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tugboater

tugboater

Veteran Member
Joined
Feb 9, 2020
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United States
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Sojourn
Hi there! I joined this forum yesterday because my wife and I are in the learning phase of all things trawler...like all of you once were. However, I've been toiling with a question on a separate venture & thought it might be a question to bring up here. Maybe I'm digging in the wrong forum, but what the heck...here goes:

I'm looking for a reference or two. I am close to starting a small business & feel like my weakness is on the financial side of the operation. Solid work ethic and love of my trade has provided well for my family, but only as an employee. I've done a ton of homework, but am not 100% confident in my plan & would pay for sound advice before I take on the risk. Hoping to find an advisor familiar with the marine industry, but not absolutely necessary. The business is in Alaska. I have a few leads, but thought it possible that a few of the boat owners on here made some good decisions with their money at one time or another! Anyone willing to share info? Thanks! If not, thanks anyway!

Eric
 
Welcome aboard. According to my wife, I am not much of a financial whiz...
 
So what is your business idea?

I am a business owner and am probably not 20 miles from you right now.
I’m pretty familiar with Alaska’s sorta unique economy and demographic.
 
Is there a branch of SBA (Small Business Administration) in Alaska where you're considering this business? In my neck of the woods (Seattle), SBA is quite well established, and they maintain SCORE volunteers who act as mentors to new business. These volunteers are typically retired executives from the field they're mentoring. I've used this service and was quite impressed. And the best part ... it's FREE!
 
If you are looking for advice with the financial side of starting a business, you require the services of an Accountant or CPA. They will set up financial records and advise you on tax matters. They will file taxes for you. If you have employees, they can handle the withholding on paychecks.

Though knowledge of the industry may be an asset, hiring an Accountants or CPA's that you can work with, have easy access, afford and trust is more important.

Find a small Accounting CPA firm that deal more with small businesses than ones that work for corporations. I used a one man CPA firm for my businesses. He dealt strictly with small businesses.

It also helps to learn simple accounting too.

A Financial Advisor deal with stocks and other investments.
 
syjos said:
If you are looking for advice with the financial side of starting a business, you require the services of an Accountant or CPA. They will set up financial records and advise you on tax matters. They will file taxes for you. If you have employees, they can handle the withholding on paychecks.

Though knowledge of the industry may be an asset, hiring an Accountants or CPA's that you can work with, have easy access, afford and trust is more important.

Find a small Accounting CPA firm that deal more with small businesses than ones that work for corporations. I used a one man CPA firm for my businesses. He dealt strictly with small businesses.

It also helps to learn simple accounting too.

A Financial Advisor deal with stocks and other investments.
Click to expand...

Not to mention, a good CPA who has been around a while has seen a lot of business make it, and a lot of businesses fail, and can usually tell you exactly why.
 
Toki said:
Is there a branch of SBA (Small Business Administration) in Alaska where you're considering this business? In my neck of the woods (Seattle), SBA is quite well established, and they maintain SCORE volunteers who act as mentors to new business. These volunteers are typically retired executives from the field they're mentoring. I've used this service and was quite impressed. And the best part ... it's FREE!
Click to expand...

As mentioned by Group 9 and others - CPA. Many SBA groups have CPAs either in house of recommendations for the appropriate one for the venture contemplated. Ksanders is the real deal, don't forget his post either.
 
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KSanders-excellent resource.

Score-could be good.

And I strongly recommend a small accounting firm/CPA who deals with small businesses regularly. Those type firms are often more advisers than accountants in their client relationships. They've seen successes and failures. They should know what to key in on.

I'm assuming you're starting a service business where you will provide the same services you have in the past, just for your own company now. Number one pitfall is one big one all tied together and that is underestimating the costs of running a business and undercharging. We get these questions here all the time, why does the yard pay the mechanic $40 an hour and bill $100 an hour and the answer is that's what it takes to stay alive. If you can't see yourself billing what your employer did for your time, or very close to it, then you can't make it. Don't think you can just add a little bit to what you were getting paid. It won't work. A good small business CPA will advise you of all the other costs you will incur and also that a business incurs costs even when not doing customer work.

