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ASIAN AMERICAN ISSUES
Starting Your Own Business
(Updated
Tuesday, Apr 1, 2008, 05:56:12 PM)
hat's not to like? Tell off the boss, scrap the suits and ties, exit commuter hell, set your own hours and rake in the riches. Hell, if average joes like Charles Wang, Jerry Yang and Pehong Chen can bootstrap startups into billion-dollar companies, what's to stop a savvy, hardworking wiz kid like you?
Top AA entrepreneur
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That's precisely the thinking of the 913,000 Asian Americans who run their own businesses. As of 1997 (the most recent year for which census compilations are available) Asians made up 4.5% of all U.S. businesses. On a per capita basis AA are nearly twice as likely as other minorities to start a business. And they're doing well. Between 1992 and 1997 the revenues of Asian-owned firms jumped 68% to $307 billion, compared with a 40% growth for all U.S. businesses.
But commerce department stats show that most AA startups aren't of the fantasy variety. Only 32% had paid employees and only 2,100 (2.3%) had 100 or more employees. Maybe the most discouraging to prospective entrepreneurs: only 5% (45,300) of firms had gross receipts of $1 million or more. Far larger numbers (259,600 or 28%) had annual receipts of under $10,000.
AA businesses also don't fit the stereotypes of hi-tech garage startups or mom-and-pop grocery stores. The biggest share (44% versus 43% for all U.S. businesses) fall into the services category, with heaviest concentrations in business and personal services. The number two category is retail (21.4% versus 14% for all U.S. businesses), followed by "Not Classified" (10%), finance, insurance and real estate (8%), wholesale trade (6%), transportation, communications and utilities (4%), manufacturing (3%), construction (3%) and agricultural services (1%).
In terms of gross receipts, however, wholesale trade accounted for over a third of all receipts with $105.5 billion, followed by retail ($67.9 billion) and services ($67.8 billion) where a much larger share of the receipts survive to the bottom line. Asians own 5,634 law firms, 74,471 medical firms and 23,242 manufacturing firms. Of those, 1,676 companies with 33,616 employees were listed as manufacturing electronic and electric equipment. The glamour fields make up relatively small numbers. For example, listed under "motion pictures" are 4,338 AA firms with $49.5 million in sales. Of those only 1,622 had paid employees, 8,326 of them.
By nationality, Chinese Americans owned the most businesses (252,577), followed by Indo-Ams (166,737), Cor-Ams (135,571), Viet-Ams (97,764), Japanese-Ams (85,538), Fil-Ams (84,534) and other Asians (70,868). Revenues showed greater disparity: Chi-Ams ($106.2 bil), Indo-Ams ($67.5 bil), Cor-Ams ($45.9 bil), J-Ams ($43.7 bil.), Other Asians ($19.0 bil), Fil-Ams ($11.0 bil) and Viet-Ams ($9.3 bil).
All these stats are meaningless, of course, if not downright hazardous to those who risk life savings, good credit and a steady paycheck to launch themselves into trajectories that are always unique, perilous and non-reversible. In the end all that separates the eight tattered failures from the one gleaming success is a relentless will to pay whatever cost is demanded.
Is starting your own business really the best way to fulfull the American dream? What separates the sun-bleached carcasses lining the road to riches from those who arrive in air-conditioned style?
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WHAT YOU SAY
[This page is closed to new input. --Ed.]
starting your own business is the only way to go for AA's. Who wants to work hard and reach the glass ceiling at middle management, only to be held back by whites at the top? If you have any pride and confidence, do your own thing and don't settle for the white's scraps.
Joe
Sunday, March 30, 2003 at 17:55:41 (PST)
[152.163.189.135]
Business Newbie,
The business development of locksmiths, A/C repair, car machanics, and hairdressor are more or the less the same.
You acquire a skill, get a local license. Then you spend your time trying to build a clientele. Most likely local clientelle, since you are the only person in the beginning to perform those skills.
AC Dropout
Sunday, October 20, 2002 at 12:40:37 (PDT)
[24.90.98.143]
One thing is I was wondering about taking classes in owning your own business by taking classes in like vocational training or even "gasp" a Correspondance course.
