Spike 06 Dec 05

Great post. Maybe a little stating of the obvious but I do enjoy your writing style. A lot more to come, I hope.

Peter Cooper 06 Dec 05

I’m not sure about the 2 months of savings comment.. I think it’s a lot more complex than that.

It might take you up to 2 months to get money through the door.

This is about right, but misses that it might take you up to a year to get the same amount of money coming in each month to cover all your expenses and cover your full living expenses. A few hundred pounds in the first two months won’t keep food in the cupboard in month three.

Another method is to work out your living costs for a full six months, and use that as your benchmark. By six months, you’ll either be broke or bringing in at least half the salary.. but with two months, it could turn into a good success shortly thereafter but you’d have blown your wad.

Steve Akers 06 Dec 05

Fantastic post! I can’t wait to read the entire series!

JF: I have to say I really love the changes at SvN. All of the guest bloggers have been great. Posts by 37S have been good as well. Keep it up!

AndyToo 06 Dec 05

Nice article, Ryan (and kudos for leaving the comments ‘on’.)

I’m in the position of gearing myself up to start my own business in the UK, so this sort of article is really interesting.

I’d also very much appreciate some insight on how you first went about getting customers. What avenues worked for you - advertising, mailshots, cold calling, word of mouth, etc.

Thanks if you can work anything like that in. Nice work on DropSend, btw!

Jeff 06 Dec 05

I was in a unique position just about this time two years ago. I had just started a job with a new, larger firm. I felt that the small firm I was with was unstable, and with a baby on the way, it made sense to join the large firm. I was there for about two and a half months before they laid off the entire design department (it should be noted that they courted me for eight months before I took this job). The worst part was that it was exactly seven days after my daughter was born.

I took this as the kick in the ass that I needed to get moving on working for myself. It’s the best thing that ever happened to me. I have been profitable since my second week in business and am coming up on my second year anniversary.

Andytoo: I found that the secret to success is networking. Get out there and meet people. Call every contact you can think of and tell them that you are starting a business. Call in favours from friends of family members, old high school pals, anywhere. Join a referral marketing/networking organization. All of this is more effective than advertising, at least at the beginning. After you get past your inital stages, if you do good work, you’ll get most of your work through word of mouth.

Running my own business is the best thing that ever happened to me. And I think there’s something to said for the 37S mantra of working with small organized teams. After all, look what happened to me when I went to work for a big company. :)

dp 06 Dec 05

Hi Ryan,
Great read. Would you mind sharing some of those blog links?

Mark Gallagher 06 Dec 05

Excellent stuff.

Appreciate the straightforward style.

Thanks Ryan

Peter 06 Dec 05

I have to disagree. This is the worst post here in a long time. Stating the obvious. Poorly written. Sentences like the following make me cringe, and I’m not even a native speaker. Sorry.

“For instance, if you�re launching a new site, ask yourself “Why will people come here, instead of my competitor�s site?”. “

AndyToo 06 Dec 05

Peter -> could you elaborate a little more one what you find cringeworthy about the statement you quoted?

jm 06 Dec 05

Well done. I think you’ve nailed most of it Ryan. I’d like to add one more to the list:

Figure out what you want out of the business. I started a small company 8 years ago this month and we’ve gone up and down with the rising and falling US economy. People were hired, let go, and others hired again. From the beginning I knew that growth and manpower were the results I wanted from a business. I detailed an office, workstations, and an approximate number of employees. This amount of detail at the onset allowed me to keep the determination to see through times when it would have been easier to just bag it and get a job working for someone else.

Figure out the end; as Jason notes so dutifully, the plan can change but there must be a plan. And yes, I laid out the exit strategy 15 years in advance as well.

Sam 06 Dec 05

I’m looking forward to the rest of this series and I agree with most of your points.

I would just say that in my experience, starting a webapp came after working with several clients, understanding their needs and listening to their advice. It was also very helpful in dealing with the USP issue you mention.

I really admire people like you, Seth Godin and others who have an idea in their head and they just sketch it out, fill in the details and build a new enterprise out of that.

For me, an idea has to really slap me in the face and its an iterative process amongst the three of us and with client feedback along the way to get to a business that we’re confident is valuable not only for our existing clients but others with the same wants and needs.

Ed Knittel 06 Dec 05

I have a feeling there are going to be a lot of “great post” comments about this series, Ryan. I think you were able to address some of the major questions/concerns people have when deciding to go it on their own. A lot of people wish they could be their own boss but it does take a person with a lot of drive and ambition to succeed.

