How do you get started?

[stacker512]

Hi,

I've seen videos and other media online that relate to productivity and business management, and some of them mention running or starting businesses.
The videos mostly are US-focused, so invariably they talk about starting with a real estate business or making websites.

I'm currently salary employed, not likely to start a business anytime soon, however I do consider that potentially in the future this may be the avenue I may take.

What has been on my mind the last few days, is how does one actually start?

Surely the markets of:
- real estate
- website building
- etc

are already saturated in the UK (and most of the West)?

Do these suggestions work in the US primarily due to the size of the country and that there is still a lot of untapped potential to create a business there (because of geographical distribution of the population and the companies that already exist)?
Or are these suggestions simply to fool the naive (like myself?) into thinking that they too can start a business?

How would a person actually start thinking about:
- the industry they would want to start their business in?
- the product or service they would want to offer / produce?

Do the bulk of the new and fledgling companies form because of:
- a bright new idea, that no one else thought of yet? (to be first in the market)
- the idea that those with money (and therefore those that would be customers) are wanting to exchange money for the time / product / service, simply because it's too time-consuming / difficult / annoying to do yourself? (the company makes it easier than not using it)
- the founder already doing something and therefore thinks that others would benefit and would be willing to pay?

Not completely sure why this is now interesting to me, I think perhaps because I want money, and perhaps my testosterone levels are also increasing and this makes me want to be more productive?

For example, I am in IT as a software engineer. I'm not really interested in AI, but am interested in cars and electronics (made a device already for my own daily use at home). I feel that I would struggle to think of ideas on how to start.

Thoughts welcome. Thanks.

[Dicky99]

Are you a salaried software engineer? Would you dip your toe in the water by establishing a ltd company and seeking work assignments which are outside IR35?

[stacker512]

Are you a salaried software engineer? Would you dip your toe in the water by establishing a ltd company and seeking work assignments which are outside IR35?

Correct, I'm a salaried software engineer.

One of the things that I'd need to decide, is whether I would want to do software engineering on my day job as well as in the spare time when a new company is started during its growth phase. Any sort of business development in the same area as my day job may become too much work to set up? I suppose any new business will have a lot of work needed - perhaps there's no difference what type of business area it's in, and perhaps that's my mind still following the "you are an employee, not an entrepreneur" mindset?

The other thing to work out would be whether there would be anything in my contract that would stop me working on such assignments due to non-compete clauses (there are some in my contract).

I've only heard of IR35 very vaguely online, and I don't know much about it. A very quick Google search suggests it's a way to be a contractor via your own LTD company.

I've recently been appointed to a voluntary position in a different field, that would now require me to learn about corporate governance and finances and various aspects of the relevant law, and to then put into practice those aspects. These are all valuable transferable skills for the future, if I was to setup a company.

[Mike4]

I have successfully coached and helped a software engineer wanting to become a self employed gardener, but without a clue how to make the transition. And quite a few others over the years into self-employment.

Regarding entering a saturated market, these are often the easiest markets to elbow yourself a space in. There is ALWAYS space for a extra "little-un" in a large and busy market. I used to worry about this too as a young plumber worrying that there was already about 200 plumbers already in my local Yellow Pages, but it turned out to be an unnecessary concern. Just start marketing your services as though you've always been trading in your local market and a space for you will open up.

The most important thing is to pick a product or service or trade you know a lot about and are dead interested in. Think of a favourite restaurant for example. A truly great restaurant will be popular because the owner puts their heart and soul into it and makes it better in some way than all the neighbouring chain restaurants. Similarly it must have entered a saturated market and elbowed itself a space. There are ALWAYS too new restaurants starting up and thriving, or failing. Often I notice a thriving restaurant fails when the owner gets jaded or burned out and simply stops trying so hard.

Just a bit of a brain-dump really... ask some follow-up questions!

[kempiejon]

whether I would want to do software engineering on my day job as well as in the spare time when a new company is started during its growth phase. Any sort of business development in the same area as my day job may become too much work to set up? I suppose any new business will have a lot of work needed - perhaps there's no difference what type of business area it's in, and perhaps that's my mind still following the "you are an employee, not an entrepreneur" mindset?

I think it's important you think about your mindset and motivation. I tried it, twice. Starting a side hustle, as apparently freelancing or a 2nd job is called these days, does indeed use up time, especially if full time already. Squeezing my part time venture into holidays, evenings and weekends eventually wore me down. I had a partner and we eventually shared with each other we were fed up of not having any free time. We wound up by putting our prices up until the market couldn't stand it. That took longer than expected so we had a bumper year before we closed.
Later, in a gap in employment, I tried full time working for myself. I had contacts, kit and skills, had been made redundant so started punting myself out, I got a work quite quickly. Being the boss, admin, accounts and HR department as well as front line worker didn't suit me. As I'd say "The trouble with working for yourself is the boss can be a dick." I had about a dozen clients but 50% of my work was subbing for one company and most of their work was a contract with a publishing house. When they lost that contract half my work dried up and the other clients didn't need any more. That should have been obvious to an averagely alert entrepreneur but not me.
I found a part time job as I let that venture fade out then re-joined full time employment.