Things like locksmithing, Heating and Air-Conditioning, etc. Does anyone have any advice in terms of success taking courses thru vocational schools or correspondance courses and eventually started their own business that way.
Any help again would be appreciated.
Business Newbie
Wednesday, October 16, 2002 at 12:02:09 (PDT)
[199.174.230.37]
My father started three businesses and failed in all three. I remember our family moving into smaller and smaller houses, then finally into a dilapidated apartment. Then while I was still in school my father died, probably from the strain of all those business failures. I had to get a job and work 40 hours a week while going through high school. I was too busy supporting my mom and brothers and sister to even think about going to college.
The point of this long story? I am now well off and own three busineses that are all quite profitable. I am convinced that what made me so successful was the hard experience I got working to support the family. It taught me that employees can work very very hard or they can soak you for all you're worth. Business success depends on who you hire and trust. And you can't learn that unless you've had the experience of working your way up from the bottom. You have to see every level of a business, especially the lower ones. Otherwise you will make all kinds of bad assumptions that will destroy your business.
So if you're going to start a business, spend about 5-8 years working your way up from the bottom of a business. That's where the real action is.
Accidental Businessman
Thursday, October 03, 2002 at 08:16:30 (PDT)
[188.43.117.102]
Pros and Cons of starting a business...
Hmm....I know some of the most talented, and intelligent people who have tried to start their own businesses. Some of them fail and some succeed.
Some of the pros of starting your own business are: The opportunity to become rich, the chance to do what you really want, being your own boss.
While some of the cons of starting your own business are: Getting bored doing the same thing all the time, long hours, no security (consistent pay checks and medical insurance) and lots of risks!!!
I know people who have become successful and people who have failed. No matter how much strategy you put into your business, and no matter how hard you work at it, you won't succeed without a little luck.
Opening a business has its ups and downs but it's not for everyone
A Cute Filipino Guy
Wednesday, September 11, 2002 at 23:22:20 (PDT)
[198.81.17.169]
be,
That's the ticket. Good luck and best wishes.
AC Dropout
Monday, September 09, 2002 at 10:54:20 (PDT)
[24.90.98.143]
Entrepreneurship has it Rewards:
I took your advice and read E-Myth Revisited by Michael Gerber. It's an excellent book with valuable information! Anyone whose currently owning or thinking of owning a business should read this book!!! He shows you how to apply the lessons of franchising to your own business (regardless of your company's size or type). They're foolproof strageties that would ensure the growth and success of any business.
How to own your business yet be free of it, how to spend time doing the work you love rather than the work you have to do, how to build a business that works without you, rather than b/c of you, etc...are exactly the reasons why I've always wanted to be an entrepreneur. This book reassured me that self-employment can be rewarding as I have always hoped it would be.
AC Dropout:
Thanks for the advices. After doing some researching, the business process and strategies are making more sense to me. If you know of any valuable resources, please let me know.
Believe or not...for once, I'm happy that the stress and miseries of my current job forced me to examine my career. It took me a few monthes, but I've finally made a decision on which type of business would be most suitable for me to build. I also took your advise...I'm starting to devise strategies to study the demographics and psychographic, and ways to test my product before launching my business. It'll probaly take a year or two...but at least it's giving me hope for a more fulfilling career (and hope of freeing myself from corporate slavery)!!
Any other advices you have are welcomed.
be
Sunday, September 08, 2002 at 20:43:16 (PDT)
Thanks for the Info guys.
It answers my questions. So either way if I started a business myself and did all the work and she didn't, I'd still have to give her half of the business if a divorce happens.
I did get married and she is a good wife. I was going to get a prenup right before the marriage but decided to back out. I was hesitant about getting it because of what I've read also about the statistics of getting one.
For one thing, it is impossible to separate the cost of living among two people because living expenses can come from your account or hers and the minute you purchase a group item like a car or a house from your account, it automatically becomes joint property if a divorce happens. Also a prenup can also be contested in a court of law if the other spouse so chooses. So either way if anything happens, she still gets half anyway either with or without a prenup.
