How much?

[Spider]

Originally Posted by vangogh

...I agree it depends on what your business is. It would obviously cost more if I needed employees and an office to start. It would naturally cost more money if I needed a physical store or a plant to manufacture something.

I was about to raise this very point, Steve, when I saw that you had already raised it. You picked me out as the only one who had spent more than a few hundred dollars to get started, but how many who spent little actually started a big company? I get the idea that most, even now, are one- or two-person busineses. I started with the intention of being in major construction -- not one-house-at-a-time, but office buildings, apartment complexes, hotels, schools, etc. One is not going to start a business like that on a few hundred dollars.

Mind you, that is not to say a $200 start-up cannot grow into a large business, but it would be impossible to move straight into being a large business with $200.

[vangogh]

I only mentioned you since the rest of us posting here hadn't spent much. Obviously some businesses do need more start up costs than others and I know your business is larger than most of ours.

You're absolutely right that you can't start or grow to a larger business without some investment. It's interesting though how little you can start some businesses. Without checking I suspect that most of us who had little start up cost have online businesses and we're probably either the entire company or there are one or two employees. That's certainly my situation. All I needed to start was some basic equipment that I already owned and my own knowledge. Over the last year though, I've been looking to grow and so have been investing more money toward that end.

This is one of the ways the internet has changed things for good and bad. It's great that some can start a business quickly and easily without a huge investment. On the other hand you end up seeing a lot of garbage businesses because it's so easy to start one.

[Spider]

I really don't think it's any easier today than it was in the past. If you wanted to be in business before computers were invented - let alone, before the internet - you just painted a sign and hung it outside your front door. Or went around, knocking on doors, offering to do such-and-such work. You didn't even think about incorporating or getting a DBA, you just started. You borrowed some cloth from a friend and sold it one piece at a time in the local street market. You bought some produce for a few pennies from a local farmer and sold it by the side of the road. In fact, that was the principle behind all the old, large businesses that we know and love (?) today - JCPenny, Sears Roebuck, General Electric, Shell Oil....etc, etc.

In fact, due to the increase in regulations, laws, zoning, public safety, etc. it is probably a lot more difficult today to start a business than it ever was. But it's not difficult and you build what you can with the resources you have.

The difference, I would say, is attitude. Today's schools - for all the complaints levied against them - produce a greater level of independence and a desire to better themselves in children than ever before. Sure, there is still a lot of work to do in that regard, I don't doubt, but I believe it is better than it was in the past.

Attitude trumps all!

[vangogh]

I think it's still easier now with the internet. Granted you didn't have to spend a lot to go door to door or sell at the local street market, but that's still more than sitting in your home and working on a laptop.

You're less constricted by time now. The local market had specific hours when it was open. You can sell your ebook or your software while you sleep.

I'm specifically talking of business online here. The situation offline may have more complications now, but online people can write a few pages of content, slap AdSense on the pages and consider themselves to be in business. That may not be the most sustainable business model, but it's still a way many people jump into business online.

It's true that people are more independent now. I couldn't tell you if it's the school system since it's been a long time since I was in a classroom. I suspect the internet has something to do with it as well.

[orion_joel]

When you consider business online, i think it is even less costly to get started. In reality, to start a business online really i do not have to register a business name. I could in reality start a business for absolutely no cost, not even the other associated costs i mentioned.

I can walk into the local library here, use the internet for free, as long as i am a member of the library, sign up for a free hosting account or blog, and recommend sites i joined as a an affiliate, admittedly it may or may not end up a good business, who knows but it could be done for free. You can take it another step with spending maybe $30 or $40 a year registering a Domain for $10 and small and cheap hosting account, again using the public library internet access.

I think the key to remember with internet based businesses is that if you spend more money there is a chance that you will have more success however you can do the same thing and have it cost $100 or $10,000 on the internet and it may not mean you succeed any more.

When you take it offline, i think that it can be much more difficult to overcome the hurdle of the cost involved in starting a larger business. Almost anything that requires an office or store, immediately takes anything from $20K per year in leasing, fit-out, stock, staffing, services (Phone, power, ect) all add more to this. I think that these sort of costs is what makes online business so attractive to many people.

[greenoak]

evan ,we started with a few hundred and on our own property with no overhead.....the good thing was we were discovered early in a super hot market and we offered something very much wanted...... we were willing to sell a very popular thing, antiques, at bargain prices and with a very low mark up for us..we had a huge turnover and reinvested ....
i dont think a bank would have given us money...our plot was to buy from dealers to sell to dealers.....plus antiques maybe look like junk to bankers...anyway we were outside the box...
we were lucky, or whatever you call it, to connect to very good buyers right away..buyers who would buy over and over again from us....buyers who made money from us over and over...
we made our living off it by the 2nd or 3rd yr....slim as it was back then.......
the bad part for us was if we did a good job picking, as we call it in the antique world, the buyers would never refer anyone else to us...they wanted all the goodies....
hope there is something relevant for you in this ...our accountant said it was an unlikely plot...... ...ann

[BillR]

Our first company was started out of a basement with a $2000 advance on a credit card. It was computer consulting and that fee carried us until we recieved our first check for our services (80 hours X $75/hr) = $6000. The guy who received the advance was eventually paid back in full.

Our second company was started with $100,000. That got us two employees, a small office, and an immediate start for sales. We were bought out of that venture by the original two employees (also partial owners) after the 2nd year for a decent sum.

Although I am still part of the first company I am planning the third company now. I will in some way, shape, or form exit the first company and then use up to $250,000 to start the third one. My immediate first costs will be:

-Office - $2K/mo
-Infrastructure (network, email, file server, CRM software) - $20K up front
-Training - $40K up front
-Staffing (3 people - cost unknown).
-Misc office equipment $5K

[orion_joel]

Bill, that is a perfect example of building one business off another, to have greater means to start from a position that requires more financial needs.

I am in a similar position fairly small upfront for my first business and it has provided some good returns. However while i am in a similar position to start a business with similar capital to what you mention for your second am at an absolute standstill on just what business to go into.

[BillR]

Originally Posted by orion_joel

Bill, that is a perfect example of building one business off another, to have greater means to start from a position that requires more financial needs.

I am in a similar position fairly small upfront for my first business and it has provided some good returns. However while i am in a similar position to start a business with similar capital to what you mention for your second am at an absolute standstill on just what business to go into.

Sent you a PS off-list. I think you'll like it.

[orion_joel]

I almost got caught on what PS was, but figured you meant PM.