Read any business book or listen to any business guru, and you'll hear the message of "Flexibility".
It is very true.
I've done that in everything from modifying my business plan to add new services before the other, original "planned" services were implemented to negotiating teacher rent percentages in order to get prime teachers.
The latest event happened yesterday. In the new studio build-out, there was some cabinetry that we wanted removed. As luck would have it, the original owners placed the cabinetry first and then cut carpet in around it. So there we are, needing to redo the carpet in the room.
This was an additional $1000 expense that I didn't plan on. However, in budgeting the move, I knew from experience that the final cash outlay seems to be 15%-20% over whatever you plan on, no matter how well you budget.
So, while I would much rather keep that $1000 in the coffers, it is work that needs to be done and that I can afford to do.
By keeping the budget flexible, meaning - not stretching so far that anything like this would have been a show stopper, I am able to keep the business running smoothly and not lose too much sleep at night!
Thursday, July 31, 2008
Tuesday, July 29, 2008
Second opinion on starting your small business
So, the other day, I wrote about my first opinion on starting your own business, namely, being passionate about what you want to do.
Today, I'll let you know what I believe to be a crucial element to success when starting a small business...
You need to have your financial affairs in order and have sufficient capital to start and sustain your business until the revenue kicks in.
As you know, I took a buyout offer from at&t that provided a nice lump sum payment to leave the company in 2005. However, at that time, we were in a situation where both our vehicles were paid off, as was our house. Yep, no car payments and no house payments.
This is one of the reasons my wife agreed to letting me live my start-up dreams. Had we a house note and/or a car payment or two, I myself would have likely passed on the buyout offer.
After all, it would not seem likely that we could pay a mortgage note and a lease note on a retail space, as well as a car note or two, along with double utilities, double insurance, sign costs, advertising and all the other various expenditures. I'm sure some have scrapped by on that dual road, but I don't think I would have risked my wife and kids financial well being to do so.
Now, I'll agree that I did have what some would call a "silver spoon" by not having a car note or house note when I started my business. Without either, the buyout money was more than enough to give me $40k of start-up capital and have a nice fat savings account to live on while the business grew.
However, I still had to manage my start-up budget with lease requirements (first/last months rent and security deposit), signage, utilities and deposits, insurance, advertising, furnishings, office equipment, music gear, etc., etc., etc.
There were several opportunities where I could have spent too much on getting better PC's for the studio ($500 more each), more expensive paint/carpet, furniture from Dillard's rather than Ashley's, a crazy big LED sign rather than a plain lettered sign and so forth. By being responsible in my initial build out, I had the funds to keep me debt free for 12 months, before I would have to hit the savings account.
(BTW - I became profitable 3 months after opening, beating my business plan by 4 months)
Now, if you are looking at a home-based small business, you have instant savings in that you will not have a second lease payment, less fuel costs by not having to drive to-from work, maybe some utility savings, insurance, as well as some tax write offs for your home office. This is more manageable than having a brick and mortar business.
If your business requires a retail/warehouse location, my advice is to have minimal to zero debt (credit cards especially). I know, easier said than done, right?
Well, If you have car notes and a house payment, try to knock the car notes out and drive an older car for several years (they last if you take care of them). Use the savings from the car notes to build your start up capital. Start planning your budget and how long it will take you to get to that dollar amount.
Then - work at saving the money - or if possible, take a buyout like I did for a little head start!
I'll talk soon about that first budget. Whatever you come up with, even with some extra thrown in just in case you overlooked anything, go ahead and add another 20% on top of that. Then, you may be getting close to what you will really spend! LOL
Today, I'll let you know what I believe to be a crucial element to success when starting a small business...
You need to have your financial affairs in order and have sufficient capital to start and sustain your business until the revenue kicks in.
As you know, I took a buyout offer from at&t that provided a nice lump sum payment to leave the company in 2005. However, at that time, we were in a situation where both our vehicles were paid off, as was our house. Yep, no car payments and no house payments.
