Ask HN: About to quit my job and work full-time on my side business, advice?

https://news.ycombinator.com/item?id=19243208

by theleap • 7 years ago

35 14 7 years ago

news.ycombinator.com

I have a profitable side business I created over the last year while working full time. I've decided to make the leap and work on it full time.

The business profits are comparable to my full-time salary, so money isn't really an issue. I'm based in the US. What advice would you give to someone in this situation (Taxes, incorporating, lifestyle, anything and everything welcome)?

rogerkirkness• 7 years ago

Keep your personal and business expenses separate. Make sure you have a proper C Corp setup. If you ever intend to raise money, make it a Delaware C. Don't underestimate the mental health impact of the uncertainty and sheer weirdness. Don't be surprised if you level up skill wise faster. Don't be afraid to invest personally if there is ROI, sometimes people under capitalize lifestyle businesses and they could do better by rolling more money back in. About 5% of customers will not hesitate to be abusive, pay extremely late or exploit the fact that you're small. Learn what they feel like in the sales process. The first time you'll be convinced it's you, and blow at least a month. Learn to fire them during the sales process or insulate yourself with much worse terms for them and stronger for you (paid up front, higher rate, easy out for you). Dealing with abusive customers is one of the hardest "didn't expect that" things I've experienced. Otherwise, enjoy.

muzani2• 7 years ago

With abusive customers, it's usually best to set up an SOP to detect then filter them out. I'm totally against the whole "customer is always right" mindset because that's a beacon for abusive customers. Generally they hang around the cheapest priced products.

I agree that tough terms are good at filtering them out. You might even have to be a little aloof, but not outright rude. Things like pay up front, by a certain date, is great for this.

mattm• 7 years ago

The original quote of "the customer is always right" referred to"the customer" as the market as in the collective group of customers is always right.

As anyone who has worked in retail or has had customer interactions can attest to, individual customers can be very wrong.

matt_the_bass• 7 years ago

What is SOP?

el_dev_hell• 7 years ago

About 5% of customers will not hesitate to be abusive, pay extremely late or exploit the fact that you're small. Learn what they feel like in the sales process. The first time you'll be convinced it's you, and blow at least a month. Learn to fire them during the sales process or insulate yourself with much worse terms for them and stronger for you (paid up front, higher rate, easy out for you). Dealing with abusive customers is one of the hardest "didn't expect that" things I've experienced. Otherwise, enjoy.

Some of the best advice I've seen in a while.

In my situation, most clients/users are amazing, understanding, and appreciate the work we're doing.

Between 5% and 10% are insane. In my very small part of the market, I've learned that most horrible clients will be either very small (1-2 employee businesses or family operations) or enterprise level with sloppy internal policies. I try to catch on early and tweak the terms to: a) discourage them from using us b) insulate us from their hellish behavior.

mrfusion• 7 years ago

Any tips to recognize those customers?

rajacombinator• 7 years ago

Don’t form a C Corp unless and until you have people with a 6+ figure check lined up.

muzani2• 7 years ago

Read up the startup playbook if you haven't: https://playbook.samaltman.com/

You should probably decide early on whether it's a lifestyle business (steady $40k per month) or a VC backed business ($100M+ valuation). VCs won't back lifestyle businesses, but they can be life-changing. On the other hand, lifestyle businesses are actually harder, but in different ways, e.g. you can get disrupted by Google or a VC backed company 20 years later.

Don't spend too much focus on incorporating and lawyers and all that. It's probably worth paying well enough to trust someone to handle it. Some of my biggest regrets are spending days handling my own accounting and logo design. Even a mediocre lawyer probably knows better than you.

Try your hand at applying for accelerators. The good ones are easy to apply to and the process forces you to analyze your company.

You should also get a cofounder if you don't already have one. This could be a spouse or early employee. The standard is 4 year vested equity.

taf2• 7 years ago

If it’s a software startup don’t be persuaded to raise money giving away what you have created - software has like zero overhead compared to other industry. LLC is perfect for getting started as it protects you and it’s tax favorable to start. Get ready to work 24/7 or at least always have your phone with you, depending on the service type you want to make sure you reduce the risk of downtime. don’t be afraid to buy more servers/instances for redundancy. Always be closing, always be coding, always be caring - remember your abc’s

jasonkester• 7 years ago

You’ve already taken the best advice I have to give on the subject: don’t quit your day job until you replace it’s income.

Beyond that, I personally made a point of ensuring that my product stuff runs itself with no human input whatsoever. Even to the point of ensuring that customer support tasks get automated after the second time I see the same request.

The goal is to be able to really down tools and disappear for a month at a time without the business falling apart. Chances are you will have had to do a lot of this in order to run the thing while employed full time, but now that the payoff will be true 100% downtime for you whenever you want it, it’s well worth finishing the job.

Good luck!

wrestlerman• 7 years ago

I'm gonna say, don't be too hard on yourself. You may expect to be as productive as on your previous job, but there is a big chance that you won't be. It will take some time to adjust to the new setting (even if you worked in your free time on the business).

Anyway, congrats, good luck.

wasi0013• 7 years ago

I think you should read this: https://docs.google.com/document/d/1wkJ6Ruh2IiR-caT-PS3n5Yt5...

Take it with a grain of salt and use your intuition. Related thread on HN: https://news.ycombinator.com/item?id=19214512

borplk• 7 years ago

I'm wondering what's the topic of the business?

Ask HN: About to quit my job and work full-time on my side business, advice?

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