business and am saving up to do just that because, like Eddy said, avoid taking a loan out to start the business. Anyhow, the documentation I reviewed indicated that, while establishing a sole proprietorship is the most cost-effective way to start, you will want to establish is as a corporation or LLC at some point to move the liability away from your personal assets.

I'll dig through some of my files and shoot you a PM with what I find. I know I saved it, just where?

Man, I envy you! Good luck and here's to your success!

 

[FastEddy]

There is a lot of good reasons to form an LLC or corporation for liability reasons. If your working on large ticket items like houses, cars or anything that can possibly burn down or kill someone. A corporation will shift the liability to the corporation rather then individual. On the other hand vender's and landlords will always ask for a personal guarantee. this insured them against corporate bankruptcy. Having a personal guarantee will make you liable for any debt and take you down as well. With my business model it offerers no more protection then good liability insurance at half the cost. A million dollar business policy and another million dollar umbrella that incorporates my business, house, and autos is just what the Dr. ordered. As far as credit ratings go, If you go down, you go down! Nothing is going to help.

If you do things right like no loans, no credit and separate checking accounts you can just shut the door if things don't go as planned. The next day you can take what you learned and do it again only better.

DON'T BE AFRAID TO FAIL! It will be the best business experience you ever had. Plan for the worst, hope for the best, and work your ass off. You have heard from 3 small business owners now that have failed the first time around. Its not what you want but the chances are that it will happen. Don't let this discourage you. Its like playing cards. You will loose a few hands before the right cards are dealt. If you have the knowledge to know when you have the good hand your a lot better off and will know how to play them.

Ill agree to disagree with the 4 year number listed above. If you lay out a good plan you can make profit for your pocket fairly quickly. Its all about controlling your overhead. You need to know exactly what you make off of each sale. Make sure you take in more then you spend. After you investment is paid off your on the road to putting some in your pocket.

Start off with as little overhead as possible. If you make 10.00 PROFIT on a sale, put 5.00 in the bank and spend the other 5.00 on inventory or advertising. never spend money you don't have. Don't think that you have a sale next week and spend the money you think you will have this week. Its never a sale until you have the money in your pocket. Always ask for a deposit on pre-orders that will cover your cost of goods. People will order things then not get them. Its a fact of life. If they are going to get them they will have no issues on paying up front. If they don't want to do this, there is a reason. Once you get a bank roll you can start to stock fast moving items. Don't do this until you have the ability to toss them in the trash can and call it a loss. You will most likely never sell all your stocking items. Depending on your cost, if you order 10 units and sell 7 of them you haven't made a penny.

Advertising is the key. Its an investment that you will never get back. Its like rent. You will pay whether it works or not. On the other hand, if you don't do it no one will know you are out there. A great investment would be a book called Guerrilla Marketing for Dummies. Read it, read it again then eat the pages for dinner so its in you forever. Its better to be a big fish in a little pond at this point in your game. Kudos to Rush for the fine job he has done using this tactic. Find a small market and make sure they know who you are and trust you.

Manage you money.
Get quickbooks, set it up properly, AND USE IT! It has every tool a business needs to know exactly whats going on in any given part of your business at any time. Inventory, cost, sales profit, losses, AP,AR, and account balances. Don't get sloppy. Your in business to make money. You will have no idea of whats going on if you don't track every penny. At this point, its the pennies that matter. Don't get sloppy. Offer service rather then discounts. You can't afford to make 5% at this point. Your time is free your product isn't.

All the above is just my opinion for your benefit. People do things differently and if I was starting out with a new project this is how I would approach it. It may not be how others would do it. You will need to find what works for you. All the opinions above take into consideration that you have little to no money for startup. If you had a bank roll and a proved track record it would be a lot different. There are shortcuts that can be taken but you need to make your map first.

Your time is free

LMFAO @ Me

 

[Revo Rancher]

The best time to start a new business is when you DON'T need the income to pay your rent and buy food.

KISS method works best. Eddy knows enough about me and my wife tio vouch for his method as the best method, and he has retired once already!

As to the LLC vs the SS#, depends what state you are in. In CA, almost no difference except for your credit rating.

 

[okihost]

I started a small computer repair business about 5 years ago and it failed within 6 months due to not planning and just logging myself with too much work.

I also started selling web hosting to some clients while I was doing the PC repair and ended up starting a small hosting business and closing the doors on the PC repair thing.

It has been 4 years this February and took about 16 months to even start breaking even on what I was spending on one server when I started.. I try my best to take care of customers and give them one-to-one support if they need it and in turn I get a lot of referrals from word of mouth, with businesses such as web hosting the market is so saturated that you must do something different and my choice is to pretty much devote my life to my clients - sleeping, shitting, vacationing I am usually always available for them.