This is one of the reasons my wife agreed to letting me live my start-up dreams. Had we a house note and/or a car payment or two, I myself would have likely passed on the buyout offer.
After all, it would not seem likely that we could pay a mortgage note and a lease note on a retail space, as well as a car note or two, along with double utilities, double insurance, sign costs, advertising and all the other various expenditures. I'm sure some have scrapped by on that dual road, but I don't think I would have risked my wife and kids financial well being to do so.
Now, I'll agree that I did have what some would call a "silver spoon" by not having a car note or house note when I started my business. Without either, the buyout money was more than enough to give me $40k of start-up capital and have a nice fat savings account to live on while the business grew.
However, I still had to manage my start-up budget with lease requirements (first/last months rent and security deposit), signage, utilities and deposits, insurance, advertising, furnishings, office equipment, music gear, etc., etc., etc.
There were several opportunities where I could have spent too much on getting better PC's for the studio ($500 more each), more expensive paint/carpet, furniture from Dillard's rather than Ashley's, a crazy big LED sign rather than a plain lettered sign and so forth. By being responsible in my initial build out, I had the funds to keep me debt free for 12 months, before I would have to hit the savings account.
(BTW - I became profitable 3 months after opening, beating my business plan by 4 months)
Now, if you are looking at a home-based small business, you have instant savings in that you will not have a second lease payment, less fuel costs by not having to drive to-from work, maybe some utility savings, insurance, as well as some tax write offs for your home office. This is more manageable than having a brick and mortar business.
If your business requires a retail/warehouse location, my advice is to have minimal to zero debt (credit cards especially). I know, easier said than done, right?
Well, If you have car notes and a house payment, try to knock the car notes out and drive an older car for several years (they last if you take care of them). Use the savings from the car notes to build your start up capital. Start planning your budget and how long it will take you to get to that dollar amount.
Then - work at saving the money - or if possible, take a buyout like I did for a little head start!
I'll talk soon about that first budget. Whatever you come up with, even with some extra thrown in just in case you overlooked anything, go ahead and add another 20% on top of that. Then, you may be getting close to what you will really spend! LOL
Want to run your own business? Get ready for some loooong hours my friend!
Yawn...
Here it is, 2:26 a.m. my time.
I'm blogging.
And I'm a "getting older" guy too, not a young, 20 something that night owl's all the time.
So, it's 2:27 now and yes, I'm still blogging.
I just finished a blog article on my other site talking about how Best Buy is entering the retail music business and will also start offering music lessons in their stores.
You can read that article here...
Anyway, the point of this post is the time you spend in and working on your business.
If you read my first post, you'll remember that I said something to the effect of not having had to work a day since I left at&t .... even when I was scrubbing the studio toilets.
This is a true statement. What I do, day in and day out, does not feel like work.
But I work more hours now than I ever did at at&t.
Most days at at&t were getting to work around 7:45 a.m., breaks and lunch hours and then off somewhere in the neighborhood of 5:00-5:30 p.m. (on good days). All in all, around 8 hours of work. Which, truth be told, condensed to around 4 hours or real work and 4 hours of wasted time, i.e. unnecessary conference calls, trying to clean out 50 email that came in during said conference call, daydreaming of the day when I could do something else :)
With my own business, I'm typically at the studio after I drop the kids off at school (one of the perks I didn't have at at&t, being able to take my kids to school). So, let's say 8:10 a.m. I do studio business from my arrival until I start teaching. Some days, I start teaching at 9:30 a.m., other days it is 2:00 - 3:00 p.m.
After teaching, depending on whether it is one of my late nights, I'll either hang around the studio to clean/organize for the next day, check email, make calls (if not too late), talk with the other instructors about new programs and then head home.
Once home, and after I've spent some family time, it's either practicing guitar for student lessons, or like tonight, getting online to update my studio blog, blog.littlerockjams.com.
