How do you start your own business?

michael_knight

I'm thinking about going into business for myself, just a little something on the side, but I'm kind of nervous about it. I was thinking of just doing a service based company, but if someone needs hardware should I sell it to them or should I have them buy it on their own. Also what if someone needs something done that I don't know how to do (IE building a Linux Web Server)

Also If anyone can share any stories of how they started their own business It would be encouraging for me. I have never started my own business and I'm real nervous about doing this

bighornsheep

When you're just starting out and if you're doing this alone, I would suggest that you keep it small and simple. Basic troubleshooting and simple network setup or software installation will keep the cash quick and flowing. If you start keeping even the smallest inventory, you'll run into the trouble of dropping prices, warranty issues or even storage concerns.

Assuming you have easy access to computer stores, it's much better to buy what you need when you need it than buy and store things you don't need. Every client will be different with very different needs, with the flexibility of buying what suits the situation, you can offer this same flexibility to your client rather than trying to sell them what you have in stock.

Check with your state or federal requirements, starting your business could be as simple as using your name and getting some business cards without any sort of government registration if your scale is small and your regulations allow it.

Mishra

Never do anything that you can't do for the customer. If it is outside your skill set then tell them that you don't wish to create something from break/fix learning because it would give them a bad product. However you are welcome to mention that you will look into learning the product so you can have a solution for them in the future. "Then they can say they would like you to do it anyways, and you give them a discount as you are learning it".

Honestly, I wouldn't try and start a computer repair business. There are so many out there and unless you have clients at your door then you probably will expect too much. And you won't get a lot which won't teach you much. You should develop more profitable skills like building a Linux web server or maybe building websites. But of course I have no idea of your position so I may completely wrong.

dynamik

http://www.blis.state.md.us/BusinessStartup.aspx

Agreed. Don't get over your head and don't make things more complicated. If you can't do the service, find someone who can.

As far as hardware goes, you can usually next-day or two-day parts in from Newegg if you can't find what you need locally (and it's probably close to the same price as you'd pay for retail). In time, you may want to start stocking some basic items that you commonly use, but I think it would be ridiculous for you to attempt to keep everything you might possibly need on hand.

Also, be sure to check sales tax laws in your state. You will definitely have to charge sales tax if you are selling hardware for profit. You may also have to charge sales tax on service. You do not want to get to the end of the year and realize that owe X amount in sales tax for your service when you haven't been charging for it.

I also agree that tech support on a basic level is going to be a nightmare. It rarely seems to work out for people (at least without them being miserable).

As far as the business goes, you can go out and start doing work right now. You'll just claim whatever you do as additional income on your taxes. If you want to be a real business, the easiest is the sole proprietor. It's just essentially a business name for you and the taxes work the same way. LLCs and corporations can provide additional tax and liability benefits, but are much more complicated and you often need to get lawyers and CPAs involved. If you just want to get a business name and start working, go for the sole proprietor. I think it costs $25 to register in Minnesota. You can always change to an LLC or corporation later on.

[edit]
To answer the second part of your question, I hated running a business. I spent much more time doing administrative tasks than I would have liked. I dumped it a few years later and just do freelance work with a few regular clients. If it's something you're going to do, you've got to be ready to go all out. Stop by your local chamber of commerce and see what they have for resources. Ask them if they have a business plan workbook or see if you can find one on Amazon or at your local book store. That'll give you a better idea of what you're in for.

[edit2]
Here's a free one:http://www.entrepreneurship.com/tools/pdf/businessPlanWorkbook.pdf
The title is in Comic Sans though, so I don't know how much I trust it.

JDMurray

dynamik wrote:

http://www.blis.state.md.us/BusinessStartup.aspx

The rules for starting and running a business are largely defined by the state that the business is based in. Each state government has a Web site for people looking to start a business, like the one for Maryland that dynamik posted. I also recommend finding a tax preparation and bookkeeping company that helps small business get started, otherwise you'll end up working more on getting your business started than on the product or service that it provides.

sprkymrk

Insurance. Liability.

