Want to Start a Small Business? Good Idea!!

Shh...please do not use all-caps.

Request has been sent to alter. Thanks.

And NEVER , NEVER, (and I really mean) NEVER start a small business in Latin America with your wife the legal owner

Ok now everyone knows how stupid I can be at times

Hey - aren't we all at times. Don't 'beat yourself up over it' ^{_{- as they say.}}

You need two Directors if you have a Private Limited company and your first choice often goes to your spouse or child if you have grown up child.

I have learnt in Dominican Republic that man woman relationship was highly stressed up and women in their late 30s feel very insecure. Many young educated women either were moving to Miami or Brazil.

I have also met Engineers from Argentina, Chile, Urugai, Brazil and Mexico and perhaps all those countries have greater problems than we have in eastern countries in technology. Our life is more tougher in eastern Asian countries as we do not live comfortable life model of Americans. There are large resources in Latin America but people there hardly make use of them. I think those countries are less populated and many people try to migrate without concentrating on development of their own country. As we have large population in India, few millions going out or coming in does not affect us much while for those with few million population it must be a serious problem.

You have to love and live with your people else world will look like an insecure place for you. Collectively you have to develop yourself.

I think, food processing industry, agriculture, power generation and management, electronics industry and education and training are few areas excellent for those countries.

I think Brazil has few best in the world model of technology in recent years and they have done great job in garbage collection and its reprocessing. I think they can sell this technology to every state in India and can take millions of dollars from India very easily. We have very poor garbage handlng methods.

I will like to hear more from Latin countries. I do get some communication from Latin American countries from young engineers. I had many friends there when I visited those countries in 1988. After that I limited my trips only up to large cities in USA. I feel we should share knowledge and benefit from link to the entire world. Young Chinese are just doing that. Their reach is remarkable. I get few hundred calls from them each day. They want to sell something or the other. Even though their cities are abused by their own Government, they try ti live life with whatever resources they may have and try to become rich by business. Most of them are less than high school educated and that is so even in Singapore, Taiwan and Hong kong but they can still run a good high technology business. It is all in their attitude. Some of them live dirty life which I can never stand to but that part I can ignore. Their women have less respectful life and so it is for Indian women.

I have found that mastery of several skills is necessary to run a successful technically oriented business.These skills are financial/accounting, sales, marketing, R&D and engineering to name a few. Most people are good at one or two of these skills. Very few people can master all of them. Lack of ability in any of these areas can hamper a business. I find it very important to find partners who have skills that don't match, but compliment your skills. For example, 2 chemists is not a good match. They could develop the best product, but would not be effective in selling it commercially, or financing a major scale-up. However, a chemist and a sales/marketing person would be a good match. This is what works for me.

Business is an attitude and not much of knowledge required. Totally uneducated run it much better as they have little chance of diversion of mind and stick to one idea they catch and believe into it.

Most of the earlier trade were family knowledge in just one area and it was often a great thing to do.

"must be willing to work hard for few years" yes and most importantly the ability to absorb financial loss and sustain.

One more important aspect is the ability to economically scale up production and willing to move from the comfort zone such scaling up will invariably entail.

While it is easier to have a small business at survival level, but to make it at competitive level to over run competition requires a lot of planning, funds and management to reduce cost, increase productivity with quality and then lots of advertisement as name sells more than product.

Business is by its management so that parts is never out of the business. If you can not manage business then you will sure suffer in business so it is never for very weak hearted people. It does require courage but no great physical strength and often women can be a great success.

One has to realize that there is nothing great to lose then one can succeed easily. It is a fearless attitude which is a first step to do business. Success or no success, one should do it to learn all about business as that is a main part of the business and it is to be learnt by doing it. Even those who did not succeed have learnt about it for sure. At time such people do not realize the value of their knowledge and can not convert it into cash.

I remember Garthh started Biodiesel business with friend and failed but he can still make huge money if he comes to India. I can prove this very easily. Difference between him and me is that I can make use of other's knowledge easily and I know how to fit it like nuts and bolts.

Reason for such discussion is to learn from others and to overcome your pit falls. There are some weaknesses in people that drag them to financially downward and i short of negative force in their life.

When you structure a small business, you will almost never be able to do it all on your own. You will need a partner. It is VERY important that any partners have a smaller share in your business than you do. Equal parners should not be 50-50 partners, but 49 per cent and you have 51 percent. I cannot stress enough how important this is.

What is the value of a business? Normally the value of a business is assessed at seven times yearly earnings. It may be more complicated than that.... Keep this in mind if you plan to "buy out" a partner. Or to buy into an existing business.

Starting your own business is a trade, just like any other trade, and can be a full time job. A person who starts his or her own business must be prepared to not be a worker, but may have to hire expensive workers. The one worker you should NEVER hire is a CFO, you should always do that job yourself, or at least, supervise the person who has access to the money VERY closely.

In Business basically one learns to trust the partner.

One also learns to respect the value of being a partner and to give proper return for that value.

You often place close linked partner because you trust that your partner will not interfere in your bad actions. This point is often wrong in the Principal businessman and trouble also remains there.

In my business, my wife is my business partner and she is a company Director. While she receives her remuneration from company, I work honorary as I get enough funds from Government service retirement and we both do not need high personal funds.

We now are promoters for a new NGO company which is exclusively for promotion of Science. As we both are promoters, we will not draw any kind of funds and will actually inject our saving from other resources. We will have a team of members to operate this organization and will also employ scientists and engineers to work for the aim and objectives.

