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11Bulletstopper

Entrepreneurial advice?

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So it's pretty much official, I'm getting out of the army on a med board. The wife and I want to open a business. Some of you guys have heard me talk about it, and I'm signed up for lots of classes and stuff ("Boots to Business", that type of thing) that the army offers for transitioning soldiers interested in starting small businesses.

 

I know that many of you guys have some knowledge in small businesses, ownership, operation, even if you didn't open one yourself you may very well have worked for a small business that was a dozen or so employees. My family has a history of small business ownership, and I'm trying to take what advice I can there, but my idea (as some of you have heard) is somewhat 'unbroken ground' in the business world, so to say. It's taking what I believe to be a potentially burgeoning idea, coupling it with a proven and successful idea, and hoping the union isn't too niche to lose out on revenue while hoping it's not too mainstream to lose out on revenue.

 

For those who don't know, my wife and I want to (for lack of better wording) take the idea of the internet cafe and make it marketable while still mainstream. The world of gaming is growing, with nearly 60% of Americans being self-admitted gamers. We want to make the kind of place that has a coffee shop setting and comfort, with drinks, finger foods, maybe even beer and wine, and cater it to gamers. I enjoy building custom gaming rigs, and I build them as a hobby for friends and family. I'm not too terrible with trouble shooting, I do a lot of it for friends, but I know there are many out there who are far more literate than I when it comes to code... in fact, I'm basically clueless. I'm a hardware guy, not software. That aside, my wife and I both very much enjoy cafe type settings, places we can go, relax, hang out, spend time with friends, and yet very often we drag a computer along and play games with said friends. I am also very much into RPGs, board games, card games, really any type of gaming except the Vegas style. My wife is close to finishing a degree in Information Security, and she has come to enjoy computers and gaming almost as much as I do.

 

We want to open a store that combines both of those. We want it to be a cafe or coffee shop that's a safe haven for your inner geek, a place you and friends can sit down to play a few rounds of Magic: The Gathering or Yu-Gi-Oh; Munchkin or Smallworld or Settlers of Catan; or sit down at a custom-built, top end gaming machine and play a few hours of Call of Duty, Arma 3, Planetside 2, or even World of Warcraft. Oh, and while you're there you can get a mocha-latte-frap-double-espresso-caffeine-concoction, or just a regular coke, or even a beer or a glass of wine and maybe a slice of cheesecake or a raspberry tart.

 

Oh, and if you LIKE the computer you played a few hours on, got a hundred plus FPS on max graphics settings on the big widescreen monitor... that's right, you can buy it. And I can guarantee that it'll be at prices that will put companies like Alienware out of business. God, I hate Alienware.

 

But what if you already have your own gaming computer, or your top-end laptop or whatever? Well bring your rig in and for a reduced price you can use our commercial-grade high speed internet, gaming mice and big screens at a separate terminal.

 

Most of you probably missed it but a while back a buddy of mine set up a kickstarter to fund his goal of a gaming pub, and raised a huge amount of money from gamers all over the nation to help him get going. Gaming has gone mainstream. I want to bring the dedicated gamers out of hiding and let people get their geek on in a social setting. I want to expose more of the public to the idea of video games, board games, RPGs, and I wouldn't mind making a living of it. Everyone has always told me if you do what you love, you'll never work a day in your life. I love hanging out with friends, and I love games, so that's what I'm going to try to do.

 

So what advice do you guys have for starting small businesses? I've heard the term business model, and I know you need financing for set up costs, etc, etc, etc... but I don't have any real knowledge. With it being such a strange business idea, most of my family doesn't really have a whole lot to offer, and I'd like to get as much advice from as many people as possible so I can increase my realistic chances from the start with the best foot forward.

 

I plan on using part of my GI bill to go back to school when I get out, and I'd like to pursue at least an associates in business admin, something to help me grasp what are all of the things involved in starting a business. But I still think that advice from people who've done it before is an invaluable tool.

 

So throw me some bones here, folks. What advice do you have?

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I have been a part of a few start up businesses, and in 2007 I started a business with my girlfriend at the time. The business did very well and is still successful today, but our relationship did not. But that's ok, it's for the best. My point is that I believe I did a lot of things right and definitely would recommend a few things.

 

Two of the most important pieces of advice for ANY new business:

 

1) Write a business plan

 

Yes it's a pain in the ass, but the all the shit that you have to think about when writing a business plan is the very same exact shit you're going to have to think about eventually while creating the business. That is very important to understand. YOU ARE GOING TO HAVE TO DO IT ANYWAY. I can't emphasize this enough. Get started on it now and write it down in your business plan. The sooner you start addressing the details of WHAT your business is going to do and HOW it's going to do it, then the sooner you'll start hammering out the details and uncovering problems and hurdles to overcome.

