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Thread: Starting Your Own Company

  1. #1
    Endearingly Dislikable RotationSlimWang's Avatar
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    Default Starting Your Own Company

    Looking to get advice from others who have done so or haven't but are overflowing with a variety of useful knowledge about matters of business, taxes, and stuff like that (I'm looking at you, Tom). Here's my situation: my primary source of income is travelling all over LA County fixing office's computers and networks as a sub-contractor for this asshole who does almost nothing to pretend to be a legitimate business except for having a really ugly website, paying for Google AdWords placements, having a big yellow pages ad, and... actually no, that's about it. He doesn't even rent out office space, I pretty much just work out of my house and meet up with him in person once or twice a week to hand in checks and get paid. It's an annoying company to work for because I get no health insurance or mileage reimbursement but I make a high percentage of all the profit I bring in, so in theory I make really good money until you factor in car expenses, not to mention the high costs of illegally purchasing all the medications I need. The thought of starting my own company and doing the same work for the same costs but making 100 percent of the profit instead has naturally crossed my mind from time to time, but I've always been too lazy and have a savings account for appearances only.

    Despite my laziness, recently I've started getting requests from quite a few offices that have no relationship with my employer (naturally I had to sign a pretty strict non-compete agreement when I started working for this guy stating that I can't poach his clients) to do their IT, the most recent one being a big enough job--somewhere between 5-10 grand just for the initial setup--that I think it might be time I actually form a company to handle my side clients.

    So, wiser, older people who understand this stuff, what do you recommend I do and what can you tell me that I'm probably not already thinking about?

    There's the question of being a sole proprietor vs. an LLC (I'm leaning towards LLC since it would protect me from being sued personally in the unlikely event that I ever ruined a client's life and also because as a person I have fucking terrible credit but as a new company I could probably finally get a credit card again which is kinda critical as being able to purchase 2000 dollars worth of equipment immediately can be kinda crucial in my line of work). Anybody got any insight into which would be best considering that the growth of this company will probably have to be done very gradually since I need to build up a larger client base and save some money before I can actually completely split from my day job.

    Anyone out there whose work makes them acquainted with whatever new business loans/grants/whatever-just-gimme-some-goverment-money-things I might be eligible for? Does Mr. Obama have some program that will just give me a bunch of money for no good reason?

    Does anyone have a copy of that book in the infomercials with that guy in the Riddler jacket?

    You get the idea. Explain real life to me, older people. Thanks.
    Quote Originally Posted by amyzzz View Post
    Hannah, I don't know that pigs have big weiners, and my early 20's facination with dogs because of weiner size, I think. If that helps.

  2. #2
    MENACING Courtney's Avatar
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    Default Re: Starting Your Own Company

    The real benefit to being a sole proprietor is that the paperwork is much easier. But you want to be an LLC.

    But before you embark on anything, you should create a solid business plan with all your estimated costs and revenue sources. Once you really start thinking about it, there are a LOT of costs associated with running a business, so it's worth putting it all down on paper and doing some math to figure out if it's really a good idea. Having a fully fleshed out business plan will also help you to apply for loans and stuff of that sort.

  3. #3
    Endearingly Dislikable RotationSlimWang's Avatar
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    Default Re: Starting Your Own Company

    ... Courtney, for fuck's sake, I'm not a goddamn idiot. Of course before I actually do this I'm going to sit down and run numbers and probably meet with an accountant. I'm asking people for specific instances of useful knowledge they might have, not a list of the most obvious and rudimentary steps of the process. You sound like my mother. "Well, you'll need to sit down and write out a budget..." Obviously that will have to happen. I'm looking for advice from people who have actually lived, not just gone to school: SHOO!
    Quote Originally Posted by amyzzz View Post
    Hannah, I don't know that pigs have big weiners, and my early 20's facination with dogs because of weiner size, I think. If that helps.

  4. #4
    VigoTheCarpathian
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    Default Re: Starting Your Own Company

    1. Always run it like it's going broke: don't spend money unless you absolutely need to and only on goods / services that will directly benefit customers and your bottom line. Shop-out everything you buy and be patient with your decisions.

    2. Grow out of your house: start with a very low overhead situation(your personal finances included) and retain profits for investment in marketing and infrastructure.