How do you make money going out on your own? One way and one way only to be successful. Provide better service than the others, do a better job. That's how you build a business. You can't build a sound business based on price, based on charging less. Those who have been doing it know what it costs. Focus on being better.
 
BandB, thanks much for the response & tips. We are going to be doing the same thing I've been doing for most of my working life. Fortunately I've worked on the sales side a bit & have a good idea for what customers will pay for the service. I do believe I can provide a better service than the competition, that is the number 1 reason we're going to give this a go. Thanks again.
 
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Comodave- maybe we have same wife...? Mine says the same of me! :)
 
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ksanders said:
So what is your business idea?

I am a business owner and am probably not 20 miles from you right now.
I’m pretty familiar with Alaska’s sorta unique economy and demographic.
Click to expand...

Hi Kevin-
I was just in Seward looking at a couple boats (I see yours is there). Been blowin' and snowin' down there for a month straight. We're looking more aggressively down in Seattle because that's the area we want to call home. If I find one up here that we can't resist, I"ll just run it down.
As for the business, sorry...I'm going to keep it under my hat for the moment (not easy). Alaska has always been a place that rewards hard work, I hope that holds true for me. Thanks for the response!
 
tugboater said:
BandB, thanks much for the response & tips. We are going to be doing the same thing I've been doing for most of my working life. Fortunately I've worked on the sales side a bit & have a good idea for what customers will pay for the service. I do believe I can provide a better service than the competition, that is the number 1 reason we're going to give this a go. Thanks again.
Click to expand...

Well, do get a good small business accountant, one who will play devil's advocate with you. One thing I've found is that good sales people also sell themselves on their ideas and often need someone to temper their enthusiasm a bit.

Now, I found the ones I worked with learned to anticipate all my questions and objections and when they came to my office with proposals, already had addressed them. A good exercise for you, in advance of meeting with an accountant or adviser, would be to think about what others might question and how you'd answer any queries. Start trying to poke holes in your plan and if you're successful in poking those holes, then figure out how to plug them.
 
tugboater said:
As for the business, sorry...I'm going to keep it under my hat for the moment (not easy). Alaska has always been a place that rewards hard work, I hope that holds true for me. Thanks for the response!
Click to expand...


So where will you find a financial advisor that you will trust not to steal your idea?


Retired independent business people who have been there and done that are what you need, and you will have to trust one with your idea. Your local SBA is where to find him or her.



A CPA will indeed be essential, once you get your idea closer to fruition, but the only business most of them know how to start and run is an accountancy firm!
 
Toki said:
Is there a branch of SBA (Small Business Administration) in Alaska where you're considering this business? In my neck of the woods (Seattle), SBA is quite well established, and they maintain SCORE volunteers who act as mentors to new business. These volunteers are typically retired executives from the field they're mentoring. I've used this service and was quite impressed. And the best part ... it's FREE!
Click to expand...

The SBA in Alaska is an excellent resource. They offer classes and recommendations/answers to so many of the questions I've had. thx Toki
 
Thanks for all the advice folks...I need to get email notifications turned on. I didn't realize there were any responses here.
 
tugboater said:
Bob-funny you ask...that is part of my hesitation. Alaska is smaller than you think. Thanks for the advice.
Click to expand...


I was being a bit ironic.



If your idea is something that needs significant capital, has involved logistics, and so will take some weeks or months of preparation, then it is very unlikely that anyone will casually steal it from you. Wise not to blab it out on a public forum, but I feel sure that a private discussion with a helpful individual from this forum carries little risk.



You could, however, in a fever of caution, hop on a plane and go to, say, Topeka, and visit the SBA in that city. I think you'd be ultra-safe.
 
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Bob Noodat said:
I was being a bit ironic.



If your idea is something that needs significant capital, has involved logistics, and so will take some weeks or months of preparation, then it is very unlikely that anyone will casually steal it from you. Wise not to blab it out on a public forum, but I feel sure that a discussion with a helpful individual on this forum carries little risk.