 

One the the very cool concepts with problem solving is what I like to call marination time. When you encounter a problem, you might not always figure it out immediately, and that's ok. Give it some time, sleep on it, let it gestate in your mind. You'll come up with the solution eventually, and then you'll come up with another later on that is even better.

 

And this is exactly why you need to write the business plan right now! You start encountering the problems right now and it gives your mind time to think about them.

 

And don't skip the Pro Forma - it's the part of the business plan where you estimate your revenue vs expenses, and then you project growth over time. Yes it's pain in the ass on top of the business plan pain in the ass. But it is very important in visualizing the life blood of your business - cash in and cash out.

 

 

2) Begin day 1 with accounting software

 

I personally love Quickbooks. I think it is the best accounting software for any small to medium size business. Also, as a software developer, I think Quickbooks has one of the very best user interfaces of any program. I have over 30 years of experience using software and computers, and Quickbooks is one of the best I've ever seen. And it's cheap! I think Quickbooks Pro is about $200 – one of the best investments for a new business.

 

But that's actually secondary to the main point: You need to be able to track all the numbers from day 1. You can't possibly know if you're business is successful if you don't know what money is coming in or going out. And it's not just as simple as watching your bank account and reconciling your checkbook. You have fixed incomes and fixed expenses, you have variable incomes and variable expenses. You have liabilities, where you owe money in 30/60/90 days or are making payments. You have receivables, people owing you money that you need reminders for. And then you have inventory. How much revenue are those computers generating for you? If you add 5 more, will it increase revenue or only increase expenses? How many computers are not actually being used? What are the usage patterns of your computers?

 

As the owner, you are going to WANT this information and Quickbooks will help you track and organize it to help you determine if you're actually making any profit.

 

BTW profit != revenue and revenue != profit, please don't confuse these terms. A lot of small businesses fold because of this.

 

 

I've got more advice for you soon, I'll post it later. And I think you're idea is fantastic. In fact I had pondered almost the exact same idea myself, but other opportunities have come up in the past 4 months.

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Okay, let me get you to elaborate. I don't know a thing about business plans. What exactly is it? I mean yeah, I've googled and gotten the definition, but what IS it? Where can I find some examples? Where can I see something that I can say 'Okay, I get it now, I need to plan for this, and this, and have these set up for eventualities, and oh I hadn't even thought about that and that!' Obviously I haven't been looking in the right places, because I haven't found anything that makes any sense to me, and most of the results I come up with want money I'm not willing to part with just yet.

 

I mean, if it's just a manifesto of what I want to do then GREAT, I've got that down in the paragraphs I wrote in the OP! Something tells me that's not quite it, though...

 

Things like the expenses I've already started wrapping my head around, but at this stage I can't come up with numbers. I have to do a lot more research before I can start looking at serious numbers, if I tried to now it would just be guesses. That's definitely on the agenda.

 

And I hear you on the accounting thing. My mom was the accountant for my parents' small business after they had an accountant who embezzled a ton of money and it hurt them real bad, and even she started to have issues when her health began to decline that my dad still fights with the IRS over. I know that the books can make or break. I plan to stay very much on top of that issue just to keep it from being a problem.

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I'm familiar with the reluctance to spend money, but when you start forking out $1000 a pop for each computer setup, and doing that 5 or 10 times, then buying backup parts and supplies, $100 in a good investment won't even make you flinch.

 

My first recommendation is buy Business Plan Pro:

http://www.businessplanpro.com/template_offer_lt/?pdv=c

 

I bought this back in 2006 when I was writing my first business plan. It guides you step by step through the plan creation process. It has hundreds of examples that will help inspire your own business vision. It teaches you about each section of the business plan and why it's important. And it's just a damn good piece of software, really well made. It's so much more then an organizational tool, it teaches you.

 

And keep in mind, a business plan is a lot like a resume. You'll think of things to add from time to time. And every time you go back and read it you'll change the wording slightly or add something new.

 

My second recommendation is to look for any local organization that helps with small businesses. Where I live we had the SBDC (Small Business Development Center). It was funded 100% by the local University and their services were free to any new or small business. They had business counselors that helped me a lot in pointing me in the right direction. They had classes that taught things like how to setup a corporation and why it's important. And they had a loan specialist that helped us connect with a bank to secure a loan underwritten by the SBA (Small Business Administration). In fact you might want to look up the SBA website and see if they recommend any business assistance organizations in your local area. The whole point of the SBA is to help small businesses.

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