    3. Strive for high gross and net margins. You're in business to make money, lots of money, not just a little money that will be destroyed by inflation before you even spend it. A 30% net margin on gross revenues is typicaly great but every business unique. Understand your costs and the costs of financing your customers to great detail.

    4. Stay close and communicative with your customers and change readily and rapidly to their demands, preferences, and over all direction of your industry. Most big companies start off doing one thing and get rich and famous for things they never set sail to perform.

  5. #5
    Coachella Junkie heart cooks brain's Avatar
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    Default Re: Starting Your Own Company

    Regarding the non-compete disclosure, is CA right to work state? If so the non-compete is worthless, and you should feel free to poach away.
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  6. #6

    Cool Re: Starting Your Own Company

    You are over thinking it. Hire a good accountant now and get going. File the llc open a bank account bring in some money apply for a credit card and you are good to go.

  7. #7
    Coachella Junkie summerkid's Avatar
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    Default Re: Starting Your Own Company

    Quote Originally Posted by heart cooks brain View Post
    Regarding the non-compete disclosure, is CA right to work state? If so the non-compete is worthless, and you should feel free to poach away.
    No, it is not.
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    Coachella Junkie fatbastard's Avatar
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    Default Re: Starting Your Own Company

    My 2 cents on poaching customers.

    Many years ago, our company used only rhino-tech toners. Their company was started by a recovered drug user that set aside a percentage of their sales to the preservation of the white rhino.

    Anyways, I loved our rep. She always called for an order when we were close to running out. The short amount of time always felt like reacquainting with a long time friend. She lived by the beach, so we talked about that. She would ask what concerts I’d attended recently and how was the wife. Basically, she was a great sales rep.

    One day, I get a call from a guy who took her place. He tells me that she doesn’t work there anymore and that he thinks she started her own business. I place my order with the new guy and continue life. A couple of days later, I get a call from her. She goes into great detail on how management were pieces of shit and that her and a few people from the old company started their own business and were ready to take my order. I explained the reasons on why we’d continue to remain a customer with her old company and wished her the best of luck.

    This should be a no brainer but wanted to say that there were a thousand of other ways she could gone about trying to gain my business. She really could have had it. People in other departments don’t really give a fuck about toners. They just want to make sure that we are stocked with them in the office. I could have easily swayed myself to going with her company, but. So, well…you know what I’m saying.
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  9. #9
    Peaceful Oasis TomAz's Avatar
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    Default Re: Starting Your Own Company

    Quote Originally Posted by heart cooks brain View Post
    If so the non-compete is worthless, and you should feel free to poach away.
    Pretty sure this is utterly and absolutely a false statement. "right to work" states forbid any requirement that an employee join a union. This is a different thing altogether from a professional non-compete agreement.
    Last edited by TomAz; 10-07-2012 at 06:34 PM.
    Quote Originally Posted by efrain44 View Post
    Anyone know who the guy in the Cardinals jersey is? I've seen him in pictures on the board and I thought I saw him this year.

  10. #10
    Peaceful Oasis TomAz's Avatar
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    Default Re: Starting Your Own Company

    Quote Originally Posted by VigoTheCarpathian View Post
    1. Always run it like it's going broke: don't spend money unless you absolutely need to and only on goods / services that will directly benefit customers and your bottom line. Shop-out everything you buy and be patient with your decisions.
    Pretty sure I disagree with this statement too, though here it's a matter of judgment rather than fact. A startup company should focuse on generating revenue first. Use common sense when making spending decisions but don't be such a tightwad that it either drives you nuts or hampers your ability to get shit done.
    Quote Originally Posted by efrain44 View Post
    Anyone know who the guy in the Cardinals jersey is? I've seen him in pictures on the board and I thought I saw him this year.

  11. #11
    Peaceful Oasis TomAz's Avatar
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    Default Re: Starting Your Own Company

    Randy the benefits of starting your own company can be substantial and I think you are doing the right thing by giving it serious thought. The main hurdle you face is ramping up the business so that you have enough work (revenue) (that's old person talk for money) coming in. The advantage of working with the guy you're working with now is he has an established business/reputation etc and that brings him enough work to keep himself and you busy, apparently. If you go it alone, how long will it take you to get a client base big enough to make it work? Also, what will you do to build that client base? Just hang up your shingle and hope the phone rings? I don't mean this to sound negative,not at all, I'm just saying these are the questions you need to ask yourself. If you have good answers, then go for it.

