OK, so let me recap my situation real quick like...

I've been working for a cable company in the advertising division making those cheezy TV ads for local businesses. Except mine aren't so bad...

I've worked for the same basic outfit for twelve years, (some mergers in there) but they are laying me off Dec. 19th. Severance package is a full paycheck every two weeks until mid April. Can't complain.

I will probably walk away with a pretty sweet deal on the company's equipment I've been using, (paying a lease on it until I've paid it off) and keep all of my clients. So technically I should be able to take the severance money, and just bank it, while I keep billing my clients. The opportunity exists to make more money on my own than I did with the company.

I'm starting to look at possibly sharing office space with another dude that used to be my boss a long time ago. He got me my first big promotion with the company. We work well together, and compliment each others strengths and weaknesses.

Example:

He is great at networking, and I hate people.
His productions look like ass, and mine are pretty darn nice.

He is black, and I am white... He is blind as a bat, and I have sight!
Well, that part is not true...




So, seems like a good fit. But I'm new to this game. Always been under the umbrella of a major cable company. (TCI, AT&T, Comcast)

Any of you been through leaving a company to start your own business, and have any advice?

Stuff that has crossed my mind would be maybe needing a separate insurance policy for any expensive equipment I keep at the office. I haven't thought of much else.

I believe the other guy would probably have to be the only name on the lease, as my credit is not great. But not horrible either. Or is it wrong of me to keep my name off the lease?

We figured I would either pay half the rent to my buddy, or he might be able to throw work at me to pay my share. So perhaps no out-of-pocket expense on the office space.

But I run the risk of being taken advantage of, so he and I will have to make it pretty clear what my rates are, and such.

Perhaps such an arrangement precludes me from writing off the office space expense on my taxes... I suppose I need to talk to my tax guy.

Any of what I'm saying throw up red flags? If I can learn from your experience or mistakes, I would sure appreciate it.

Thanks!

Starting a new business is not as easy as many people believe. Outside of the normal expenses, there is always unforeseen circumstances. Knowing when to spend money and on what is always the trick.

I do this for a living, I consult to many small businesses, people find me and ask me to help them. I don't find them. Let me know how I can help. Standard rates $150-$250/hr. You get the forum 100% discount.

PM sent....

Starting ANY kind of a business right now is going to be a little tough.

Do you have all the capital required?
Loans are real hard to get right now.

Thanks much! I may just bug you.

I charge about the same rates for production. Need a commercial?

Sounds like maybe word-of-mouth is working for you. That is the best kind of advertising. Effective as hell, and dirt cheap!

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Not really any capital to speak of. I should have all the equipment I need. I have a vehicle that will haul my gear, and I can work out of my basement if I need to.

So there will not really be much I need to invest in right away. I do need a newer computer, but a couple recent freelance gigs are going to pay for that.

I am fortunate that I can produce, write, direct, shoot, edit, voice and do graphic design for my own productions. So I can charge about $1,000 per finished minute on a project, and not have any hard costs.

It's how I purchased my Vette last year. Three months of a couple hours here and a couple hours there.... Fifteen grand in my pocket on one project, for something I enjoy doing enough that I'd do it for free.

My goal is not to borrow anything. If necessary, I can carefully choose purchases that can be funded by the severance checks as they come in. But honestly, my goal is not to touch that money. I'd like to have 6 mos. of take home pay in the bank for those lean months.

I'm sure there will be unexpected expenses though. I think I can cover them, depending on how unexpected and expensive they are.

You should buy some air time to promote your business.
What do you need an office space for? Meeting clients? Storing equiptment? Or a place to run to get out of the house. The less overhead the better.

I would LIKE office space for all of the above reasons. I do not NEED office space for any of the above reasons.

But 90% of my client base is in Colorado Springs, and I live in Pueblo. About an hour away. Moving my family is not in the cards right now. Maybe in a couple years.

So it would be good to have a place to land. I feel like having actual office space lends credibility to my business, but I'm still in the consideration phase. So if someone can talk me out of it, that would be fine. I'm not married to any of my own ideas yet.

And that is post 2001! w00t!

Fly under the radar and keep costs low as long as possible.

When its time to sign a lease on a office youll know.

If youre bringing a partner in, everything everything in writing every time no matter what.

Best of luck.

Been burned, eh?

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Quote for truth. The less people involved, the better you are.

Well (boobies) working alone (boobies) has worked well for me (boobies) so far (boobies).

Dang (boobies) that (boobies) ava(boobies)tar is (boobies) distracting(.)(.)

I've been in business for myself for 2 years. Upside is you reap the rewards. Downside is unpaid vacation and medical expenses. You need a very understanding wife with a full time job. You need to keep overhead to an absolute minimum for the first year or two. Plan on giving the govt 50% of your income. That means setting money aside that you'd rather spend on house payments or food.

Keep your prices reasonable but just under the competitions price.

