The economy and job conditions prompted me to start my own business. Over the years, I’ve done it a number of times in three different states. This gives me a good idea of what works and what doesn’t. Here’s a look at my most recent experience in starting a small boat design and sales business. Though this is a fairly niche endeavor, most of this information can easily transfer to almost any small business venture.
Knowing When to Start My Own Business
My job conditions deteriorated significantly after the 2007 downturn. Layoffs more than doubled my workload. Benefits were eliminated. I worked more hours for less money. Since I provided technical services in a unique field, I felt my job was secure. However, I was very unhappy. Personality clashes with my supervisor guaranteed I’d never receive a promotion to the level at which I performed. Employees with fewer responsibilities were being promoted. As a result, I considered my options and decided to start my own business.
Choosing the Right Business
From past experience, I knew I didn’t want the responsibility of employees. My business had to be a one-man shop.
A service-based business required a minimum amount of money for equipment and supplies. A product-based business required a much larger cash outlay for stock and inventory. I leaned heavily toward the service-based business model.
Designing and building small boats is something I’ve done in my spare time for years. I enjoyed it and sold many plans and boats. I felt it was a viable option for a full-time business.
Defining My Business Plan, Goals, and Expectations
Creating a business plan helped ensure that I run my business as a business. Listing goals and expectations on paper helped serve as a map to the future of my business. I follow the mapped route, but I can change it if necessary.
I considered my financial condition, experience, job situation, and the economy to help decide whether I would start my new business full- or part-time. I chose full-time.
My original business plan was to provide a number of good boat designs for others to use in building their own small boats. I would provide custom boat building and repair and sell products in the form of the plans, prototypes, materials, and accessories that I purchased in order to build prototypes and custom boats.
My expectations from the business were to meet a minimum income to supplement current assets. The goal was to build two custom boats a year with most of my future income from increasing online plan sales.
Startup Costs
I wanted to keep startup costs to a minimum. Since I had been building boats for years, I already had the shop and tools. Future tools would be bought only as needed.
I standardized materials and fittings, and I had no need for a large variety of inventory. I bought in bulk when necessary. If nearby stores stock what I use, I don’t stock it.
I set up wholesale accounts for boating accessories and bought the minimum necessary for the best price break. This led to products sold through an online catalog with shopping cart. I carried little inventory and drop shipped all products. I took the order and had the product shipped directly to the customer.
Funding Choices
I funded my business through savings and cash. No loans, no credit cards. I don’t believe a small businesses like mine should financially extended beyond immediate resources. I use a debit card.
I require a one-third deposit before I start a custom boat. The deposit pays for materials. Plans are sold online and have no production costs. Accessories are drop shipped so I have no inventory costs. All products are paid up front before being shipped.
My business funding philosophy is to not use my own money. Past experience has shown that some people don’t pay. Money up front adds protection.
Advertising
I provide a quality product, but the key to success is to advertise. I organize The Texas Boat Builder Roundup at Inks Lake in May of every year. Builders show off boats; spectators see beautiful boats. Spectators are future boat-builders, and I have plans for them.
I sponsor and moderate boat-building forums. I manage several boat-related blogs, including my business website. Informative blog articles draw traffic to the site. The more traffic I have, the more plans and boats I sell.
I participate in organized river trips and marathon races. I participated In the 2011 CR100 – 100 miles down the Texas Colorado River. Four of my designs built by other people were entered in this race. Ten years ago there were few wooden boats entered in races. This exposure creates interest.
Business cards are essential. Wood composite boats are so distinctive and beautiful that I am deluged with requests for information.
Baseline for Staying in Business
Before I started my business, I sat down with a list of personal expenses. I calculated income, savings, and investments and decided exactly how little income I needed to keep the doors open. It’s that simple. The personal satisfaction and flexibility of being my own boss is worth a lot of money to me.
Problems After One Year
I started my business full-time on January 1, 2011. Perhaps due to the economy, it quickly became apparent that I would not sell enough plans, boats, and accessories to meet financial goals for the first year. I was selling less than I did when working at the business part-time. I added external advertisements to my blogs for additional income. I increased the number of drop shipped products on my catalog pages. I added teardrop trailers to the shop products .
The business is doing well enough. I simply have to stay flexible and never be afraid to change.
Sources:
U.S. Small Business Administration
Texas Comptroller
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