What happens when the server you just patched crashes and loses all the company data - with no backups? We live in a sue-happy society, so make sure you have yourself covered.

garv221

sprkymrk wrote:

Insurance. Liability.

What happens when the server you just patched crashes and loses all the company data - with no backups? We live in a sue-happy society, so make sure you have yourself covered.

Agreed. A lot of companies contract for that very reason, so there is a finger to point.

With that in mind, document everything and ensure your creditability by having valid certifications in case you were to be sued. Always do a full analysis of system hierarchy, surrounding equipment and security for your own documentation.

Regardless if your a personal or large business without a doubt purchase an LLC from your state and work beneath it. Know the law, rules, vulnerabilities and tax advantages to owning a such license in your state. Without an LLC you leave yourself and personal assets wide open. If you start knocking in some big bucks, invest in assets/funds that cannot be legally seized and a home in a state that cannot be seized. Just in case you need a quick exit from exhausted funds. lol

JDMurray

garv221 wrote:

Without an LLC you leave yourself and personal assets wide open.

In California, you need an SCORP to completely separate your personal finances and liability from those of your company (it makes it much easier to sell you business too). However, an SCORP is usually only for businesses with annual revenues between $50K and $250K. If you don't think you'll be earning much revenue in the first two or three years, you have no choice but to file as an LLC. Just make sure you have a DBA and don't name the company after yourself.

sprkymrk

JDMurray wrote:

Just make sure you have a DBA and don't name the company after yourself.

James, what's a DBA?

Also, aside from maybe selling your business in the future, are there other reasons someone shouldn't name the business after themselves? Like "Murray IT Security Consulting and PenTesting Inc."?

dynamik

Doing Business As

http://en.wikipedia.org/wiki/D/b/a

Schluep

dynamik wrote:

Doing Business As

http://en.wikipedia.org/wiki/D/b/a

Careful being that these are IT boards. It certainly does mean "Doing Business As" and is commonly used that way, including in the context of JDMurray's post. Another very common usage is "Database Administrator." If you are looking for jobs on tech websites you will see it all over the place.

I believe in every state in the U.S. you are required to file a DBA for your business (unless you have a Corporation or LLC) if you plan to name the business anything other than your personal name (some states do not require a DBA if your last name is a part of the company name, but it is still in your best interest to file one). If you do not have a DBA established for your business you cannot open any busines accounts that name (and therefore not recieve any money addressed to it). A DBA does not give you any type of entitlemet to the name, and you should have 10 people register the same or similar DBAs. Each state has very different regulations regarding DBAs. Some require you to publish the name in a local paper after filing for it and provide proof of same. Others have a long waiting period (have heard as much as 45 days) after you file for the DBA before you can use it or open any accounts under that name. You obviously cannot use anything such as "Inc." or "LLC" after your DBA name implying that you established a Corporation or LLC.

If you are just opening up a business on the side in addition to your current job as you indicated it would be in your best interest to follow the DBA route as opposed to the more costly option of an LLC. If you make it profitiable consistantly and plan to devote more time/effort to it as a result you could also Incorporate or form an LLC at that time.

Be sure to read up about starting a business in your state as others have indicated and be sure to follow all of their guidelines regarding registering your DBA, obtaining your business license and field related license requirements, establishing insurance, and setting up a seperate bank account.

nel

i too would love to run my own business one day but i just cant see it involving IT to be quite honest because where i live it seems pretty sewn up already to be honest.

im not trying to say no one will setup an IT business but from what ive seen they come in flurry's so to speak (i.e. 10 new ones appear at the same time).

if i were to start mt own business i wish i had the skills to be an electrician or plumber - hard work but my god ive known ppl start these type of businesses and lets just say there will always be driving better cars than us haha (well most of us!) to be honest, ive never come across anyone who has paid £50 an hour to get there pc looked at. im not saying there isnt anyone who does, all im saying is that ive never experianced anyone do that.