Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I was looking into this myself as a software constancy, but the fees, taxes, and overall burden seemed high to me for a side business.
The problem for me would be time, I already work 50-60+ hours many weeks and often travel on a moment's notice. So to trade off my few hours of free time for 15-20k/yr in billings seems like a lousy deal. I think a lot of people would rather get paid less to work less if given the choice.
I think the current vogue towards startups is that so many would rather try to raise money and quit their job and try to strike it big... vs work nights / weekends for someone else to make small amounts of cash.
Being an Entrepreneur isn't as procapital makes it out to be. It's NOT easy. NOT everyone can do it. In fact, most people can't. Most people need a structured life with a guaranteed salary with NO risk. .
My original post describe several options, and a business is just one of them, obviously it is not easy because it requires an "entrepreneur mindset", I claim that it can be developed, yet, most people will never do, but for those who can, a business can be a solution.
I agree that most people don't want risk, they prefer to live within their comfort zone, it is the choice. they may feel more comfortable investing part of their income, or going to school and add new skills for career advancement, and those are other alternatives as I posted originally.
The fact is that for those who are open minded there are ways to increase an income, and a business is just one of the options.
And I believe that there are businesses that can be started part time, I have done it, and many have done it, even in California.
As a matter of fact, California is ahead of Texas, Florida, NY, IL, and other lager states of states #6 overall were most business are started, even with not very friendly regulations, and most of those business are small business. (10 most entrepreneurial states - California (6) - CNNMoney)
...
As far as the "start a side project business" and make certain claims gets into the not exactly telling the truth to the IRS and wind up being busted or audited and crapping your pants. Starting any business is hard. It takes a lot of work. You become everything.
...
I would be truthful to the IRS and the CA Board of Equalization. That is the problem, and why it would not work for me here.
And yes, starting a business is hard. It takes guts. I really believe that's why we have such a vibrant and resilient economy. Talented, hard-working people who are not risk averse drive our economic roots (cue Elon Musk).
Quote:
Originally Posted by Sassberto
The problem for me would be time, I already work 50-60+ hours many weeks and often travel on a moment's notice. So to trade off my few hours of free time for 15-20k/yr in billings seems like a lousy deal. I think a lot of people would rather get paid less to work less if given the choice.
I think the current vogue towards startups is that so many would rather try to raise money and quit their job and try to strike it big... vs work nights / weekends for someone else to make small amounts of cash.
For me, I was thinking of having an LLC to house my small side jobs and build a software business slowly. With California's tax laws, it would be a money losing thing from the start.
I agree, I don't want to spend an extra 15-20 hours/week outside of work for this. It would be far less.
I'm one of those who gave up an extra chunk of $$$ for a life outside of work.
I honestly think the "start your own business" is what late night infomercials always push because many people dislike their jobs and don't make enough money. You don't move to San diego thinking it's a great place to start a business. California, in general, has some of the worst business policies and taxes. There are tons of companies here, but many of them are registered in Delaware and many push the "global concept" and wind up taxed in places like Ireland or Easter Europe where the tax rates are far far less.
I wouldn't just move from say NYC thinking "i'm going to start a business in San Diego." That really makes no sense at all. Hey, if you want to move here and have the money, great. But if you quit a job and figure you're going to make it 'rich' so to speak in San diego, you'll probably be disappointed.
As far as the "start a side project business" and make certain claims gets into the not exactly telling the truth to the IRS and wind up being busted or audited and crapping your pants. Starting any business is hard. It takes a lot of work. You become everything. You don't just quit your job and wind up working 4 hours a day. that's what the con men and women try to sell you when they speak at some seminar. "I make thousands per month sitting on the beach" is what a lot of these people push. Yeah they made money by conning the masses. The 'sucker is born every day' rings true.
Most people who start a business don't become millionaires. Hell most fail within the first five years. Or they don't make much revenue in the first few years. You need some cash or a job to hold you over. Many of these tech startups spend years and years making no revenue, but they got VC money from people they knew. That helps.
But the theory of making $150K per year at a job, and then making another say 100K per year on some side business is just unrealistic. There are only so many hours in the day. If you are already working 60+ hours a week at your job, when are you working on your side projects? THe side projects are usually harder because you have to do everything. Is it possible? Yes. But I hate when people just throw out the fake SEO marketing and late night BS about "work a few hours a week and make hundreds of thousands." It's really just a con to sell to people who hate their jobs and lives. And the suckers fall for it and the cons get away with murder.
