How much can you make realistically in entrepreneurship?

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How much can you make realistically in entrepreneurship?

Like what sort of size business, what industries (revenues, no. of employees) to make a certain amount?

Stories welcome....

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Comments (55)

Jul 19, 2018

..

Jul 19, 2018

I was thinking more businesses that arent famous and never will be. For instance having 5 small restaurants.

Jul 19, 2018

6 figures I would say - there are guys online saying you can make 6 figures a year from your laptop writing a few e-mails or managing a business's social media.

    • 1
Jul 19, 2018

You can also realistically make 0. :)

    • 3
Jul 19, 2018

You could actually make in the negatives as well

    • 1
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Jul 19, 2018

According to indeed, the average entrepreneur pays themselves roughly $58,000. Some people weren't meant to work for themselves. Roughly 75% of millionaires own their own business and I don't know the statistics for self-made billionaires but I'd have to think that all are self-employed to a certain extent. You can only become so rich working for someone else. If you go off on your own, you are in control of making as much as you want.

Most Helpful
Jul 19, 2018

it depends on the specific industry. A while back, I was in commercial banking and had some lower revenue Clients, this is what I can recall:

  • Industrial Firms with $10-15M rev, I've seen Owners' make $500K+ pretty regularly all-in. In most cases if the business has $5-7MM Rev, the Owner is usually making at least $200K, usually closer to $300K from what I've seen.
  • I've also seen professional recruiting firms where there's maybe $3-5MM rev and there's multiple people making $500M+. This is pretty common for any professional service such as engineering consulting, etc. High margins and very low costs.
  • Low margin businesses like trucking, Owners' are usually making $300-400k with $12-15MM rev. depending on how well the Company's run.
  • You'd also be surprised with how much restaurant Owners' can make, especially when they founded their own chain and have 3-10 locations. On the low end they're making $150-200k, on the high end I've seen two owners' of 8 ice cream locations make consistently $800K - $1MM a year, or $1.6MM-$2MM profit for the entire business on about $10MM in rev.
  • I've also seen a commercial snow plow company with I believe $10MM rev or so with the Owner bringing in $800k+
  • I've seen a promotional products company with ~$7MM rev where the Owner is making $500K+

I'm from the rust belt so I couldn't give you figures for tech related companies

In short, these modestly successful blue collar type business Owner's can make a lot more than most professionals..... you really need to make it to the Exec level in most cases to surpass these business owner's income. Important to note that they also tend to live in VERY low COL cities where $500-750K buys you a mini mansion with 4,000-5000 sq ft

It's a good life

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Jul 19, 2018

I just got me a shitty little ecommerce business and making like 300K a year now on 600K revenue. Life's good.

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Jul 20, 2018

Can you elaborate? I'm in university and really considering starting an online sales company

Jul 20, 2018

Elaborate how? I'm not sure what to tell you.

Find something you can sell. Create site. Market. Profit.

Jul 21, 2018

What do you sell?

Jul 20, 2018

That is indeed the life my man

Jul 23, 2018

How do you compete with Amazon?

Jul 25, 2018

There's millions of ecommerce sites out there. You don't have to be amazon.

Jul 26, 2018

you can buy products from alibaba and then list them for sale on amazon (this is a very big business....something like 40% of amazon sales are people doing this)...so....don't fight amazon...join them.

just google it...you're welcome

Jul 21, 2018

I assume these are just the salaries they pay themselves or distributions they dividend to themselves. A good life indeed. These guys / gals also own the majority of the equity in their business. If the opportunity comes to sell, an EBITDA multiple of anywhere from 4x to 10x depending on the industry and business profile could leave them with a nice lump sum after many years of hard work.

The chief benefit of being a well paid owner vs a well paid employee is that you can sell your business (or hire someone to run it), but you can't sell your job.

