Starting my own company...

Mad Dog_2

Very Sound advcie. Mad Dog

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Robert O'Connor_3

Hey guys, just trying to get some input on starting up my own plumbing/heating buisiness. Somewhat tired of being underpaid, over worked, and not respected at all. I'm a younger guy, without a mortgage, kids, or any huge debts, so the way I see it, I don't have much to loose. The thought of working 24/7 doesnt scare me, but being able to keep busy and pay suppliers does. Just basically looking for your input/ personal experiance... and for you guys who own your own co. if you could go back would you have worked for soemone else or gone out on your own?

Mark Eatherton1

Good Luck...

24/7 is not going to be enough time.

If you're lucky and happen to make enough money, the insurance companies are going to get the most of it that may leave you with nothing, literally.

Or, if you're smart and learn how to make a lot of money, you may only have to put up with it for three or four years before you decide wether or not you want to continue doing it to yourself. Some people become employed by others, and make a lot of money for both of them, like me. I don't own my own company, but I make more money per year than the owner:-) He doesn't care, he's making it too...off of me:-)

You might want to consider not starting your own business, but merging your talents with the talents of some who has real, good experience with running a business, and just go to work for him/her.

And no offense, but if you talk the same way you write, you may be better off working for someone else. Try changing something. Anything:-)

Good luck in your endeavors. seriously. You've stumbled upon the greatest resource in the hydronic community. It's a secret. Don't tell anyone.

ME

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Mark Hunt_2

Mr. Eatherton has given wise council


pay attention to what he posted.

That being said, here is my experience.

Do not think that because you have a great amount of technical and mechanical ability that customers will automatically recognize it or even care. You may know how to build a heating system, but building a sale is a VERY different system!!! If you don't agree with that, start looking in the want ads.

I assume that you currently report for work every day and your schedule is more or less planned for you. Who did that? When you go out on your own, YOU will be responsible for getting the work, that means SALES. You have to sell. If you can't sell, you will starve.

At the end of each week, you currently get a check for the hours that you worked. That will not happen when you go out on your own. There will be countless hours that you will NOT get paid for. Until you have enough income, you will be the "office" guy as well as the sales guy as well as the installer guy as well as the service guy, not to mention the secretary, accounts payable, accounts receivable and estimater.

You will need a company phone number as well as liability insurance. If you have employees, let's talk comp and payroll deductions. Oh..........did I mention accountant???

If your current employer provides you with health coverage for a minimal fee............kiss it good-bye. Your new health coverage will be $1000 a month for basic family coverage. If you have another source for health insurance, all the better.

Your current boss has "name recognition" where you do not. His phone rings everyday, yours will not for quite some time. What plan do you have to market your new company???

It's not as easy as it looks...............but I would never give it up.

Mark H

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John@Reliable_10

> Hey guys, just trying to get some input on

> starting up my own plumbing/heating buisiness.

> Somewhat tired of being underpaid, over worked,

> and not respected at all. I'm a younger guy,

> without a mortgage, kids, or any huge debts, so

> the way I see it, I don't have much to loose. The

> thought of working 24/7 doesnt scare me, but

> being able to keep busy and pay suppliers does.

> Just basically looking for your input/ personal

> experiance... and for you guys who own your own

> co. if you could go back would you have worked

> for soemone else or gone out on your own?



"Somewhat tired of being underpaid, over worked, and not respected at all" That sounds like why I went back to working for someone! Like others have said, it looks easy.
I spent 12 years always working but never had the time to grow the business. Start by talking with others in your area about costs you may not even throught about. Also sit down with your banker about a business plan and credit. Good Luck

John@Reliable_10

"Somewhat tired of being underpaid, over worked, and not respected at all". Wow that sounds like why I went back working for someone! After 12 years of always working I found myself burnt-out and to tired to grow the business now.Read what the others have said, also before doing anything have a business plan in place your banker should be helpful with one. Even better take some business classes at your local college for an real eye opener Good luck

Wow

wow

wow-"no offense, but if you talk the same way you write". I've been on this site daily for 3 years, and I've watched you make quite a few un-called for comments to people IMHO. Let me make some corrections in your post:

wether--- whether
"fo money"--- of money

Maybe it's a good thing you too just work for the owner..

