Forum Post: Starting a business is HARD
Posted 12 years ago on June 10, 2012, 6:30 a.m. EST by delayedgrat
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This content is user submitted and not an official statement
1 year ago i started a business with a partner. We borrowed $750000 at 10%. Right now we have 8 employees who make on average $13/hr. We have gone thru 5 other employees who were worthless, and only took a job inorder to get fired and collect unemployment.
We finally took our first paycheck, we split a $10000 profit. We both work 36 hrs week so for the last year, we put in 3500 hrs with no paycheck. We have done this few times before, and we know the arc of this will be eventually we will be splitting $1 million or $500k each. The business wil have about 20 workers at peak capacity. We will sell this business to someone for about $2 million and start a new one in a different town.
Not everyone is cut out to run a small company. Its hard work. We sell these things to people who think itsceasy money but they are in no way ready for the day to day hedaches that inevitably occur.
36 hrs a week means you don't really care about the progress of this business. You need to be inputting 70 plus hours a week to be serious.
I don't know if it's possible to build a business on 36 hours a week or not. Frankly, if delayedgrat can do it, I congratulate him/her; I wish I could do the same. My own experience has been more like 80 or 90, but that's not to say that you couldn't do it differently in a different line of business or by being better at it. The year without a paycheck sounds about right, though.
Not everyone is cut out to be a nurse either. So what? Am I the only one wondering if there is an actual point to this post?
Starting out $750,000 in the hole is a real tough nut to crack, what a debt load! As stated by others 36hrs a week will not cut it. 80-90 hr weeks should be the norm, I don't see how you can avoid that with all the details that need attending to.
Most people start real small, like in a garage and figure out if they have a marketable item, without demand there is no business at all. Starting a bushiness in a recession is another problem... low demand in general. Add to that your debt load.... and it really doesn't look good. I wonder how you figured out that your business is worth $2 million with almost a million in debt?
Good luck. Work smarter. work harder.
Actually most businesses fail because they are undercapitalized.
A friend of mine, a fairly smart, fairly wealthy man just started a Mexican restaurant in town. He had no idea how hard itwas to develop and keep an eatery going. He is putting in ridiculous hours and STILL he cant get decent help.
I've heard restaurants are one of the hardest businesses to maintain.
I went to eat there a couple days ago, excellent food, bad, bad service. Entrees were $12-18. Thats pretty high for Mexican food. I guess he could pay more for help, like $20/hr, lol, but then he would be priced out of existence.
I'll bet bad service will kill an otherwise good restaurant. The competition is fierce in the food service industry. I pray he finds good help soon.
How does he know what it's worth? He sounds like a pro that's done it before. There's a certain sort of guy that's a serial entrepreneur -- likes the excitement of starting a business, hates running an established one; so they start 'em and sell 'm, start 'em and sell 'em. That's no doubt also how he manages to not work 80 hours a week -- he already knows what he's doing, not learning as he goes -- and why he's got the balls to go out and borrow that kind of money, and why they'll lend it to him -- he's got a track record.
Sounds like he's a professional gambler.
Nope, not at all. That's how a lot of serious entrepreneurs work.
Serious entrepreneurs are very conservative and don't gamble much at all. But attitudes have changed quite a bit. Today gambling in business is respected and encouraged. Massive bets in the derivatives markets are made each day, only today the results are pretty devastating, as witnessed by this last economic crash.
It's not investing per-say not any more - it is out and out gambling and the house can not lose.
monopolies: http://blakemasters.tumblr.com/post/21169325300/peter-thiels-cs183-startup-class-4-notes-essay
Just the other week, someone said starting a business was a walk in the park - even a poor person or a cavemen could do it - all you needed was $100 bucks for start up.
Provided that you have or can provide something that is in demand.
I think this person was trying to prove that poor people could lift themselves out of poverty with only $100 bucks. I guess he forgot about needing a product consumers want.
A poor person can lift himself out of poverty with even less than $100.-; happens all the time. But what about a stupid person? No offense to anyone, but the inconvenient truth is that that is a lot of the problem. This is not to say that it is ok for the rich and quisling government to stack up odds against, and rip off poor and stupid folk.
Most supply-siders miss that essential point completely.
Supply-siders say the darndest things.
36 hours??? Sounds like you are a stay at home Mom
my partner works 36 too, In reality we put in together about 100 hours.
That makes 76 hours total if my math is right. Another 24 hours to make 100 hours. 24 hours is another part time persons worth of work.
I dont understand. ???
My fault. I was thought you were the OP.