Author Topic: Starting a business  (Read 2096 times)

joenorm

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Starting a business
« on: November 03, 2020, 06:06:59 AM »
I have a pretty low stress W-2 type work situation. It pays the bills comfortably and I can even a save a bit each month. I am by no means getting rich.

There is high demand in my area for the work I do(trades) so once I started a business and got it off the ground I have no doubt it would work.

It's the commitment to startup I am having a hard time with. Going to work daily and not thinking about the interworking of a business is so easy. I do feel like I am inclined toward running a good business if I was to go for it.

I just know it will likely be waaaay more work. The potential gains are definitely greater but they are just that, potential. On an energy output to reward scale I am wondering if you'll would recommend running a business vs. the lower stress of just working for someone else.

I know this is very personal choice, but still, a little input would be helpful.

Thanks 

CowboyAndIndian

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Re: Starting a business
« Reply #1 on: November 03, 2020, 07:26:56 AM »
I have a pretty low stress W-2 type work situation. It pays the bills comfortably and I can even a save a bit each month. I am by no means getting rich.

There is high demand in my area for the work I do(trades) so once I started a business and got it off the ground I have no doubt it would work.

It's the commitment to startup I am having a hard time with. Going to work daily and not thinking about the interworking of a business is so easy. I do feel like I am inclined toward running a good business if I was to go for it.

I just know it will likely be waaaay more work. The potential gains are definitely greater but they are just that, potential. On an energy output to reward scale I am wondering if you'll would recommend running a business vs. the lower stress of just working for someone else.

I know this is very personal choice, but still, a little input would be helpful.

Thanks

If you are in the trades like Electrician/Plumbing/Handyman etc., go for it.

Out here in NJ, it is impossible to find a reliable tradesman who is fair in pricing and shows up on time, and does a good job.  In the last few months, I have had guys come and give me a quote and promised to start the work the following Monday and no show. They completely ghosted me after that, with no response to my calls. This seems to be the norm rather than an exception.

You have to prime the pump initially by making your name known. But once you do that, all other references would be by word of mouth.

I have run a business. Not in the trades, but as a software consultant. Running an LLC is quite easy (S Corp is much harder). The only important things are to remember to bill your clients and make sure they pay. If you can, take an intro to accounting course at your community college so that you understand the terms and know how to use accounting software like QuickBooks. A good CPA who files your returns each year would be great, but if you know how to file, you can save a nice chunk of change. Make sure you are insured.

All of these will be hard the first time that you do it but will become second nature after some time. It definitely is not waaay more work, maybe a couple of hours a week and the discipline to put in the time.

Also, the gains will be much more than you can imagine. No idiot bosses. No stupid management rules. You take the risk and gain the rewards.



« Last Edit: November 03, 2020, 07:31:47 AM by CowboyAndIndian »

Smokystache

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Re: Starting a business
« Reply #2 on: November 03, 2020, 10:44:01 AM »
I'm someone who left a good and steady job (tenured professor) to strike out on my own -- so that's my personal choice & bias.

How much do you know about the entire business/profession? Would you need your own equipment and how much would it cost? Would you need a business location? How would you go about getting customers and how much would it cost? Would you need to get your own business or trade license and how much would it cost?

I'm not a big fan of multi-page business plans that are filled with esoteric philosophies, but it would really help to come up with a list of new expenses and new roles (marketing, customer acquisition, purchasing parts/products, etc.) and get an outside assessment to make sure you're being realistic and thorough.

If you're willing to give the trade, then there are likely people here who can help make sure you've looked at all aspects of being in business for yourself.

My personal bias is that many businesses (including trade businesses) can be started reasonably cheap -- but you need to have a clear idea of what will be new and how you'll do it. But if you've got a level-headed plan, reasonable expectations, and a desire to be your own boss, then I'd say go for it.

joenorm

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Re: Starting a business
« Reply #3 on: November 04, 2020, 08:36:00 AM »
Thanks for the replies.

The startup cost would not be significant, I already have most tools and could make do with the vehicle I have for now. I have all necessary licensing besides business and insurance stuff.

The hardest part would just be getting off my feet and the word out. After that, there is high demand in my area(electrical work).

I never have run a business but feel I am pretty inclined to do so, besides not enjoying paperwork much.



SwordGuy

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Re: Starting a business
« Reply #4 on: November 04, 2020, 11:04:46 AM »
I've started a number of businesses over the years.  My tag line has a link to a description of my entrepreneurial journey.