You could, however, in a fever of caution, hop on a plane and go to, say, Topeka, and visit the SBA in that city. I think you'd be ultra-safe.
Click to expand...

I'm not too worried about someone stealing my idea. I'm taking a risk knowing that all I'm doing is reinventing the wheel. Just making it a little more efficient, maybe? However, I do know my competitors well (they know me too) & feel like I'll have an advantage breaking into the market if they don't have months knowing. Ohhh...Topeka is a stretch, maybe Helena?
 
I would not waste my time with the SBA. I went to them for advice back in the early 80's and had I listened to their advice, I would not have been able to retire from working full time in 1992 like I did.

I was opening a video rental store before the VCR was mainstream and several SBA people from two different locations told me that renting video tapes would not be a viable business. They suggested I open a record and cassette tape store!

They also recommended I devote more capitol to purchasing expensive fixtures, and signs to make the store look classy to attract customers. I disagreed and said a better selection of tapes was more important to a renter than a fancy store. They also said to borrow money for video tapes. I had around $10,000 and opened with home made and thrift store fixtures and purchased as many tapes and rental VCR's as budget allowed. I think I started with around 100 tapes and 30 VCR's.

SBA also said that no one would pay a membership fee to rent tapes.

On opening day, I charged a membership fee, discounted for the first 100 customers and made $3,000 on the first day in membership fees and another $1,200 in VCR and tape rentals. I bought additional tapes and VCR's the next day. And pretty much every day for several months.

Opened a few more stores after video rentals got real hot after the Sony Betamax case was settled. What's amazing is that the first store was opened with $10K and 100 tapes. The second $80K with 1200 tapes due to the expansion of the market and expectation from customers. Bought the fancy fixtures as cash flow exploded.

Sold the stores after 10 years before Blockbuster, Hollywood Video and other chains started moving into the state putting "Ma and Pa" video stores out of business.

One of the other suggestions from SBA was to lease stores instead of purchasing in order to have more capitol for inventory. I leased the first store but subsequent ones were purchased. When I sold the business, not the buildings, rent income was close to the income from the stores. When I first opened I was the only store within 10 miles, but by the time I sold, there was a Video stores at every shopping center and net profit was declining. The income from the buildings allowed me to pursue part time side hustle businesses that was more fun and less time working.

SBA might be helpful for starting an established type of business, but for something new, they have no imagination and tend to discourage startup.
 
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syjos said:
I would not waste my time with the SBA. I went to them for advice back in the early 80's and had I listened to their advice, I would not have been able to retire from working full time in 1992 like I did.

I was opening a video rental store before the VCR was mainstream and several SBA people from two different locations told me that renting video tapes would not be a viable business. They suggested I open a record and cassette tape store!

They also recommended I devote more capitol to purchasing expensive fixtures, and signs to make the store look classy to attract customers. I disagreed and said a better selection of tapes was more important to a renter than a fancy store. They also said to borrow money for video tapes. I had around $10,000 and opened with home made and thrift store fixtures and purchased as many tapes and rental VCR's as budget allowed. I think I started with around 100 tapes and 30 VCR's.

SBA also said that no one would pay a membership fee to rent tapes.

On opening day, I charged a membership fee, discounted for the first 100 customers and made $3,000 on the first day in membership fees and another $1,200 in VCR and tape rentals. I bought additional tapes and VCR's the next day. And pretty much every day for several months.

Opened a few more stores after video rentals got real hot after the Sony Betamax case was settled. What's amazing is that the first store was opened with $10K and 100 tapes. The second $80K with 1200 tapes due to the expansion of the market and expectation from customers. Bought the fancy fixtures as cash flow exploded.

Sold the stores after 10 years before Blockbuster, Hollywood Video and other chains started moving into the state putting "Ma and Pa" video stores out of business.