This is why I enjoy reading SvN. Keep up the (thought) provoking posts.

Nick 06 Dec 05

Thanks for the post!

kendrick arnett 06 Dec 05

Nice article. It seems like 6 out of 10 people I talk with in the industry are looking to work for themselves, but maybe 1 in 10 pursues it. No one knows where to start, which is why I’m excited about this series.

rhjr 06 Dec 05

My new venture is doing things slightly differently. We’re not bailing out of our dayjobs just yet. We’re working on our own web apps at night instead of freelance projects, and when those start to roll out and (hopefully) take off, then we’ll consider going at it full-time.

Gordon 06 Dec 05

Following on from Peter’s comment of “Stating the obvious.”

That is precisely why this article is good. Most articles assume a level of knowledge that isn’t always there, if you ARE new to this whole startup thing then NOTHING is obvious and if nothing else it’s always good to read that you have covered most things, saves the worry.

Ohh and just because something is written in ‘simple’ English doesn’t make it any less valid, just makes it MORE accessible to more people.

Anyway, interesting post. Thanks.

Michael 06 Dec 05

Great article!

I partly agree with Mikepk. 2 months is not enough if you’re starting a product company, but well enough if you do consultancy.

For me, consultancy has been profitable in week 1, because i had the chance to prepare.

Advice 1: start building your consulting business while working at your dayjob. Work for small clients, put money in the bank, work hard on your offer, and slowly walk toward your dayjob’s door. That’s what i’ve done 7 months ago and i’m happier than ever, have 3 months of salary in bank, 4 months of salary value in assignements and another 2 months in business development . I’ve wait for the “break” for 2 months to met a interesting new client that allow me yo have a good financial start.

Advice 2: Always keep business development in sight. If you’re not good at it, team with people that are. Always keep your sales funnel busy. Think in “months of salary” units.

Advice 3: you need a good accountant. Keep focus on what you like to do and outsource this stuff.

christen 06 Dec 05

When striking out as a consultant - how experience should you hav under your belt for credibility?

christen 06 Dec 05

PS. Sorry about the typos in the above comment. I hit “Post” way too soon!!!

Jeff 06 Dec 05

Am I the only one who completely HATED David Allen’s “Getting Things Done” book? I forced myself to read the first half dozen chapters or so and couldn’t handle it anymore. Save yourself the $15 and keep that in your “2 months” worth of salary.

I also have to disagree with the USP statements in this article. Who says you have to be unique?

And I completely disagree with filling a niche that doesn’t exist. Tell that to the Google guys who are my age and started out of a garage. Is it harder to compete with something that already exists? Maybe. I don’t think so. Starting something new requires that you convince people that they need this “new” thing rather than pull someone over from another place doing the same thing.

For example, the vast majority of people that start attending a new church come from other churches, not those who do not attend church in the first place.

I think the biggest thing is that you really enjoy what you do.

christopher 06 Dec 05

interesting timing… as yesterday i lost my job. so this morning i began working on the business plan and took a few minutes away to read my blog lists… looking forward to more advice.

Robert G. 06 Dec 05

I love articles like this.

I recommend not waiting so long before attempting something like this. Now that I have a wife and two kids, I feel like I’ll never get a shot…

I also HIGHLY recommend the Getting Things Done book. The filing system alone is worth the read.

Jerome Bernard 06 Dec 05

I faced the same kind of issues a few months ago. I do agree with some of the comments: depending on your business and the money you need/will spend before you can start, the two-month stuff won’t be enough.

As explained on a post on my website (http://weblog.kalixia.com/archives/2005/12/06/small-biz-101-annotated/), I searched for an alternate solution to this problem by working part-time on the development of my product and part-time on contracts enabling the business to stay alive.

shotoshi 06 Dec 05

Sorry but there’s so many things wrong this advice I don’t know where to start.

First off, it’s safer and wiser to compete with something that already exists, a gap that’s already filled. It proves that there’s an established market. Your competitors have already done most of the groundwork for you. So, you don’t ‘have’ to fill a gap necessarily.

