If you were starting a small business with <10K startup capital... (1 Viewer)

[David Dodds]

$10K is a ton of money actually. Joe and I started FBG with less.

In college I was part of these successful businesses that required less than $10K:

1. Find the highrise building(s) in your hood that have lots of law offices in them. Find the closest popular restaurants near these buildings. Go talk to these restaurants and have them tell you their most popular selling items. You make a flyer that has 3-4 items per each restaurant and list 4-5 restaurants. Law Offices don't like letting their workers go to lunch during big cases because it takes too long to go down the elevator, drive to said destination, order food and come back. You provide delivery of popular food for $3+ cost of item and you can also profit handsomely with sodas (kept in the van parked on the street). Do this in the summertime and kids can be your runners. Knock on some doors. Hand out some fliers and you will soon have a long list of people that will pay you to do this. My friend quit USC because this business became so lucrative for him after killing it for two summers prior.

2. Determine the biggest outdoor events of the summer. Bring coolers and sell water / sodas. We used to hit all the beaches, and make a fortune. Technically a legal issue and you could be harassed by cops, but we would always just move on if questioned.

3. Go to the $1 store. Find 5-10 items household cleaning items that seem worth at least $2 (sponges, scrubbers, etc). Go door to door and sell said items for $2. This works especially well if you have a compelling story. College kid looking to continue my education for instance. About to lose my house because I lost my job type of thing. Old ladies will give you a $20 and not always take the 10 items.

4. Go to conventions (I used to do sportscard shows) with a dolly and a sign saying you are ready to move boxes for them. People will tip well if they had a great show selling things. They are tired and want to head home.

Generally if you want to break away from the MAN and work on your own, there is always a path. And it usually does not require a giant investment of money. Lots of time and sweat equity for sure, but not always a lot of money.

Back to the FBG example. We created FBG. I coded the pages. We hired staff on "credits" where we would pay based on subscriptions sold. We sold ads by hustling up that business, etc. Website businesses can almost always be created / started for less than $10K and lots of sweat equity.

 

[(HULK)]

$10K is a ton of money actually. Joe and I started FBG with less.

In college I was part of these successful businesses that required less than $10K:

1. Find the highrise building(s) in your hood that have lots of law offices in them. Find the closest popular restaurants near these buildings. Go talk to these restaurants and have them tell you their most popular selling items. You make a flyer that has 3-4 items per each restaurant and list 4-5 restaurants. Law Offices don't like letting their workers go to lunch during big cases because it takes too long to go down the elevator, drive to said destination, order food and come back. You provide delivery of popular food for $3+ cost of item and you can also profit handsomely with sodas (kept in the van parked on the street). Do this in the summertime and kids can be your runners. Knock on some doors. Hand out some fliers and you will soon have a long list of people that will pay you to do this. My friend quit USC because this business became so lucrative for him after killing it for two summers prior.

2. Determine the biggest outdoor events of the summer. Bring coolers and sell water / sodas. We used to hit all the beaches, and make a fortune. Technically a legal issue and you could be harassed by cops, but we would always just move on if questioned.

3. Go to the $1 store. Find 5-10 items household cleaning items that seem worth at least $2 (sponges, scrubbers, etc). Go door to door and sell said items for $2. This works especially well if you have a compelling story. College kid looking to continue my education for instance. About to lose my house because I lost my job type of thing. Old ladies will give you a $20 and not always take the 10 items.

4. Go to conventions (I used to do sportscard shows) with a dolly and a sign saying you are ready to move boxes for them. People will tip well if they had a great show selling things. They are tired and want to head home.

Generally if you want to break away from the MAN and work on your own, there is always a path. And it usually does not require a giant investment of money. Lots of time and sweat equity for sure, but not always a lot of money.

Back to the FBG example. We created FBG. I coded the pages. We hired staff on "credits" where we would pay based on subscriptions sold. We sold ads by hustling up that business, etc. Website businesses can almost always be created / started for less than $10K and lots of sweat equity.

I agree that websites can be done sucessfully for under 10K. But beyond hard work and getting people to show up, you need a compelling reason for them to stay... unique and good content. If you've got that, its a lot easier to market as well because the word of mouth amps up.

 

[Abraham]

"Making money" and starting a business can be two different things.

 

[dmac37]

Topless Barber Shop

 

[NCCommish]

Good info in this thread. How important is it to have an IT background for managed services? My expertise is delivering exceptional sales and customer service results, and more recently training people how to achieve this for themselves. Thinking of doing my own thing, I am not going to become a millionaire working for my current company.

My wife is an award winning marketing consultant, has her own successful company already but only for marketing to date. Her best friend manages HR for a private school and would no doubt like some extra work. So we have some valuable services combined and $100k startup funds, but no IT guy :(

Might have to find one...

Well you can hire the IT background. You'll want to be outsourcing the level 1 stuff. If you can get someone with the tech skills to do more advanced projects/level 2 support while you handle the sales that would probably get you started.

 

[Joe T]

A few years ago, I read an article in the WSJ that suggested it was smart for everyone to start their own business no matter how small. The tax advantages for the first few years of "owning" your own business are worth it alone. I just did a search for the article, but couldn't find it.

Let's say I start Joe's Consulting company or Joe's Internet Website this year. Now in 2014 I can write off things like: a new laptop, a new camera, part of my home internet, part of my cell phone bill, some mileage on my car... on and on.

I do have a side business that I enjoy. It brings in a good side income allowing me to buy nicer things than I otherwise would and save a lot more than I would normally. But, it is also very nice around this time of year when I look at all the things from the prior year that I can write off that otherwise would just be normal life expenses.

 

[Abraham]

Good info in this thread. How important is it to have an IT background for managed services? My expertise is delivering exceptional sales and customer service results, and more recently training people how to achieve this for themselves. Thinking of doing my own thing, I am not going to become a millionaire working for my current company.

My wife is an award winning marketing consultant, has her own successful company already but only for marketing to date. Her best friend manages HR for a private school and would no doubt like some extra work. So we have some valuable services combined and $100k startup funds, but no IT guy :(

Might have to find one...

