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Old 10-15-2018, 06:46 PM
 
6,058 posts, read 2,492,570 times
Reputation: 3876

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Hello everyone,

I am seeking some advice on how to start a business from scratch. I will post out my situation which may get long and hopefully someone can share how they started a successful business from scratch,

I am a process/chemical engineer and was recently laid off from a major oil company (I am also almost finished with my A&P cert and I am quite a significant ways towards a second degree in electrical engineering so I have tons of transferable skills outside of just chemical engineering, I also have a PE in chemical engineering). Anyways, I was laid off before my finances were shored up and now I am in kind of a bind. My original goal was to work another 3 years or so (or as long as I could since the job was flexible and paid a ton) and pay off our house and put away enough money to develop enough passive income that I could afford to buy equipment as needed as well as have the time needed to develop the intellectual side of the business (product development)

Now I am in a situation where I have about 20k in an investment account that is making some money but I was forced to take a low wage pedestrian job (I went from making 65/hr to 11/hr) which consumes almost 40 hours of my time so any product development is stunted because the job is less flexible and the pay is so meager that there is no longer a light at the end of the tunnel (the job also has the crappiest hours which is effecting my marriage). We are just treading water as I scour job ads, SO MANY job ads for a customer service rep that, sales rep this, just a massive sea of crap jobs, with a tiny tiny fraction of good jobs (which I apply for). Its basically just barely enough to keep the wheels on the bus with my wife making up the lions share of the finances so there is no more saving there is only treading water.

Luckily we were able to pay off all our debts (student loans from my BS in chemical engineering and my truck, I had A LOT of student loans and I have no interest in going back into debt) before I got the pink slip but our savings is really meager and basic bills (gas, power, etc) just keep going up, especially real estate taxes.

I see these businesses doing similar things that I want to do and I am like how the heck did they get over such huge barriers to entry. For instance some of these small buisenss have hangars on public air fields which costs hundreds of thousands just for the lease and structure, thats before you put any equipment in it or anything.

My goal is to leverage my engineering and design abilities to basically take a napkin sketch from someone and engineer a part or system and have the full CNC machining capability to build proto types for people.

How do people leverage their time when they are being robbed of gobs of time at a pedestrian job

- Trying to study to jump into another field of engineering (finish my second PE in EE) as well as hopefully taking edx EE masters classes
- finishing up my A&P just because I am already so far along
- continuing product development
- Working with another guy to get my little entry level CNC xcarve beefed up with new rails and controllers so I can cut aluminum without issues (but its taking SO long due to both of us being robbed of time and having so little cash flow).

The product I am developing I believe is profound and I am not willing to give up the intellectual property to an "investor" (unless it was family). Its something with extremely complex engineering I have been working on for decades.

Then there is the power supply to run said proto type which is another super expensive thing so I am faced with having to build it from scratch which is still money, materials, and time (again so much time is being consumed in a pedestrian job). Plus the parts that would have to be machined to build a 30 kw generator from a run out air craft or car motor would have to be made out of iron and that cant be cut with a basic CNC machine to make the main body of the generator.

I mean should I just table this stuff and put away my $50 a month or what ever I can scrape together and hope I don't die before I can do anything. Are there places like Germany or other countries where people are fleeing to in order to have a real job where they can cash flow and finance a business (and not an "outside sales rep" or "customer service agent")

I have been applying to federal jobs since 2015 and its been a horrid nightmare trying to put together their onerous custom resumes only to get rejected, it sucks because federal jobs are about the only stable good employment in the USA that I am aware of.

Anyways I hope there is some way out of this hell I am in after being laid off. I had no idea how awful the job market would be for actual GOOD jobs.

Thank you,
Ron
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Old 10-16-2018, 07:16 AM
 
3,266 posts, read 2,335,410 times
Reputation: 5622
I'll be honest, I don't think this is a good time for you to start a business with a new product. For something that complicated and expensive, you're going to need a lot of cash to move forward. And the big issue with something brand new is whether or not anyone will buy it for the price you need.

