Are you business owner, salaried worker, both

[oracle]

Hi all,

I am a salaried employee, but have been planning on starting a part time business and keep working on it.

I will still continue to invest in properties. I still haven't hit the servicibility barrier yet, but it won't be long before it happens. Hence have been thinking for some months now how to plan in advance about dealing with servicibilty barrier. One of the options was to find another job with more salary. Unfortunately, I am already reaching at a point where I cannot get much more then what I am already earning.

This is obviously not working towards my final goal of passive income but I think it would be a worthwhile exercise to be able to run a profitable business. I feel it would certainly help later down the track in running a successful investment portfolio. Something I learnt from Robert Kiyosaki book Cashflow quadrant.

Would love to hear your comments and views.

Also, the poll is to know bit more about how most investors fund their investments. Apologies, if a similar poll has been done in the past.

Cheers,
Oracle.

 

[pennyk]

I used to be a business owner....... but it went belly up and we lost a great deal of money...... So, I certainly have a someone negative slant on the business world
I think alot of people are sucked into business, thinking it will improve their financial position and serviceability. But in reality, any business worthwhile going into costs a great deal of capital, and you need to ensure that you have enough back up prior to getting into it. I would say at least 1 years salary for you and anyone you plan to employ.
Start up businesses also are a killer for getting loans.... you need 2 years of business tax returns before the banks will take you seriously.

Not that I want to discourage you!! Its just that I see so many people go into business with their eyes closed, and I would want to avoid anyone going through the financial pain we still live with as a result.

Having said that, being in business opened up many doors for me and gave me a great career opportunity. So, I can definitely see the good things that came out of it.

Pen

 

[Aaron Sice]

full time business owner, share trader, futures trader.

have been in business 2 years and only had 2 rough patches - christmas/new year 06 and Feb/Mar 08.

i just borrow from tax money i have set aside and live frugally.

 

[Rob Williams]

I'm a full time salaried employee.
My property protfolio is my part time business. I run it as a business, manage cash flow very strictly and each property is treated as a separate entity and is fully accountable.
I earn nearly as much in rent income as I do salary from my job.
Eventually property will be my full time business and work will become a part time activity.

 

[josko]

Job 1 - SE - Director, but really husbands business,
Job 2 - Sub-contractor - Draftsman.
Job 3 - Group Fitness Instructor - Keeps me sane!
Job 4 - Property Investor
Job 5 - NEW! Author. Web page should be ready this week! ( Used to be a Graphic Artist - helps with the design!)
Job 6 - proud mum of three! (last but not least.)

Regards Jo

 

[Peter 14.7]

Full time business owner here and sucessful.

My advice is research, research and research.

1. You have to have deep pockets, so start your business whilst working. That way you have income to cover losses and have not given up on JOB if it doesn;t work.

2. It aint glamourous. Some people see it as sexy to be Bus Owner but I assure you it is not. You have staff issues, insurance, bills, tax, super, advice fee, computer accounts, etc...

A god test of prospective bus owners is when they ask me how much I spend on my accountant. It averages $5k pa and we do the books in MYOB. If they freak and say "I expected $250 a year" I politely say "you may want to reconsider". How does this answer make you feel?

3. Also, banks dont like to loan you $$.

On wages, you hand in payslip and they say how much....With bus owners they want rights to your first born child!

Example credit card. With JOB they say sign here. With bus (and we are 7 years old) we needed to submit returns for 2 years for both bus, family trust, cash in bank, etc...........took 2 months. Loans are even harder. You need a good broker or bank contact. Explaining the complexities of the bus income versus personal verus trust income is a waste of time to most loan persons/banks.

4. Personal Life. It is like baby, it changes everything. Many marriages dont make it. Even mine struggles at one point. Partners expect to have you home sometimes. Unreasonable I feel Why not work 100 Hours a week.

Sound discouraging hey? No, just a warning, I love it and would not work for someone else in a pinch but I have back up plans and skills they are not all in one area. Even so I still have some sleepless nights.

Do a TAFE or local Community Course, Unless it is really simply stuff it is worth the investment to get handle of you business and what is really is.

Peter

 

[s_t]

Full time business owner, though earning less than when salaried On the other hand, have much more time with kids and stuff, so the earning less bit is probably largely self-inflicted.

 

[HiEquity]

Salaried employee whose earning capacity is still growing strongly so just enjoying the ride at the moment... and buying more IPs as and when a pay rise gets me over the serviceability wall...

I know a few successful business owners and their family lives have definitely suffered through the start up and establishment phases. That, together with a lack of small scale niche opportunities in my industry (that I can identify anyway), is the main killer to the idea for me.

But would still like to if I could see a way past those two issues...

 

[WinstonWolfe]

I am self employed. Some facts about business:

everyone is lazy. therefore, people are prepared to pay a premium for a reasonably well run established company with established systems.

starting a company from scratch will not pay for up to 3 years.

there's very few original ideas. someone marketing the truth will go broke before someone marketing feel goods and molly coddling.

unless you have a lot of energy or a significant strategic advantage, then don't do it.

if you have to ask people on Somersoft about being self employed, you don't have the energy, creativity, or passion to go it on your own. harsh but true........

keep in mind the somers didn't pay off their debt via being self employed. They were both public servants for most of their working years.