Well you can hire the IT background. You'll want to be outsourcing the level 1 stuff. If you can get someone with the tech skills to do more advanced projects/level 2 support while you handle the sales that would probably get you started.

I was at IT Nation in November and it is staggering how many founders/owners are tech-side and not business or sales side. I'd say it leans close to 95%, no kidding. It makes sense: person likes technology, starts a business consulting, learns more, settles in to a Managed Services business where 2/3 is recurring monthly's and 1/3 is project work. You have to be able to hire the person to do the 1/3 stuff and that can be extremely difficult.

 

[Abraham]

"Making money" and starting a business can be two different things.

Come on man. Of course this is right.

Maybe you should read the thread, since it appears you popped in on page 3 declaring that you hadn't.

 

[Godsbrother]

With 10k I probably wouldn't bother but if I did it would be a nano-brewery.

 

[NCCommish]

Good info in this thread. How important is it to have an IT background for managed services? My expertise is delivering exceptional sales and customer service results, and more recently training people how to achieve this for themselves. Thinking of doing my own thing, I am not going to become a millionaire working for my current company.

My wife is an award winning marketing consultant, has her own successful company already but only for marketing to date. Her best friend manages HR for a private school and would no doubt like some extra work. So we have some valuable services combined and $100k startup funds, but no IT guy :(

Might have to find one...

Well you can hire the IT background. You'll want to be outsourcing the level 1 stuff. If you can get someone with the tech skills to do more advanced projects/level 2 support while you handle the sales that would probably get you started.

I was at IT Nation in November and it is staggering how many founders/owners are tech-side and not business or sales side. I'd say it leans close to 95%, no kidding. It makes sense: person likes technology, starts a business consulting, learns more, settles in to a Managed Services business where 2/3 is recurring monthly's and 1/3 is project work. You have to be able to hire the person to do the 1/3 stuff and that can be extremely difficult.

Yeah our owner is all tech side. I was on the tech side but was always the one with the marketing ideas and I was our top selling tech so I am handling the sales/marketing now. It;s nice to have that tech background though as few tech questions are going to stump me while I am presenting. Really getting excited about this product launch. I think it's going to allow us to really hit it hard this year on the MSP side.

BTW Have you(any of you) ever used or had much luck with press releases drumming up business?

 

[NCCommish]

$10K is a ton of money actually. Joe and I started FBG with less.

In college I was part of these successful businesses that required less than $10K:

1. Find the highrise building(s) in your hood that have lots of law offices in them. Find the closest popular restaurants near these buildings. Go talk to these restaurants and have them tell you their most popular selling items. You make a flyer that has 3-4 items per each restaurant and list 4-5 restaurants. Law Offices don't like letting their workers go to lunch during big cases because it takes too long to go down the elevator, drive to said destination, order food and come back. You provide delivery of popular food for $3+ cost of item and you can also profit handsomely with sodas (kept in the van parked on the street). Do this in the summertime and kids can be your runners. Knock on some doors. Hand out some fliers and you will soon have a long list of people that will pay you to do this. My friend quit USC because this business became so lucrative for him after killing it for two summers prior.

2. Determine the biggest outdoor events of the summer. Bring coolers and sell water / sodas. We used to hit all the beaches, and make a fortune. Technically a legal issue and you could be harassed by cops, but we would always just move on if questioned.

3. Go to the $1 store. Find 5-10 items household cleaning items that seem worth at least $2 (sponges, scrubbers, etc). Go door to door and sell said items for $2. This works especially well if you have a compelling story. College kid looking to continue my education for instance. About to lose my house because I lost my job type of thing. Old ladies will give you a $20 and not always take the 10 items.

4. Go to conventions (I used to do sportscard shows) with a dolly and a sign saying you are ready to move boxes for them. People will tip well if they had a great show selling things. They are tired and want to head home.

Generally if you want to break away from the MAN and work on your own, there is always a path. And it usually does not require a giant investment of money. Lots of time and sweat equity for sure, but not always a lot of money.

Back to the FBG example. We created FBG. I coded the pages. We hired staff on "credits" where we would pay based on subscriptions sold. We sold ads by hustling up that business, etc. Website businesses can almost always be created / started for less than $10K and lots of sweat equity.

Do you really think you could start FBG now, in this maturing market, for 10k or less and be successful enough for it to come to something? Timing is important in all things. I do like some of those ideas though.

 

[mr roboto]

I think of a business as a living entity, one that if built properly can almost live on its own. The founder/owner's job IMO is to build the business in such a way that he or she is unnecessary for the successful operation of the business.

I also believe in adding value, not simply capturing spreads, markups or arbitrage. Some of Dodds' examples are neat ways to make money, but are not really businesses IMO.

I work in business development, specifically in franchising. Many of the people I speak with who are looking at owning their own business are considering existing businesses (both franchise and non-franchise) or buying a franchise and developing.

The common story is that in a non-franchise small business, the owner is absolutely critical to the success of the business. He or she has all the information, skill, contacts etc. So when they want to sell the business, there's not a system or something built that can stand on it's own apart from the owner's efforts.

For 10k you aren't looking to build the next Facebook, but even if you parlay it into a small local business, always ask yourself 1. How am I truly creating value? and 2. Coukd this exist without me?

 

[Joe T]

$10K is a ton of money actually. Joe and I started FBG with less.

In college I was part of these successful businesses that required less than $10K:

1. Find the highrise building(s) in your hood that have lots of law offices in them. Find the closest popular restaurants near these buildings. Go talk to these restaurants and have them tell you their most popular selling items. You make a flyer that has 3-4 items per each restaurant and list 4-5 restaurants. Law Offices don't like letting their workers go to lunch during big cases because it takes too long to go down the elevator, drive to said destination, order food and come back. You provide delivery of popular food for $3+ cost of item and you can also profit handsomely with sodas (kept in the van parked on the street). Do this in the summertime and kids can be your runners. Knock on some doors. Hand out some fliers and you will soon have a long list of people that will pay you to do this. My friend quit USC because this business became so lucrative for him after killing it for two summers prior.

