From debian@21:1/224 to All on Sunday, August 14, 2022 00:50:31
A few days ago, I received the second edition of the "Beartaria Times" magazine. There is an article in this edition titled "How I started a business with practically nothing". A very good read. I absolutely recommend purchasing this magazine and reading this article. There are a ton of good articles with good off-grid and homesteading information. You can purchase a copy of the magazine at beartariatimes.com. I read the aforementioned article and there
are a few points I want to discuss and expand upon.
While I am employed full time, I do run a business operation outside of my employer - I am a freelance electronics technician. I have been doing this
for close to 1 year. I have been running most of my business operations on
eBay (eBay user name is CKERepair). You won't see anything on my eBay store
at the time of writing this because my inventory has sold out. I have a large batch of old radios coming in as I write this, so I will have some repaired items in the comming weeks.
Now, on to the commentary. First and foremost, when you run a business, especially as the sole proprieter, you are will be paying for all of your taxes, especially your income tax. You will be paying for medicare, social security, and the various other governmental programs. You will also be paying estimated taxes. This will either be quarterly or annually. I opt to do it quarterly because I don't want to forget and have the IRS hounding me.
Also, you absolutely must keep records of all your transactions. Sales, purchases, investments - any movement of money needs to have records not only for balancing your own books, but also to show the IRS. Pix or it didn't happen. I always keep a paper, digital, or both, receipt + a paper register showing the transaction. If the IRS decides to audit my taxes, I have the
paper trail showing all of my transactions.
If you ship anything to a customer, you will want to keep a copy of the tracking number (and the receipt, both the receipt for the business transaction, as well as the receipt from the shipping company). Reason being
is that some payment processors may withhold pay until you can prove that
the item has actually been shipped (and received) to the customer.
Continuing on in the article, the author states that when creating a product listing, include as much information as possible about the item you are selling. The more information you can give about an item, the better. I always did this by detailing what was tested and confirmed working. Creating a
listing with allot of information is very attractive to potential buyers than
a listing with one sentence. It better informs the customer about your product and increases the chance of a potential buyer purchasing your product. Also,
Be sure to include as many photos as you can from as many angles as you can.
The author talks allot in this article about researching the items that he restores. Some items will have a higher resell value, whereas others have a smaller resell value. This type of research will dictate how much of a
restore you will perform on the given item and will inform you what your
profit margin will be. Obviously, an item with a lower profit margin won't be getting the royal treatment.
Now - lets talk about making a profit. The author gives a good high level overview of what costs you should expect to incur when operationg a business. "First, the cost of buying the item is actually more than just the price
you paid for it". The author states that when he purchases an item, he
factors in the cost of gas to drive to the location, the amount of time invested in driving to the location, obtaining the item, then driving back
to the workshop, plus the wear and tear on his tools and vehicle. Different types of business are going to have different operating costs which must be factored in as well. Businesses also have bills (electric, water, sewer, etc) that need to be factored as well.
Making a profit is not just buy low and sell high. That is an over-simplification of making a profit, and I have seen allot of people make that mistake (myself included). Pricing something for (re)sale is not just
as simple as 2x the purchase price. Track every expense you incurred when purchasing or creating the item, do the math, and then you will see how you should price that item.
As I stated before, I have been repairing and reselling vintage electronics
for the past year. I have made plenty of mistakes and have learned from them. For any aspiring business men out there, don't be afraid to make mistakes.
If you do, learn from them quickly! Always fail forward - If you are going to fail, make it a success in some way. Never make excuses for anything! You are the business man, so you are responsible for everything you do, even if you have employees working for you - you must answer for any and all failures that happen.
Source: "How I Started A Business With Practically Nothing", Stuntman Bear, Beartaria Times issue no. 2, p. 80-82.