Today, for example, is a 18 hour day spent on the business. And I would say the norm, now heading into year three, is 12-16 hours.
Again, it doesn't feel like work because I love what I do and I work with some really great people who totally kick my ass on guitar. LOL
But, if your idea of going into business for yourself is so that you can kick back and not have to work as much ... well, you're setting yourself up for a rude awakening my friend.
As I mentioned, I am just now starting my third year in business. I can say that the time demands have diminished some. But overall, I am still putting in nearly double the hours I did at at&t. Who knows, maybe next year I can cut back to just a few hours a day. My crystal ball really doesn't tell me if that will be the case. ;)
So let me say this again ... If you plan to go into business for yourself, do so because you have a passion for what you are going to do, not just because you want to be the boss and get rich. Yes, being the boss and hopefully getting rich are nice things. But, if they're not to be for 5-10 years after starting your business, and after many thousands of hours of your time invested, can you honestly say that idea appeals to you?
Until next time...
Here it is, 2:26 a.m. my time.
I'm blogging.
And I'm a "getting older" guy too, not a young, 20 something that night owl's all the time.
So, it's 2:27 now and yes, I'm still blogging.
I just finished a blog article on my other site talking about how Best Buy is entering the retail music business and will also start offering music lessons in their stores.
You can read that article here...
Anyway, the point of this post is the time you spend in and working on your business.
If you read my first post, you'll remember that I said something to the effect of not having had to work a day since I left at&t .... even when I was scrubbing the studio toilets.
This is a true statement. What I do, day in and day out, does not feel like work.
But I work more hours now than I ever did at at&t.
Most days at at&t were getting to work around 7:45 a.m., breaks and lunch hours and then off somewhere in the neighborhood of 5:00-5:30 p.m. (on good days). All in all, around 8 hours of work. Which, truth be told, condensed to around 4 hours or real work and 4 hours of wasted time, i.e. unnecessary conference calls, trying to clean out 50 email that came in during said conference call, daydreaming of the day when I could do something else :)
With my own business, I'm typically at the studio after I drop the kids off at school (one of the perks I didn't have at at&t, being able to take my kids to school). So, let's say 8:10 a.m. I do studio business from my arrival until I start teaching. Some days, I start teaching at 9:30 a.m., other days it is 2:00 - 3:00 p.m.
After teaching, depending on whether it is one of my late nights, I'll either hang around the studio to clean/organize for the next day, check email, make calls (if not too late), talk with the other instructors about new programs and then head home.
Once home, and after I've spent some family time, it's either practicing guitar for student lessons, or like tonight, getting online to update my studio blog, blog.littlerockjams.com.
Today, for example, is a 18 hour day spent on the business. And I would say the norm, now heading into year three, is 12-16 hours.
Again, it doesn't feel like work because I love what I do and I work with some really great people who totally kick my ass on guitar. LOL
But, if your idea of going into business for yourself is so that you can kick back and not have to work as much ... well, you're setting yourself up for a rude awakening my friend.
As I mentioned, I am just now starting my third year in business. I can say that the time demands have diminished some. But overall, I am still putting in nearly double the hours I did at at&t. Who knows, maybe next year I can cut back to just a few hours a day. My crystal ball really doesn't tell me if that will be the case. ;)
So let me say this again ... If you plan to go into business for yourself, do so because you have a passion for what you are going to do, not just because you want to be the boss and get rich. Yes, being the boss and hopefully getting rich are nice things. But, if they're not to be for 5-10 years after starting your business, and after many thousands of hours of your time invested, can you honestly say that idea appeals to you?
Until next time...
Monday, July 28, 2008
Developing a business idea...
I'll be honest, my business idea kind of just popped into my head as I was driving home from Nashville one day. The drive from Nashville to Little Rock is about 6 hours, so I had plenty of time to work a mental "rough draft" of my business plan in my head.