2. Determine the biggest outdoor events of the summer. Bring coolers and sell water / sodas. We used to hit all the beaches, and make a fortune. Technically a legal issue and you could be harassed by cops, but we would always just move on if questioned.

3. Go to the $1 store. Find 5-10 items household cleaning items that seem worth at least $2 (sponges, scrubbers, etc). Go door to door and sell said items for $2. This works especially well if you have a compelling story. College kid looking to continue my education for instance. About to lose my house because I lost my job type of thing. Old ladies will give you a $20 and not always take the 10 items.

4. Go to conventions (I used to do sportscard shows) with a dolly and a sign saying you are ready to move boxes for them. People will tip well if they had a great show selling things. They are tired and want to head home.

Generally if you want to break away from the MAN and work on your own, there is always a path. And it usually does not require a giant investment of money. Lots of time and sweat equity for sure, but not always a lot of money.

Back to the FBG example. We created FBG. I coded the pages. We hired staff on "credits" where we would pay based on subscriptions sold. We sold ads by hustling up that business, etc. Website businesses can almost always be created / started for less than $10K and lots of sweat equity.

Do you really think you could start FBG now, in this maturing market, for 10k or less and be successful enough for it to come to something? Timing is important in all things. I do like some of those ideas though.

I don't think starting FBG now is the point. I think starting something is the point. Of course, starting FBG now would be more difficult. The three guys that started Bleacher Report didn't say, "Hey. There's a lot of sports sites out there, we can't get into that business." They built a site worth $100m+ and I'm guessing they started with less than 10k.

There are thousands of ideas out there. There are just not very many people willing to put in the work to get there. Another example, I know a guy that started a site "Joe's Old Lures" for people that wanted to talk about old fishing lures. The site gets a very nice amount of traffic for a one person operation. Or look at Chase Stuart who created his own Football Perspectives and look at what he has built. I don't think he said, "Oh, FBG has already been built."

It's simply a matter of finding something you are passionate about and then doing it. Most people don't.

One other question, didn't we do this a year or two ago and Abe talked about starting a site and getting writers from here to add content. Whatever happened to that? That actually could work if you had the right, dedicated people adding content to a site that they owned instead of posting here all day.

 

[E-Z Glider]

Good info in this thread. How important is it to have an IT background for managed services? My expertise is delivering exceptional sales and customer service results, and more recently training people how to achieve this for themselves. Thinking of doing my own thing, I am not going to become a millionaire working for my current company.

My wife is an award winning marketing consultant, has her own successful company already but only for marketing to date. Her best friend manages HR for a private school and would no doubt like some extra work. So we have some valuable services combined and $100k startup funds, but no IT guy :(

Might have to find one...

Well you can hire the IT background. You'll want to be outsourcing the level 1 stuff. If you can get someone with the tech skills to do more advanced projects/level 2 support while you handle the sales that would probably get you started.

I was at IT Nation in November and it is staggering how many founders/owners are tech-side and not business or sales side. I'd say it leans close to 95%, no kidding. It makes sense: person likes technology, starts a business consulting, learns more, settles in to a Managed Services business where 2/3 is recurring monthly's and 1/3 is project work. You have to be able to hire the person to do the 1/3 stuff and that can be extremely difficult.

Im a 5%'er (no technical IT background whatsoever). Keep in mind that what works in one market / business model may not be right for another. Building a huge infrastructure with high-end monitoring and reporting capabilities and outsourcing level 1 stuff may work for NCC's market and business model, but Id never recommend these for a start-up targeting local SMB's in a smaller market. In that scenario, Id suggest...

1. You need to have 2-3 clients (5-50 users) ready to go before starting. Charge them a flat monthly fee for unlimited support/monitoring. Like Abe said, this can be any type of business. Offer them free/reduced $ service for 3-6 months if you have to.

2. Hire a really smart IT guy who is very personable and you really like/trust. Make him part owner of the company - partly because you want him to have blood in this and partly because he should be commanding a salary that you cant afford. When you run into business issues (payment problems, billing disputes, cust sat issues, etc), you will be "bad cop" and he will be "good cop". Clients must always like/trust this person. Separating them from business decisions (in the clients eyes at least) is an important aspect missing in most tech-owned MSPs.

3. Hire a low-end IT kid that is smart and respectful.

4. Choose an affordable MSP/ticketing/billing platform.

5. Do a great job with those 3 clients and leverage the hell out of them (referrals, testimonials, joint-venture marketing). Work hard on your marketing and you will be doing so much more than the competition.

6. Only spend what you have to to start (you'll need that 100k to keep you afloat for a while). No infrastructure / office space. Go with a cloud-based MSP/ticketing/billing platform that is billed monthly. Laptops/aircards/smartphones for everyone. Monthly expenses should be at an absolute minimal. Your goal is to have all of your monthly expenses covered when you send out the invoices on the first of each month.

 

[Tiger Fan]

Good info in this thread. How important is it to have an IT background for managed services? My expertise is delivering exceptional sales and customer service results, and more recently training people how to achieve this for themselves. Thinking of doing my own thing, I am not going to become a millionaire working for my current company.

My wife is an award winning marketing consultant, has her own successful company already but only for marketing to date. Her best friend manages HR for a private school and would no doubt like some extra work. So we have some valuable services combined and $100k startup funds, but no IT guy :(

Might have to find one...

Well you can hire the IT background. You'll want to be outsourcing the level 1 stuff. If you can get someone with the tech skills to do more advanced projects/level 2 support while you handle the sales that would probably get you started.

I was at IT Nation in November and it is staggering how many founders/owners are tech-side and not business or sales side. I'd say it leans close to 95%, no kidding. It makes sense: person likes technology, starts a business consulting, learns more, settles in to a Managed Services business where 2/3 is recurring monthly's and 1/3 is project work. You have to be able to hire the person to do the 1/3 stuff and that can be extremely difficult.

Can a non IT person with great business acumen start a managed services co?