Jul 21, 2018

Yeah those general numbers include salary plus distributions. Most don't take over a 100-200k salary, a majority of their earnings are distributions.

from what I've seen, most of these types of businesses won't go more than 4-5x EBITDA. Nevertheless, still great. You won't see much PE in companies will less than $1MM EBITDA and I think normally 2-3mm+ is the sweet spot where they get more looks

    • 1
Jul 23, 2018
BBDreamin:

* I've also seen a commercial snow plow company with I believe $10MM rev or so with the Owner bringing in $800k+

FTW if he doesn't work summers and it's purely snow removal generating the 10

Aug 9, 2018

Forgot to mention - commercial roofing contractor with revenue of $20MM a year, Owner makes ~$2.5MM a year all-in

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Jul 21, 2018

loser mindset

heister:

Look at all these wannabe richies hating on an expensive salad.

    • 1
Aug 9, 2018

Don't have a great idea, don't want to drop the start up capital, extremely high risk, there are a lot of reasons to start a company and many more reasons not to

If I had asked people what they wanted, they would have said faster horses - Henry Ford

Aug 9, 2018

The idea's the big one among people I know. You might have the money and whatnot, but unless you have something you actually want to do it's a non-option.

Aug 9, 2018

Execution takes primacy over the idea, imo.

I win here, I win there...

Aug 9, 2018
I Am Batman:

Execution takes primacy over the idea, imo.

I don't care how you execute the Waterproof Towel, the shit isn't going to sell...

If I had asked people what they wanted, they would have said faster horses - Henry Ford

Aug 9, 2018
I Am Batman:

Execution takes primacy over the idea, imo.

True. But with absolutely no idea, there's nothing to execute.

Aug 9, 2018

But the amount of money varies depending on the business. A manufacturing business may require much more start up $$ than an online site.
I found this very interesting:
http://www.wallstreetoasis.com/forums/article-abou...

Jul 21, 2018

I'm 25 and will net out $1M+ personally this year. I've also been working 80 - 100 hours since I was 18 though. YMMV.

It's a slow burn but once you get the fire going things can get really good really really fast.

Jul 21, 2018

What's your business?

Jul 21, 2018

Diversified D2C brands and eCommerce retailers. Most of my cash comes from the former. My main business runs @ 35%+ EBITDA margins which is glorious.

Jul 22, 2018

what are you doing in terms of ecommerce? amazon fba?

Jul 23, 2018

I primarily launch companies with niche products that are usually med/high end (think BMW/merc in terms of brand/pricing) and build a real brand around them. Some of them could be colossally mismanaged but they'd still make good money because the brand behind them is so powerful and the product(s) are amazing.

I don't like "businesses" that are built on the back of Amazon because:

a) You're at Amazon's whim. They routinely shut seller accounts down even when they have a solid reputation and move real volume ($5M+).

b) EV sucks for companies that make their money selling largely on Amazon.

Jul 23, 2018

What kinds of products? Like, sunglasses, etc?

Jul 23, 2018

No. Creating a fashion brand involves too much of a luck factor. I create products that are fundamentally better than the competition's but also branded very very well. I've done everything from cosmetics to consumer electronics (super niche ones).

Jul 23, 2018

So essentially private labeling with a step up in terms of quality and design? What is your research process like for identifying new products?

Jul 24, 2018

We use contract manufacturers but the products aren't the same as anything else.

Private/white label = same shit as everyone else

Jul 24, 2018

Sorry to add to the litany of questions about your business as I'm sure you're trying to keep details private. But, very generally, what do you think about KickStarter / Indiegogo to gauge demand and obtain startup capital? Do you use them at all to fund your products and determine if there's demand?

Or do you have other ways to determine if a product will be successful prior to plopping down money to a CM to get started?

Jul 24, 2018

I had to bootstrap everything so I used preorders. Not any platforms but basically did the same thing using my own site. Keeps working capital requirements null and yes I use them to test demand. No point making a SKU if we can't get certain volume on preorders...but sometimes it's worth just buying inventory outright. I recently started a supplement company and hired a GM for it + bought inventory ASAP because the inventory was only like $25,000/$35,000 ish which is not much.

Jul 24, 2018

got it. How do you come up with ideas for your inventions Any blogs/websites you frequent?

Jul 24, 2018

I don't come up with the ideas myself. Someone on my team or one of my business partners do and it's usually collaborative.

The idea usually starts with some sort of every day problem that I think would be fun to solve and market the ever loving shit out of. I'm a hardcore marketer/sales guy at heart so it's where I typically get the most involved.