One of the other suggestions from SBA was to lease stores instead of purchasing in order to have more capitol for inventory. I leased the first store but subsequent ones were purchased. When I sold the business, not the buildings, rent income was close to the income from the stores. When I first opened I was the only store within 10 miles, but by the time I sold, there was a Video stores at every shopping center and net profit was declining. The income from the buildings allowed me to pursue part time side hustle businesses that was more fun and less time working.

SBA might be helpful for starting an established type of business, but for something new, they have no imagination and tend to discourage startup.
Click to expand...

I recommend a small business accountant, but I also caution not to judge the SBA today based on one situation in the 1980's. That's nearly 40 years since. Things change in 40 years.
 
Syjos: I would not disagree with anything you say, except when you dismiss the SBA advisors out of hand. Remember that some of them are people exactly like you.



A person has to take a close second and third look at any advice. We did that for our first clinic: I went to my bank to enquire about a business loan. They said I needed to write a business plan, and handed me a 60 page booklet. I threw that in the trash and we started on a shoestring with cash in hand and IKEA cabinetry. That was our best ever decision. But we knew our business well, as my wife had managed other clinics before, and there was nothing new or revolutionary in what we were doing. It is different if you are new to independent business and need to understand the basics.



I say get as much advice as you can and then sift it all carefully. Borrow as little as possible: once you are approved for a business line of credit, financial institutions want to lend you as much as possible, often against their own long term interests as a lender. Resist the pressure to borrow more than you absolutely have to.


Tugboater, if what you really need to know is if an idea will fly, or at least float, then you are probably going to have to rely on your own judgement for the final decision. You will surely be taking a risk. Never know till you try.
 
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Bob Noodat said:
Borrow as little as possible: once you are approved for a business line of credit, financial institutions want to lend you as much as possible, often against their own long term interests as a lender. Resist the pressure to borrow more than you absolutely have to.
Click to expand...

Bob-thanks so much for your time. This bit quoted here sounds so much like another one I've read a few times on these forums. It sounds something like, "Don't buy the biggest boat you can afford, buy the smallest that fits your needs & can live on."
 
BandB said:
I recommend a small business accountant, but I also caution not to judge the SBA today based on one situation in the 1980's. That's nearly 40 years since. Things change in 40 years.
Click to expand...

The SBA has not changed much in 40 years. I know several SBA advisers and they are still too cautious and discourage taking risks. I tried volunteering with them but they are too restrictive with wild ideas for my taste.

Imagine Mark Zuckerber describing his idea for Facebook getting nods of approval from SBA. SBA - "You're not going to charge money to people using your service? hmmmmm."

Or Elon Musk pitching Tesla to SBA. SBA - "Mr. Musk, men with more experience in auto manufacturing than you have attempted launching their own automobile companies. What makes you, with no background in auto manufacturing, think you will succeed when they failed. Go home and read about Preston Tucker and John DeLoren before you lose your money".

Or Sergey Brin and Larry Page floating Google.

Or Space-X, eBay, Twitter, etc.

I haven't mentioned the other businesses I started after the video stores, but most of them would have been discouraged by SBA advisors.

As I posted earlier, SBA might be helpful for starting an established type of business, but for something totally new, they have no imagination and tend to discourage innovation.

An entrepreneur is born with imagination, resourcefulness, self confience, good work ethics, determination and no fear of failure. They have ideas. They are not created by the SBA.
 
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My experiences working with SCORE mentors at SBA really had nothing to do with "Is this a good idea or not?". Rather, it was more like "Here's the business I'm getting into. What do I need to know about financing, accounting, biz plans, licensing, regulations etc. etc. etc.", and I found them very helpful with that.
 
syjos said:
The SBA has not changed much in 40 years. I know several SBA advisers and they are still too cautious and discourage taking risks. I tried volunteering with them but they are too restrictive with wild ideas for my taste.

Imagine Mark Zuckerber describing his idea for Facebook getting nods of approval from SBA. SBA - "You're not going to charge money to people using your service? hmmmmm."