Have a good day and maybe we can get together sometime and discuss the co-efficient of linear expansion of metals or something.

Mark Eatherton1

Dear Wow...

I'm not casting bricks in a glass house. Just simply making observations. If you came to this site looking for a perfectly spelled thread, you came to the wrong place.

At least I'm not afraid to use my real name and e-mail address... and I use as many letters as I can, even if they're not in perfect order.

Grow some cajones.:-)

As for uncalled for comments, that's your perrogative. I just calls them the way I see's them. No BS.

ME

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Wow

That's fine- I call them the way I see them too!!!

Mad Dog_2

Both Marks and John are giving it to you straight

It is very, very, difficult. Before making that huge leap, I think you would be better off finding a better compnay to work for first, where you can be happy. If you still feel you can do better and want to try it, then you will atleast have a good paradigm (a profitable P & H company)to work from. Don't make any quick decisions. Mad Dog

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Unknown

Top Notch, I agree with most of

what the others have posted. I have been in this business for a long time. I have worked for a corporate utility, owned a restaurant service company (while still working for the utility, with permission from them to do so), was down sized and now own and operate a training and consulting business. I first started in the heating industry when I was 13 delivering boilers on a truck with another guy who had a drivers license. I am now going to be 66 years old this November, so I have seen it all and other than 9 years in the Navy have been in the industry all those years.

Here is my advice, if you are not happy doing what you are doing then do not keep doing it. Better to try and fail than to have never tried. It takes a lot more than just being a good mechanic to run a business so be ready for many long nights and frustrations.

There are some things you need to do up front:

1.Talk to a lawyer

2. Look into cost of insurance, liability, health and so forth.

3. Talk to a CPA who handles similar business to what you will be doing.

4. Borrow a business plan from someone who has actually taken the time to write one and look it over.

5. Maybe buy and read Al Levi's books they will help you to see what a monumental task you are taking on.

6. Have some money set aside at least $25,000 for the days when no money is coming in and you have to pay the bills.

It may seem that some who posted here were a little harsh with you but they are trying to give you a slap in the face to bring you to face reality. Reality is that most business started fails within 5 years.

You had better have the smarts, the work ethic and be able to handle stress or you will not make it.

If you are ready to handle all that go get em! We will be here to help you.

Let me know when you are up and running as I usually send those starting a business a gift of one of my manuals or guides. Good luck and may God Bless You.

George_10

You also need a small web presence

so you can post some pictures of your work. This isn't a deal buster, money wise, and it can make you look very good in the eyes of the client.

This is also a lower priority than other items already mentioned.

heatboy

If I knew then, what I know now........

would I? Not sure. We are all good mechanics that were over-worked, under-appreciated and worn out. I knew nothing about running a business when I started (not that I'm a genius now), but if I did, there is no way I would have jumped. At times, it is blissful to be ignorant to some things. I'm in my 14th year and have been through it all, at least until the next crisis. Two near bankruptcies and a severe toll on my personal mental health and life. I would not recommend doing this just because you feel under-anythinged. Going on your own, if done haphazardly, may lead to financial ruin. Maybe improving your current employment situation is a better option. There are many good contracting companies. Interview them while they are interviewing you.

That said, there are many guys here, besides myself, that have fought the battles and are willing to help if you are willing to listen.

hb

Mike T., Swampeast MO

On the plus side, you're young with little debt.

On the minus side, you're young with [probably] little capital.

Be prepared to work even more, have an even lower income until you're established and have any employees accuse you of doing the same to them...

ScottMP

As Ken Said at Wetstock

"Its the honesty amoung us that makes this place great "

O.K. I paraphrased but it was something like that. You'll never get honest opinion like you will here.

Just like Heatboy and others I have run the guantlet of finacial stabilty ( or is it instability ).

It aint an easy road, its not for the week hearted or weak minded. Theres alot more that goes into a business than just being a good fitter. Mechanics are lousy business man. I know, I was one. Now I am a business man, and if you have no desire to be one, you have no right being in business.

Its a whole different ball game. Numbers, Insurance, numbers, negotiations, numbers, salemans, taxman, numbers, human resources and did I mention math.