 

[Abraham]

Good info in this thread. How important is it to have an IT background for managed services? My expertise is delivering exceptional sales and customer service results, and more recently training people how to achieve this for themselves. Thinking of doing my own thing, I am not going to become a millionaire working for my current company.

My wife is an award winning marketing consultant, has her own successful company already but only for marketing to date. Her best friend manages HR for a private school and would no doubt like some extra work. So we have some valuable services combined and $100k startup funds, but no IT guy :(

Might have to find one...

Well you can hire the IT background. You'll want to be outsourcing the level 1 stuff. If you can get someone with the tech skills to do more advanced projects/level 2 support while you handle the sales that would probably get you started.

I was at IT Nation in November and it is staggering how many founders/owners are tech-side and not business or sales side. I'd say it leans close to 95%, no kidding. It makes sense: person likes technology, starts a business consulting, learns more, settles in to a Managed Services business where 2/3 is recurring monthly's and 1/3 is project work. You have to be able to hire the person to do the 1/3 stuff and that can be extremely difficult.

Can a non IT person with great business acumen start a managed services co?

So far (I've only been in this business for 7 months) I would recommend against it. Not unless you have a partner. That would be like saying "Can a person with great business acumen start a homebuilding company?" Sure, you could. But at some point you have to find someone that knows something about building houses and either hire or partner with them.

 

[NCCommish]

Good info in this thread. How important is it to have an IT background for managed services? My expertise is delivering exceptional sales and customer service results, and more recently training people how to achieve this for themselves. Thinking of doing my own thing, I am not going to become a millionaire working for my current company.

My wife is an award winning marketing consultant, has her own successful company already but only for marketing to date. Her best friend manages HR for a private school and would no doubt like some extra work. So we have some valuable services combined and $100k startup funds, but no IT guy :(

Might have to find one...

Well you can hire the IT background. You'll want to be outsourcing the level 1 stuff. If you can get someone with the tech skills to do more advanced projects/level 2 support while you handle the sales that would probably get you started.

I was at IT Nation in November and it is staggering how many founders/owners are tech-side and not business or sales side. I'd say it leans close to 95%, no kidding. It makes sense: person likes technology, starts a business consulting, learns more, settles in to a Managed Services business where 2/3 is recurring monthly's and 1/3 is project work. You have to be able to hire the person to do the 1/3 stuff and that can be extremely difficult.

Im a 5%'er (no technical IT background whatsoever). Keep in mind that what works in one market / business model may not be right for another. Building a huge infrastructure with high-end monitoring and reporting capabilities and outsourcing level 1 stuff may work for NCC's market and business model, but Id never recommend these for a start-up targeting local SMB's in a smaller market. In that scenario, Id suggest...

1. You need to have 2-3 clients (5-50 users) ready to go before starting. Charge them a flat monthly fee for unlimited support/monitoring. Like Abe said, this can be any type of business. Offer them free/reduced $ service for 3-6 months if you have to.

2. Hire a really smart IT guy who is very personable and you really like/trust. Make him part owner of the company - partly because you want him to have blood in this and partly because he should be commanding a salary that you cant afford. When you run into business issues (payment problems, billing disputes, cust sat issues, etc), you will be "bad cop" and he will be "good cop". Clients must always like/trust this person. Separating them from business decisions (in the clients eyes at least) is an important aspect missing in most tech-owned MSPs.

3. Hire a low-end IT kid that is smart and respectful.

4. Choose an affordable MSP/ticketing/billing platform.

5. Do a great job with those 3 clients and leverage the hell out of them (referrals, testimonials, joint-venture marketing). Work hard on your marketing and you will be doing so much more than the competition.

6. Only spend what you have to to start (you'll need that 100k to keep you afloat for a while). No infrastructure / office space. Go with a cloud-based MSP/ticketing/billing platform that is billed monthly. Laptops/aircards/smartphones for everyone. Monthly expenses should be at an absolute minimal. Your goal is to have all of your monthly expenses covered when you send out the invoices on the first of each month.

If you don't outsource the level one you severely ####### the profitability of managed services. Hybrid models that don't outsource see their margins cut in half or more. And keep in mind I am talking about North American outsource that answers the phone as if they are your employee. Now as the owner here says there will always be hands on level 1 but it is a small percentage of the actual work. You really want to invest your technician money in people who do a lot more than level 1.

 

[The Duff Man]

Good info in this thread. How important is it to have an IT background for managed services? My expertise is delivering exceptional sales and customer service results, and more recently training people how to achieve this for themselves. Thinking of doing my own thing, I am not going to become a millionaire working for my current company.

My wife is an award winning marketing consultant, has her own successful company already but only for marketing to date. Her best friend manages HR for a private school and would no doubt like some extra work. So we have some valuable services combined and $100k startup funds, but no IT guy :(

Might have to find one...

Well you can hire the IT background. You'll want to be outsourcing the level 1 stuff. If you can get someone with the tech skills to do more advanced projects/level 2 support while you handle the sales that would probably get you started.

I was at IT Nation in November and it is staggering how many founders/owners are tech-side and not business or sales side. I'd say it leans close to 95%, no kidding. It makes sense: person likes technology, starts a business consulting, learns more, settles in to a Managed Services business where 2/3 is recurring monthly's and 1/3 is project work. You have to be able to hire the person to do the 1/3 stuff and that can be extremely difficult.

Can a non IT person with great business acumen start a managed services co?

So far (I've only been in this business for 7 months) I would recommend against it. Not unless you have a partner. That would be like saying "Can a person with great business acumen start a homebuilding company?" Sure, you could. But at some point you have to find someone that knows something about building houses and either hire or partner with them.

This is where I was going with my questions. In my most recent job, I took a small unit ($2 million) that was growing at 10% and delivered 25, 45 and 65 percent growth over the last three years.Now I am starting with a $15 million dollar division and am confident I can do the same thing. But I am getting paid a fraction of my value to the company and question, why am I doing this for someone else when I can do it for myself?