That's the thing I can see why when a divorce happens how many families get destroyed because of any kind of unfairness of the law. Doesn't matter what the other spouse makes because they are guaranteed half if anything happens even if the other person never lifted a finger or not.
You see many stories of guys and girls knocking off their spouces because they either can't afford to split the half or was unfairly splited or got screw over because of having a prenup. If only the laws of this country can change I feel there will be less murders or crimes committed in the family structure.
I guess the best is to have the spouse work for me as a VP so I can get some help at least and be setup as S Corp so to avoid Double Taxation.
Business Newbie
Wednesday, August 28, 2002 at 12:37:27 (PDT)
Business newbie
I strongly suggest against a prenuptuaial agreement. It is a gaurantee to end the marriage. Studies have shown couples with prenuptual agreements are almost certian to fail in marriage.
Your best protection is find a good wife in the first place.
Obviously C offers the most benefits, as it is the major corporate entity. However if you business is rather small, S-corporation is the way to go. It treats your corporation as single person. So you dont get taxed twice.
Regarding your spouse thing. No it dosent work to have her work as secretary. Heck she dosent have to do anything and if you divroce she gets half the pie.
The keyword is shareholder. She automatically has 50% of shares in the corporation. If you sell the shares to outsiders, she will still get 50% of proceeds.
Unless... you make her sign a contract with you stating explicitly what percentage of the corporation she will own. (this is a dirty dirty technique) I personally think it unhonorable to do this. However, its just a way to do it, (if she cheated on you).
SOG
Saturday, August 24, 2002 at 19:51:09 (PDT)
Business Newbie,
S-corp - are for small business with about 25 people or less. The advantage is that there is a corporate entity, however, corporate and personal income tax are rolled together at the end of the year.
C-corp - are for larger business with 25 people or more. There exist a corporate entity. However, the corporate entity and yourself will both be taxed at the end of the year.
Limited Liability - there is no corporate entity. Just you.
Your going to have to consult a divorce lawyer about that spouse thing. Basically from my understanding if the spouse can claim she assisted you in anyway in developing a business. They can claim a part of it. Pre-nup is your best protection.
AC Dropout
Tuesday, August 20, 2002 at 08:38:03 (PDT)
Does anyone know what the best type of Corporation one should start if they own residental properties like 10 to 12 units? With the possibility to get more properties in the future?
C-Type,S-Type or Limited Liability?
I would like to have the best tax deductions and have things like company medical insurance and company health club benefits for any future employees. Which type of corporation will give me the most options for deductions and yet give me the most in return for what I am doing?
Also does anyone know how should you factor in your spouse or your significant other in your business?
Meaning if you happen to get into a divorce, would it be better to setup your corporation as you being the CEO, sole propietor without your spouses name; so if anything happens, the company doesn't get split up in half?
Is it OK to just have your spouse be a secretary and so you can say that you are the main boss and not them so you don't have to split the company because of it?
Sorry to make it sound weird but most people don't think about it, when you setup a company and stuff like divorce happens, it can mess up all the hard work you put in to the business let alone your relationship.
If anybody knows, please feel free to comment on these subjects.
Business Newbie
Monday, August 19, 2002 at 16:14:38 (PDT)
be,
My advise all along has been to start a business in a field you enjoy. Mine was a hobby/interest turned into a business. The reason I recommend this is because there will be many obstacles in running a business. And if it is something you enjoy, it will be all the more reasons to stick with it when the going gets tough.
Both my parents are doctors, so I really had no background in business besides the adage "buy it for a buck and sell it for two."
Starting from scratch is not easy. Here are somethings you will need to ponder
1) Type of business : S corp, C corp, Sole proprietor.
2) Do you need government licenses conduct your business?
3) If your think about retail, who are your suppliers?
4) Where are your customers?
5) How to you plan to test the market?
These are just simple questions to get the mind thinking. Just keep mulling over this stuff for a few months and everything should become clear after a while and you will know how to begin.
AC Dropout
Thursday, August 15, 2002 at 15:03:59 (PDT)
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