Jul 24, 2018

Any resources you recommend for someone that is wanting to do the same? There's a lot of fake gurus and fluff going around

Jul 24, 2018

You have to develop your own approach and play to your strengths. I would read up on internet marketing as much as possible if I was you as that's the core behind any eComm/D2C co. as well as branding/storytelling and other more traditional marketing aspects. Don't know what a good resource is as I haven't been involved on the tactical side in ~2 years. That doesn't sound like very long but in marketing you're outdated if you don't stay up to date within 3 - 6 months...

Jul 24, 2018

Would you be willing to pm me? I have like two more questions but have hi-jacked this thread enough.

Jul 24, 2018

Ask questions here so the whole forum benefits!
https://www.wallstreetoasis.com/forums/bootrapped-...

Jul 24, 2018

this is awesome. Didn't even see this. Thanks!

Jul 24, 2018

thanks, adding to frontpage

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Jul 23, 2018

ok thanks. but so I'm guessing you market your products primarily through facebook ads and instagram or something ? since you're not on amazon.

Jul 24, 2018

I use a ton of different channels to reduce channel risk. Deriving too many sales from one channel tanks your EV really badly and EV = where you make your real money as an entrepreneur. The salary is cool and all but exits are $$$.

Obviously we never end up with even distribution just due to the nature of specific audiences or products but yeah. Varies a ton. Some products are collabs with huge YT influencers with 1M+ subs so in that case YT drives traffic and then AdWords/FB are retargeting users and saturating them with ads.

Funniest
Jul 23, 2018
LaNoob:

How much can you make realistically in entrepreneurship?

Like what sort of size business, what industries (revenues, no. of employees) to make a certain amount?

Stories welcome....

There was a guy named Jeff who wanted to sell books online. He's now worth $140B.

Jul 23, 2018
TechBanking:
LaNoob:

How much can you make realistically in entrepreneurship?

Like what sort of size business, what industries (revenues, no. of employees) to make a certain amount?

Stories welcome....

There was a guy named Jeff who wanted to sell books online. He's now worth $140B.

Definitely best answer here.

Trying to answer what realistic earnings are for an entrepreneur is the same as asking how much you can make from trading with your own money. You could be the guy under the bridge that guessed wrong and now you are broke or you could be the billionaire who can buy anything his heart desires. It all comes down to a good idea and great execution, if you can get those 2 together then you probably will have at least a somewhat successful business.

As for those giving out specifics, in my opinion the most valuable part of owning a business is the ability to run expenses through it - nothing like good pretax income.

Jul 24, 2018
bl00211:

As for those giving out specifics, in my opinion the most valuable part of owning a business is the ability to run expenses through it - nothing like good pretax income.

I'd say the best part about owning a business is being able to do whatever you want, whenever you want, however you want.

"If you always put limits on everything you do, physical or anything else, it will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them." - Bruce Lee

Jul 23, 2018

I think this is a hard question to answer, but in my experience, most business owners are making somewhere in the 6 figure range, which I know is broad.

Something to throw in here is that the hardest part is getting any business going and on solid footing. It doesn't matter if it's a restaurant or a trucking company. Once you have experience and a few years of decent financials, you have access to capital and a network. From there I would say, your income potential is almost unlimited. The question becomes how hard do you want to work, are you able to take that "next step" (i.e. moving from the chef and GM of your restaurant, to learning to delegate so that you can open multiple locations), and are you willing to take the risk.

I think the majority of small businesses stop once their initial idea becomes successful in whatever terms that means to them. And there is absolutely nothing wrong with that.

Actually, now that I think about it, that's where I am in my practice (independent PWM). I am completely happy financially and my schedule is spectacular. I share an assistant and office space with another FA who is in a similar spot and mindset. I have enough brand presence, leads, and a system in place that I could probably launch 3 new FAs and darn near guarantee them success (and make more money for myself). Ken Fisher would. Ric Edelman would. I'm just not that guy.

Food for thought.

+1 SB for the "guy named Jeff that wanted to sell books online." I laughed!

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Jul 24, 2018

"If you always put limits on everything you do, physical or anything else, it will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them." - Bruce Lee

Jul 23, 2018
Jul 23, 2018