/endhijack

 

[Abraham]

If you don't outsource the level one you severely ####### the profitability of managed services. Hybrid models that don't outsource see their margins cut in half or more. And keep in mind I am talking about North American outsource that answers the phone as if they are your employee. Now as the owner here says there will always be hands on level 1 but it is a small percentage of the actual work. You really want to invest your technician money in people who do a lot more than level 1.

That's interesting. We have two techs on the desk and a tech support director. Based on what I know about our MS business and what I know about their earning, we run at about 50% margin on the service, which is not bad. I've heard of people getting their managed services margins up to 60% but having the guys here to do things exactly the way the owner wants has at least a little value.

 

[NCCommish]

If you don't outsource the level one you severely ####### the profitability of managed services. Hybrid models that don't outsource see their margins cut in half or more. And keep in mind I am talking about North American outsource that answers the phone as if they are your employee. Now as the owner here says there will always be hands on level 1 but it is a small percentage of the actual work. You really want to invest your technician money in people who do a lot more than level 1.

That's interesting. We have two techs on the desk and a tech support director. Based on what I know about our MS business and what I know about their earning, we run at about 50% margin on the service, which is not bad. I've heard of people getting their managed services margins up to 60% but having the guys here to do things exactly the way the owner wants has at least a little value.

I have seen 75%. And as my boss says there will always be a reason to have someone to do hands on level 1. But if you can get the truly low level stuff out of your hair you can concentrate on much more profitable ventures for those folks and delivering better service to the people who need more than level 1 hand holding that day.

 

[Flying Spaghetti Monster]

Topless Barber Shop

This is gold.

 

[Hawks64]

Good info in this thread. How important is it to have an IT background for managed services? My expertise is delivering exceptional sales and customer service results, and more recently training people how to achieve this for themselves. Thinking of doing my own thing, I am not going to become a millionaire working for my current company.

My wife is an award winning marketing consultant, has her own successful company already but only for marketing to date. Her best friend manages HR for a private school and would no doubt like some extra work. So we have some valuable services combined and $100k startup funds, but no IT guy :(

Might have to find one...

Well you can hire the IT background. You'll want to be outsourcing the level 1 stuff. If you can get someone with the tech skills to do more advanced projects/level 2 support while you handle the sales that would probably get you started.

I was at IT Nation in November and it is staggering how many founders/owners are tech-side and not business or sales side. I'd say it leans close to 95%, no kidding. It makes sense: person likes technology, starts a business consulting, learns more, settles in to a Managed Services business where 2/3 is recurring monthly's and 1/3 is project work. You have to be able to hire the person to do the 1/3 stuff and that can be extremely difficult.

And the project work IS really expensive if you don't have the skills yourself. I work for a consulting company. We do managed services and professional services. Professional services run about 2x the managed services.

ETA our managed services aren't level 1, we are the escalation desk for in house IT depts. Our clients are really med sized companies and up. Typically they will have an onsite guy that does all Level 1 and we handle the escalations for them.

 

[jwb]

Good info in this thread. How important is it to have an IT background for managed services? My expertise is delivering exceptional sales and customer service results, and more recently training people how to achieve this for themselves. Thinking of doing my own thing, I am not going to become a millionaire working for my current company.

My wife is an award winning marketing consultant, has her own successful company already but only for marketing to date. Her best friend manages HR for a private school and would no doubt like some extra work. So we have some valuable services combined and $100k startup funds, but no IT guy :(

Might have to find one...

Well you can hire the IT background. You'll want to be outsourcing the level 1 stuff. If you can get someone with the tech skills to do more advanced projects/level 2 support while you handle the sales that would probably get you started.

I was at IT Nation in November and it is staggering how many founders/owners are tech-side and not business or sales side. I'd say it leans close to 95%, no kidding. It makes sense: person likes technology, starts a business consulting, learns more, settles in to a Managed Services business where 2/3 is recurring monthly's and 1/3 is project work. You have to be able to hire the person to do the 1/3 stuff and that can be extremely difficult.

Can a non IT person with great business acumen start a managed services co?

So far (I've only been in this business for 7 months) I would recommend against it. Not unless you have a partner. That would be like saying "Can a person with great business acumen start a homebuilding company?" Sure, you could. But at some point you have to find someone that knows something about building houses and either hire or partner with them.

This is where I was going with my questions. In my most recent job, I took a small unit ($2 million) that was growing at 10% and delivered 25, 45 and 65 percent growth over the last three years.Now I am starting with a $15 million dollar division and am confident I can do the same thing. But I am getting paid a fraction of my value to the company and question, why am I doing this for someone else when I can do it for myself?

/endhijack

This is the right attitude to at least look in the direction of doing it yourself.

That said, can you do it without the support system? You have to fairly and honestly answer that question. They have handled everything, from lights and heat to desks to paying for the marketing to having someone empty the trash to... well, everything. It's a completely different animal on your own (couple that with the fact you don't get paid unless you make the work appear) - it will cause you to make different decisions.

 

[Long Ball Larry]

I think that the key takeaway of this thread, and any other thread really, is never, ever, ever be like datonn.

Ever.

 

[Abraham]

That said, can you do it without the support system? You have to fairly and honestly answer that question. They have handled everything, from lights and heat to desks to paying for the marketing to having someone empty the trash to... well, everything. It's a completely different animal on your own (couple that with the fact you don't get paid unless you make the work appear) - it will cause you to make different decisions.

I found that the dream of having my own business wasn't as appealing as I thought, at least towards the end. Not that it was too hard, just that I didn't want to live my life that way. I started the business because I wanted to make a bunch of money, be "in charge", and do the fun parts of the actual work. What I found was that to get to those three things required doing the ####ty part of the work, making no money, and never ever really being in charge of anything. Maybe I'll try again sometime, but I'm in no rush at all.

 

[jwb]

That said, can you do it without the support system? You have to fairly and honestly answer that question. They have handled everything, from lights and heat to desks to paying for the marketing to having someone empty the trash to... well, everything. It's a completely different animal on your own (couple that with the fact you don't get paid unless you make the work appear) - it will cause you to make different decisions.

