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Self employed

mattycmattyc Member Posts: 9
My question is for the contractors out there (especially the one man shows)..I wanted to see others experiences or hear advice of working for yourself. I currently work for a company and also run my own small business and am looking to make a switch..I admit the stress can take its toll on me sometimes Bc of the fact that I’m working 16 hours a day 6 days a week but I’m keeping good faith that it’d be worth it in the end. Any insight would be appreciated. Thanks

Comments

  • pecmsgpecmsg Member Posts: 1,205
    Huge difference between being a good tech and a good business owner.
    Ironmanrick in Alaskadelta TSuperTech
  • IronmanIronman Member Posts: 5,513
    Get as much business training as you can. That's where most fail.
    I admire your work ethic and tenacity, but 16 hours a day tells me you're not charging enough and you may be neglecting your most important business - your family.
    Bob Boan


    You can choose to do what you want, but you cannot choose the consequences.
    ethicalpaulRich_49
  • JUGHNEJUGHNE Member Posts: 6,622
    I agree with above;
    My BIL, self employed programmer, has $mills in the bank and has always has a simple philosophy: If your'e too busy you're too cheap. It took years for me to realize this.

    Then overhead costs are easy to lose track of.
    My single largest expense was and still is insurance.
    Health, life, business liability, vehicle coverage, tool & inventory coverage, house, shop and umbrella policy.
    More expense than income and real estate taxes combined.

    Being a Boomer generation dude, I wanted to be my own boss and have been for 42 years.
    Self employment gives you great tax advantages, consequently the bottom line at the end of the year has you paying little in FICA dues. Now I collect a minimum SS check as a result.....after all we were all sure the kitty would be dry by now.....BTY I thank all of you worker bees who still contribute. ;)

    So a big item for you is who pays health insurance and what will you retire on......that is just a short time away regardless of your age.....time flies.

    Inventory; being in a remote area I overstocked many items.
    Have controls past return date, white elephants on the shelf, lucky to move them. You may not have that problem.

    I watch U tube a lot, enjoying watching other people work.
    A good one is Steve Lavimoniere, very entertaining and really educational. Has a get it done approach. He has a couple of "Coffee Chats" about how he charges and does business....straight forward and no BS.
    Been in it a long time and busy by word of mouth.
    Very interesting truck set up, wouldn't want to know what the inventory cost is that he has in it. It is a hoot to watch!

    Check out Dave Ramsey concerning saving for retirement and budgeting.
    ethicalpaul
  • Intplm.Intplm. Member Posts: 1,081

    Hi, I've been self employed for about 45 years. @pecmsg is right, just being a good technician is different than understanding the business side of things. But even being self employed does not mean you do this alone. You need a team that begins with an accountant or CPA an attorney and a good insurance person. I'd also look up SCORE, (service corps of retired executives) who will give you good and free advice.
    I'd specialize and become really good in one area. That way you refer out work to good technicians, that isn't your cup of tea and hopefully others will refer your kind of work to you. Find ways to write or communicate about your field in ways that can help others.
    Consider forming or becoming part of a group of business owners that meets regularly to discuss problems and ideas. This will give you perspectives you probably couldn't get on your own.
    Never stop learning! Remember that about 2% of your clients will cause 90% of your trouble. Let those clients go. And finally, never doubt that if you take care of others, you will be taken care of. It's always worked for me. Good luck!

    Yours, Larry

    This is excellent advice.^^^^^^^^ Especially the "SCORE" info and the "specializing" in one area idea is just plain smart !!
  • STEVEusaPASTEVEusaPA Member Posts: 3,948
    It's pretty common now a days to get a business coach. My buddy and a co-worker, were both great carpenters, started a business together. Hired a great business coach. Both are pretty smart guys too.
    In 4 years they are doing over 30 million in sales.
    steve
  • GroundUpGroundUp Member Posts: 880
    edited December 2019
    I too am employed by someone else while running my own business also. Quite honestly, I don't have the discipline to be completely self employed although I make more than enough to prosper at it, only working weekends. I do radiant heating and radiant heating only, as a 1 man show- very little service and zero electrical. Most will cry about that, claiming a "real tech" needs to do all of these things but quite honestly I make 10x more per hour as a radiant installer than I would doing it all and use the brain reserves to try to be good at one thing, not mediocre at several. There are other HVAC companies in the area that thrive on service and countless electricians that are well versed in hydronic controls, there is absolutely no reason to try to take their work away over Wal-Mart wages. I also own (and self manage) several rental properties and half of an auto body shop on top of my 40 hour commercial pipefitter job and 15-20 hours of weekly commuting, so I feel your pain on the 100 hour work weeks but that's a choice both of us make and not necessarily a byproduct of not charging enough. Some of us like to excel financially and working harder is a great way to get there.