It was 2005, and I had just finished a week at the National Guitar Workshop (NGW) in Nashville. NGW is a week long guitar/bass/drum camp where you literally wake up thinking about music, talk and play music all day and then go to bed thinking about music. It was music 24 hours a day. Every time I attend one of these camps, my playing goes through the roof because I have the guitar in my hands for like 12 hours a day.
As I was driving home after camp, I thought how great it would be if Little Rock had a place where you could take lessons, group classes, jam with other people and just hang out and talk about music ... much like I did at NGW.
Voila' - there was the start of my business idea!
I knew that I had the skills to teach guitar, but there were already several established studios in the area. If the business idea was to have any legs to stand on, I would have to create a niche offering that no other studio provided.
Given that the other studios were doing lessons and some workshops every now and then, the niche would be the jam sessions. A jam session is where players get together and play a common song that they all know or just play over a static chord progression and take turns soloing.
And, in my opinion, if you want to get better at making music, you have to play with other people. Staying at home practicing your scales and chords over and over will not do as much for you as an hour or two a week jamming with other people.
So, there was the business idea ...
A music studio that would offer lessons, regular workshops and a weekly jam session for students. In addition, I wanted to create an environment where the students felt welcomed even when they didn't have lessons or a jam session. If they wanted to come up and hang out to talk about music and play a bit, great!
I'll stop here for now. Next time, I tell you how I fleshed everything out on the way home and presented it to my wife (for the first of many times before she gave in)...
It was 2005, and I had just finished a week at the National Guitar Workshop (NGW) in Nashville. NGW is a week long guitar/bass/drum camp where you literally wake up thinking about music, talk and play music all day and then go to bed thinking about music. It was music 24 hours a day. Every time I attend one of these camps, my playing goes through the roof because I have the guitar in my hands for like 12 hours a day.
As I was driving home after camp, I thought how great it would be if Little Rock had a place where you could take lessons, group classes, jam with other people and just hang out and talk about music ... much like I did at NGW.
Voila' - there was the start of my business idea!
I knew that I had the skills to teach guitar, but there were already several established studios in the area. If the business idea was to have any legs to stand on, I would have to create a niche offering that no other studio provided.
Given that the other studios were doing lessons and some workshops every now and then, the niche would be the jam sessions. A jam session is where players get together and play a common song that they all know or just play over a static chord progression and take turns soloing.
And, in my opinion, if you want to get better at making music, you have to play with other people. Staying at home practicing your scales and chords over and over will not do as much for you as an hour or two a week jamming with other people.
So, there was the business idea ...
A music studio that would offer lessons, regular workshops and a weekly jam session for students. In addition, I wanted to create an environment where the students felt welcomed even when they didn't have lessons or a jam session. If they wanted to come up and hang out to talk about music and play a bit, great!
I'll stop here for now. Next time, I tell you how I fleshed everything out on the way home and presented it to my wife (for the first of many times before she gave in)...
Saturday, July 26, 2008
First opinion on starting your business
Notice how I wrote "opinion" rather than rule? I make no claim to be a business guru or an all knowing expert. However, I do know what worked for me and that is what I will write about on this blog.
Here is opinion number 1 ...
Have a passion for the business you are starting. Be passionate about what you do.
I know both successful business owners and those that have not been successful. And while I am 100% sure that you can have a successful business doing something you do not really care about, my instincts tell me that if you absolutely love what you do, success will be yours.
In my case, by opening my music studio, I can play guitar all day. I also get to hang out with like minded individuals that have a passion for making music. Because of this, I can honestly say that I have not worked a single day since I left at&t.
Over the past two years, I have not started a day thinking "God, I hate that place", which is what I was doing at at&t. Even when I'm scrubbing the toilets at the studio - not the most glamorous part of my day - it doesn't feel like work. It feels like just another item I have to do to make the business a success.
So, if you are thinking about starting your own business, take a moment to look at your reasons. Is it because you think the business will make you a ton of cash or do you have a fire inside of you to do what you want to do? If it is for the cash, be careful, you may end up not liking what you do down the road.