The last thing I would mention, and her again I agree with my frind Ken, is a business is a organic thing. It has life of its own and that "soul" comes from you the owner. Its nothing thats taught in books, its a feeling, a natural understanding of relations.

O.K. now I sound like Weezbo.

Good Luck

Scott

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heatboy

Having the honor..........

of being friends with you and Ken, as well as many others here, makes being in business a little bit easier. Knowing I can pick up the phone and talk, congratulate or commiserate with like minded people has always been, to me, the greatest thing The Wall has as an offering.

hb

munchkin-man

You guys are all awsome

Unknown

Yeah, it's definitely not easy. Nevermind all the business stuff, which, by itself, can be absolutely overwhelming, especially for those of us who had no background in it at all before taking the plunge. But simply, there is no safety net of any kind, which can be either a great motivator or a great source of anxiety.

On your current job.. run into something you don't know? Hey, call the foreman, boss, older tech.. get some help. Big judgement call needs making? It's not all you who has to make it. But on your own.. it's ALL you. You make all the decisions, you live and die by the consequences of those decisions, and there are a WHOLE LOT of decisions that need to be made that can break you at any time.

Personally, I love being my own boss, but it's nothing like I thought it would be. Once I didn't have the safety net anymore, I realized how often I used to lean on the boss to make decisions when I was out of my comfort zone. Now I don't have a comfort zone.. I either need to know it cold, or be able to figure it out quickly, accurately, and well.. every time.

Then you've got the business side... and lemme tell you, those first couple of years when Rent is coming due and you don't even have enough in your business account to pay it are definitely nerve wracking. No guaranteed income. No guaranteed ANYTHING. You fight tooth and nail to stay afloat, you sell yourself short just to get some cash flow... I'm glad we're moving beyond it now, to say the least.

All that said, if you can swing it financially or can make money doing odd jobs on the side or something during slow times, the time to do it is before you have a family you have to take care of.. or, after you've socked away a fat wad of cash. Any other situation, I don't see how anyone could make it work (unless you have a partner you can work really well with).

I still marvel at the ride all this is taking me on. Better or worse for others, I can't say.. but I wouldn't have it any other way, personally, risks, stress and all. I love the total ownership of my own work. Nothing makes you learn faster than messing something up and having to put your money, sweat, and blood where your mouth is to make it right. But nothing feels better than doing it. Except not messing up in the first place

Dave Yates (PAH)

Not an easy trip!

I was as naive as they come when I pushed away from the safety of working for someone else. $500.00 in the bank and a used 1966 Ford pickup with topper. It was Sept. of 1979 & we were in the middle of a recession. Row home with a two-car garage for my shop.

Home office where we slaved over the billing and books (my, how I hated doing the books!) after dinner each night and on weekends. 24-hour service, which often took me away from an evening out or drew us out of a movie theater mid-movie. I was busier than a one-armed paper hanger, but not charging my worth. I had the superman complex.

Tore my ligaments in an ankle that March & had them put me in a “walking” cast so I wouldn’t miss a beat. Three Mile Island went into a near melt-down the day following our seeing The China Syndrome movie - we lived within the 10-mile radius & were warned to stay indoors with windows closed. Pulled a 700’ deep 50-Gpm pump on 2” steel pipe & pretty much ruined the first cast. Doc gave me hell, but I was one independent & proud cuss. (Others would call that behavior stupid.)

Disaster struck in the form of Hepatitis type-A a year later. Raw clams were the culprit. Doc said either stay put in bed or die. Laid up for months & the cash dried up. Sold my Harley Super-Glide Were it not for overflowing scrap barrels, there wouldn’t have been a Christmas tree or gifts that year. Went on a Christmas-day no-heat call & ran into a Charley Brown Christmas scene in a very poor neighborhood. As much as we needed the cash, I couldn’t bring myself to charge the single mother of two with just one gift for each child resting under the half-bare tree. But, my family approved upon returning. You learn to share and give back till it hurts in this business.

We struggled mightily in those early years. Fortunately, Lois had a good job that included health insurance. Dad, the ever-patient accountant, never gave up trying to pound sound fiscal ideas into my head. Slowly, ever so slowly, I learned the business side of the business and grudgingly began to respect those as skills too.