    As others have mentioned, being a good technician and a good business owner are seldom traits of the same person. I'm not good at either one but learning both every day. Although I am not a solely self employed person, I've had some sort of side hustle since I was 14 and have learned some lessons that I can share:

    -A good CPA is worth their weight in gold- absolutely spend the money on one, even if you think you can save money with TurboTax or your local $75 clown; you can't.

    -Keep good records of EVERYTHING you do. Name, address, and contact info of each and every customer along with detailed description of what was performed. Date and hours worked, expenses and income as well as how they paid you, literally everything. Keep these records in a safe place for 7 years. Leave nothing to chance, should the IRS come knocking some day. You do not want them digging into your finances and you not having proof of every penny, I can assure you of this- ask me how I know.
    mattycPeter_26
  • hot_rodhot_rod Member Posts: 12,891
    check out the offering at the heatinghelp store
    Bob "hot rod" Rohr
    trainer for Caleffi NA
    The magic is in hydronics, and hydronics is in me
    mattyc
  • JUGHNEJUGHNE Member Posts: 6,622
    Yes, don't forget your new friends at the IRS, both state and federal.
    What might be a 1-2 page return for wage earners has, for us gone up to 59 pages. IRA-Roth IRA-HSA-Rental income-capital gains, ridiculously small amounts of interest gained on misc accounts, etc.
    You want someone who knows all this and does your taxes. If a registered letter shows up from the IRS, (and it has) we turn it over to the CPA tax person and never worry about it---so far.

    Once you stumble, your name comes to the top of some list and they want to dig in your $hit for a long time.
    Just like the old military...don't be the tallest, shortest, come in first, come in last and most of all never volunteer (info to them without your CPA).
    GroundUpmattyc
  • jumperjumper Member Posts: 1,401
    A big positive of self-employment is no fear of getting down sized out when you're in your late forties or fifties.

    A negative is that your time is money and time wasters cost you.

    Good advice in this thread. Here's another suggestion from an old guy. Develop good relations with suppliers. Sometimes when you're old and tired of your work a distributor may hire you for marketing, selling or consulting.
  • EBEBRATT-EdEBEBRATT-Ed Member Posts: 6,706
    @mattyc
    not to discourage you but if your stressed out now running your own business will be more stressful
    mattyc
  • mattycmattyc Member Posts: 9
    Appreciate the good advice...I agree that doing the work is not the hard part but learning how to run a PROFITABLE buissness is the hardest part for me n I have a long way to go..I just can’t wait for the day when I can focus solely on my own business rather then still have to work for someone else while running things on nights and weekends....again thanks for all the great tips...I think this post was me venting after having to spend the weekend doing warranty work and chasing down money from a “house flipper” (big lesson learned that I will never work for house flippers again”
  • IcarusIcarus Member Posts: 105
    Being self employed virtually my whole adult life, (and never making much money, as I chose life style over income (wanted time to do fun stuff!) I learned a couple of things. The first was, I always made it a policy to pay the help first, the venders second, the tax man next, my IRA next and finally myself. If you don’t pay for your retirement, you will end up at an age where your body can’t perform in the trades, but you don’t have enough to retire either.

    Many years I made (considerably) less than my lowest priced guy. (I was a custom home builder/designer/remodeler.). Granted the business “paid for some of the perks”, like the phone bill, the truck etc, but If I had punched a clock as a journeyman or a project manager I would have had a lot more money to show for it, then and now.