Another benefit I have is my wife does all of the billing and sales work so she is cheap and I have a few techs helping out which I offer heafty hosting for free in return for helping out with some very basic level 1 support tickets.

I would also suggest joining your local chamber of commerce to try and get to know other local business owners and find out what is working for them and you can often save money on other things such as advertising by being a member.

 

[FastEddy]

Make that 4 small business owners that have failed out of the gate and learned enough to make their next attempt successful.

Your in good company with the rest of us loosers

 

[Plaidfish]

LOL....make that 5 eddy,
I started a small skateshop in Richmond Hill, Queens years ago w/ a friend and his mom....we were open a whopping 9 months.....and the best way I found to keep customers happy was like eddy said.....I didn't charge for stuff I could do while just sitting around.....most shops charged to build board setups....if I sold it I'd build it for em.....simple.....that flopped then I moved to FL and started a Painting business......that actually started making money w/in a month (very rare in any business) and was very profitable fo 2 years, then the partner issues started....advice to that is NO PARTNERS...no matter how "cool" they might seem and how long you've known them, fact is money changes people and some will stoop lower than others to get more.....I sold out to the man and I'm toting that barge til I can see another business op come up...you will never make the American dream under someone elses bank account

 

[psunitro]

All of this is GREAT info. BUT........is there really a market in your area for a hobby/craft shop? That would be the biggest ? you really need to ask yourself. How busy is the LHS? No matter how bad they are they are established, and you wont take 100% of their custormers away. I am not tring to discurage you at all, just be realistic in your goals!!

 

[racin_38]

psunitro your from where state college-bellfonte area right?
up there you have a few shops to choose from over the mountian where i am we have 1 close and thats a radio hut/hobby shop that is more towards rc planes then nitro cars and trucks ,right at the moment the LHS has 1 tmaxx ,a nitro rustler a XXXNT thats the owners and thats it
HE orders the stock for the shop and only orders what he feels ppl need not what they actually look for ,very rarely do i go in there and buy something off the shelf simply because the selection sux ,thats the main idea behind the hobby shop
craft shop yes there is a high demand for that kinda thing in my area and the closest to us is the lewistown walmart and jo-ann fabrics ,both 11 miles away
so i think if we do it right we can make a go of it ,not lookingot get rich and retire early but give ppl a honest to goodness nice place to shop and get what they need.

 

[psunitro]

Well, I'm on the other side of Harrisburg. Go for it.

 

[LesWV]

If you are serious about wanting to start a Hobby shop.
Contact Hobby Town. They will help you get started if you meet the requirements. I know that they are not much (at least the ones around here aren't). But it could allow you to see if it is something that you wish to venture into.

Not long ago. Tower hobbies required independent hobby shops that had accounts set up with them to make something like a $2500 per month purchase in order to for the dealer to use them for suppliers.

Online "Hobby Shops". Think about that seriuosly for a minute. You will need to get your stuff from some distributor. Tower, Horizon, Hobby People? How can you compete with the people that you are buying your stuff from?

Want a good example of a complete failure of such a venture? Just look at E Hobbies.

I wish you well.

Just do your home work before you leap.

 

[savagefan04]

here are my 2 cents. if u have the cash go at it alone. partners are great for spreading the risk, but sooner or later they change...someone can't meet their share and fights start. trust me, been there, done that. Avoid dealing or getting involved with a franchise. in the beginning u barely make enough to pay the bills, let alone paying a franchise fee, and running "your" store how someone else tells u, sucks. throw on that u need to advertise when and how they tell u, and even if it doesn't help u, u still need to pay a natioanl ad campaign fee. Yes, a franchise will have a proven model, but it nothing that u can't duplicate on your own with some sound planning and judgements.

My first piece of advise is come up with a business/project plan. detail everything in this plan. from information about u, to how u are going to stock inventory, sell items, market them, account for lost or damage items, to simple customer satisfaction. target a sale pitch to the suppliers u want to carry. start small. go with 1 supplier and then grow from there. places like integy and RD logics are very simple to deal with and have no buy in factor.

when the time comes and u are ready to expand, this business plan will come in handy if u go for loans or business lines of credit. not to mention distributors want to see this to make sure u are not some single guy looking to get personal parts cheap.

as for the LLC V SS#, for me it was better getting the LLc. all the business liability stayed there...in the business. NONE of my personal assets were ever in jeapordy if the venture failed. aside from the liability issue, the llc allowed me to take a loss against my normal income so that helped out too...

as for people failign when they start, yes, they do. but thats from poor planning. like someone before me said, if u budget to spend 5k, count on really needing 15k. it just works that way. as for turning a profit, its doable inside 2 months. atleast for me it was...(i was a partner in a computer consulting firm) 5 yrs later the business has grown and was recently sold to a larger firm for nice profit..x partner was sold in the deal too.

good luck and if u need any info on suppliers send me an email. i might be able to send u some names on who to call.