The fourth year was the first really profitable year and things began to get easier. Hired our first two employees – a field mechanic and part-time book keeper. The business grew. My first experience with a builder going bankrupt arrived and he was skipping town. Caught him at the bank withdrawing the draws & managed to get my money. $1,700.00, which would have placed me in a position where I’d have missed my supply house discounts and month-end payments. Never miss a discount and never let the bills get past due or your creditors will cut you off.

We grew! The price of success was paid by our working virtually around the clock 24/7/365 – the business was running us! I was still more than a decade away from running the business.

Ran into my original bosses one day & they mentioned selling the business. We entered into a year-long negotiation & ended up buying the firm where I had started my career. Jumped from three employees to five with a partner. Doubled the business volume in the first year and hired more employees. My partner was the book keeper & I was happy as a clam in mud because I was twisting wrenches again – along with estimating. I completely ignored the books because someone else was taking care of business. Bad move. Long & short of it – I had to get rid of the partner & clean house. We came within hours, if not minutes or seconds, of being bankrupt.

The worst struggle of my career unfolded as we began rebuilding. Hundreds of ignored warranty calls were found stuffed into a desk drawer & each one was resolved to the owners' satisfaction, which cost us a ton of money – all of it borrowed. Lois had to quit her job and come to work with me on a full-time basis if we were to pull the fat out of the fire. The second three-year building cycle began in earnest. By 1989, we’d managed to recover and have been building ever since.

Managed to contract spinal meningitis & came to death’s door. A morphine-drip kept me in an induced three-day coma while my family prayed.

Still have ups & downs & always will. That’s the nature of a service-orientated business. Feast or famine & we always stay prepared for the famine periods that will surely come – like the three months following 9/11 when the phones died too.

I strongly urge you to get Ellen Rohr’s books on management (see books and more to the left).

A good friend just closed his doors last week. He was in the new construction market where margins are razor thin and builders crucify subcontractors without a moment’s lost sleep. A builder hit him for 20-G’s & moved on to another one of the thundering horde of newbies who no doubt has the superman complex too – I can do it faster, cheaper and make money while undercutting the last guy who went belly-up.

Best of luck, but luck won’t pay the bills consistently. And don’t steal your current boss’s customers. Stealing always comes home to roost. If they come to you on their own, that’s legit and they’re fair game.


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rb_6

GO FOR IT!

Depending on your credit rating (or lack there of) you may not have to start anything.

I’ve bought a few businesses with financing by the seller; bank and my own wherewithal (read beg, borrow and put any asset I had up for collateral), grew and successfully sold them.

There may be a business with decent cash flow, a strong customer base and an owner willing and able to make an exit. Often times if you look at the personal and financial risk and length of time to turn that start-up into a going concern you may be better off taking all that P & V in your veins and buying something that needs the energy and naivety of youth. If you can find the right operation with the business systems in place & functioning, all you have to do (grin) is apply your love for work in great big gobs to retain the customer base and start reading business books( Click here to see my library, took 20 plus years and still going strong) taking night classes and making daily mistakes quickly. Fail Forward Fast and learn ASAP, that way you can get into the profits much sooner! I’m into another new start up right now (my fourth not including the businesses I bought) – serial entrepreneur, basically unemployable…If you look around and you’re the youngest, have more passion, more creativity, more energy, a past history of getting into and out of tough spots plus bigger balls then those around you - and it drives you bonkers when someone says you're not allowed to do or it can't be done - then jump in with both feet! Like you said - at this short point in your long life - what have you got to lose.

Been there, am here, and plan on staying until I croak or someone comes along with a open seat on a wilder more riskier ride that’s copious more fun than what I doing now…not holding my breath…need all the oxygen I can get for the marathon ahead.

RB

Robert O'Connor_3

Thanks alot guys for your comments they where all really enlightning. And no hard feelings to mark as he was obviously just kidding around... I type like a true scholar . I'll try to respond to everyone's posts in order...