I hope you find it helpful.


CowboyAndIndian

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Re: Starting a business
« Reply #5 on: November 04, 2020, 11:08:08 AM »
Thanks for the replies.

The startup cost would not be significant, I already have most tools and could make do with the vehicle I have for now. I have all necessary licensing besides business and insurance stuff.

The hardest part would just be getting off my feet and the word out. After that, there is high demand in my area(electrical work).

I never have run a business but feel I am pretty inclined to do so, besides not enjoying paperwork much.

Just get a CPA to create your LLC. Approx. $500 where I am. Could be cheaper where you are.

Paperwork is not hard. It may be a little difficult the first couple of times, but with practice will be very easy.

Go for it!

lhamo

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Re: Starting a business
« Reply #6 on: November 04, 2020, 11:48:19 AM »
Do you know any real estate agents or home inspectors/appraisers?

People buying/selling houses often need work that turns up in the inspection done quickly.  And then if people are happy with the work you do, you become the go-to for their future needs.

Kroaler

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Re: Starting a business
« Reply #7 on: November 04, 2020, 03:04:41 PM »
My advice is to ask yourself the following:

How will you get paying clients?

It seems everything else is just noise.  At it's fundamentals, if you can connect your service with paying clients you have a business.

They don't just show up and it's skill you probably haven't honed yet in W2 employment.

The one page marketing plan is a pretty simple book on basic marketing and forces you to answer some questions that must be answered and solved to be successful.  - I'm not sure if there is a more recommended book for easy reading books but that one helped me.

CNM

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Re: Starting a business
« Reply #8 on: November 04, 2020, 03:57:56 PM »
It is sounding like a business you could set up (insurance, bank accounts, tax ID numbers, website) while you are still employed.  Maybe you could even start working for yourself on weekends or for people you know to get your name out.  You can test your idea this way before pulling the plug on your cushy W-2 gig.  You could also explore whether your employer would want to keep you around either on a contractor basis or part-time basis while you work on establishing your own business. 

Hawaiian

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Re: Starting a business
« Reply #9 on: November 05, 2020, 02:36:41 PM »
I've thought about doing the same thing except I'm on the PM/estimator side so I'd need a good foreman/leadman and a couple of carpenters or laborers to get started. I'm curious to hear what you do or hear from others who have made this leap before...

Smokystache

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Re: Starting a business
« Reply #10 on: November 05, 2020, 03:02:33 PM »
My advice is to ask yourself the following:

How will you get paying clients?

It seems everything else is just noise.  At it's fundamentals, if you can connect your service with paying clients you have a business.
...

Read what @Kroaler said several times. I can't over-emphasize this.

I'm sure it varies by profession, but in starting my own business, at the beginning 90-95% of my time/energy is spent getting clients. And then a year later I'm still at least 50% of my time and energy is spent getting customers. In successful businesses that gets easier as you build up repeating clients. But don't under-estimate the challenges of getting started. In fact, I think this is something that separates employees from owners/entrepreneurs. The latter are willing to stick with it and do the work involved in getting new customers. Employees like to do their primary job and not worry about anything else.

Of course, this also means you'll have to be ready to not get paid very much until you build a customer base and make a name for yourself - definitely something to be planned for. Or put another way, I don't know any new business owners who say, "it's easy to find customers and I'm making more money faster than I hoped."  Assume the opposite. Good luck!

Kroaler

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Re: Starting a business
« Reply #11 on: November 06, 2020, 10:26:59 AM »
Just wanted to chime again.

I will admit that I greatly underestimated the time sink of gaining new clients and the frustration of it being something I know NOTHING about and had to self teach.

If you are smart, you will find ways to "automate" the task through good marketing practices, maybe a refer a friend type of thing.(There are plenty of other ways)


The world isn't fair. A good business man will outperform a good technician with bad business skills every time while offering subpar service.


I dont know what your business idea is, but if possible, start it on the side to get a real taste of having to market yourself.  Does it take a lot of capital investment in tools?  Then narrow down your focus and find a happy medium of an activity you can do well that has good profit and intersects with low capital requirements.  No sense in starting up with all the tools to do every job. Instead specialize in what you are best at with limited capital commitment.

Michael in ABQ

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Re: Starting a business
« Reply #12 on: November 12, 2020, 06:03:53 AM »
I'll just reiterate that when it comes to any sort of trade simply answering your phone and keeping your word will put you in the top 20% very quickly. You can price yourself low at first to get some early jobs and customer feedback. Then start raising your prices as you get more work. Nobody says you can't start out at $30/hour and be charging $100/hour a year later.