I"ve started a few businesses, sold one, still work on various things. But you don't quit your day job to start a business where you work 10 hours a week. Anybody that throws those claims out there should just be ignored.
I totally agree with Pedro on ALL these points. So true about the Delaware LLCs (which I think are the best structure to set up when forming a company). Also, totally true about the high taxes here and horrible business policies. I'm actually starting a new company and of all places we are setting it up, I've been surprised at how good Canada is. The CCPC (Canadian Controlled Private Corporation) seems solid. Lower corporate taxes vs. most places and they have tax credits (SRED's) and grant programs for Entrepreneurs { http://www.cra-arc.gc.ca/txcrdt/sred-rsde/ }. As high as 64% refundable tax credits on direct labor!
(Of course you have to have a Canadian partner...but I've been impressed with Canada). I never would have guessed that!
So true that most start ups you will be working a TON of hours. I laugh at the books like 10 hour work week to riches or other garbage like that!". It just doesn't exist for the most part!
Quote:
Originally Posted by Sassberto
I could see an internet, home based business making an extra 15k or 20 or even 30k a year, but it's a lot of work for not very much money, and I doubt it's enough to close the income vs expense gap in a place like SD. It makes sense for a stay at home mom with free time who can do some accounting on the side, not for two parents with full time jobs.
IMO not very attractive vs buying a rental property and using it as a credit line, which is what a lot of people I know have done for years. The majority of people I know live above their income by being mortgaged out the eyeballs.
EXACTLY Sassberto. There are jobs where you can probably make some smaller amounts like you mentioned, but it's not typically much. Sure you might get lucky in some scheme and make more but generally that is the exception NOT the rule in those types of businesses.
As you mentioned, it's more for the stay at home mom that has time on her hands anyway vs. a busy corporate professional or executive.
Quote:
Originally Posted by Sassberto
The problem for me would be time, I already work 50-60+ hours many weeks and often travel on a moment's notice. So to trade off my few hours of free time for 15-20k/yr in billings seems like a lousy deal. I think a lot of people would rather get paid less to work less if given the choice.
I think the current vogue towards startups is that so many would rather try to raise money and quit their job and try to strike it big... vs work nights / weekends for someone else to make small amounts of cash.
Yep. That's how I was before. I was a very busy executive that was already super busy working a lot of hours. What I did was formulate a solid business plan. I worked on that business plan for over a year and thought about all the various scenarios. The problem is many Entrepreneurs are only thinking about today, tomorrow and maybe next year. And the most successful ones are the ones that project out 5 years or even 10 years down the road.
From what I've seen everyone wants to get rich quick overnight and that just doesn't happen for the most part. It takes blood, sweat and tears and massive amounts of time to become an "overnight success".
The most successful Entrepreneurs are the ones that plan things out ahead of time and do a lot of research, due diligence, understand the market they are in, understand the competition, understand the potential of the business, etc.
Quote:
Originally Posted by Sassberto
Procapital you are right it can be done - it always can.
Everything can be done. I agree with Procapital on this. NOTHING is impossible. But I think most entrepreneurs need to distinguish with possible vs. probable.
As a matter of fact, California is ahead of Texas, Florida, NY, IL, and other lager states of states #6 overall were most business are started, even with not very friendly regulations, and most of those business are small business. (10 most entrepreneurial states - California (6) - CNNMoney)
Not sure there is anything necessarily impressive with that number. California is a large state. Lots of unemployed people start their own businesses of one employee. I could tomorrow. Doesn't mean the vast majority of them go anywhere. (Wow, what a downer I am.)
I'm one of those who gave up an extra chunk of $$$ for a life outside of work.
I think it's a very large percentage of people, and it increases as income increases, unless you make a significantly large income for the area, where you break free of the tax / housing cost burden. IMO it nets to about 300k/yr - far beyond what 99% of jobs in SD pay. Nearly impossible here, but not necessarily the same scenario in SF, NY, other tier 1 cities.
I think it's a very large percentage of people, and it increases as income increases, unless you make a significantly large income for the area, where you break free of the tax / housing cost burden. IMO it nets to about 300k/yr - far beyond what 99% of jobs in SD pay. Nearly impossible here, but not necessarily the same scenario in SF, NY, other tier 1 cities.