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I've tried that model in the corvette world. Doesn't always work.

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I've got some more. I think you would have liked the hamburger.

Well, no, starting ANY kind of business ain't so hard at all.

Get a van, and 500 Joevetteowner's courier&delivery cards, go to the local Fedex hub DHL UPS, ask the ops manager what has to go out. He will have something. ANY time of day, everyday, oftentimes Sunday too. Get his package where it has to go, at whatever price he will pay.

On the way back for more, stop at the local junkyard, and see what fenders/bumper/motor need to go to the body shop in town, or in the next town. His phone will ring, or network call radio, with parts request while you are there, guaranteed. When you leave, call the body shop, ask the office manager what supplies they need, cause you're goin by [Office Depot] on the way (who might ALSO need 4 cases of printer paper to go out locally).

While in the next town, copy the telephone # of Johnvetteowner's courier&delivery off his van, and start networking.

Everywhere you go, people need stuff. Car parts, office supplies, documents, tools. You can gross $100k, starting tomorrow. I know, I did it. Stopped, counseled kids for a couple of years, quit, and started driving again, and was well on the way to doing it again, when the drunk got me.

You might dump $40 - 55k on fuel alone, and drive for 37 hours in a row, and it's there if you want it.

EASY AS PIE!

I would say anytime you're bartering to cover shares of rent it could turn into something bad.

I would want a clearly written agreement that protects you from being his breadwinner. You have to make an agreement that will hold up when you're on bad terms with him, because that's the only time that it's going to come into question.

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Exactly, partnership agreements are not written to bring people together. Actually written right, what you are writing is a separation agreement. Think of it as a pre nup when you get married.

I have a boiler plate one, if you want to see it let me know.

Don't get into any partnership if it does not directly relate to your business. This loosy stuff rarely works.

Thanks for your thoughts guys. I will be a little more careful moving forward than I was planning to be.

I really do not want the expense or the drama. But there will be days when I have an early meeting, then nothing for most of the day, then a late meeting. It would be nice if I had a place where I could get some work done in between those meetings.

But there may be other solutions that I haven't considered yet.


Anyway, thanks again for all your comments and advice. Hopefully I'm smart enough to use it to make the right decision.

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No, it doesn't always work. If you can sell your value and expertise, you can charge more than the competition.

If you find yourself in a situation where the determining factor is price, sometimes you need to walk away.

Better to do fewer jobs and higher margin and crank out quality work, than to do a million jobs razor thin and screw them all up.

Lighter on resource, better reputation, etc...

I've managed to do both with success.

But in either scenario, I under promise and over deliver. I show up on time, and if I say I'm gonna do something, paying customers can count on it being done. Sometimes the stuff people ask me to do for free gets delayed a little. But I always let them know how things are progressing.

I've built a pretty good client base of folks who have turned down free production by other companies so that they could continue to pay for my services. It is a good feeling.

What I may need to work on, is creating a presence in the community. I suck at networking, as mentioned. And unfortunately for the time being, my customer base is not in the same town where I live. This is where the other guy can help.

And yes, we are in the same business, so that is a positive thing. And my brain works about ten times faster than his, so I can usually get things done my way. He's just an honest, friendly guy that people seem to like.

He's failed to deliver on some small things, but never really let me down. That is not to say it could never happen.

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I can imagine that Corvette people are suspicious if the price is less. My clients are penny wise and will crucify the guy trying to charge 150/hr for simple PC services. Good service and reasonable costs will make for excellent word of mouth and repeat business.

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I disagree there, Mr Coach...

If your customers like you, they will pay significantly ABOVE the going rate. Particularly in the service industry. That was my experience for almost 17 years, which included good times, and tight times.

Chuck, I saw the same thing for many years myself but honestly the last two its been all about "cheap", not quality anymore. If you dont drop the price to "me can" territory, you dont eat.
Sad.

I guess I'm a dying breed. I'd rather have a guy in the middle pricewise with a good reputation than a cheap guy who has to be cutting corners somewhere. Although in our plant business we sell high volume at low prices rather than low volume at high prices. Other nurserymen are always telling the wife.......Dammit , your prices are too low. We're also making sales in a recession. Low prices can move a product. On the services end there is no barter. She gives them a modest take it or leave it price. Many of them take it. She has a solid reputation.

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I have no idea what it is about Corvette people. You have one extreme with guys spending big bucks, then you have the cheap who won't pay for a quality product, they bitch just to bitch. And to top it off, they waste your time. It's gotten real bad in the C4 world.

Most of the biggest bitchers never buy anyway, they are just pissed they cant afford it. Good work costs money, good work isnt cheap and cheap work is never good.

Personally Jeff, I dont know how you deal with it especially dealing with ZR1s and seeing the hack fixs appear there that are trickling over from the C4 crowd. Hell you see it in the C5 section, too.
You got a good knowledge/wrenching experience base on those, its worth something.