New business mistakes to avoid

[Elec-]

I’ve decided to start my own business in a few months and would like to be able to complete commercial and bigger jobs as soon as possible. Wanted to know tips to getting started and things to avoid instead of learning the hard way.

 

[letgomywago]

Talk to a bank and lawyer if going big. If starting small doing remodels or service calls double the time of what you think it'll cost because you're going to be working crazy hours for a while.

 

[hillbilly1]

Don’t try to compete with the trunk slammers, their clientele want it as cheap as possible, and not concerned with safe and correct installations. They are usually not insured or licensed, so their overhead is very low.

 

[zbang]

Talk to a lawyer about whether an LLC or corporation is right for you. Get the proper business licenses and insurance.
Have at least 5-6 months of operating cash in the bank or be able to finance that yourself.
Talk to an accountant about setting up the books and learn how to do the bookkeeping. And about your area's taxes.
Search this forum for all the previous "how do I start" threads , you'll find a lot of useful info.

 

[cdslotz]

I’ve decided to start my own business in a few months and would like to be able to complete commercial and bigger jobs as soon as possible. Wanted to know tips to getting started and things to avoid instead of learning the hard way.

Do you have estimating software and know how to use it? Commercial estimating is an exact science. If you use square/ft pricing, unit pricing, service rate pricing.....you will get crushed

 

[ptonsparky]

All of the previous.
Make sure you get a paycheck.
Have an understanding spouse or significant.

 

[gadfly56]

Do NOT underprice yourself. That's a quick way to put your business under. You must meet your fixed costs as much as your variable costs. The laws of economics will grind you down otherwise.

 

[zbang]

A paycheck and include vacation time (in the cost/price equation). Also include building up a cash reserve and the cost of using credit if you have to for materials.

Basically, everything has a cost somewhere, the more of them you know about, the more of them you can control.

 

[petersonra]

I’ve decided to start my own business in a few months and would like to be able to complete commercial and bigger jobs as soon as possible. Wanted to know tips to getting started and things to avoid instead of learning the hard way.

Get good business lawyer. Listen to his/her advice.

Get good accountant. Listen to his/her advice.

Make sure you are adequately insured. Liability, health, life, disability, vehicles, etc.

Expect to turn a profit in 2 to 3 years. Have enough cash to last that long. Very few new businesses survive that long. You might be one of the lucky ones that starts to turn a profit sooner, but don't plan on it.

If you have employees, make sure you pay them before you pay yourself. They are more important than you are to the business.

 

[brantmacga]

I wouldn’t discourage anyone from starting a business, but here are the questions I would ask myself:

What position are you in at your current company that indicates to you that you’re capable of running a business? What size projects are you PM’ing now?

What network have you built for yourself that would give you access to work?

What amount of private capital are you able to obtain to float a business? The chances of walking into a bank and securing a loan for a construction business are basically zero unless you have proven experience project managing. Even then, I would look for private capital or a silent partner that can help you scale a business up quickly.


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