I don't get the $300K number. Unless you get lucky and strike it rich with some product, it's a hard hard thing to do. And it's obvious most people never do as most people in the US make far less than $250K per year gross. Hell, as others mention Musk, his company has lost money for years. Go back to Amazon and they were a company that didn't turn a profit for almost a decade. You need big VCs and/or subsidies to be able to get to that point. Hell, FB had some rich co-founder, and then convinced even more VCs to invest. Most businesses never will. If you follow things like Y-Coordinator or the SXSW or other incubators around, 99.9 percent of businesses won't get much money at all.
The 'in' thing now is for some new company to make an app and sell it. Except most aren't making a ton of money from apps. People like free. So the smart ones figured a way to offer free apps and start charging for upgrades or other purchases within an app/game app. But some people are getting annoyed by that. Zynga made millions and is now in a free fall. If you look at blogging or Youtube, the people making money have sponsors. They aren't really making a ton of ads. That's what the marketing Gurus will tell you, optimize your adwords and keywords and do a lot of SEO or TOp 10 This List, except it all comes down to finding sponsors. Yes you need viewers, but a lot of the PPC and everything else make money for google, it hardly makes money for most bloggers or video/podcasters.
There's the other "Residual" or passive income that has become rampant in the internet age. Except most of it is BS sold by some fake gurus who shot a video at some little known fancy hotel. And claim it's their own. A few people have made it rich. But most people who have a product or service and make it rich aren't writing a book "how to make it rich like me." It's just a nextgen MLM for people who want to work 10 hours a week and think they'll make millions.
Back to the Software/Consulting business, it becomes very hard due to the fact there is one you and only so many hours in a day. So you either hire people or outsource work. But then you either have to charge a client more money for you to make a profit or you take a hit and try to make small margins, bigger projects. I've had some 1099 contractors over the years and I've used offshore workers on some projects. But the issue is you don't want to hire crappy people. And you don't want to charge your client so much that you big yourself out of a project. So you start to look at it like, well, if I pay so and so $80/HR and I charge a client $120/HR, but there is travel involved, etc etc etc. It's easy when it's just you, but you aren't cloned. You can't work two full time jobs for long.
I tried the two full time jobs over the years. It's impossible when you work 60 hours at one, 60 hours at the other. So you try to find clients in different countries, different coasts. So if you wake up at 6am for east coast companies and staff, you might have till 9-10am till your west coast project starts up. And so it goes.
I came to the conclusion that it's just not worth it. There is only one me and no matter what, you can only charge so much and you can only work so many hours. And in software it's become harder as a consultant because you compete with the Indian firms who are known to charge 'pennies' on the dollar. Maybe you have more experience and talent, but it's about money. Most Managers will think 10 people at this cost is better than 1. It's just the way it is.
In the software/consulting world, you have to find the clients and to net over $300K per year, you'll have to charge over $150/HR and work for around 45-48 weeks during that year. Is that possible? Sort of. The truth about consulting is big firms rip companies off, but they have the contacts, networks, and big 200K employee crap going for them, one person firms can get away with $150/HR, but most companies aren't going to pay a consultant that much money for a 12 month project. They might bring you in for some strategy stuff, architecture, and then they'll offshore the rest of the work at a far cheaper rate. I mean people don't realize these big 200K employee consulting firms lose something like 90 percent of the projects they bid on. And they have the VPS ears. Some no name one person firm will either have to charge far less, or they'll lose most of the bids.
Sometimes you get lucky, and win some government contract. You do that enough and you can make a damn good income and revenue. But again, you become a business owner and not just some guy doing side projects. Some guy doing side projects rarely will make over $300K per year just from those projects. Especially when there are still tons of companies who want you onsite more often than not. hard to do if you are working a FT job who requires you to be onsite or onsite often enough.
Pedro is right. The Consulting gigs can kill you. One of my companies I did consulting. Gobs and gobs of consulting. Yes, I did make over $300k doing it but I was working insane, unhealthy hours. It wasn't uncommon to have a 120 hour work week. I'm lucky I didn't have a heart attack. Possible when you are single but not possible when you have kids.
Also I guess it depends on what kind of consulting you do but I agree with him that it's easier said than done.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
