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GOLD! How to waste time and money playing entrepreneur

oldkevx

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Here I am, two years in "playing" entrepreneur and frankly failing. I want to share exactly how to waste money/time so you can avoid the pitfalls that I succumbed to:

Here's what you should do to guarantee wasting two years and money. I've quantified both elements for you

  • Form an Llc before you have paying customers $500 + 4 hours
  • Hire someone on elance to conduct industry research: $450 + 2 hours
  • Build a killer website: $2,000 + 2 weeks of tuning
  • Design and order business cards: $50 + 2 hours
  • Order checks $100 + 1 hour
  • Order envelopes $75 + 1 hour
  • Buy (and laboriously research) tax accounting app $200 + 8 hours
  • Open a bank account $0 + 2 hours
  • Get an EIN $25 + 1 hour
  • Hire an accountant to do taxes $250 + 4 hours
  • Get a merchant account $0 + 1 hour
  • Get a really cool stamp for depositing checks
  • Buy some BS courses $500 + 2 weeks
  • Download tons of free content and consume it in the car, at night and any other downtime $0 + 6 months
Total time wasted: Over 6 months
Total money wasted: $4,150


What if I would have invested all of this time and money in doing just one simple thing that actually moved the needle vs. made me feel like I was running a business?

Game over...I just killed the inner wanna be. Time to take action. I hope I saved someone else some time and/or money.

K
 

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Michael Raphael

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So true. This happens a lot to people that come to me wanting to start their business. Best advice, actually find a need and test it on a dummy site. Do your own market research & proof of concepts. Literally, you can make $10,000 by spending a couple hundred dollars in Adwords, and a week of your time.

Great post, hope it motivates others to think like a real business and not pretend to act like one!
 

The-J

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I did the same exact shit a few years ago. I thought I was hot shit, I had a business, a business bank account, a business debit card, a LinkedIn profile that said I ran a business...

...no paying customers, and when I tried to sell what I had, nobody wanted it. No market need.

Waste of time, waste of a couple grand. But it was a good lesson to learn for only a couple grand.

Hopefully other people won't have to learn this the hard way.
 

RazorCut

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I always started businesses on a shoe string (I guess the American term is Boot Strap) and reinvested the money as it came in. I'd only buy the software, business cards, etc. etc. as and when it became necessary preferring to spend the profits on new stock lines that would earn more money rather than on stuff that just added to the overhead.

Buy (and laboriously research) tax accounting app $200 + 8 hours
Why would you do that when you have little to no sales? When I started out everything went into an Excel spreadsheet. These days you don't even need to buy that as Google Sheets is available for free.

In fact you can start a whole business on literally no money at all. Create an eBook, build a WordPress/WooCommerce Web Site. Use PayPal as a payment processor. Pretty much zero overhead. Wow the world really is your oyster.
 

RazorCut

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Don't beat yourself up Kev, you broke even and the time was well spent as a valuable lesson learnt. All in all not a bad result mate. :)

Sharing it here means that hopefully others will benefit from your hard learnt wisdom too.
 

Joe Cassandra

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The last two on your list were big time for me. I would scoff at other people wasting time watching tv, reading 50 shades of grey. I'm thinking: "What lame-O's, I'm bettering myself, I'm better than you. I'll be rich and you'll be poor, blah blah." In the end, sure you may end up with a better outlook, marketing, business skills, but net income differentiation is $0.

Going along with your last point on consuming tons of content, I spent years just creating content hoping to "get a book deal" or "sell coaching" or something like that. Fact is, all the people who you think are doing great from it, are probably not near as well off as you think. It's hard to do it that way. Problem I see nowadays is tons of people want to be coaches. Someone like MJ or Jack who've built million dollar businesses I don't have problems if they start a coaching biz [as they've built a biz themselves]. But so many people want to skip the creating a biz first and go right to coaching [I guess because Oprah did it that way, which is a bit of a stretch].

This forum has thrown me for a loop and seeing the opportunities out there as online business was starting to feel slimy for me, but with stuff @biophase , @Ecom man @JasonR and others are posting, it doesn't have to be that way and it's legit and lucrative at the same time.

Love it!
 

MJ DeMarco

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Liked. Stickied. Golded. Rep transferred.

Thank you for sharing your story. It's easy for us to post our triumphs (just look at any FB newsfeed) but very rarely do we hear about the failures and the lessons learned. Thank you.
 

jon.a

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Thanks everyone! If I save someone else time or money then it was a solid "investment." @MJ DeMarco, thank you for creating this amazing place for us to all share triumphs,challenges and failures. Onward!
You're off to a great start.
 

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jeremye

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This is exactly what I've been doing for the last month... well, I used oDesk to build a transactional email solution for my website visitors.... all 200 of them.

