4 answers

How do I start my own business?

Asked Austin, Texas

I want to be a business or franchise owner #business #entrepreneurship #entrepreneur #ceo #franchise-leadership

4 answers

Aaron’s Answer

Updated California, California

Hi Ignacio,

I like your entrepreneurial spirit! First up, there is a great non-profit organization called SCORE that provides free mentorship for potential entrepreneurs like yourself, you can learn more by searching for SCORE org on the internet.

A couple of other things to consider: - I'd suggest a business that you are very passionate about, because starting your own business can be a tough grind at first. It's best if it's something you are excited to tackle every day. - Begin putting together a business plan; think about things like: what is going to set your business apart from the competition, what is your unique product or service? How much money will it take to get started, how many products/services do you need to sell and at what price to make a profit over your costs?

Good luck!

John C.’s Answer

Updated San Marino, California

Ignacio,

Good for you for being secure enough in yourself to think you can be an entrepreneur. Being your own boss is a lot of hard work and you need to be able to stay calm and focused. There's a ton to learn. In America today it's the hardest it has ever been to be a business owner due to the current socialist administration trying to kill private business with too many taxes and regulations.

The best thing to do if you want to own a franchise is to file a C-corporation. This has some benefits such as lower tax rates, tax credits for employing certain groups of people and a disconnect between you as a person and the liability and debt of the corporation. In short, even if the business completely fails no one can generally come after you or your personal assets. In most states an LLC or S-corporation won't protect you as well.In fact in most cases neither of these will keep you from being financially ruined.

When choosing a franchise, make it something you know and enjoy. All businesses cost money to stat and operate so don't be afraid of the upfront price tag. For instance a McDonald's franchise is usually over a million dollars to start with royalty payments extra. That said, most who own a McDonald's make a profit of a million dollars a year.

So with big risks, come big rewards. Remember when you establish a C-corporation the corporation, not Ignacio, holds the debt. Yet you get to draw a salary from the business and a bunch of other expenses that can directly benefit you in the cause of doing business. For instance if you love to go fish or golf or race go carts etc.. and make it an employee outing, the business can legitimately pay for all of that and write it off on taxes as a cost of doing business. So it still costs money, but some of it will come back into your macro profit picture through the normal course of doing business.

So to do this for real, you need to consult a good business attorney and CPA. In fact there's a major benefit to establishing your C-corporation first and then finding investment partners before choosing a franchise. You could just brand it 'Ignacio Inc' or if specifically a food franchise anything related, perhaps 'Super Yums Inc' etc... In many cases it's good to make your Corp name something broad and marketable in the business sector you want to do business. For instance the Corporation that owns Taco Bell, Pizza Hut, A&W restaurants and KFC is called YUM! Brands Inc. The guy who started that company died with a net worth of 1.1 billion dollars. To give you some perspective, the current CEO, not even the corporation holder, was paid 7.5 million dollars last year alone. Now remember that kind of money only comes when you grow a huge business with locations in several nations.

There's a simple point to all of this information. If you're going to do it and take all the trouble of starting down this road, go big or go home! Yes, start with one location and grow that business hard and fast. Pay yourself first, but don't get greedy or bad with money! Be frugal and put most of the money right back into the business. When you've built up some profit, pay off debts as fast as possible and start the next unit ASAP. Now the profit you were making has doubled. That said, the more you buy, the more power you have to negotiate with vendors for lower costs. So while profits double with each unit, costs begin to come down, adding even more profit to the business.

The beautiful part of all this is, you are still the corporation owner. Even if you take an investor on, you'll get them paid out in short order if you're smart. Don't give someone a forever stake in your company. Offer them a repayment schedule with an incentive under 15%. That means if they fund your start up for 1 million, you pay them back the original million dollars and an extra $150,000 as their payback on the investment. Once they're paid off though, you'll have a profitable business that never needs a backer to fund you ever again. It means total financial freedom and income for as long as you hold the corporation. Build it big enough and you never need to go to work, just pay a CEO to run the business. It takes time and you can never totally let go of everything ...just make sure things are running properly on a consistent basis. It let's you focus on customer service, quality and product diversification.

Now here's the best part of all of this. You don't really need a formal education to do this. In actually running a business for about 5 years, you'll functionally understand as much as any MBA and beyond. Regardless, always hire those smarter than yourself who've accomplished significant things to help you run the business. Don't hire family or friends unless you know for sure they can do the job without needing to lean on you for support. In fact anyone who isn't growing your business is costing you money, so cut them loose. It's not personal, it's business! So long story short, while your friends all flounder through college getting high and indoctrinated by the lefty socialist useless of America and go into very deep debt with no jobs waiting for them when they get out... you'll make a few hundred thousand dollars and grow the foundation for a huge networth later in life. The corporation holds the debt, you get the paycheck. See how this is a great idea now?

Never doubt someone's abilities. Always challenge them to do more than what's called for and to innovate. Show people you trust them enough to make smart mistakes and by in large they'll just make things better for you. One of the best compliments I ever received was the CEO of a company who called me into his office. He said, "Luna, I keep giving you rope and you've yet to hang yourself with it." I saved the company a million dollars in operating costs that year. I was 26. Almost no one that young can save a company that kind of money unless they're valuing the company as if it's their company. Those are the kind of employees you need, true teammates, self governed, natural leaders who have a 'we' and 'team' attitude. People who will work both smart and hard for you and be proud doing it. Just remember you MUST lead by example. If you have a lazy bone in you, people will find it and when they do it'll be the excuse they need to underperform. That will kill the company, so always be the leader to show the way and set the standards for excellence.

So I don't know you, nor what you love or are passionate about. Regardless, if you really want to do this, I can only applaud you. Is it risky, can it fail in a huge way? Totally! Does that make you a failure? NEVER! So walk with your head up in all seasons. You are as much of a success as you decide to be. Failure is only an option, success is too. Walk, think, act, do the next right thing, speak it into reality and a massively successful future is yours! People who say you can't are just serving hater-aid. Those who resist you are growing you up. Thank God for all who resist you because they are facilitating your greatness. Remember an airplane can't come off the ground without the right kind of resistance and you are the same way. I see an awful lot of planes coming out of the sky at the airport, don't you? It means they all got up there too...so why can't you?

Yoda says; in you... believe I must...

Renee’s Answer

Start small and NOW in whatever way you can. Don't get held up with not having this amazing business plan or big business when you first launch.

Starting small will allow you to iterate and will lead you to paths you didn't even think about before. I have seen business fail that were all about creating a business plan and buying space even before they tested the idea out on a smaller scale. On the other hand, my husband started a successful film production company in baby steps--first shooting some side videos while he worked another job which then lead him to bigger and bigger projects and then establishing a strong mission and values.

Bradley’s Answer

Understand what your product or service is providing for potential customers. Then test and learn by soliciting feedback from those customers through free product demos or giveaways.