Or Elon Musk pitching Tesla to SBA. SBA - "Mr. Musk, men with greater experience in auto manufacturing than you have attempted launching their own automobile companies. What makes you, with no background in auto manufacturing, think you will succeed. Go home and read about Preston Tucker, John DeLoren before you lose your money".

Or Sergey Brin and Larry Page floating Google.

Or Space-X, eBay, Twitter, etc.

I haven't mentioned the other businesses I started after the video stores, but most of them would have been discouraged by SBA advisors.

As I posted earlier, SBA might be helpful for starting an established type of business, but for something totally new, they have no imagination and tend to discourage innovation.

An entrepreneur is born with imagination, resourcefulness, self confidence, good work ethics, determination and an idea. They are not created by the SBA.
Click to expand...

Interesting perspective. I am a somewhat successful entrepreneur but I'm conservative. Of those you mention, I wouldn't have had interest in Facebook or Tesla. Space-X too early for me. Ebay would have gotten my interest but concerns about trust and payments would have been on my mind. Still I thought it would work, just not to the level of success they had. Twitter I thought was a definite as others had paved the way. I had a cousin who had the first video department in his town and I thought it was shear genius. That said, I'm creative business wise, but not product wise.

So, brought me to the girl I've ended up mentoring. She had the idea and I believed in it and in her but she had no experience and I gave her the task of writing a business plan. She had no experience, hadn't yet taken any business or accounting course, and I provided no help. 10 days later she handed me one of the best business plans I've ever seen and I've supported her effort from there. She was and is a creative genius and also she is an incredible salesperson who at 19 was selling major department stores on her line. She is CEO of a business doing $2.5 million in sales in 2017, $80 million in 2018 and over $250 million in 2019. I still don't believe it all but I never personally could have done what she has.

So, your point in conservatism is well made.

However, there are advisers who can support and advise effectively, even if they wouldn't have undertaken the business. I never would have done what she has, but she couldn't have done what she has without me and others.

I watch shows like Shark Tank and The Profit. What I often see is very creative entrepreneurs but they are struggling and need someone to guide or support them on the next step. They have the ideas, have knowledge of their business, but lack the overall knowledge and experience.

So, I'd still recommend trying to find an adviser, whether a local small business accountant or through score or just finding a retired businessman. There are many people out there willing to share knowledge if one will listen. Now, what I generally would not do is take anyone on as a partner or investor unless one just has no other way. I do not like partnerships.
 
Toki said:
My experiences working with SCORE mentors at SBA really had nothing to do with "Is this a good idea or not?". Rather, it was more like "Here's the business I'm getting into. What do I need to know about financing, accounting, biz plans, licensing, regulations etc. etc. etc.", and I found them very helpful with that.
Click to expand...

If that's all you allow SBA to assist you with, you're safe.

I would rather pay a CPA to provide that service from the beginning. A small business will need one sooner than later.
 
BandB said:
I watch shows like Shark Tank and The Profit. What I often see is very creative entrepreneurs but they are struggling and need someone to guide or support them on the next step. They have the ideas, have knowledge of their business, but lack the overall knowledge and experience.

So, I'd still recommend trying to find an adviser, whether a local small business accountant or through score or just finding a retired businessman. There are many people out there willing to share knowledge if one will listen.
Click to expand...

I agree. One of the side hustle businesses I started was as a Retail Consultant. I started helping small business owners but soon I'm contracted to Bank of America and Key Bank wanting to assess and train their tellers and personal bankers how to upsell money market, CD, loans and investments to customers. It was more work than I wanted to conduct and dealing with bankers is not easy so turned it over to another consultant.
 
Asking financial advice from boaters. What could go wrong.

First thing my financial advisor said to me was to sell the boat, first this I said after was he was fired.
 
Lollygag1 said:
Asking financial advice from boaters. What could go wrong.

First thing my financial advisor said to me was to sell the boat, first this I said after was he was fired.
Click to expand...

Our CPA says, "You sure you don't want to take a business deduction for any of their use?" I repeat, "No, they're pleasure boats, not business. When we have employees aboard there is no business reason. In fact we have a rule against discussing business."
 
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