New business advice?

[Burnadell]

Most companies need 1.5 to 2.5 times receivables to operate. Reason being most people pay you 60 to 80 days. Good luck

Can you explain this please. 1.5 to 2 times what? Actually a business would be better if it had NO receiveables and got paid in cash, although that is not realistic for the oil business.

I agree with others who recommend buy/sell agreements with the partners. Generally, it is difficult to own/start a business with 3 equal partners who may later develop different ideas on how to operate or have different needs, or instead of a partner that is compatible, you wind up with their widow as a partner.

[bowfishin fool]

This is great advice guys, keep it coming!


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[planomustang]

If you can, attend a training course offered by the Service Corp of Retired Executives (SCORE). It is free, and they give you real lessons on starting a business. First off, they teach you how to create a business plan, which tells you how likely you are to succeed.

SCORE will ask you lots of questions, and they will challenge your assumptions.

They have been there/done that, many times, then succeeded.

[Slicefixer]

In an ideal world? Ok....here ya go.

Can't give you just one as they're all very important.

Raise 2x the $$$ you think you'll need for construction and infrastructure.....you'll go over budget, and I don't care how much due diligence you do in prep.... and perform a LOT of it.

Do it as "right" as you can the FIRST time. Redoing is expensive.....

"Don't let a dollar chase a dime".....in other words, the cheapest bid will often times get you in trouble and cost way more money when the smoke dissipates.

If a contractor, at least on major/expensive items, can't afford the insurance and bond the job then, well, you're begging to need a lawyer. (And have one on your favorite cell numbers on day dot)

You've got to be optimistic/idealistic to be an entrepreneur, but, don't lose your realism and common sense.

Avoid having too many partners if you CAN avoid it. ONE bad one WILL ruin the party for all the good ones. ALWAYS be straight up with ALL of them....never sugar coat. NOBODY likes surprises and they'll be some along the way no matter how hard you try to avoid em'.

Have 2 years worth of operating capitol in the bank the day you open. You've got to operate it like its successful on day dot.. Sweating payroll, taxes, insurance, etc ain't any fun.

Be careful about being too trusting..... SOME contractors, suppliers, etc WILL take advantage of you. However, when you find good ones be VERY good to em' as they'll save/make you a lot of money over time.

Don't fall in love with your employees until they prove their worth to the business. Even then be careful. However, when you find a good one be VERY good to them. THEY'LL save/make you a LOT of money over time. Once they take pride in their work and your business, well, you've hit a home run.

I could go on and on....but that's enough for now.

[No-Tox]

My wife and I have actually started three:

A small oil company (personal)
A cattle company (personal)

And the one I’m reallly wanting the advice on is the Oil Tool/ Service company. I have three partners and we are doing this with our own money... it’s a little different when it’s your own money and I want to make sure we get it right! We already have so much promise and have had a great start picking up business. Want to make sure we are covering all our bases!


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1. Don't have partners. Especially friends that are partners. Typically ends poorly. Someone always feels they are getting the short end of the stick.
2. Start with plenty of capitol or a way to get your hands on capitol when needed.
3. Expect to work long, hard hours. You are investing in yourself with every hour you put into it.
4. With the long hours, don't lose focus on your family relationship.
5. Don't expect to take a salary for the first year. Reinvest profits back into the company. The more stable your company is in year 2 and 3 the better percentage you will make it past 5 years (when most small businesses fold).

[curtintex]

Don’t get so busy making a living that you forget to make a life.


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[Bassdeer]

All good stuff, I will add on the God stuff

Tithe on the business income, and you business will grow. The trick is you have to tithe on a giving heart. If you tithe on thinking I give 10% and more every week why isn't God blessing my business it will never happen. Just remember you can't out give God. Good Luck

[Atfulldraw]

ask yourself if you are willing to work weekends, forever.
If the answer is yes, find a different job.

don't try to do everything yourself.

I currently find myself at the end of my career, with my best income years still ahead of me, busier than ever, working on a Saturday when I should be off hunting.

And it's a shame that I still can't "turn it off" and take more time off to do what I want to do.

[JHart8]

Don't ever partner,and make sure you marry the right woman.That was told to me by one of the largest HVAC contractors in this state.He was right about both.I've always been a hard head.

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[Burnadell]

If you can, attend a training course offered by the Service Corp of Retired Executives (SCORE). It is free, and they give you real lessons on starting a business. First off, they teach you how to create a business plan, which tells you how likely you are to succeed.

SCORE will ask you lots of questions, and they will challenge your assumptions.

They have been there/done that, many times, then succeeded.

Great advice. SCORE can keep you from making mistakes, and if you already have, they can advise you how to regroup.

[TradAg02]

Do you want to build a business or just be self employed? If you want to build a business, start with the mindset that you want to work yourself out of a job from day one.


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