Take advantage of things like Google My Business https://www.google.com/business/ . With those first few customers go above and beyond and leave them feeling like hiring you was the best decision they every made. Ask them to leave you a review on Google. It doesn't take much to put yourself near the top of the search results for "Electrician near me" or "Electrician in Albuquerque" since much of your competition is probably not very tech savvy. Leave them an easy way to refer you such as a couple of simple business cards.


CowboyAndIndian

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Re: Starting a business
« Reply #13 on: November 12, 2020, 06:58:30 AM »
I'll just reiterate that when it comes to any sort of trade simply answering your phone and keeping your word will put you in the top 20% very quickly. You can price yourself low at first to get some early jobs and customer feedback. Then start raising your prices as you get more work. Nobody says you can't start out at $30/hour and be charging $100/hour a year later.

Take advantage of things like Google My Business https://www.google.com/business/ . With those first few customers go above and beyond and leave them feeling like hiring you was the best decision they every made. Ask them to leave you a review on Google. It doesn't take much to put yourself near the top of the search results for "Electrician near me" or "Electrician in Albuquerque" since much of your competition is probably not very tech savvy. Leave them an easy way to refer you such as a couple of simple business cards.

+1

Also do not forget to utilize area based Facebook groups. Recommendations from neighbors are very valuable. That is how I found my electrician to put in the car charger in my garage.

Uturn

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Re: Starting a business
« Reply #14 on: November 12, 2020, 07:47:07 AM »
Since you have always been W2, you might not know or do much of the business side of things.  If you find you love doing the work part, but don't like doing the run the business part, don't be afraid to outsource that.

There are three things to just about all businesses
1. find customers
2. do the work
3.  billing and chasing down money

If you are doing one of those, the other two are not being done. I found that I loved part 2, but hated parts 1 and 3.  I went back to W2.

cool7hand

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Re: Starting a business
« Reply #15 on: November 12, 2020, 08:03:21 AM »
Check out Seth Godin's work. It's very helpful for framing your ideas about potential projections/opportunities.

ghsebldr

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Re: Starting a business
« Reply #16 on: November 15, 2020, 07:05:23 PM »
Regarding number 3 in the previous post. Billing/collecting. Credit, debit (via square) or cash. In 15 years I haven't had to chase down a payment. I inform the customer in advance of payment options and make no exceptions. I even have customers call me before they come to our shop and remind them at that time that a check is not the same as cash. I chased payments in a previous business and it's no fun at all.

I have been 100% clist and facebook for 15 years now and haven't paid over $3 for an ad in that time. We've gone from a nice retirement gig to several employees and too much work. I've also found that you need to watch what you wish for. Bigger better and more clients isn't always a great thing. Slow and steady gets the job done and keeps the repeat customers coming back.

Part time or weekends sound like a good starting point too. I would think that you're already doing that for friends and relatives. Just think of it as a business now.

Good luck

AM43

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Re: Starting a business
« Reply #17 on: November 18, 2020, 05:39:39 PM »
I'll just reiterate that when it comes to any sort of trade simply answering your phone and keeping your word will put you in the top 20% very quickly. You can price yourself low at first to get some early jobs and customer feedback. Then start raising your prices as you get more work. Nobody says you can't start out at $30/hour and be charging $100/hour a year later.

Take advantage of things like Google My Business https://www.google.com/business/ . With those first few customers go above and beyond and leave them feeling like hiring you was the best decision they every made. Ask them to leave you a review on Google. It doesn't take much to put yourself near the top of the search results for "Electrician near me" or "Electrician in Albuquerque" since much of your competition is probably not very tech savvy. Leave them an easy way to refer you such as a couple of simple business cards.

This^^^^
You nailed it right there.
Most will not show up on time , will not pick up the phone, forget to return customers calls.
Most are not organized enough and have little idea how to properly run businesses and interact with customers.
Most are out there for a quick buck and will take on too many jobs that they can not timely complete.
Stay on top of those things and your name will be first one people call.
If you do a decent to a good job, you are golden.
I am recently FIRE and have been it trades most of my life.
After I decompress, I will most likely start working for myself doing little jobs that I can finish in a day or two.
Like others have said, most important part is to get your name out there so people get to know you.
After that just stay on top of your game, don't get greedy and treat your customers well.