Set up the LLC and setting up business banking stuff with only like $4k/month coming in.

TONS of reading...

This was a good post.
 
G

Guest3722A

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I had one paying customer $4k and came out even financially, the time...gone forever!
Maybe look at it as 6 months of hands-on education for free? I'm sure one day you're going to reach these levels where some of these things will be needed. And when that happens, you'll know what to do, which will save you time and possibly even money.

On a side note, a seasoned LLC will have some value in the future. So even if you don't use it, keep it active.
 

liquidglass

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I think you gained a very cheap (free since you broke even) education and it was better than anything you could learned at a college you dumped 100k and 4 years into.

thanks for sharing bud, now that you know, you'll do it better.
 

The-J

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Wait, you won't get in legal trouble if you start a business without an EIN and LLC? o_O
No because when you form a LLC you set the date you started doing business. So if you started up a business today (July 14th), got some sales, then decided to get your EIN (which you could get anyway, it's like $25) and form your LLC in September, you can say you started business in July.
 

ddall

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The Lean Start Up - Eric Ries
Ready, Fire, Aim, - Michael Masterson
Two books (among many) that espouse the MVP (minimum viable product) and do/ learn|fail /iterate approach to building a business.

I think most entrepreneurs create inefficient time sucking busy work when they begin their journey, replacing their old unfruitful habits with equally frivolous activities, however these new actions provide a false sense of accomplishment.

"Hey, I have a logo (I spent two minutes contracting out on fiverr). Now I have a REAL business I can show my friends and family." Yet no sales, no product/service, not even an audience or market.
 

NicoleMarie

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No because when you form a LLC you set the date you started doing business. So if you started up a business today (July 14th), got some sales, then decided to get your EIN (which you could get anyway, it's like $25) and form your LLC in September, you can say you started business in July.
Oh! Ok thanks. :) Thankfully I made my focus broad enough that if I need to switch gears, I have some leeway to do so (general hint for anyone else starting a business). ;)
 

Nadia

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The crucial bit people miss out on is that UNLESS someone is paying you for your service, you aren't in business. It may just be ONE person but that ONE person believes in your service to pay you and then from there, you slowly start to build.

I don't even have a proper logo and many other things that people deem are important but I have paying clients.

Works for me.
 

shane8399

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Good post. But heres a few quick adds.

EIN are free??? http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Apply-for-an-Employer-Identification-Number-(EIN)-Online

Filing an LLC, at least in Wisconsin, only costs you a little over $100, not $500. But most dont use this, or pay for attorneys out of fear. Call the state if you need help! Be nice and they should help.

Do open a business bank account, and keep track of transactions via excel or spreadsheets, until you can afford Quickbooks Online at a measly 35 a month, and then wonder how the hell you ever survived on shitty spread sheets. (it integrates with your bank accounts, categorizes and remembers transactions, and matches deposits with invoices, it also gives you an opportunity to email your customer list (CRM FUNCTION)).

Worry more about customers then the logistical aspects of your business.

An entrepreneur jumps off the cliff and builds the plane on the way down.
 

shane8399

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I pay $250 for accountant all day. I had a job, multiple houses, and a business.

What one needs to assess is, for $250, and 1 hour of my time, they are done, or 10 hours of my time to figure it all out, file it all myself, and hold the liability of the filing! Whats your time and liability worth? Pay the $250. Cant afford the $250? Your business model and or income needs reevaluation.
 

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oldkevx

oldkevx

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Yeah, I got hosed by LegalZoom and had them do it it was a Texas Llc, one of the more expensive states. Business idea....legalzoom but cheaper!
 

Milkanic

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Hire someone on elance to conduct industry research: $450 + 2 hours
Buy some BS courses $500 + 2 weeks
Download tons of free content and consume it in the car, at night and any other downtime $0 + 6 months
Don't really think any of these are a waste of time/money. Fail forward.
 

FLYmk

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$520 in Mass, go tell the state that please. That is why so many small businesses here are S Corps.
Yup, one of the most expensive states. And add a $500 Annual Filing Fee (for LLCs) despite if nothing about the entity changes. Absolutely ridiculous for just submitting a form in 5 minutes online that didn't change from the previous year.
 

MJ DeMarco

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Yup, one of the most expensive states.
California is worse. I think theirs is $800 and get this, you have to pay it if your non CALI LLC is a member of a CALI LLC.

For example, DeMarco LLC (an Arizona LLC) owns a 1% interest in Company X, a California LLC. Such an arrangement will have the CA Franchise Tax board coming after you for taxes. And it doesn't even matter if you ever visited the state. Imagine never stepping foot in that blasted state and having those tax vultures coming after you, and yes, they're relentless.
 

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