RSJ Posted January 27, 2006 Share Posted January 27, 2006 I have been seriously thinking about making a move toward entrepreneurial ship. I think I'm ready but to be honest I'am a little scared. I have 7-10 years of experience in accounting and finance. And I've been very well prepared due to holding key positions in all different sized corporations. I have an idea for a cutting edge company that could streamline a specific product and feel I have the ability to lead. Still with young kids and a mortgage to pay it is a huge risk. Anyone have any suggestions/thoughts on this topic? Link to comment Share on other sites More sharing options...
Maxman Posted January 27, 2006 Share Posted January 27, 2006 Well it depends on how much you have to fall back on. Meaning if oyu can float the mortgage for awhile, it is worth a shot. As long as you are well thought out and willing to work hard. Good luck with whatever you decide! Link to comment Share on other sites More sharing options...
joewilly Posted January 27, 2006 Share Posted January 27, 2006 not sure I can advise properly without knowing you, your financial position, age etc.( or even if I did for that matter) You have to take risks to succeed though. best of luck & perhaps you can find a trusted partner with deep pockets. Link to comment Share on other sites More sharing options...
DHJF Posted January 27, 2006 Share Posted January 27, 2006 You have to take risks to succeed though. best of luck & perhaps you can find a trusted partner with deep pockets. Great risk = great reward. Joewilly said it best; find yourself a partner that has loads of dough. Link to comment Share on other sites More sharing options...
JerryK Posted January 27, 2006 Share Posted January 27, 2006 Partnerships regularly fail, however. The guy with all the money typically wants 90% equity for no effort. If you're going to find an angel with cash, form the company 50/50. Then have the company take his money as a loan, and repay it with interest. This policy will help you weed out the angels that are crooks. The money should in no way become a way for the angel to leverage greater equity, especially if you're doing ALL of the work to run the company. That's my 2 cents. (and i expect some equity for my 2 cents) Link to comment Share on other sites More sharing options...
Green DNA Posted January 27, 2006 Share Posted January 27, 2006 It all depends on the potential for significant success. You have to able to recognize benefits that you are not getting in your current position. I wouldn't have the 'nads to give up the guaranteed paycheck every two weeks, the health benefits and the chance to go home every night without worrying about business related issues. Remember if you hire people, then you get into meeting the payroll, increased insurance limits and exposure, possible workers comp coverage etc. etc. If it worls out though, you will have the opportunity to put some serious coin in your pocket and not depend on "the man". Having said that, if nobody took a chance and followed their vision, 90% of the products and services we have today would never have been created. Good luck, I hope it works out for you. Link to comment Share on other sites More sharing options...
RSJ Posted January 27, 2006 Author Share Posted January 27, 2006 After reading your responses I realized that I was a little vague in my description. I want to use my accounting and finance background to float the company in it's infancy stage. I will most likey offer Accounting and Finance services to small businesses at first and loan the money to the other company as I can. I have some cash that I made in real estate over the last couple of years but I'm saving that in hopes that the real estate market dips or flattens - which I think it will. In otherwords I do not want to touch my savings to get this going. But that is ok since my idea involves a service and there is not much needed in terms of investment or overhead. Plus all of the work I can do myself. I'm 30 years old right now and this would be my first venture on my own. I believe I'm capable just a little scared to fail. I hate working for people and do not want to do it anymore. I don't hate working with people just for them in an employment type of relationship. Sick of the politics I guess. Anyway, like what was said earlier - the most successfull people are also the ones that took the greatest risk (unless you were born into it). Link to comment Share on other sites More sharing options...
Bugg Posted January 28, 2006 Share Posted January 28, 2006 Just understand that the first 9 months to a year on your own can be tough. You will always go through more cah than you expect. And get a steady stream of some revenue to sustain you up and running ASAP. Wouldn't say the bubble has burst. But between slowly-rising interest rates and higher fuel costs, does seem that the realty market is beginning to flatten out. I do al ot of tax prep for individuals, and some small companies. And smaller companies-partnerships, proprietorships, S corps-are alway looking for someone to do the accounting end of it. There's market for it. Just let them know you have to charge more if their filing system or accounting consist of a box of coffee-stained reciepts. Let people know you can do it and you'd be surprised how much work you can get. Adevertise lcally-pennysavers, church bulletins, flyers. And do it now, because after 4/15 no one cares. Even if you do it at night while keeping your day job. Most software providers have deals on new tax pros that include free e-filing. Link to comment Share on other sites More sharing options...
Cant Hackett Posted January 28, 2006 Share Posted January 28, 2006 I started my accounting practice at age 30, with a wife and 2 kids at home and crap in the bank. 20 years later, it was the best thing I could have done. You can always get per-diem work at a larger firms to supplement your income. It's just like football, you need to have balls. Link to comment Share on other sites More sharing options...