If it is for the passion you feel for what you are going to do, you are starting on the right foot!
Here is opinion number 1 ...
Have a passion for the business you are starting. Be passionate about what you do.
I know both successful business owners and those that have not been successful. And while I am 100% sure that you can have a successful business doing something you do not really care about, my instincts tell me that if you absolutely love what you do, success will be yours.
In my case, by opening my music studio, I can play guitar all day. I also get to hang out with like minded individuals that have a passion for making music. Because of this, I can honestly say that I have not worked a single day since I left at&t.
Over the past two years, I have not started a day thinking "God, I hate that place", which is what I was doing at at&t. Even when I'm scrubbing the toilets at the studio - not the most glamorous part of my day - it doesn't feel like work. It feels like just another item I have to do to make the business a success.
So, if you are thinking about starting your own business, take a moment to look at your reasons. Is it because you think the business will make you a ton of cash or do you have a fire inside of you to do what you want to do? If it is for the cash, be careful, you may end up not liking what you do down the road.
If it is for the passion you feel for what you are going to do, you are starting on the right foot!
Friday, July 25, 2008
Introducing My Business Journal
Disclaimer: This will be the longest post - EVER - on this blog.
This is my story so far.
Hi everyone!
My name is Jason and I am a small business owner. I have been running my music studio, Little Rock Jams, for two years now and loving every minute of it!
Before that, I was in mid-level management at at&t (that is the "new" at&t with lower case letters, not the old AT&T from yesteryear). Actually, I started with Southwestern Bell, which later became SBC, which then became at&t.
I spent 17 years with the company and met many wonderful people and developed great business skills over that time. But I reached a point somewhere along the road where I lost my passion for the job. In looking back, I think my passion was for advancement - you know - climbing the corporate ladder. I came to realize that with each level of management I attained, there would never be that moment where I could say "I've made it". It became clear that I was in a never ending cycle.
Well, eventually I started to loathe the job. Don't get me wrong, I worked with great people, many of whom I call close friends to this day. The pay was outstanding, with big fat bonuses every year. But I felt like I was just a butt in a seat, conference calls day in and day out. Deadlines upon deadline ... Trip after Trip (don't get me started on airport delays and missed flights). Team meetings, email, email, email....
So in 2006, when SBC acquired the old AT&T, the corporation offered a buy-out package to managment employees in order to minimize future surplus numbers. In other words, let's give some buy-out cash for those who want to leave and we'll have to fire fewer people in the end.
Disclaimer - Yep, long post - I told you so!
Before I talk about the money, I have to let you know that I am a musician. I play guitar, bass, some piano and can program a drum machine (LOL - my wife would never let me buy drums to learn). Music was my passion outside of my family. It still is to this day.
I had an idea for a music studio around 2004-2005 that I just knew would work in our market area. I would "try" to talk to my wife about it, but she wouldn't hear it. It was absurd to her that I would leave what she deemed a "pud" job with great pay, bennies, vacation, etc., for the uncertainty of the small business world.
Actually, in her mind, there was a certainty about the small business world - that is - that my business would fail and we would be screwed royally.
I'll talk more about my business, the inspiration and methods in the next post.
Well, cut to 2006 and the buy-out offer. Based on the numbers the company was offering, I realized that I would have enough capital to start a business and live on for two years before I would have to go belly up ... assuming of course that the business did not work.
I came home that March day in 2006 and casually mentioned to the wife that the company offered a buy-out and now would be the time for me to open my business. After all, I had 17 years with the company and I really felt that if I made it to 20+ years, I would be compelled to stay to make my 30 years and the retirement package.
My wife didn't flinch when she looked at the offer. She just said, "Well, if you're going to do it, do it now."
In hindsight, I believe that she probably thought I wouldn't have the balls to do it. This way, she would be the "good guy" by saying I could do it, "thinking" I wouldn't go through with it.