Your very hosts of this esteemed blog, for example, haven’t exactly broken new ground/reinevnted the wheel - they’ve simply created something ‘better’ - or so they keep telling us ;-)

If you’re serious about business then working ‘less’ is not a viable option, unless you can afford to hire staff and most self-financed start-ups do not have that luxury.

shotoshi 06 Dec 05

Sam, I have to say I am not looking forward to the next post at all if it’s anything like this one. Affiliate links to recommended books on Amazon is just sleazy in book. I’m guessing the next post will all be about using moleskin notebooks with affiliate links to where you can buy them!

Sorry if this post is blatantly inflammatory, if it’s any consolation it wasn’t intended to be ;-)

Steve 06 Dec 05

That’s the old way. Check out this great posts about a new one…

Brad M. 06 Dec 05

Ryan, I stumpled upon your blog a few weeks and read your articles there as well. 37S must be a big fan as well if they’re having you aboard (even though temporary).

Oddly, I just started a new venture and I have found some great articles (such as this) and some not so great articles / advice, however, there are a few things that never really seem to come to surface: (none that I can find)

1) Business Plans - I have them, I hate writing them but they need to be done. Now, I should re-iterate that, BP articles are all over the place, -but- the writers of those articles do not seem to feel that design / web firms are not important enough to write about. The software industry seems to be missed entirely on this subject. I did manage to find a sample web design business plan from 1996 that quoted Netscape revenue forcasts etc, but that didn’t help me much.

2) Proposal Writing - I’ve worked for nearly 8yrs and never did I write the final document on a proposal. Samples, standards for writing would be great!

Now, once again I have found some documentation on these subjects, but nothing as concrete as I found with articles on IA or CSS or VC funding.

Thanks for the great article! Can’t wait for the rest.

sb 06 Dec 05

brad m.: for proposals i suggest “the one-page proposal” by patrick riley. my copy is well worn.

RyanC 06 Dec 05

Thanks for responding everyone. As I expected, some people agree with me and some don’t.

Regarding the 2-month savings: Yes, it does depend on your business. I am specifically referring to those who are in web design/development, who want to start their own service or web-based product company.

I really like what jm said: “Figure out what you want out of the business.” I couldn’t agree more. It’s easy to stray off your goals and end up working your ass off for something that doesn’t have any real significance.

shotoshi says “If you�re serious about business then working �less� is not a viable option.” Being “serious about your business” has nothing to do with how much you work. It has everything to do with how effective you are, while you’re working. Also, not sure what the “Amazon referral link” accusation was all about. Sheesh …

Brad M: Regarding business plans - In a sense, everything I mentioned in the article makes up a basic business plan. You don’t have to write these things down in an official document, in order to create a business plan. In my experience, as long as you’ve thought long and hard about the above issues, you should have a solid base to begin. However, if you need to secure funding, that’s an entirely different matter. You’ll definitely need a proper business plan for that. This Small Biz 101 series is going to focus on starting a business without the need for funding (as that’s what we’ve done with Carson Systems). If you’re going down the loan/funding path, I’m afraid I can’t offer much advice.

Anyway, thanks for the feedback. I’m excited about writing the next instalment!

shotoshi 06 Dec 05

Ryan says: Being �serious about your business� has nothing to do with how much you work. It has everything to do with how effective you are, while you�re working.

Thanks for that tip! I think it has a lot to do with what business you are in.

The Amazon referral link may have been off the mark, if so, forgive me but somewhere in the url I’m sure there’s an associate code. Again, apologies if I’m wrong.

No offence Ryan but I would rather have your secret for perfect mashed potatoes (I’m not being sarcastic by the way, I genuinely would love your recipe if you have one)

JF 06 Dec 05

FWIW, if you’re self-funded you’re wasting your time writing a business plan. If you can’t keep your “plan” in your head then your plan is too complex. Keep everything simple and you don’t need to write or remember as much: you can just build.

Don Schenck 06 Dec 05

RE: Regular job = security

Not really. Once you are established, and have several clients, you have more security. That is, if your business model supports the idea of multiple, ongoing customers.

Once I get to 20 customers … then if one “fires” me, my income drops five percent. If an employer fires me, my income drops 100 percent.

On your own is the way to go. And the freedom that you feel … well … it just can’t be described. You suddenly see the world as One Big Opportunity.

Kevin Burton 06 Dec 05

Good post…. keep up the good work… Can’t wait for the next one :)

Kevin

Paul 06 Dec 05

Great dialog from people WHO ARE ACTUALLY RUNNING BUSINESSES in this domain!