I found that the dream of having my own business wasn't as appealing as I thought, at least towards the end. Not that it was too hard, just that I didn't want to live my life that way. I started the business because I wanted to make a bunch of money, be "in charge", and do the fun parts of the actual work. What I found was that to get to those three things required doing the ####ty part of the work, making no money, and never ever really being in charge of anything. Maybe I'll try again sometime, but I'm in no rush at all.

I hear that. I'm a copywriter, I work from home, etc. I love being my own boss, but I wish sometimes I had the simplicity of a job - that weekly check, co-workers to BS with, no worries about no work lined up for next week, weekends off, etc.

From the outside, my business seems idyllic - sleep in, work when I wish, take off any day I want, make fairly decent $ (not FBG coin, but likely more than I could at a job considering I don't have a 4 year degree)... but it's hard, and most people could probably not do this. I spend maybe 20% of my time actually doing the creative writing that's the juice of the job, and the rest is spent on communication, research, marketing, etc (hint: marketing is not fun when you're spending your own money, and you *must* have results, or you starve.)

I still wouldn't have it any other way - working for myself is just the way I'm wired. But it's a lot harder than most people think it is.

 

[Maelstrom]

The other key:

You need to start. Today/tonight. Right now.

Of course, this applies to everything, not just business, but don't "figure things out" or "wait until the timing is right". Make a decision, and start working towards making things happen immediately.

This is also the part I struggle with the most. It's so much easier to research and read and ... type posts like this. Go. Do.

 

[humpback]

What if you were starting a business with $100k? Any better ideas?

This landscaping thing isn't for me.

Lots of better ideas. 100k is enough to pay people whereas 10k is not.

Go on....

 

[humpback]

 

[Abraham]

It's on the way.

 

[Abraham]

100k business to start.

I'm going to assume that our "team" of cofounders doesn't have any special skill set. Anything technical will need to be outsourced.

1. No Network effect - Our business needs to be able to generate revenue right away with customer #1, so "websites" and "apps" that rely on lots of users are out.

2. No R&amp;D - we're not inventing anything here. We want to make money. So spending 100k on engineer salaries to invent a new color of ice is out as well.

3. We want a market that is expanding, not contracting. Commercial construction is fine, media brokering for Cable companies is not.

4. All of our employees have to generate revenue in some way.

My immediate thought was a remote desktop provider. This IT service fits the service and recurring revenue model from before and the margins are fairly rich. But the upfront investment to deploy the desktops is at least a few grand. We'd have to hire at least one technician to manage things (I'm not a fan of outsourcing the administration of a key service) and that's a big chunk of change for a non-revenue-generating position. Furthermore, Microsoft, Google, and Amazon are getting in to this business so while I believe remote desktop solutions are an excellent and growing market, it isn't the best fit for us.

Instead, we are going to key in on a market that is growing and everyone (or almost everyone) is a potential client.

Lead Generation for Senior Services.

Our customers will not be senior citizens, mind you, but service providers for senior citizens. (Ironically, Cos and I launched a biz like this about 4 years ago called Smart Senior Choices. Had we been more organized and focused I think it would have done well). Our entire staff will be sales and marketing professionals. We'll drop a few grand on a website that faces end-users (senior citizens and their families) and quickly captures as much of their demographic info as possible. We'll do a little research on markets with growing senior populations and start there. Our sales process will be focused on hitting the pavement to sign up senior service providers (doctors, dentists, chiro, nursing homes, etc.) as customers. Many lead gen companies take a cut of each transaction (i.e. fee equal to first month's rent, etc.) but we'll be much less greedy. We'll have a couple subscription packages available ranging from $100 to $1,000 a month depending on how much revenue the customer (service provider) can reasonably expect to earn off of a lead we send them. Our marketing dollars will be focused on driving potential leads to our site. We will differentiate from "A Place for Mom/Dad" and other sites by focusing on a specific location first and building relationships with the providers (i.e. face to face interaction) as much as possible.

No, we aren't making the website like Care.com where providers can have profile pages and crap like that. Too much cost and maintenance. We only care about signing up providers and bringing in leads.

 

[slackjawedyokel]

Bump. Great ideas here and I learned quite a bit about some of the regulars around here.

The struggle is choosing the life of Datonn, the punch-in/punch-out for someone else, or somewhere in between.

Right now I'm working as an insurance producer for another agent, working 60-70 hours per week, making less than $40k. That's the pits, but it puts food on the table. This might only make sense to those in insurance, but I'm selling 40-50 policies per month right now (blend of personal lines, commercial, and life). Stepping out is tough when the wife and kids are at home waiting for grocery money. Anyone have experience starting an insurance brokerage/agency on their own? It can be done for 10k, but the build-up is slow going, hence my pensive approach to doing my own thing.

 

[satch]

I'm always toying with the idea of starting an online "boutique" musical instrument store offering vintage/rare/classic/hard to find items. I'm semi-addicted to buy/selling/trading gear on craigslist. I'd be in heaven if I could profit doing so. Technically, I have profited doing so, but on a very small, personal scale.

I'd do repairs &amp; restoration myself, and offer a service to find specific items people were looking for, as I also love the searching aspect of it. $10,000 should be plenty to get a cool website up and running and acquire some gear to offer for sale. I'd use ebay, craigslist, and be active on forums featuring Fender, Martin, Gibson, etc. Additional items would be added as acquired.

I know it's not a unique idea by any means, but it would just be a part time thing to do for personal enjoyment and hopefully some profit. Would never get rich, and best case scenario is maybe if I executed it well enough I could grow a decent reputation as a go-to resource for items like this and my "find it for you" service would be popular among those who just don't have the time to scour the internet looking for what they want. Worst case scenario is I end up with a bunch of really cool gear in my basement, which isn't so bad. I'd sell it all eventually, or just keep it. Seems like kind of a no-risk, all reward scenario for me based on my interests.

 

[Dentist]

Good luck to everyone. Technically i run a small business, albeit one that could never be started for 100k let alone 10k... but starting a small business sounds like it sucks really big time.

 

[NCCommish]

Good luck to everyone. Technically i run a small business, albeit one that could never be started for 100k let alone 10k... but starting a small business sounds like it sucks really big time.

