Learning about business

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Luke
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Learning about business

Post by Luke »

I am considering organizing a business of my own. Since I left my old job, I have been dabbling in contract work with them and various other people, but I would like to get a bit more serious and put together a legitimate business for the future release of several products.

Lately it has become apparent to me just how little I know about business and how it all works. For instance, I don't fully understand the differences between sole proprietorship, LLCs, and corporations. I also don't understand our economy and the way stocks work. I would like to learn about business and economics as much as possible. I guess my question is, how should I go about this? Should I enroll in community college classes? Books? I am really leaning on enrolling in classes. What do you guys think?
matthijs
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Re: Learning about business

Post by matthijs »

Do you have some sort of chamber of commerce were you live? Here in the Netherlands they are a (semi) public institute and have a lot of good info on what you need to get started.

The classes might be an idea, but you might pick up the same information faster/as well in other ways.

A lot depends on what you want to do. Starting small as a one-man company might not be too complicated. But if you go bigger things get more complicated.
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Christopher
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Re: Learning about business

Post by Christopher »

matthijs wrote:Do you have some sort of chamber of commerce were you live? Here in the Netherlands they are a (semi) public institute and have a lot of good info on what you need to get started.
Here in the United States they are an aggressive wing of the Republican party.
matthijs wrote:The classes might be an idea, but you might pick up the same information faster/as well in other ways.

A lot depends on what you want to do. Starting small as a one-man company might not be too complicated. But if you go bigger things get more complicated.
I think some basic courses in accounting, finance and legal would be helpful to give you the basics of business. It is very important, if you plan to start your own business, to have a solid foundation in the law and the money side of things. For the business strategy you can probably find millions of books on that...
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Peter Anselmo
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Re: Learning about business

Post by Peter Anselmo »

Well, you touched on quite a few topics there that are related but not critical. Having been successfully self-employed in the past, I've done all of the things below. I would start small and expand outwards.

I would first focus on marketing. This is what will immediately legitimize your business and give you some momentum. Create a logo, deciding on your branding, order some business cards, and create a business website (not a personal blog). Then go and meet people to spread the word.

After that, you can focus on the financial stuff. Thing like accounting, cashflow and creating a profit/loss statement are best handled by specialized software. Quickbooks is the industry standard for small start-ups, which I've used and liked.

Understanding how are economy works, and how investments like stocks and bonds play in, is a different can of worms. I'd say a few economics classes are probably your best bet there. Like arborint mentioned, there's also a million books on the subject.
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Luke
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Re: Learning about business

Post by Luke »

OK, thanks guys. Just to give you an idea of what kind of business I intend to start, 37signals is the closest to the business model, although I would obviously be much smaller. I intend to release several web apps as a service. I'll charge monthly and my clients will get access to a subdomain they can then log into to use my apps. There are already several partners, although we have yet to organize, so that will need to play in as well.
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Re: Learning about business

Post by matthijs »

The people from companies like 37signals probably can be found at every web conference. If you're serious I'd plan a few of those to visit. You'll probably can ask and learn a lot and create a good network.
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Luke
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Re: Learning about business

Post by Luke »

Yes, that is definitely something I plan on doing. When my first product is ready, I'm going to create shirts and then have my gorgeous girlfriend and her twin sister all decked out in my gear handing out shirts. They will be wearing skimpy clothes so as to attract as much attention as possible. This was their idea mind you. I love my girlfriend! :)
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Re: Learning about business

Post by josh »

Knowing the fundamentals of double entry accounting vs accural based is good. In the long run you're going to want a full-time accountant though. LLC vs C crop vs S corp you should be able to learn about online. For instance Florida has sunbiz.org

LLC is the best bet, it allows you to do write-offs and work for yourself. Profits and losses "pass thru" to your personal return. If you're making 6 figures+ you should get an S or C corp, talk to an accountant. When I started I didn't even know how to create invoices, etc... A copy of quickbooks will help you out, quickbooks isn't the best software but its most widely used.

You'll have to renew your business license ( your LLC or corp ) every year, if you forget you'll get fines. Since you don't get tax automatically deducted from your paycheck you may need to pay estimated taxes, only if you make a certain amount though. Also you are responsible for 15% not just 7.5%. With a W-2 ( regular paycheck ) you pay 7.5% and your employer matches it, people who contract your business will pay sales tax if you are delivering tangible goods only. Websites are not considered tangible but when in doubt consult an accountant. You might need to purchase some contract templates for your clients to sign, just to cover your ass business wise. It all seems daunting at first but I've been on my own 2 years now, not looking back at all. If I can make it thru it you can too :lol: Most important of all save all receipts and organize your expenses. Make photo copies of all checks before depositing them. Organize everything, you won't regret it.
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JNettles
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Re: Learning about business

Post by JNettles »

Make sure to consider how risky this venture is going to be - if you're going to be borrowing a lot of money from institutions, you need to form as an LLC. Yes, your tax rate will probably be a little bit higher but the LLC will shield your personal assets in the event that your business sinks and you suddenly owe the bank unholy amounts of money. As josh said, organize organize. And keep track of everything!
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