A Conversation with a START-UP / USA Entrepreneur, David Cox

 

Question: Tell me about your business.

Answer: I set up Total Outdoorsman, LLC while I was looking for a job after graduating from college. I get bored easily, and the job search was moving slowly, so I decided to start a web-based business. I thought it would be fun and something that I could make some extra money doing while not taking up so much time that I couldn’t work full time when I found a job. I love the outdoors and drop-shippers for outdoor equipment are relatively easy to find, so it was a good match.

I setup Total Outdoorsman, LLC as a retailer and manufacturer of outdoor sporting goods. The “manufacture” part will allow me to add shop tools in the future to produce my own products to sell. Total Outdoorsman, LLC owns and operates www.totaloutdoorsman.com, which currently has over 2,000 products listed for sale.

The only products that I stock are the Total Outdoorsman bumper stickers; everything else is drop shipped from my suppliers so I have no inventory to pay for, stock, or track. When an order is placed, the customer’s credit card (or whatever means of payment they choose) is charged, and an email is automatically sent to me with the order details. The customer also automatically receives a confirmation. I process the order, either during my lunch break at work, or at night by going to my suppliers’ websites and entering the order. When it is shipped, I am emailed a confirmation with a tracking number from my supplier, which I place online. When I put the number online, the customer is emailed again with a shipping confirmation and tracking number. At that point, the order is complete, and all I need to do is to input that data into Quickbooks for accounting reasons. Roughly half of this process will eventually be automated once the business grows, and I can invest more into software upgrades.

Question: How is your business doing?

Answer: At this point, business is slow for several reasons. The primary reason is that I have not been able to put as much time into operating it as I would like. I work full time as an engineer, which is not a big problem, but I also design most of my own adaptive equipment. I designed all of the modifications for my next vehicle, which is currently in production. This project’s budget is about $80,000, and a timeframe of nearly a year. This timeframe should have been much less, but it will stretch out to almost a year when it is all done.

I am creating all of the designs, building the electronic circuits, programming the microcontroller, and coordinating work between three different shops. That project, along with benefit planning, since my PASS is now complete has taken all of my spare time. Once the truck is completed, I plan to invest money that I have earned from my salaried job. Then, I plan to spend my extra time to grow Total Outdoorsman, LLC into a more profitable business.

The long term goal for the business is for it to generate enough income to support itself, along with my expenses related to my disability (i.e. attendant care, wheelchairs, etc.), because I expect to eventually loose all benefits. If it grows large enough to fully support me and my family that will be great. However, I suspect that if it becomes that large, I will have to make the decision to quit my job and work full time with Total Outdoorsman, LLC. Depending on its potential at that time, I will make that decision. For now, the plan is to continue to work full time, but operate Total Outdoorsman, LLC at night and on the weekends to generate the extra income that I need for special expenses.

Question: What were the major challenges to getting your business started?

Answer: I had three major challenges in getting the business started. The first challenge was setting it up so that it would not negatively affect benefits. Second, I had to choose a business model that would allow me to work full time as an engineer when an engineering job became available. Third, I had to select the appropriate software and services that met my needs, but where affordable.

Question: Now that you are successful, what would you have done differently?

Answer: While the business currently is not making money, it has met most of its goals. If I had it to do all over, I would have invested more in customized software/website design to make listing mass quantities of products easier. I would also invest more in advertising. However, both of those changes would have required more startup capital.

Question: How has owning a business helped you in your personal life?

Answer: I have met dozens of people along the way who either helped set it up; perform some type of service such as accountants. My business has made me prioritize, made me more independent, and self-confident. It has made me a savvy businessman! It gives me a sense of independence and freedom.

Question: What impact did owning a business have on your family?

Answer: Due to the fact that Total Outdoorsman, LLC is a small company designed to be operated as an “on the side” business, it has had little impact on my family. I suppose that if I had a wife and children, some time with them would have been sacrificed. Since I am single, that has not been a problem.

Question: What surprised you about owning/running your business?

Answer: What I thought would be difficult (accounting, business structure, in general “back end” tasks) has been easier than expected, but what I thought would be easy (promoting the website, bringing traffic in and converting the visits to orders) has been more difficult than expected.

Question: What was the most important support service you received when starting your business? Can you describe how that service was provided?

Answer: My mother loaned me a few hundred dollars to buy equipment that I needed. I did not want to take that, but looking back, I wish I had taken more. Not because I wanted something for nothing, but if I had gotten more startup capital, I may have been able to advertise and/or customize my website software. That extra few hundred dollars may have allowed me to make the money back by now to repay them.

Question: What advice would you give to others wanting to start a business?

Answer: Take the time to set it up the way you want to and the way you feel that it will work best for you. Don’t take the fast “cookie cutter” route. Get a good advisor who understands business structure, accounting, the IRS, and Social Security. I was aware of the different types of business structures as well as the e-commerce industry, but Dave Hammis of Griffin-Hammis (now START-UP / USA Co-Technical Assistance Director) helped me put it all together in a way that worked for me, and most importantly, in a way that has not adversely affected my benefits.

Starting a company is a risk, so be a risk taker. The majority of your startup capital needs to go to advertising and other forms of promotion. I took the approach to start very small so that my financial liability would be minimal. At the time, I was fresh out of college with no job and only $400 SSI benefit each month. It is working, but far slower than expected. When I start another company, I will jump in head first with plenty of startup capital (personal input, investors, and loans) and take any risk necessary. Sure, it is a big step, but in the end, I will be extremely successful, or back where I started. That’s the risk you have to take.

Resources

Small Business Administration / Forms of Business Ownership
http://www.sba.gov/smallbusinessplanner/plan/getready/Corp_learn_more.html

The Small Business and Self-Employment Service (SBSES) / Glossary of Terms http://www.jan.wvu.edu/SBSES/Glossary%20of%20Terms.htm

Internal Revenue Service: Limited Liability Company
http://www.irs.gov/businesses/small/article/0,,id=98277,00.html

Limited Liability Company 101
http://sbinformation.about.com/cs/ownership1/a/LLC.htm