It's a ton of work everyday. There are not a lot of 8 hour days when you start you own thing from scratch.

 

[jwb]

Bump. Great ideas here and I learned quite a bit about some of the regulars around here.

The struggle is choosing the life of Datonn, the punch-in/punch-out for someone else, or somewhere in between.

Right now I'm working as an insurance producer for another agent, working 60-70 hours per week, making less than $40k. That's the pits, but it puts food on the table. This might only make sense to those in insurance, but I'm selling 40-50 policies per month right now (blend of personal lines, commercial, and life). Stepping out is tough when the wife and kids are at home waiting for grocery money. Anyone have experience starting an insurance brokerage/agency on their own? It can be done for 10k, but the build-up is slow going, hence my pensive approach to doing my own thing.

Can the wife help with income? 40k is really not that big a number. If she can make 20k part time, and you can make 20k part time (you can both make that working just about any job), and also start your own thing full time...

In your situation, that's prettymuch how it has to work. But she has to be on board 100%. If she's not - if she's tapping her foot saying "ok Rockefeller, where's the big insurance bucks"? after six months, you're doomed.

 

[Hot Diggity Dog]

Very mundane but I think a service business like a home cleaning business would work well with the right owner. Employees don't need a high skill set and easily trained up. Could easily be run out of a house, cleaning tools aren't that expensive. Canvas middle to high income neighborhoods.

 

[kutta]

I started my business for with a $10K investment (5 from me and 5 from my partner). We started 13 years ago and never had to put another penny of our own money into it. And last year we did $9M in sales and we have 40 employees.

We are both engineers and started by quitting our jobs at Honeywell and creating a consulting company where we would hire ourselves out to other companies. We quit with no work lined up but confident we could find it. Well as luck would have it, our old bosses at Honeywell hired us back the following week at almost twice the pay we were making as employees. From there we started bidding other jobs at Honeywell (after we got on the supplier list) and the business grew from there.

In 2003 we realized that the service business actually kind of sucks because it is so volatile. We got tired of spooling up for large jobs and then laying off a bunch of people as soon as the job was over. We began writing government proposals (specifically the Small Business Innovative Research - SBIR - program) and had great success with that. We sold off the service business in 2006 and now we focus pretty much entirely on DoD projects. Our sales this year will top last year's.

My advice is pretty simple.

1. Make sure you understand your business and/or technology inside and out. I find it hard to believe that a non-tech person could successfully run a tech company, just as I find it hard to believe that a guy who's never used a lawn mower could run a successful landscaping business. Of course there's always exceptions, but a general rule of "do what you know" is probably pretty good.

2. Get customers. It sounds easy, but cash flow is king. You don't have a business until you get customers. Anyone can write a business plan (we never did) or a marketing plan (we never did) or a five-year forecast (we never did). But not anyone can get customers. Once you have customers, you have a track record. And a track record is what gets you more customers. So instead of writing a 100 page business plan for your landscaping business, I'd say go put your walking shoes on and knock on 100 doors. You'll get to where you're going much quicker.

3. Don't go into debt. Debt sucks. It drains your energy and makes you desperate. If you think you have to take on debt, then think again about what your plan is. Start slower. Get a 2nd job. But avoid debt. In 13 years we never missed a payroll and the only debt we have ever had is a revolving line of credit to cover expenses while waiting for account receivables.

So I guess, if you had $10K, I'd have to recommend starting a software consulting business.

 

[slackjawedyokel]

Bump. Great ideas here and I learned quite a bit about some of the regulars around here.

The struggle is choosing the life of Datonn, the punch-in/punch-out for someone else, or somewhere in between.

Right now I'm working as an insurance producer for another agent, working 60-70 hours per week, making less than $40k. That's the pits, but it puts food on the table. This might only make sense to those in insurance, but I'm selling 40-50 policies per month right now (blend of personal lines, commercial, and life). Stepping out is tough when the wife and kids are at home waiting for grocery money. Anyone have experience starting an insurance brokerage/agency on their own? It can be done for 10k, but the build-up is slow going, hence my pensive approach to doing my own thing.

Can the wife help with income? 40k is really not that big a number. If she can make 20k part time, and you can make 20k part time (you can both make that working just about any job), and also start your own thing full time...

In your situation, that's prettymuch how it has to work. But she has to be on board 100%. If she's not - if she's tapping her foot saying "ok Rockefeller, where's the big insurance bucks"? after six months, you're doomed.

The wife has been great and actually is working currently but will be coming home soon (expecting our 3rd). There's another thread idea... " ways for the stay at home wife to make cash".

40k is tough to live on in California.

 

[datonn]

Good luck to everyone. Technically i run a small business, albeit one that could never be started for 100k let alone 10k... but starting a small business sounds like it sucks really big time.

It's a ton of work everyday. There are not a lot of 8 hour days when you start you own thing from scratch.

^ This. I was taking a MOOC (online course from a university for free) over the winter, focused on growing small businesses, and one of the key take-aways from that course was this:

Other than God and (immediate) family, if you aren't willing to put everything and everyone else at least temporarily aside in effort to grow your own venture? You might want to think twice about if entrepreneurship is for you.

Kind of similar to a comment I made back in January, but hearing it being taught to students by a former CEO of a multi-billion dollar company drove that point home to me even more.

I work at LEAST 11-12 hours/day, Sunday thru Friday. I usually put in 4-5+ hours every Saturday too. With the only "holidays" I'll observe being Thanksgiving and Christmas Eve/Day (and even then, I'm checking/sending messages). I work 4-5 of those hours every day while my daughters are asleep (10-3am) and 6-7 hours every day they are in school (8-3pm), so that I don't miss out on quality time with them after dinner and on Saturday. But every last other thing in my life, apart from my faith and my girls, takes a back seat.