We had no problem for the last 14 years in running business, and my wife took all decisions along with me, including signing documents for bank loan. I keep her informed about my activities as I am the first decision maker but all decisions are taken in a meeting jointly if these are changing company policy and were not discussed before.

Too many partners may sometime be of problem when funds are short and wasted. Be very careful that funds are not wasted. Company supposed to grow and funds must not be removed out for a decade. This is a key point to let it grow. One can take out only minimum expenses, like travel funds and minor expenses for survival.

It is very good for the startup to discuss with someone already running a successful story.

My company started with just $2000 in the starting with my share $1000 and that of my partner $1000. We then moved to $50000 share of each and in next phase US$100000 each share now. W will move to $1 million each share in another few years as company grows. We never take out funds so it keeps growing on its own.

Company uses out share money, some loan from us and loan from bank. This total fund is good enough to rotate 4 times in year to have business multiple times in turnover for the company that also brings in profit. 25% profit becomes 100% profit per year as money is reused four times in a year. It is very important to have fast turn over and quick money back into the company for reuse use for next production. Sometime we take advance payment from buyer.

Indian wives quite obviously are a bit different then Latin wives Good luck, keep her on a very short leash...

I agree fully with the above 51% idea in places where this is possible.

What would you do if she desires to take her money out of the business to give it to her grand children, and YOU desire to keep it growing? Flip a coin? No business can predicate its existance on a coin flip. No ship can have two captains.

This part is realized by the Governments and in Private Limited companies sale of shares is possible only to the existing Directors. hares cannot be sold in public to others. Every man, woman has right to give personal money to whomsoever they wish to give. Why should there be any problem. After all the money is earned just for such purposes.

Many men hide their evil plans and wrong decisions from their spouse. This is where things are seriously of greater problem. Discuss clearly nd then if you feel it is a good decision then make partner in industry. Your bad decision is your bad decision in any way so why to blame others.

Profit dividends is decided in a meeting of Board of Directors and there is no harm in taking out profit of the company by declaring dividend.

If you have a partner who is going against a common decision then running a joint company sure is a problem and such companies are of high risk and bank should not finance and Government must not help and for this reason, there is this requirement of two Directors to go together and make a successful story.

Company can also be by a single person but such companies are called Proprietorship companies and profit is taxed like personal income.

In Private Limited company, Directors are employees of the company and company is taxed like a person under companies act.

I have two different types of companies. One Private Limited and other Section 25 Private Limited. Section 25 companies do not have share capital so no dividend is possible on profit and hence they cannot be taxed. Section 25 companies are not for personal profit and are generally known as non-profit NGO Organizations

We have 30% tax on profit for Private Limited companies on their profit. It is different from VAT and EXCISE and Customs Duty or Service tax.

Laws related to tax differ in each country. However, most of the countries help SSI. USA does it in many ways.

It would not be evil to want to dissolve a partnership and give the money to charity or your grandchildren. But the business might not survive being broken in half like that. But that is only one thing that can "go wrong". There are many more.

A friend of mine had a fifty fifty partnership and it was agreed that after six years, they would go their separate ways. When the six years were up, the business was in a temporary down turn. So they decided that it would not be a good idea to break up the business since neither would get their money out of it. So they hung on for another two years, becoming increasingly bitter towards each other. When the business was doing well, parner A tried to sell it. And discovered that nobody wanted to buy just half a business, and the other half was unviable on its own. The result was that nobody won.

Thats why.

Family always has issues. 49-51 is the way to go.

(And yes, I have started four different businesses. All successful, as I define success. I only have one left now though.)

In a Private Limited Company no one can give share money to any one else other than already existing investors. Who holds how many shares makes no difference. It requires a common agreed decision. Anyone interested in getting out need to negotiate within existing investors.

Private means totally private. Leading person often holds higher number of shares but sometime sleeping investor may also hold larger shares if people with knowledge do not have their own funds.

In Public Limited company one can sell share to any one in public. Restrictions are only on large number of shares generally used for toppling the management which is not permitted in India but may be permitted elsewhere.

With common understanding and with board of Directors decision, Private Limited company can transfer shares to a new member. In India, minimum 2 and maximum 50 members can exist in a Private Limited company to hold shares.

Actually shares do not affect the company. Funds on hand, proper decision making and business in right direction operated efficiently matters in running a business.

Sometime trade is confused with manufacturing business. There is manufacturing in trade business. Company only sells goods and it can sell almost everything and can vanish.

It is also important to know that some people may be totally unfit for business and such people should realize very early. In Singapore 80% people move to trade business after their high school education. In India even after engineering, MS or Ph.D. degrees, people remain unfit for business. Less than 5% Indians are fit for business. That is one reason that only <8000 people hold 80% wealth of India. Others are unfit even to hold the wealth of India. They prefer to remain as slave and always want to work like a slave under command of someone. They are scared to death to take their own charge. It is not funny and it is a very sorry reality. 600 years of slavery or perhaps 3000 years of degraded life has left this poor effect on Indian people very deep. Those move to western countries also remain slave there. They may earn high salary but cannot run a business of their own.

Slave maker businessmen and dirty politicians run country. You can easily understand why there are so many poor. They are made so by themselves due to their own mentality. Chains are inside their mind and their mind cannot think beyond.

I have seen worst situation in many other countries.

Good answer. Good analysis