A bit like investing, it's good to know yourself.

[Mike4]

A bit like investing, it's good to know yourself.

^^^ This ^^^

The best and most important bit of wisdom so far in the thread.

The OP says nothing about why they want to start a business but this is where it all stems from. I started working for myself when I was 22 because I was totally confident all the bosses in my jobs to date were dicks, I felt could do it better and I wanted to be freed from being constantly poorly managed as an employee and to do it all myself.*

Other people have a great idea for a product and a burning desire to make it and sell it. Yet more people see it as a way to make a tonne of money and set out with that goal. Its also important to see the (massive) difference between being self employed (as I am) i.e. establishing a stream of work from the general public, and running a company with employees and a premises and a product line or service. (Being a subby to just one customer doesn't really count as 'running a business' according to the taxman and his IR35 rules.)


* My own joke about this is after 45+ years of self-employment, I'm still not sure if its going to work out in the long term...

[tjh290633]

Are you a salaried software engineer? Would you dip your toe in the water by establishing a ltd company and seeking work assignments which are outside IR35?

Correct, I'm a salaried software engineer.

One of the things that I'd need to decide, is whether I would want to do software engineering on my day job as well as in the spare time when a new company is started during its growth phase. Any sort of business development in the same area as my day job may become too much work to set up? I suppose any new business will have a lot of work needed - perhaps there's no difference what type of business area it's in, and perhaps that's my mind still following the "you are an employee, not an entrepreneur" mindset?

The other thing to work out would be whether there would be anything in my contract that would stop me working on such assignments due to non-compete clauses (there are some in my contract).

I've only heard of IR35 very vaguely online, and I don't know much about it. A very quick Google search suggests it's a way to be a contractor via your own LTD company.

I've recently been appointed to a voluntary position in a different field, that would now require me to learn about corporate governance and finances and various aspects of the relevant law, and to then put into practice those aspects. These are all valuable transferable skills for the future, if I was to setup a company.

If you want to continue as a self employed software engineer, then you need to decide how you want to operate. For example, do you want to design and manage websites for small local businesses? Do you have a special skill that larger companies might need?

As long as you are not working exclusively for a single company, IR35 should not apply. What is an advantage is the ability to claim expenses against your income from your self employed work. HMRC keep sending me help messages about various aspects of self employment, even though I stopped several years ago. The expenses that you can claim include car mileage, telephone costs, maybe part of your housing cost, if you have a room as an office, conference fees, professional institute or society fees, protective clothing, etc.

TJH

[stacker512]

Correct, I'm a salaried software engineer.

One of the things that I'd need to decide, is whether I would want to do software engineering on my day job as well as in the spare time when a new company is started during its growth phase. Any sort of business development in the same area as my day job may become too much work to set up? I suppose any new business will have a lot of work needed - perhaps there's no difference what type of business area it's in, and perhaps that's my mind still following the "you are an employee, not an entrepreneur" mindset?

The other thing to work out would be whether there would be anything in my contract that would stop me working on such assignments due to non-compete clauses (there are some in my contract).

I've only heard of IR35 very vaguely online, and I don't know much about it. A very quick Google search suggests it's a way to be a contractor via your own LTD company.

I've recently been appointed to a voluntary position in a different field, that would now require me to learn about corporate governance and finances and various aspects of the relevant law, and to then put into practice those aspects. These are all valuable transferable skills for the future, if I was to setup a company.

If you want to continue as a self employed software engineer, then you need to decide how you want to operate. For example, do you want to design and manage websites for small local businesses? Do you have a special skill that larger companies might need?

As long as you are not working exclusively for a single company, IR35 should not apply. What is an advantage is the ability to claim expenses against your income from your self employed work. HMRC keep sending me help messages about various aspects of self employment, even though I stopped several years ago. The expenses that you can claim include car mileage, telephone costs, maybe part of your housing cost, if you have a room as an office, conference fees, professional institute or society fees, protective clothing, etc.

TJH

Just a quick reply (I need to reply properly to all the posts later when I have more time).

I don't do websites, but something I may look into. I do C# / C++ software on desktop / cloud.
I also do some electronics (made one product for myself to use, and currently designing another product for me to make and use), so may look to pivot to that for the business while I still work full time in software.

If I continue to work for my current employer, then it seems that IR35 would apply, given what you wrote.