    As for the mechanics of actually setting up the business, J$ is right, don't overthink it, just find a guy who knows how. Or google it or something. The mechanics of starting the business are important but secondary to the business plan and mission of your firm.
    Quote Originally Posted by efrain44 View Post
    Anyone know who the guy in the Cardinals jersey is? I've seen him in pictures on the board and I thought I saw him this year.

  12. #12
    Peaceful Oasis TomAz's Avatar
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    Default Re: Starting Your Own Company

    Also, one more thing: Does your noncompete have an expiration date?
    Quote Originally Posted by efrain44 View Post
    Anyone know who the guy in the Cardinals jersey is? I've seen him in pictures on the board and I thought I saw him this year.

  13. #13
    Coachella Junkie chairmenmeow47's Avatar
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    Default Re: Starting Your Own Company

    Quote Originally Posted by TomAz View Post
    Also, one more thing: Does your noncompete have an expiration date?
    and if not, can you threaten said boss with incriminating information to get out of the contract?
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  14. #14
    Old Gay Guy gaypalmsprings's Avatar
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    Default Re: Starting Your Own Company

    By a book on declaring bankruptcy.

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    Member Grandma's Avatar
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    Default Re: Starting Your Own Company


  16. #16
    Peaceful Oasis TomAz's Avatar
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    Default Re: Starting Your Own Company

    Quote Originally Posted by chairmenmeow47 View Post
    and if not, can you threaten said boss with incriminating information to get out of the contract?
    No, if there's no expiration date the contract is probably unenforceable. Reasonable noncompetes are generally allowed by the courts but a noncompete that lasted for eternity would be deemed unreasonable, I believe.
    Quote Originally Posted by efrain44 View Post
    Anyone know who the guy in the Cardinals jersey is? I've seen him in pictures on the board and I thought I saw him this year.

  17. #17

    Default Re: Starting Your Own Company

    Quote Originally Posted by fatbastard View Post
    My 2 cents on poaching customers.

    Many years ago, our company used only rhino-tech toners. Their company was started by a recovered drug user that set aside a percentage of their sales to the preservation of the white rhino.

    Anyways, I loved our rep. She always called for an order when we were close to running out. The short amount of time always felt like reacquainting with a long time friend. She lived by the beach, so we talked about that. She would ask what concerts I’d attended recently and how was the wife. Basically, she was a great sales rep.

    One day, I get a call from a guy who took her place. He tells me that she doesn’t work there anymore and that he thinks she started her own business. I place my order with the new guy and continue life. A couple of days later, I get a call from her. She goes into great detail on how management were pieces of shit and that her and a few people from the old company started their own business and were ready to take my order. I explained the reasons on why we’d continue to remain a customer with her old company and wished her the best of luck.

    This should be a no brainer but wanted to say that there were a thousand of other ways she could gone about trying to gain my business. She really could have had it. People in other departments don’t really give a fuck about toners. They just want to make sure that we are stocked with them in the office. I could have easily swayed myself to going with her company, but. So, well…you know what I’m saying.
    I'm not seeing where she drastically fucked up here?

  18. #18
    Endearingly Dislikable RotationSlimWang's Avatar
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    Default Re: Starting Your Own Company

    I've talked to numerous people about this, several of them being guys who actually did exactly what I'm talking about--got tired of consulting for other people, started their own. And yeah, the basic rundown is that you either have to delicately balance growing a client base on the side equal to at least 33 percent of the work I get from my current situation OR that I'd need to have one year's worth of expenses saved up. Preferably, I should have both. As far as poaching customers goes, honestly he has very few who I'd even consider taking. It's part of my contract that I keep my cell phone number a secret from clients and I love it--even though it means turning down a lot of fast money from all the people who offer to cut my boss out of the equation because they like me better, I don't really care for the way he handles his customers and he takes too many residential customers, something I hope to phase out as soon as my new business becomes remotely financially solvent.

