Questions About Self-Employment

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Hey folks,
I was a member of a company in upstate NY whose owner died. Supervisors scrambled to get rid of their competition within the company. I was fired for a fender bender after 12 years of making the company money. Fired on Thursday, DBA on Monday, Van full of tools and material by Saturday. No experience running a business.
Its been hard but I've been in business now for 7 years and have been pretty stable in work flow but stagnate on financial growth. Still going at it paycheck to irregular paycheck. I get about 50/50 residential/commercial work. Mostly small projects like fit ups and service calls. Sometimes the oddball call comes in for industrial machine repair,... Never afraid to try working on something I'm not familiar with.
1. I need to hire someone exactly like me. (HA!) Someone who cares about the customer, the business, and work quality. I'm not afraid to hire, but I am a bit weary of my ability to read others and their qualifications. Any suggestions?
2. Saving money as a one man shop isn't easy, but I can't see how to grow without employees. Catch 22? How do I go about obtaining a reserve to make payroll before the benefits of an employee come in?
3.How far ahead do I put in reserve for payroll?
4. Does profit sharing work?
I have read a lot of the advice on this site and am thankful to Mike for creating it. I appreciate the wisdom found here and am ready like a kid at Christmas to gain from the experiences others have had. Any help would be greatly appreciated.

Regards,
JoeP

I would start by raising your prices 10% (or more). If you are staying busy and can't save, you most likely are not charging enough.

As far as the rest of it, ..... well everyone struggles with this. You probably can't afford to hire someone "exactly like you". At least not until you raise your prices. :)
 
I can tell you that your own business is not a job, it's a life style.
Expect to spend a lot of time on things that are not directly billable time. Going on estimates, figuring, typing up and sending out bids, scheduling, getting permits, paying bills, doing your billing, scheduling, buying material, screwing around with local, state, and Federal taxes and the innumerable forms and returns you have to deal with, dealing with inspections and inspectors, inevitable call backs for one thing or another, more scheduling, answering your mail, your emails, and your texts, dealing with insurance, organizing your shop, your office, and your truck, repairing your truck and your tools, etc. and more scheduling. Lots of scheduling. Especially once you have employees. You'll find that after working an 8 hour day, you'll start the night shift taking care of those kind of things. And when you get older you won't feel much like working more after an 8 or 10 hour day so you'll either take a day during the week or end up doing it on weekends. Keep that in mind when you figure how much to charge.
I've been at this for many years. Had as many as 14 employees and as few as one. I now have 2 2 man crews, and find that manageable and somewhat profitable. I will probably get out in the next year or so, and by saving....not scrimping, have a decent retirement to rely on. I have no regrets and it has been mostly fun. Dealing with other people's issues....employees, contractors, homeowners..that cost you money can be annoying. But sometimes I wonder what would have happened had I kept that County job I had when I was young...insurance, paid holidays, paid vacations, and a great retirement program....and going home at the end of the day without bringing the job home with me.
 
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Thanks guys for all your replies. There is a wealth of experience on this forum from which to draw. Your insights are invaluable. I think the part of this decision that scares me is giving up the security and benefits of my current job. Nothing ventured, nothing gained...right?
 
self employment

self employment

you hit the nail on the head with your last post, "nothing ventured nothing gained" I will say i agree with a few people on here. I wouldn't start anything with friends or family it usually doesn't end well. I would target residential business to start. and grow from there. you will need a really good website to get consistent business.
I would suggest hiring a professional. i hired some website guys to do my website. I am also just starting out in Kansas city fyi
my site just got put up. The key is to get your name out there and do great consistent work

thanks
 
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If you do decide to go out on your own, which I think can be a good idea, make sure you learn your local and state contract laws. Without this information you can go broke very quickly.
 
Thanks guys for all your replies. There is a wealth of experience on this forum from which to draw. Your insights are invaluable. I think the part of this decision that scares me is giving up the security and benefits of my current job. Nothing ventured, nothing gained...right?
I have been on my own almost 20 years, and that still scares me. Disability insurance is too high, so I take that risk that should I ever become disabled, even if something that will only take a year to recover from, my finances will turn upside down and I will likely have to move on in some other unknown direction.

As a couple have commented on - going into this with a partner that is a lifelong friend - be careful, those ventures usually destroy that friendship at some point. You probably should go in both knowing you each will need each other at first but in a few years you likely will split your own ways, and maybe even have some contingencies up front of how to go about that, especially if you want to remain friends.
 
My grandmother has always said "If partnership was a good thing Jesus would have had a partner"
 
I agree with many others that partnerships often fail. Think about it: One of the big reasons people go out on their own is because they want to be the decider. You cant really have two deciders. It is more likely to be feasible if the two people have their own niche in the company. Say maybe one does estimating, administrative, book keeping stuff, and the other guy has the tool belt on. Another way to go about it is the the way my partner and I do it: We are both officers of the LLC, but in practice we each have our own clients and mostly do our own thing, although we do help each other out frequently. So we both have our independence, but get help if we need and we share the business structure benefits.

My advice would be to ask yourself why you want to go out on your own. Ill bet many sparkies will tell you that they are better at being sparkies than business people, and work more and make less working for themselves.
 
There are a lot of successful businesses that are run by family members. Some started up as two brothers with a dream, some maybe started by another generation and the new ones have taken over. There are also families split up because they couldn't run a business together. Doesn't matter what kind of business it is either.
 
I think in a successful partnership each person would have specific areas of responsibility- At least that's how I envision it. And while probably difficult it can be done. The EC that I work for now does upwards of $50 million a year. They formed the company 35 years ago with 2 guys and a pickup truck.
 
I think in a successful partnership each person would have specific areas of responsibility- At least that's how I envision it. And while probably difficult it can be done. The EC that I work for now does upwards of $50 million a year. They formed the company 35 years ago with 2 guys and a pickup truck.

May have started as two guys in a simple partnership. Is probably a corporation now. Do you know if both original partners have equal share, or maybe one always had a little of an upperhand and the other was ok with it?

Not saying partnerships won't work, just be careful should you decide to go that route. Long time friendship can easily be ruined when finances get in the way.
 
I'm not sure of the original partnership details. One of the founders is currently the CEO. Its a big company with hundreds of employees and offices in multiple states. Anyway it's a lot for me to consider. The thought of giving up the security and benefits of my current job is scary.
 
Research partnerships.... I have never heard of a single one that lasted. You need to research and be your own boss. Very serious. Research this and hopefully you do it yourself. Hire him as an employee if you must.

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The successful ones became corporations:happyyes:

that is what almost always happens to any successful business. A corporation of some kind is a more flexible organizational structure than a partnership or sole proprietorship. It can also outlast the founder, which becomes an issue when the guy that started the business wants to retire.
 
There are a lot of successful businesses that are run by family members. Some started up as two brothers with a dream, some maybe started by another generation and the new ones have taken over. There are also families split up because they couldn't run a business together. Doesn't matter what kind of business it is either.
I started a panel shop with my brother who, being 10 years older than me, was the business owner and I was his peon. When we started growing, became a contractor and hiring employees, the power went to his head. One day I came in late and he said I was "setting a bad example for the other employees" even though we had previously discussed this (because I was still in college and had other priorities). In the ensuing fight, he told me I had been handed a job on a silver platter, I told him where he could put his F'ing platter, and I never worked for him again.

He eventually sold that business for a princely sum and because of his success, was hired as a CEO of several big companies, then just retired as a multi-millionaire. I'm still working my ass off for a living...
 
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