Entrepreneurs: What does it take to start a business?

[lchyi]

I was thinking about what to do coming out of college and with the only skill that I find that is marketable to me (web design) I wanted to start my own firm employing some of my more talented collegiates.

I want to start in a comfortable, small, two room office with about 4 computers and at least 2 of them being complete workstations.

With all this in mind, I had a few questions for you knowledgable ATOT people, I apologize some of these will be a bit naive sounding:

1) How much and how willing are banks going to give a fresh-out-of-college-kid a business loan. From what I described, I can't imagine the costs being too high. Sunk costs will be the rent, leased costs will include the computers, and then the rest is just salary. Plus, knowing that I have loans already for school (not much though, I'm at a public school) will that put me out of the running automatically?

2) How much is a typical small business startup for web design?

3) Assuming everything fails, what's the worst that can happen?

 

[theNEOone]

it's good to have that ambition. but why not start out doing independent projects on the side, or perhaps from home, so that you can build a client list and solid reputation first? learn how the business/industry works before diving in, eh?


=|

 

[dartworth]

I would have thought these would be the kind of things you would learn in college...

 

[waggy]

i would guess a computer at least...

 

[getbush]

Don't forget the water cooler.

 

[lchyi]

I do have some clients on the side which makes this deal for me pretty sweet, I don't have to build a client base from scratch right now though some marketing will be needed.

 

[Pastore]

Originally posted by: dartworth
I would have thought these would be the kind of things you would learn in college...

Why the hell would you learn this stuff in college? Especially a degree in Web Design?

 

[us3rnotfound]

Originally posted by: getbush
Don't forget the water cooler.

haha

 

[xanis]

I agree with theNEone. Start out doing small independent stuff on the side for individuals or local buisnesses, then once you get some money, use it as capital and see if you still want to expand into a full-size buisness.

 

[lchyi]

No college program that I know at our school teaches you about starting up businesses and the risks associated with it. It's all about hypothetical risk management, equations about hypothetical situations, and how to deal with ideal situations. Honestly, since I've done Management Science I haven't learned to manage anyone any better.

 

[lchyi]

Originally posted by: getbush
Don't forget the water cooler.

Hell no I wont, and definitely not Arrowhead, it'll be Sparkletts all the way!

 

[BigJ]

Originally posted by: lchyi
No college program that I know at our school teaches you about starting up businesses and the risks associated with it. It's all about hypothetical risk management, equations about hypothetical situations, and how to deal with ideal situations. Honestly, since I've done Management Science I haven't learned to manage anyone any better.

There's got to be a course in your Uni. Look for "Small Business Management" or something like that.

 

[AgaBoogaBoo]

Freelance from home till it becomes larger... lots of freelance webdesigners nowadays.

 

[Golgatha]

Give yourself a goal to achieve in 2-5years and continually work towards that goal. Start now. Stop wasting time thinking about doing it and lurking around the Anandtech Forums.

/thread

 

[fitzov]

lookup 'business plan'

 

[dartworth]

Originally posted by: Pastore

Originally posted by: dartworth
I would have thought these would be the kind of things you would learn in college...

Why the hell would you learn this stuff in college? Especially a degree in Web Design?

So you go to college for graphic design for 4 or 5 years. None of your profs, TA, or students farther along in the program have or had their own design firm or work for one? You never had an intership or part time job at a design firm while going to school? It was never brought up in one your classes about working in the real world? It never occured to you to bring these questions up in class? What kind of phoney school are you talking about?

Learning just doesn't take place in the classroom or lecture hall. Then again, what do I know about graphic designers...I'm only married to one...

 

[tfinch2]

clients

 

[440sixpack]

I can only speak from my own experience.

What do you need?

Iron nerves and flexibility - when you are responsible for all incoming funds, instead of some corporation cutting you a check every two weeks, it can get a bit... interesting at times. The buck stops with you as the owner, in both good ways and bad.

The ability to make decisions - Waffling and trying to take the time to analyze every decision from every angle is just not feasible. Someone in the organization must have the ability and authority to make a "gut" call from time to time.

The skills to wear many hats - many different tasks will fall to you as a business owner. In my case, there were two of us as co-founders/co-owners so there was some ability to split up tasks, but Finiancial, IT, Engineering, Facilities Management, Shipping, Corproate Complaince and more still fell to me.

A drive to succeed - forming a startup is almost never a 9 to 5 job. be prepared to devote a large chunk of your time to making the company work, at least if it is to be your sole/major source of income. That said, if you do succeed in your venture, it is a truly great feeling.

As to the specific questions, I can't speak much to how willing a bank will be to give you money. The first place they'll start is with your personal credit rating. Be sure to incorporate in some form prior to starting the whole process, to protect your personal assets if things don't work out. Having your own startup capital is generally better (in my opinion) than taking on immediate debt that you have to start making payments on. Tough for someone just starting out, but the usual advice is to hit up friends and family first. It doesn't necessarily take tons of money if you are smart about costs and able to be a little creative. My company we started with less than $10,000 initially, and less than $20,000 overall invested. Our revenue at the end of year one was well over $100,000 and here in year two we will triple or quadruple that. A lot depends on what you are willing to put up with and for how long. My partner and I drew no salary for the first 6 months.

Taking on a physical location (office) adds a lot of costs/responsibilities, with a major factor being where you are. An office in Smallville USA will tend to be significantly cheaper than say midtown Manhattan. For what you are planning, all you really need is a place with a decent internet connection, so you have good flexibility there.

The worst that can happen is the business fails, with all it's assets being liquidated (assuming you are properly incorporated), or personal bankruptcy if you are not properly protected.

This is just the tip of the iceberg, you could (and many people have) written boks on this. That said, it will always be a learning experience, no book will ever be able to truly tell anyone how to start/run their own, unique business. But personally, I think it is all worth it. The feeling of success is like no other if you do make it, and even if you don't it can be a great learning experience you can take on to whatever you do next. Just be ready for the risks, and don't gamble with what you can't afford to lose.

Edit: Damn how could I forget, a good sales guy is crucial. Someone has to convince your clients to give you money for what you do, and a good sales guy is worth his/her weight in gold. More than anything else, the key to our success was the fact my partner has great sales ability, and some great relationships already in place that became our first clients.

 

[spidey07]

I know I won't be taken seriously....but.

Business Plan
Capital
Sales and Marketing
Management
Workforce

and more importantly - customers.

So work on those first five while you make contacts/relationships with your future customers in some occupation that exposes you to them.