If English is not your native language and divining the knowledge here is difficult due to simple sentence structure or you find recipes for mashed potatos more interesting, please…find another blog.

Ebrahim Ezzy 07 Dec 05

Ryan, you must include the most important topic - Fear of Success.

Sometimes everything is going great; you have an ingenious idea, terrific USP, sleepless nights and a brilliant end-product, but you somehow lose confidence after completion, and everything turns into a rubble.

Fear to the success occurs when a project that is on the verge of being finished is left or slowed down from fear of the impact that its culmination can have.

An example of it is when a module of a system is ready to give itself in an organization where giving results outside the considered time perceives like lack of planning or lack of integration to the work groups. The delivery of the module could then be slowed down to avoid standing out of the group.

The solutions to this pattern comes by the change of behavior in the work groups, to make sure that the best results indeed are valued.

Excellent article nevertheless!

RyanC 07 Dec 05

Wyclif, you said (regarding Google) “They simply did it better than anyone else.” That’s exactly what a USP is all about :)

It doesn’t mean you have to think of something that has never been done before. It simply means you should:

1. Look for things that are overly complex that could be easier

or

2. Look for a need that hasn’t been met and meet it

Steve 07 Dec 05

Great to see another article on starting up in this business - I’ve been designing sites for a few years now and only in the last 12 months have I decided that I want to do this fulltime.

When is the time to ‘go for it’?

There’s never a ‘right time’ .. especially if you’re waiting till you have enough projects/clients on the go to convince you the work is going to be out there.

Advertising and cold calling are definately NOT the way to go; NETWORKING is the best way as this brings referrals and the best way to get that job is to be recommended.

Looking forward to more on this, good or bad!

Steve

Daimon 07 Dec 05

Excellent post! It is very straight forward. When I started my boutique experience design firm in 2001 I found lots of information on starting a business but nothing relating to my industry. I love to hear start up stories from those in my field. Starting a bakery and starting a design firm are not the same :)

Ed 07 Dec 05

Nice work, RyanC.
A few lesser-known items to consider before making the jump:
1. Prepare for the mental hurdle of not receiving a regular paycheck anymore - this may seem a bit obvious, but it can be somewhat distressing at first.
2. Plan social interactions periodically throughout your work week… working for yourself can occasionally get lonely.
3. Wake up early - the time before the work day begins is often the best time [only time] to get organized

David Merwin 07 Dec 05

I really hope you talk about debt. My partner and I started our firm with NO DEBT. Not a dime. We begged, borrowed and well, not stole. But we did not incur any debt at all.

Why is that a big deal? Because we were profitable right away. The day we started we started making money. As time went on, we needed to save to buy our own equipment. So we were planning ahead, instead of reacting to current financial issues. It is such a GREAT feeling.

Being creative in the beginning will not be as slick, but when you start to add the cool stuff, cell phones, laptops, and bookkeeping, it is all paid for.

SO nice.

Matt 08 Dec 05

Peter, you’re not being fair and you’re obviously missing the point. This is a handy article - clearly written and free of techno-jargon that often blurs the important messages of a work. Can’t wait to read more from this author - I’m learning a ton and looking forward to further enlightenment.

John 09 Dec 05

Peter,
Thanks for the article…
I have always lived by the axiom that great business grows itself. Some people struggle for years to keep a mediocre idea alive while others have that effortless meteoric rise right to the top. If you’re working too hard maybe it’s not worth doing.

John

beano 10 Dec 05

Man that was a great read. keep up the excellent work. i really enjoyed it.

now i am off to start my own company! woo-hoo!

Andy 10 Dec 05

Very well written and straightforward. I will enjoy reading the rest of this series. Thanks.

Jawad Shuaib 11 Dec 05

This stuff keeps me motivated. keep up the good work!

dino 14 Dec 05

you really forgot one big thing…. you need to have balls of steel to start your own company. that’s probably really two big things, but regardless, it’s a big thing.

Marko 18 Dec 05

Really interesting article , it’s nicer then the others I found on the net :)

jlarson43 20 Dec 05

I’m running Firefox 1.5, IE 5.5, and Netscape 6.2: of those three browsers, IE 5.5 is the only one that gets the left margin decent. Firefox 1.5 has a zero left margin. Netscape 6.2 is the worse, as it appears to have a negative left margin.

High end training for Web professionals and your article isn’t cross-browser compliant? Or is this problem some kind of bug in the browser versions I’m running?