Are you working with any headhunters? At your previous salary range, I'd think you'd be able to find recruiters that specialize in your field.
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Old 10-16-2018, 09:30 AM
 
195 posts, read 37,361 times
Reputation: 285
Quote:
Originally Posted by pittsflyer View Post
Hello everyone,

I am seeking some advice on how to start a business from scratch. I will post out my situation which may get long and hopefully someone can share how they started a successful business from scratch,

I am a process/chemical engineer and was recently laid off from a major oil company (I am also almost finished with my A&P cert and I am quite a significant ways towards a second degree in electrical engineering so I have tons of transferable skills outside of just chemical engineering, I also have a PE in chemical engineering). Anyways, I was laid off before my finances were shored up and now I am in kind of a bind. My original goal was to work another 3 years or so (or as long as I could since the job was flexible and paid a ton) and pay off our house and put away enough money to develop enough passive income that I could afford to buy equipment as needed as well as have the time needed to develop the intellectual side of the business (product development)

Now I am in a situation where I have about 20k in an investment account that is making some money but I was forced to take a low wage pedestrian job (I went from making 65/hr to 11/hr) which consumes almost 40 hours of my time so any product development is stunted because the job is less flexible and the pay is so meager that there is no longer a light at the end of the tunnel (the job also has the crappiest hours which is effecting my marriage). We are just treading water as I scour job ads, SO MANY job ads for a customer service rep that, sales rep this, just a massive sea of crap jobs, with a tiny tiny fraction of good jobs (which I apply for). Its basically just barely enough to keep the wheels on the bus with my wife making up the lions share of the finances so there is no more saving there is only treading water.

Luckily we were able to pay off all our debts (student loans from my BS in chemical engineering and my truck, I had A LOT of student loans and I have no interest in going back into debt) before I got the pink slip but our savings is really meager and basic bills (gas, power, etc) just keep going up, especially real estate taxes.

I see these businesses doing similar things that I want to do and I am like how the heck did they get over such huge barriers to entry. For instance some of these small buisenss have hangars on public air fields which costs hundreds of thousands just for the lease and structure, thats before you put any equipment in it or anything.

My goal is to leverage my engineering and design abilities to basically take a napkin sketch from someone and engineer a part or system and have the full CNC machining capability to build proto types for people.

How do people leverage their time when they are being robbed of gobs of time at a pedestrian job

- Trying to study to jump into another field of engineering (finish my second PE in EE) as well as hopefully taking edx EE masters classes
- finishing up my A&P just because I am already so far along
- continuing product development
- Working with another guy to get my little entry level CNC xcarve beefed up with new rails and controllers so I can cut aluminum without issues (but its taking SO long due to both of us being robbed of time and having so little cash flow).

The product I am developing I believe is profound and I am not willing to give up the intellectual property to an "investor" (unless it was family). Its something with extremely complex engineering I have been working on for decades.

Then there is the power supply to run said proto type which is another super expensive thing so I am faced with having to build it from scratch which is still money, materials, and time (again so much time is being consumed in a pedestrian job). Plus the parts that would have to be machined to build a 30 kw generator from a run out air craft or car motor would have to be made out of iron and that cant be cut with a basic CNC machine to make the main body of the generator.

I mean should I just table this stuff and put away my $50 a month or what ever I can scrape together and hope I don't die before I can do anything. Are there places like Germany or other countries where people are fleeing to in order to have a real job where they can cash flow and finance a business (and not an "outside sales rep" or "customer service agent")

I have been applying to federal jobs since 2015 and its been a horrid nightmare trying to put together their onerous custom resumes only to get rejected, it sucks because federal jobs are about the only stable good employment in the USA that I am aware of.

Anyways I hope there is some way out of this hell I am in after being laid off. I had no idea how awful the job market would be for actual GOOD jobs.

Thank you,
Ron
State jobs are available too and usually easier to get. But not many State jobs are in your field The federal process seems ridiculous to me. They post a job title that does not ever match the description. For example, the skills they want never seem to line up with their description.
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Old 10-17-2018, 06:15 AM
 
6,058 posts, read 2,492,570 times
Reputation: 3876
Quote:
Originally Posted by Snowpacked View Post
State jobs are available too and usually easier to get. But not many State jobs are in your field The federal process seems ridiculous to me. They post a job title that does not ever match the description. For example, the skills they want never seem to line up with their description.
I have been trying to get a state job for a long time, not sure how to get in
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Old 10-17-2018, 06:25 AM
 
Location: Chattanooga, TN
57 posts, read 29,231 times
Reputation: 124
Your business idea as you described it is inherently capital-intensive. Thus, you are going to need significant initial capitalization to launch anything and sustain it until your revenues match your expenses. I am a commercial banker and can assure you the #1 reason that businesses/start-ups fail is being undercapitalized. Don't think you can do it on a shoestring budget - things happen, development costs more than you think, etc.

Do you have a network of potential clients that you've pitched your services to? How aware are you of the demand for this product and what pricing is in the market? Are you able to calculate your costs per unit of product? Do you have a comprehensive business plan outlining all the various financial/non-financial factors that would determine break-even/success?