Mark Hunt; you couldn't be more right about the guaranteed hours I get each week while working for someone else... that is what scares me. It's nice knowing that i'll always get at least 45 hours a week with no questions asked. But, a few things i have going for me are the fact that my cousin owns a job temping agency for tradespeople (like when a five guy company takes on lets say, a school project and needs extra man power but don't want to hire more people, they'll go to him.) I also have two friends who are builders, who I stay busy from on nights and weekends right now...
In regards to becoming a salesman, that doesnt scare me very much mostly because the company i work for currently we sell almost every job we do as technicians. we invoice and collect every service call, quote large remodels, boiler replacements, ect. Plus I have the benifet of having attended numberous sales training seminars.
Insurance (liability business and health) are all things i need to worry about, as well as marketing. I would venture to guess it will be mostly word of mouth at first because i won't be able to afford much more than a fingernail sized ad in the yellow pages...


John you say after 12 years you're too burnt out to grow? That's exaclty what I'm afraid of. a friend of mine's uncle has been a one man show his whole life and wishes he grew back when he was young enough to. I'm worried about not making enough to pay for helpers/ other techs and being a small company.


Mad dog the co i work for right now is quite profitable and I have definetly learned a good deal about the business (sales and tech) from him. I deflinetly don't want to make a quick decision... I'm totally going to give my self at least a half year to really make sure I want to go through with this.


Tim McElwain thank you for the sound advice... I keep telling myself that one of these days I'll attend one of your seminars... i've read your post in regards to some technical questions people have posted here on the wall and your wealth of knowladge is truly astounding.


George I couldn't agree with you more a website is eye candy to the customer.


Heatboy, I may very well just look for another employer, but the starting of my own business is an option I want to really look into first.


Scott you hit the nail on the head, I wanted straight answers thats why I came here to the wall... The group of my fellow techs here is one that is truly special. And I actually like the 'businessman' side of things. I love selling, and talking with customers.


Dave, your story was enlightning and the 'superman' syndrome seems to be a very common one. So many small shops out there charge so little it's not even funny.


NRT Rob that 'saftey cusion' is one that I know for a fact I'll miss. I do have a LOT of independence where I'm at and do a bit of decision making but it's always nice when I get out of my 'comfort zone' to call the bossman, or w/ technical questions it's nice to be able to fall back on numerous other techs.


RB you gave great advice as well and I thank you. I do feel sometimes like I'm the only one with initiative, or the only one he actually LOVES what I do for a living.

Thanks to everyone who responded for the great advice.

ALH_3

The Worst

What's the worst that can happen? You can fail and go back to work for someone else. At this point, if you feel you have the knowledge to do this on your own, you're in a good position to take the risk.

There are a lot of different personalities out there. Some dont like the uncertainty of knowing where their next paycheck is coming from. Some people thrive on the possibilities. Decide which you are; then find the best way to make the most of your decision.

-Andrew

joeoilman

don't worry about being able to pay your suppliers. go c.o.d. it's alot easier.

John R. Hall

Top Notch

Keep us (and me) posted on what you are doing. I am mired in research for a book I am writing on advice from HVAC contractors who share their experiences on starting up their own businesses. Many of the Wallies have sent me their thoughts which will be scattered throughout the book. Being able to share the "dark side" of business (including a company that went belly up amid bankruptcy) is part of the presentation that takes a look at the HVAC contracting busness from 10,000 feet above the ground (my narrative view).

All stories are anonymously attributed with fictitious names and I still encourage anyone who has story -- good or bad -- to drop me a line. Thanks for everything you guys do!

Edward A. (Ed) Carery

First building block for your business

Top Notch,

You many or may not decide to go into business for yourself. However, before just jumping in with both feet, the very first thing that you did was ask advice of others who have experience in the matter. That is the first step to being a person that can be successful in business.

I saw all the posts and I saw your responses. I am self employed for many years and I know for a fact you got a lot of good advice.

However you did not just get a pat on the back, you got some hard and undesirable facts. By your response it appears that you did not just blow them off, you absorbed them.

It also appears that you intend to use the information from the others as tools to consider carefully your options. That was your first building block.

Asking advice, and having a real workable plan before you do this, is the only way you can succeed.

Regardless of what you decide, best of luck to you.

Regards,

Ed Carey

hr

A business plan!

This should be your first step. Plenty of software available, inexpensively, to help you create one.

This will be your road map to a sucessful business undertaking. You may get to the end of the plan and decide being self employeed is not your "cup of tea" Better to find out with projections on paper than taking the plunge.