    I did get luck at the age of ~50 in that I shattered the home building business, and started doing some contract project management, specializing in one off, remote site projects that required specialized skills. I was able to parlay one of those jobs to another, and another etc, and now, I simply consult, mostly on energy/solar projects that either pay well, or are of great interest to me. I do a fair amount of pro bono work simply because it allows me to give back to a couple of not for profits, and I get to do some pretty interesting stuff, and in the process educate some folks about energy/solar issues.

    If you go into business for yourself because you want to be a big player in your market, your trade skills are not what are going to get you ahead, but rather your business skills. On the other hand, if you want to work in the tools, make a good living, and have some security, working for wages has some real advantages, just don’t think it is the golden road to riches.

    Icarus
    mattycethicalpaulratioGroundUp
  • ratioratio Member Posts: 2,278
    For a different viewpoint, I have absolutely no interest in working for myself. Punching the clock is just fine for me. I do have more job security than many others that do so, as I am (apparently!) the only one able to do a lot of the work I do around here. (I know, I know, but I've got good soft skills as well, the company really likes me, & I've never burnt a bridge, so I feel pretty secure. And the company knows this.)

    I think it stems from a startling lack of ambition and a sense of responsibility that doesn't want to let me charge money for things that I like to do. I do side work for family & friends, basically at cost or a little under, & I've been known to cash checks that others write on my own dime, I guess that counts as pro bono.

  • hot_rodhot_rod Member Posts: 12,891
    Take a day or two and do a business plan first. This is the road map for getting where you want to be. It is also useful if you need to borrow or involve investors or partners.
    Bob "hot rod" Rohr
    trainer for Caleffi NA
    The magic is in hydronics, and hydronics is in me
  • mattycmattyc Member Posts: 9
    @hot_rod That’s a good idea. I’ve read one of those books on the list you sent. Time to grab a couple more for sure. Also appreciate all the webinars and other info you guys put out there
  • HvacinspectorHvacinspector Member Posts: 2

    Hi, I've been self employed for about 45 years. @pecmsg is right, just being a good technician is different than understanding the business side of things. But even being self employed does not mean you do this alone. You need a team that begins with an accountant or CPA an attorney and a good insurance person. I'd also look up SCORE, (service corps of retired executives) who will give you good and free advice.
    I'd specialize and become really good in one area. That way you refer out work to good technicians, that isn't your cup of tea and hopefully others will refer your kind of work to you. Find ways to write or communicate about your field in ways that can help others.
    Consider forming or becoming part of a group of business owners that meets regularly to discuss problems and ideas. This will give you perspectives you probably couldn't get on your own.
    Never stop learning! Remember that about 2% of your clients will cause 90% of your trouble. Let those clients go. And finally, never doubt that if you take care of others, you will be taken care of. It's always worked for me. Good luck!

    Yours, Larry

    I went to a business seminar and the best thing I learned was to double your prices lose 50 % of your customers but lose 95 % of your headaches. I went home from the seminar told my wife this was my plan, she said we will be out of business in less then 6 months. Well how wrong she was, we did lose a ton of our customers all the bad customers or problem customers POOF gone Tire Kickers POOF gone. What was left were great loyal customers who valued Great service and customer relations. a few years later we sold company for high 6 figures.
    ethicalpaulSTEVEusaPAmattyc
  • ethicalpaulethicalpaul Member Posts: 1,510
    So well said @Hvacinspector. This is one of the best lessons any independent businessperson can learn IMO. Every time I hear about a tradesperson who is "busy out for months" I think "They are priced too low".

    Independent tradespeople tend to have a certain ethos that makes them want to take every customer who contacts them, and they keep their prices artificially low to support that idea.

    I admit I did it myself for several years when I was doing some independent software work.
    1 pipe Utica 112 in Cedar Grove, NJ, 1913 coal > oil > NG
  • hot_rodhot_rod Member Posts: 12,891
    This poster I have hanging in my office applies to all tradespeople.
    Bob "hot rod" Rohr
    trainer for Caleffi NA
    The magic is in hydronics, and hydronics is in me
    ethicalpaulmattyc
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