Without any of those things, you are not ready to advance this idea down the field. When you do have all those things lined up, it sounds like you will need an investor. This investor need not get full ownership to your IP, but they are going to want some significant returns on their equity. If you are averse to debt, then that means ownership will be commensurate with the amount of capital provided and you may not have control of your company. Getting bank debt will require personal guaranties and if your financial situation is as described then you are likely not going to add much to the equation from a bank's perspective. Having an investor sign a guaranty to qualify you for debt is a good option, but expect them to demand a guaranty fee for this (either in the form of payments or additional equity).
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Old 10-17-2018, 06:41 AM
 
Location: The Triad (NC)
26,831 posts, read 57,830,396 times
Reputation: 29215
Quote:
Originally Posted by pittsflyer View Post
I am seeking some advice on how to start a business from scratch.
Okay. Don't even try.
Especially not if the reason is about buying yourself a job.

Quote:
I am a process/chemical engineer...have about 20k in an investment account
Get a straight job.
Move if getting a good job requires that.
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Old 10-17-2018, 06:55 AM
ERH
 
Location: Cary, NC
1,030 posts, read 1,489,810 times
Reputation: 1608
Not a great time to start a business, but keep active in your pursuit. Build some thought leadership around the concept (publish, speak, get on panels, etc.), which will create credibility and probably give you access to angel investment easier. Can you provide your services via consulting?

Have you limited your search to the oil industry, or are you exploring others? I recently worked with a client who has built a very successful career in pharmaceuticals, and his educational credentials are in chemistry and organic chemistry.
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Old 10-17-2018, 04:25 PM
 
6,058 posts, read 2,492,570 times
Reputation: 3876
Quote:
Originally Posted by ERH View Post
Not a great time to start a business, but keep active in your pursuit. Build some thought leadership around the concept (publish, speak, get on panels, etc.), which will create credibility and probably give you access to angel investment easier. Can you provide your services via consulting?

Have you limited your search to the oil industry, or are you exploring others? I recently worked with a client who has built a very successful career in pharmaceuticals, and his educational credentials are in chemistry and organic chemistry.
I am actually hoping to get out of oil and gas, I have applied to telecom (since I have significant amount of course work and controls experience in electrical).
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Old 10-18-2018, 04:15 AM
 
6,058 posts, read 2,492,570 times
Reputation: 3876
Quote:
Originally Posted by MidasMulligan View Post
Your business idea as you described it is inherently capital-intensive. Thus, you are going to need significant initial capitalization to launch anything and sustain it until your revenues match your expenses. I am a commercial banker and can assure you the #1 reason that businesses/start-ups fail is being undercapitalized. Don't think you can do it on a shoestring budget - things happen, development costs more than you think, etc.

Do you have a network of potential clients that you've pitched your services to? How aware are you of the demand for this product and what pricing is in the market? Are you able to calculate your costs per unit of product? Do you have a comprehensive business plan outlining all the various financial/non-financial factors that would determine break-even/success?

Without any of those things, you are not ready to advance this idea down the field. When you do have all those things lined up, it sounds like you will need an investor. This investor need not get full ownership to your IP, but they are going to want some significant returns on their equity. If you are averse to debt, then that means ownership will be commensurate with the amount of capital provided and you may not have control of your company. Getting bank debt will require personal guaranties and if your financial situation is as described then you are likely not going to add much to the equation from a bank's perspective. Having an investor sign a guaranty to qualify you for debt is a good option, but expect them to demand a guaranty fee for this (either in the form of payments or additional equity).
This is kind of what I was afraid of, this is the opposite of a cooperative type of relationship and more or less forming an antagonistic relationship which I am not interested in. Especially since said product is designed to sell to generals to embolden military's to start WW3 and destabilize the status quo.
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Old 10-19-2018, 06:37 AM
 
4,313 posts, read 5,265,036 times
Reputation: 4211
The type of business you seem to want to start just seems too cost-intensive as others have mentioned. When I started my company 10 years ago, I already owned the film equipment and we were a corporate video production company. I ended up hiring a full-time sales and marketing head about a year later, but as our business plan developed I realized the only actual expenses would be her and insurance, besides the little stuff. The rest of the expenses are project-dependent, and while I hired a part-time editor, I did so because it's cheaper to have a staff editor than to pay freelance (which we did for the first 2-3 years). We don't have an office, we don't need ANY equipment, not only does our editor use his own computer, but we film across the U.S. and hire contractors locally, so it became something where my own gear is never used on a shoot nor do I even involve myself in the day-to-day running of the company anymore. It pretty much runs off a Website and a great portfolio of work along with my head of sales closing deals based on our extensive experience in the industry. That's the kind of company that's pretty cheap to start, but when you're making a product I can imagine that could get quite expensive!

I'd focus on finding a good job again, there's no way that you should be making $11/hour if you were making $65/hour, that just seems crazy to me. Even my GF makes $25/hour as a waitress after tips lol.
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