I imagine most every business owner at one time or another has wished they would be employeed with benefits, insurance, and a weekly pay check. It depends mostly on what YOU want from a business. And life

Take the time to plan it out and do it right from the start. Much easier than catching up when the calls flood in.

Some excellent books available at the Books and More section of this site. Good luck.

hot rod

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Weezbo

First you must have walked on water....*~/:)

This is minimal experience

when you consider the long term theres alot to be said for owning your own business,seldom is the movie like the book and more often than not the reality is nothing like the imagination. while running your own show will allow you alot of experience ,i think that having some definite previous experience is a must. many guys mentioned getting a business plan, thats good to help focus on the administrative side,getting stuff out of a book and applying it might be a bit like seeing a picture and copying it vs actually thinking it through thouroughly...i been at this a while and every year theres some new twist to the whole picture that leads me to belive that a persons really really got to like this work in order to get anywhere....to me People are more important than money, invest in good people :)Last week i got back from a class in Anchorage after which i checked out a new sprinter ,drove back and proceded to do three underground rough-ins one of which i bagged out in the middle of the day in favor of a Tecmar class on the new controlls ,on and on....no one can really teach anyone what that means its just got to get done and on to the next place...thats nearly a mile of radiant tubing and 5 bathrooms and 3 kitchens,oil ,water,and sewer drains,wastes and vents ...when you have to hammer out boilers its the same deal...whatever it is tenacity, perserverance sticktoitiveness, it is something each person has and as a charater trait is well worth the investment...........maybe i am making this sound too easy...

lchmb

John L

Biz plan

One of the first things you should do is to set a marketing plan in place because the biggest problem is not having potential biz in the hopper all the time. An effective and well planned marketing program will generate revenue and a well managed biz will generate profits.
If you can sell and repair/install you are 2 steps ahead of the game. The vast majority of companies in this industries do not know how to effectively market or advertise their biz. Check out Hudsonink.com, this co. has a lot of experience and programs available. Don't go for big ads in the phone book, they're costly and you are competing with the rest. New construction can suck the blood out of a biz. Replacement and repair is best for cash flow. this country was built by people like you who are willing to take a calculated risk and go ahead and follow their dreams/ gut feeling.
It won't be easy, but then again anything worth achieving is never easy,
The bottom line is this, when you own and operate you own biz you chances for prosperity are greatly enhanced and when you turn 50/60 you will want to look back and say I made it through despite all the stuff that happens in the life of a biz owner. Spend time planning, revise and tweak that plan and when you are satisfied with it then go to work and put that into action. Find a mentor if possible.
With regards to the work aspect stand behind what you do.
Build a loyal customer base by ofering service/maintenance agreements. Don't quibble over small stuff with customers, remember people want someone they can rely and depend on. When they find that person they usually refer them on to their family/friends and co-workers. Find and develop your niche and market to this segment. Plan your work and work your plan. Go for it.

Scott Kneeland

own business

I can give you some advise that was given to me many years ago by a man I use to work for, he never finished school but ran one of the most profitable businesses in my area from 1929 until present.
If you committ to this you must give it 200% effort or it will never fly thats first, If you don't truly love the trade and working with the public don't do it. don't expect every day to be roses there not, PAY ALL BILLS ON TIME,sometimes this REALLY hurts but everyone will respect you for it. Take every discount that is offered. Don't over extend your yourself, Charge what you need to to and don't worry what the "other guy" charges he doesn't pay your bills, I charge 140.00 for a boiler cleaning there is a guy a mile from me who charges 65.00, he has no money , a junk vehicle , no credit. I have more work than I will ever live to complete and am one of the most expensive in my area. remember you can stay home and make no money you don't have to work to do it. Be a people person, have understanding for theie situation,Go above what the customer expects to be done be a professional, and with the luck of the three angles it might fly.

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Jimmy Gillies

Dear Top Notch

When as a 21 year old Plumber I started my own show, I could not spell, did not know the first thing about accounts or estimating and lived with my Mum & Dad.
I worked hard and did accountancy & estimating courses and have not looked back.
Who was it that said something like 'A long journey starts with the first step'??
Ofcourse it's tough, but 'when the going gets tough the tough get going'!!!
I wish you all the best.
Jimmy Gillies (Scotland)