PatsFanTX Posted January 28, 2006 Share Posted January 28, 2006 I have been seriously thinking about making a move toward entrepreneurial ship. I think I'm ready but to be honest I'am a little scared. I have 7-10 years of experience in accounting and finance. And I've been very well prepared due to holding key positions in all different sized corporations. I have an idea for a cutting edge company that could streamline a specific product and feel I have the ability to lead. Still with young kids and a mortgage to pay it is a huge risk. Anyone have any suggestions/thoughts on this topic? sherry, Do you have any actual P&L experience? By this I mean not just "watching" numbers, but being held totally accountable for achieving results? I read an article several months back in the Wall Street Journal about this exact topic and very similar to what you want to do. Of all the entrepreneurial failures within the first 3 years, 62% of those failures were because expenses were greatly underestimated or not under control and in line with the business plan. (I would have thought 90% of the failures would come from lack of sales/lack of clients, but I was wrong). Good luck on what you decide. Link to comment Share on other sites More sharing options...
Green DNA Posted January 28, 2006 Share Posted January 28, 2006 Of all the entrepreneurial failures within the first 3 years, 62% of those failures were because expenses were greatly underestimated or not under control and in line with the business plan. (I would have thought 90% of the failures would come from lack of sales/lack of clients, but I was wrong). QUOTE] Good point. In the first years of any business, fixed costs are a huge burden in addition to the uncertainty of variable costs. After the first couple of years, any major fixed asset purchases have already been made (and are being capitalized) and the variable cost are more predictable. It would be a good idea to project your initial expenses and then increase your estimate by 30-40%. Link to comment Share on other sites More sharing options...
Bugg Posted January 28, 2006 Share Posted January 28, 2006 If you can take away from your former company some assets, be they customers, as much as you can, or physical supplies, hardware, software, etc., do it within reason. Nothing to get you fired or get into a stupid lawsuit. Things as simple as boilerplate legalese and basic software, make copies of and load into your own hard drive. Another big mistake-understand the IRS expects that you won't turn a profit for a few years. No shame in taking losses for the first few years, especially as you depreciate new big ticket things. And while you're a professional keep track of what you're spending and your revenue. It's easy with basic software like quicken; 5 minutes a day tops. And yet I still get goofballs who walk in with the shoebox full of reciepts and have no clue what they're doing profit/loss wise. If you're taking money from a deferred comp/401k/retirement account, know there's a 10% penalty on what you don't roll over. Better you roll it over into a comparable plan as much as you can. And the Roth IRA goes up to $4k in 2006; don't neglect that. It's a great investment vehicle when you work for yourself. Link to comment Share on other sites More sharing options...
RSJ Posted January 29, 2006 Author Share Posted January 29, 2006 Bugg - You seem to understand exactly where Iam coming from with this. I'm planning on getting a few contracts to do the accounting for small businesses. I have 3 in the pipeline that are very serious. Like you stated there are a lot of small companies willing to pay for good, experienced accountants. Ones who can provide everything from financial statement prep to sales and use returns. This is what I will use to get the real company I have in mind off the ground. Tx - That is an excellent point. I have a wide variety of experience. Where I currently work I review the financials (P&L, Balance sheet, etc.) for over 35 clients (they are not very complex) as well as the corp. financials. The biggest problem with my current employer is that they know just enough about accounting to be dangerous so to speak. The financials and accounting procedures are ass backwards and it is mostly thier own doing. They donate mega amounts of cash to churches and write them off on thier corp return (can't do this). They give access to the accounting information to oprations people. The list goes on and on and I just can not be a part of it anymore. These types of things make it impossible to do my job. Also when I calculate the amount I make over the hours I work it is not even close to being worth it at this point. But getting back to your point you are correct. I heard on 20/20 or 60 minutes once that 9/10 of businesses that keep poor records are out of business within the first 5 years or somthing staggering like that. Link to comment Share on other sites More sharing options...
NJ Posted January 29, 2006 Share Posted January 29, 2006 sherry, Do you have any actual P&L experience? By this I mean not just "watching" numbers, but being held totally accountable for achieving results? I read an article several months back in the Wall Street Journal about this exact topic and very similar to what you want to do. Of all the entrepreneurial failures within the first 3 years, 62% of those failures were because expenses were greatly underestimated or not under control and in line with the business plan. (I would have thought 90% of the failures would come from lack of sales/lack of clients, but I was wrong). Good luck on what you decide. RS - Tx is right. Most new ventures that tank are due to undercapitalization -whether it's the in or the out side of the pot of money doesn't matter. Contact your local Small Business Administration office. They might dance you through a lot of business planning that you think is un necessary, but they do offer a lot of help. I'm just starting my 3rd biz and they've been a lot of help in the past. Good luck to you. Link to comment Share on other sites More sharing options...
RSJ Posted January 29, 2006 Author Share Posted January 29, 2006 RS - Tx is right. Most new ventures that tank are due to undercapitalization -whether it's the in or the out side of the pot of money doesn't matter. Contact your local Small Business Administration office. They might dance you through a lot of business planning that you think is un necessary, but they do offer a lot of help. I'm just starting my 3rd biz and they've been a lot of help in the past. Good luck to you. Great advice - Thanks! I just looked the local chapter up and will contact them tomorrow. Link to comment Share on other sites More sharing options...
Green DNA Posted January 29, 2006 Share Posted January 29, 2006 I'm just starting my 3rd biz Link to comment Share on other sites More sharing options...
NJ Posted January 29, 2006 Share Posted January 29, 2006 Link to comment Share on other sites More sharing options...
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