Other than that, the content seams pretty interesting and reasonable.

Business for sale 01 Jan 06

Happy New Year to Everyone!

Vikas Kaushik 29 Jan 06

Really Good One!!. Keep the good work going!!

web developer india 22 Apr 06

Web software outsourcing company

cleo 17 May 06

Hie

This article has helped me a lot.
I need help in starting a small company in electronic security in a developing country.

Cleo

Jeff Stephens 22 May 06

Without detracting from any of the other comments, I would say that it is important to embrace the sales and marketing aspects of self-employment. Since most of the readers have never held a sales position, you need to understand that you will be performing sales related tasks every day if you are going to succeed. This includes prospecting for new customers, selling projects, and closing business. If this is something that sounds distasteful, unpleasant, or you just won’t do it, you should not start a new company.

tim 06 Jun 06

How would I go about starting my own, small graphic design business? Anyone know the legal requirements?

cobweb 19 Jun 06

Only found this article today, thanks to a link from the Vitamin website.

It’s good advice for even non-web/IT businesses, too.

cobweb

Pat 22 Jul 06

Good article. I would like to add that to succeed in business:

a) you also need a vision i.e. you need to have both a microscope and a telescope when look at your business.

2) You need a quality driven mindset in all aspects of your business if you want to succeed in the long-run.

Best Regards,
Pat, Singapore

Singapore Business Setup 22 Jul 06

I forgot to mention in my previous post that to succeed, you must also be constantly learning and improving your business. This requires a flexible mindset.

Best Regards,
Pat, Singapore

yusuf moh'd iliyasu 28 Aug 06

the reason why of me writting is to inform you that i want to start a self own business but i dont have the capital to back up my busiess, here in my country banks only finance a large goverment project that the can earn huge amount of money. and if you dont have any colesral as a security you can get any loan fron them , that is why am writting so that you can give me any clew or assistant in which i can stat my business. thank you very much sir for your anticipation

yours faithful
yusuf moh’d iliyasu

Mr Blair 07 Sep 06

Dear Sir/Madam,

I am a certified loan lender.I offer secured and unsecured loans to individuals and companies at low interest rate.I offer long and short term loans.My firm has recorded a lot of breakthroughs in the provision of first class financial services to our clients especially in the area of Loan syndication and capital provision for individuals and companies.
We have brought ailing industries back to life and we back good business ideas by providing funds for their upstart. We have a network of Investors that are willing to provide funds of whatever amount discreetly to individuals and organizations to start business and operations. We also recruit Agents to assist our client companies to receive payments for their goods and services. In our bid to be useful to you, please tell us which area that you wish us to be of service to you. Kindly respond immediately to this email, Looking forward to your reply.
Truly yours,
Mr Blair
email:[email protected]

————————————————————————————————————————

Mr Blair 07 Sep 06

Dear Sir/Madam,

I am a certified loan lender.I offer secured and unsecured loans to individuals and companies at low interest rate.I offer long and short term loans.My firm has recorded a lot of breakthroughs in the provision of first class financial services to our clients especially in the area of Loan syndication and capital provision for individuals and companies.
We have brought ailing industries back to life and we back good business ideas by providing funds for their upstart. We have a network of Investors that are willing to provide funds of whatever amount discreetly to individuals and organizations to start business and operations. We also recruit Agents to assist our client companies to receive payments for their goods and services. In our bid to be useful to you, please tell us which area that you wish us to be of service to you. Kindly respond immediately to this email, Looking forward to your reply.
Truly yours,
Mr Blair
email:[email protected]

————————————————————————————————————————

seun ola 14 Sep 06

pls, i need list of business ideas i can select from . Thanks

VICTOELLI POLLO ARYANA 28 Sep 06

ME GUSTA POLLO VERDE CON PANTOLONES ROJOS. ME CHOCA VACAS Y SILLAS EN ME CASA. VIVA LA CHORIZO.

VICTOELLI POLLO ARYANA 28 Sep 06

ME GUSTA POLLO VERDE CON PANTOLONES ROJOS. ME CHOCA VACAS Y SILLAS EN ME CASA. VIVA LA CHORIZO.

VICTOELLI POLLO ARYANA 28 Sep 06

ME GUSTA POLLO VERDE CON PANTOLONES ROJOS. ME CHOCA VACAS Y SILLAS EN ME CASA. VIVA LA CHORIZO.