    I'm not planning on taking the leap too soon and I think urging me to just get an accountant and go do it is stupid. You're not taking a lot of shit into account with that thinking. There needs to be preparations. What I want to start doing is getting some cheap business materials made up--even just VistaPrint cards--and going office to office in the fields that I know the best and just seeing the reactions I get. Generally speaking I find most office managers will tell you they're dissatisfied with their IT people at least 75 percent of the time. Most of the guys doing my job are incompetent, gouging, mutant-looking motherfuckers. Just as a test I think I'll spend a couple weekends going around the area and trying to get some face time with businesses nearby. The real important thing to figure out--unfortunately I can't do it until I have a website to deploy--is how much it's going to cost me to get the Google placements I'll need. That's where the majority of our business comes in now, I need to set up an account just to test for a day or two and plan out what my monthly expenses for getting the upper-tier results in the towns I'd like to be working in. That's a big variable that my boss doesn't seem to like getting into specifics about. He'll never say exactly how much the advertising costs him, probably because he's concerned I'm doing exactly what I'm hoping to do.
    Quote Originally Posted by amyzzz View Post
    Hannah, I don't know that pigs have big weiners, and my early 20's facination with dogs because of weiner size, I think. If that helps.

  19. #19
    Endearingly Dislikable RotationSlimWang's Avatar
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    Default Re: Starting Your Own Company

    Also I'm 99 percent sure that my boss doesn't have the foggiest fucking clue where the non-compete paperwork I signed five years ago is. I've quit and come back to work for him four times now and he SUCKS at keeping records, so the clients I really want to keep are gonna get kept, fuck 'im. Gas is 5 dollars a gallon. Time to slit throats.
    Quote Originally Posted by amyzzz View Post
    Hannah, I don't know that pigs have big weiners, and my early 20's facination with dogs because of weiner size, I think. If that helps.

  20. #20

    Default Re: Starting Your Own Company

    Quote Originally Posted by RotationSlimWang View Post
    Also I'm 99 percent sure that my boss doesn't have the foggiest fucking clue where the non-compete paperwork I signed five years ago is. I've quit and come back to work for him four times now and he SUCKS at keeping records, so the clients I really want to keep are gonna get kept, fuck 'im. Gas is 5 dollars a gallon. Time to slit throats.

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  21. #21
    Peaceful Oasis TomAz's Avatar
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    Default Re: Starting Your Own Company

    Second newsflash: Randy asks people for advice, then insults the advice they give him.
    Quote Originally Posted by efrain44 View Post
    Anyone know who the guy in the Cardinals jersey is? I've seen him in pictures on the board and I thought I saw him this year.

  22. #22
    Coachella Junkie Drinkey McDrinkerstein's Avatar
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    Default Re: Starting Your Own Company

    It's just such a great way to remind yourself that you already know everything you need to.
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  23. #23
    Daft Punky Junkie BROKENDOLL's Avatar
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    Default Re: Starting Your Own Company

    I don't think any boss, foggy, or not, is gonna feel threatened by an employee that has quit and returned 4 different times in 5 years... just sayin'.
    Its like the Infinite Monkey Theorem, if you put X amount of monkeys in a room with a typewriter and ask them to give you Shakespeare 99% of them will fling their shit at you while the other 1% will masturbate in the corner.

  24. #24
    The Encyclopedia bmack86's Avatar
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    Default Re: Starting Your Own Company

    Quote Originally Posted by TomAz View Post
    No, if there's no expiration date the contract is probably unenforceable. Reasonable noncompetes are generally allowed by the courts but a noncompete that lasted for eternity would be deemed unreasonable, I believe.
    This is true. In California, if I remember my corporate law correctly, it's something like 5 years maximum, within the same exact field, within a very specific geographic radius (I want to say 25 miles, but I may be incorrect). California's not overly cool with noncompete clauses.
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  25. #25
    VigoTheCarpathian
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    Default Re: Starting Your Own Company

    Quote Originally Posted by TomAz View Post
    Pretty sure I disagree with this statement too, though here it's a matter of judgment rather than fact. A startup company should focuse on generating revenue first. Use common sense when making spending decisions but don't be such a tightwad that it either drives you nuts or hampers your ability to get shit done.
    Austerity For Posterity.