Well, I did and here I am, successful business with 140+ students and 3 teachers, ready to move into our new 4000 square foot facility in two weeks.
So there is my abbreviated story.
With this blog, I plan on sharing my experiences in leaving the safety of the corporate world and setting off on the small business journey.
If you are a small business owner, I hope that I can offer some insights on what made my business successful. I also hope to meet many like minded people to share ideas with.
I also plan on letting you know where I've stumbled in the past (and when I do so again in the future). There are setbacks, as in life, but it is how you handle those setbacks that determines your success or failure.
Thanks for reading the Looooooooooooong post. Keep checking in and I hope you'll like what you read!
This is my story so far.
Hi everyone!
My name is Jason and I am a small business owner. I have been running my music studio, Little Rock Jams, for two years now and loving every minute of it!
Before that, I was in mid-level management at at&t (that is the "new" at&t with lower case letters, not the old AT&T from yesteryear). Actually, I started with Southwestern Bell, which later became SBC, which then became at&t.
I spent 17 years with the company and met many wonderful people and developed great business skills over that time. But I reached a point somewhere along the road where I lost my passion for the job. In looking back, I think my passion was for advancement - you know - climbing the corporate ladder. I came to realize that with each level of management I attained, there would never be that moment where I could say "I've made it". It became clear that I was in a never ending cycle.
Well, eventually I started to loathe the job. Don't get me wrong, I worked with great people, many of whom I call close friends to this day. The pay was outstanding, with big fat bonuses every year. But I felt like I was just a butt in a seat, conference calls day in and day out. Deadlines upon deadline ... Trip after Trip (don't get me started on airport delays and missed flights). Team meetings, email, email, email....
So in 2006, when SBC acquired the old AT&T, the corporation offered a buy-out package to managment employees in order to minimize future surplus numbers. In other words, let's give some buy-out cash for those who want to leave and we'll have to fire fewer people in the end.
Disclaimer - Yep, long post - I told you so!
Before I talk about the money, I have to let you know that I am a musician. I play guitar, bass, some piano and can program a drum machine (LOL - my wife would never let me buy drums to learn). Music was my passion outside of my family. It still is to this day.
I had an idea for a music studio around 2004-2005 that I just knew would work in our market area. I would "try" to talk to my wife about it, but she wouldn't hear it. It was absurd to her that I would leave what she deemed a "pud" job with great pay, bennies, vacation, etc., for the uncertainty of the small business world.
Actually, in her mind, there was a certainty about the small business world - that is - that my business would fail and we would be screwed royally.
I'll talk more about my business, the inspiration and methods in the next post.
Well, cut to 2006 and the buy-out offer. Based on the numbers the company was offering, I realized that I would have enough capital to start a business and live on for two years before I would have to go belly up ... assuming of course that the business did not work.
I came home that March day in 2006 and casually mentioned to the wife that the company offered a buy-out and now would be the time for me to open my business. After all, I had 17 years with the company and I really felt that if I made it to 20+ years, I would be compelled to stay to make my 30 years and the retirement package.
My wife didn't flinch when she looked at the offer. She just said, "Well, if you're going to do it, do it now."
In hindsight, I believe that she probably thought I wouldn't have the balls to do it. This way, she would be the "good guy" by saying I could do it, "thinking" I wouldn't go through with it.
Well, I did and here I am, successful business with 140+ students and 3 teachers, ready to move into our new 4000 square foot facility in two weeks.
So there is my abbreviated story.
With this blog, I plan on sharing my experiences in leaving the safety of the corporate world and setting off on the small business journey.
If you are a small business owner, I hope that I can offer some insights on what made my business successful. I also hope to meet many like minded people to share ideas with.
I also plan on letting you know where I've stumbled in the past (and when I do so again in the future). There are setbacks, as in life, but it is how you handle those setbacks that determines your success or failure.
Thanks for reading the Looooooooooooong post. Keep checking in and I hope you'll like what you read!
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