 

[aaarghhh]

I work part time for salaried employer, 4 days a week.
Also have part time business.

 

[skater]

No options for part-time or casual employees. I work part-time, but also do a little extra from home.

 

[evand]

Both very true and the 2nd one is the main reason most businesses don't last.

Look up "unique selling proposition" (USP) on Google.

To anyone thinking of starting a business, its absolutely crucial. If you want to thrive as a hairdresser in a shopping centre with 10 others you need a significant advantage, a strategic difference that has major benefits to your customer, a USP.

Otherwise you will struggle or make so so money, which is exactly what most small business owners do. Much less than they could.

You also need to make sure there is strong demand for your product/service before you go into business.

I'm rambling now, this is my pet subject.

there's very few original ideas. someone marketing the truth will go broke before someone marketing feel goods and molly coddling.

unless you have a lot of energy or a significant strategic advantage, then don't do it.

 

[natmarie73]

I am (will be) a salaried employee but I treat my property and share investing as a business.

I have never had the urge to own a business, but eventually I would like to do some consulting work once I have experience in my new field.

 

[quoll]

No salary, just pull drawings out of business.

Bank hates me, used to love me when I worked for JOB monthly pay cheque.

Have learnt heaps but lost a small fortune over the last 3 years.

1 Business - going bust - sucks up all the cashflow
2 Business - run under management - doing OK
3 Business - me contractor - pretty good
4 Property Investing - going really well
5 Share Investing - haven't done much lately no spare cash see #1
6 Wife and 3 kids (16/14/11) help with running house
7 Business - property development and renovation

Paying a lot less tax now, if it wasn't for #1 all would be good but give it 6 months and things will work out.

Cheers
Quoll

 

[oracle]

Thanks everyone for your input.

I am an IT contractor so you can say I am kind of self employed. I don't intend to leave contracting anytime soon.

I am working on an e-commerce website and should be ready in next 4-5 months time if everything goes to plan. The idea is new for Australia but has been very successful in the US and the UK.

I like challenges because it brings the best out of me. I have a few ideas in mind but obviously I can't work on all of them simultaneously. So will be pursuing them one after the other.

Cheers,
Oracle.

 

[Aaron Sice]

Both very true and the 2nd one is the main reason most businesses don't last.

Look up "unique selling proposition" (USP) on Google.

To anyone thinking of starting a business, its absolutely crucial. If you want to thrive as a hairdresser in a shopping centre with 10 others you need a significant advantage, a strategic difference that has major benefits to your customer, a USP.

Otherwise you will struggle or make so so money, which is exactly what most small business owners do. Much less than they could.

You also need to make sure there is strong demand for your product/service before you go into business.

I'm rambling now, this is my pet subject.

sound advice!

most people become self employed because they think "i can do it better & get more money for it". trouble is, why is someone going to pick their service over the service of others?

kudos 8)

 

[evand]

That is the number one question every business owner should ask of their business and if they can't answer it with specifics (not broad answers like 'we're the best' or 'we have the best service' etc) they need to look at finding (or creating) a USP for the business.

sound advice!

trouble is, why is someone going to pick their service over the service of others?

kudos 8)

 

[BayView]

Now I'm back in the workforce, I am both salaried and a business;

My Proshop hours at the golf club are salaried, but the Lessons I do are my business and I run an ABN number for those.

Wife is full-time salary earner.

Our IP portfolio is also a business I suppose, but it's not full time.

 

[Peter 14.7]

Hi Oracle

1. All good stuff here and thanks for the Kudos i got.

2. Well done for asking the question. We all answered as Devils Advocates but we failed to acknowledge that you took the correct first step and got the advice of others.

3. One KEY thing we failed to raise is Passion!

If you are not passionate about what you are doing you don’t have the energy and drive to make it work when the going gets tough.

Sounds Marketing Waffle eh... but Passion should not be underestimated as I have found.

My bus is 7 years old and at 5 years was successful and I was over it. I used a Bus Coach and worked that I liked to money but the challenge was gone. Hence the Tree Change two years back.

The Manager I got in to replace me was 27 and had the passion I had at 27 and has grown us 100%. I am reinvigorated as a result and came see where I was at before.

My new proposed business is retail in two aspects, one I am passionate about and the other a good bus idea and money spinner. I doubt if I can make the 2 one work if I don’t “want it” enough.

4. Consider a bus mentor. Someone older who can listen and give you a warts and all outsiders viewpoint. Can be friend but an honest one

Some more thoughts, Peter 14.7

 

[BayView]

My bus is 7 years old and at 5 years was successful and I was over it. I used a Bus Coach and worked that I liked to money but the challenge was gone. Hence the Tree Change two years back.

AHA! I thought it was just me who got burned out at year 5!

That's been happening to me for 30 years.

Thanks Pete for making realise I'm pretty normal.

Or are we both ab-normal?