  26. #26
    Endearingly Dislikable RotationSlimWang's Avatar
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    Default Re: Starting Your Own Company

    Quote Originally Posted by Drinkey McDrinkerstein View Post
    It's just such a great way to remind yourself that you already know everything you need to.
    No, it's a great way to remind other people not to be silly. Drinkey, suppose you started a thread about how you've recently started playing chess and asked for recommendations of good books/games/learning tools to help sharpen your game. There here comes Courtney, drunk off power from her first semester of Business classes and starts things off by informing you that you should find good players to compete with, and to always remember that knights are the only piece which can jump over other pieces. That would be a retarded contribution to the thread. Except that in my example, at least she'd be giving dumb advice to someone who could conceivably be fairly dumb. I mean, who the fuck knows? You have the movie tastes of a middle-of-the-road brain and you don't know how to be photographed without making faces the way preschoolers do, so she'd actually be less culpable in that example since there's some basis to suspect you might need a much slower paced education.

    I, on the other hand, have about 1000 times more experience running a business than Courtney The Employment Illusionist except that I've never had to deal with the accounting and I've always joined pre-existing companies. I was asking for people's suggestions on what things I might not find out in the course of the standard due diligence any thinking person would obviously go through before doing something like this, and so when she pops in to remind me to write a budget and a business plan it's kinda insulting if not just totally unhelpful. I don't think she was intending to be insulting, but it is. It'd be like a first year Psych major hopping into the Anxiety, Depression, Medication thread and throwing out buzz words she'd learned in that week's class to people who've been in treatment for over a decade.
    Quote Originally Posted by amyzzz View Post
    Hannah, I don't know that pigs have big weiners, and my early 20's facination with dogs because of weiner size, I think. If that helps.

  27. #27

    Default Re: Starting Your Own Company

    Your arrogance in ignorance will cause your business to fail. It's okay to say thanks for the advice and move on. You asked the question. Don't bite back. The worst thing that ever happened to small business is yelp, BBB and other rating sites, customers are not scared to throw you under the bus over the smallest bullshit, and your attitude towards people will be your downfall.

  28. #28
    Endearingly Dislikable RotationSlimWang's Avatar
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    Default Re: Starting Your Own Company

    ... I've been the most liked tech/consultant at every company I've worked for. Clients love me. Me giving my friend Courtney a little ribbing for something she privately admitted was pretty useless doesn't really have much to do with my business. Forgive me if I don't really give much of a shit about the opinion of the guy whose brilliant advice of "just fucking go do it, man, stop thinking and planning so much and just get moving." Usually solid counsel for anyone making a major financial decision. I keep forgetting whether you're Mr. Nipples or J$$$, and so I'm not sure whether I should tag this reply with a fat joke or a hook joke.
    Quote Originally Posted by amyzzz View Post
    Hannah, I don't know that pigs have big weiners, and my early 20's facination with dogs because of weiner size, I think. If that helps.

  29. #29
    Peaceful Oasis TomAz's Avatar
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    Default Re: Starting Your Own Company

    Quote Originally Posted by RotationSlimWang View Post

    So, wiser, older people who understand this stuff, what do you recommend I do and what can you tell me that I'm probably not already thinking about?
    I recommend that you stop worrying about trivial crap like company credit cards and VistaPrint business cards and start worrying about the fundamentals of your business. If you want to differentiate yourself from the rest of the IT community then stop acting like a smug asshole. People are offering you genuine advice, don't shit on them for it.

    Also, you can talk to office managers to start, but ultimately you want to be talking to business owners. Office managers deal with commodities, business owners work with strategic partners. I mean yeah your foot in the door is probably keeping their network running. But the long term value is in helping them use technology in ways they haven't thought of to make their business run better.
    Quote Originally Posted by efrain44 View Post
    Anyone know who the guy in the Cardinals jersey is? I've seen him in pictures on the board and I thought I saw him this year.

  30. #30
    Peaceful Oasis TomAz's Avatar
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    Default Re: Starting Your Own Company

    also, hook joke for tubesock, old joke for me. k?
    Quote Originally Posted by efrain44 View Post
    Anyone know who the guy in the Cardinals jersey is? I've seen him in pictures on the board and I thought I saw him this year.

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