That said, you can get creative with things...like driving to meetings in SC, LA, or CA instead of flying. Working from hotels at night, but enjoying a little disc golf or sight-seeing along the way. Or getting into the "right" industries with the "right" clients, so your hobbies and interests can be satisfied while "on the clock" a bit too. i.e. we have one of the world's largest disc golf manufacturers as a partner...allowing a chunk of my OTC time being spent drawing course maps, tee signage, etc. Or having professional football franchises as clients, so you can tease them about being in the War Room or how you would have drafted ________ if it were up to you, LOL.

If you cannot envision yourself going all-in like that, odds are extremely high that you'll be one of the 90% of start-ups that fail within three years. It's not meant to scare anyone out of trying it! But if you're gonna try it, go in eyes wide open...knowing how HARD work is going to kick you in the ###.

 

[sublimeone]

Use the 10k as a down payment on a rental property.

 

[Joe Bryant]

Good stuff in here. Lots of great angles.

Couple of random points. And for sure, these are just my opinions. I don't know that they're right. They're just what I believe after doing this kind of thing for a pretty long time.

*** It's cliche because it's true - But find something you at least sort of like doing and being around. I get it, not everyone can do a fantasy sports site - I'm the outlier there and very lucky. But if I wasn't doing this, I'd be doing something I liked doing.

And to dig into that a little further, lots of businesses aren't necessarily about the product. I loved my time at Bryant Boats (sold it a couple of years ago) but it wasn't so much that I loved boating. I like boating. But I love making high quality stuff that customers loved. And I love the interaction and working with the people I worked with. I think I could have been just as happy making high quality leather notebooks or boots or throwback flannel baseball jerseys. You obviously have to be an expert on the product but the main thing I believe is to understand it so that you can deliver the product that people want.

And that sort of comes back to understanding and knowing yourself. I know people who would love Abe's landscaping idea. And some people who'd hate it. Same with NCC's tech services. Doesn't mean you're a good or bad person. It's just who you are. Know yourself.

*** Take the long term view. Maybe it's our FedEx Next Day delivery mentality or the instant download from Amazon but if I consistently see a quality lacking among folks today (and not just young folks) it's patience. I see so many startups where the business plan is basically, "Make something cool, draw a ton of eyeballs, and sell to Google / Facebook / Yahoo for a zillion dollars in 3 years". That's not a business plan. That's a lottery ticket. Yet I see tons do it. Just because it worked for the company on the front page of TechCrunch today doesn't mean it'll work for you. In fact, it'll probably NOT work for you. Make decisions and choices as if you'll be the person who has to clean up the fallout.

*** It's ok not to be the hottest / most glamorous / coolest business and also it's ok if you're not the greatest. I heard a talk by the 37Signals guys a while back and he was talking about how no web companies want to be the nice Italian restaurant on the corner that does a solid business with faithful customers. It bucks the trend, but I think it's ok sometimes to not be making the giant splashes. The business world is a pretty big place. I think it's ok to be the nice Italian restaurant sometimes. That can be a pretty dang good business.

More as I think of it. Good thread.

J

 

[mr roboto]

I will say this - not every small business consumes your life. Some do. But sometimes in these threads the datonn malaise gets a bit thick. Not picking on him specifically, but I think the self-flogging entrepreneur is worshipping their business and busy-ness.

 

[sublimeone]

I will say this - not every small business consumes your life. Some do. But sometimes in these threads the datonn malaise gets a bit thick. Not picking on him specifically, but I think the self-flogging entrepreneur is worshipping their business and busy-ness.

Agree 100%

I'm on my second business, sold the first one, and it's rare that I put in more than 40 hrs a week.

 

[Joe Bryant]

I'll add a little more on the "do what you like" idea.

Think about this. A lot. The "turn your hobby into a business" is not the same as liking what you do.

Mainly, think about what you like doing AND then think about what a business involving that might look like.

I love making BBQ. I like making it for a ton of people. A couple of times per month I'll do a charity type gig and then I'll do a couple of catering type things for friends each month like weddings or parties. I've had hundreds of people tell me I should open a BBQ restaurant. And it seems to make sense.

But when I think deeper about it, I ask myself, "What do I love about cooking BBQ?" What I love about cooking BBQ is feeding folks (that I usually know and are often friends) and getting the satisfaction of being part of a special event. I get thanked for making the day special. And I have total control over when I do it.

That's a very different thing that opening a restaurant. Now that may still happen one day. But operating a restaurant is not currently what I'm getting out of cooking BBQ the way I do.

I guess what I'm saying is be careful about the "hobby into a business" thing and think deeply about that.

J

 

[KarmaPolice]

what if you think you have a good website idea but know jack and #### about computers/programming?

 

[kutta]

what if you think you have a good website idea but know jack and #### about computers/programming

I will say this - not every small business consumes your life. Some do. But sometimes in these threads the datonn malaise gets a bit thick. Not picking on him specifically, but I think the self-flogging entrepreneur is worshipping their business and busy-ness.

Agree 100%

I'm on my second business, sold the first one, and it's rare that I put in more than 40 hrs a week.

I agree too. I will say that the stress gets to me much more than the hours. In the beginning, sure, you have to work a lot. But it was never so bad for me that I considered 80 hours per week a way of life.

 

[Hot Diggity Dog]

I will say this - not every small business consumes your life. Some do. But sometimes in these threads the datonn malaise gets a bit thick. Not picking on him specifically, but I think the self-flogging entrepreneur is worshipping their business and busy-ness.

Agree 100% I'm on my second business, sold the first one, and it's rare that I put in more than 40 hrs a week.

There is some truth in this. But if your going to be opening a business for 10k you had better count on committing a lot of time to the business. 10k more than likely means your going to be wearing all the hats in the business.Owning my own business and knowing lots of people that do too , I've found some people are really good at running a business others succeed at it through sheer persistence. Key is finding efficiency and getting good employees. Some people do this as easily as breathing , others have to learn it.

 

[Joe Bryant]

what if you think you have a good website idea but know jack and #### about computers/programming?

You need a partner that does know jack about computers and programming.

What things would you bring to the business?

J

 

[phrozen]

what if you think you have a good website idea but know jack and #### about computers/programming?

You need a partner that does know jack about computers and programming.

What things would you bring to the business?

J

:blink: