Self Employment

Z

ZachHane

Member
Location
Ma
Occupation
Electrician
Good morning everyone, for years I’ve been tossing around the idea of self employment. I have my masters, but have been with the same company for 10 years. All my w2 related experience is industrial / commercial fields. No problem running jobs in the million dollar ranges. I’m treated well, usually don’t have to stress out, and am making 100k with no overtime (which I think I will be capped out at with no management positions opening up in the future). Within the last 1-3 years, I’ve really ramped up with side work, resulting into spreading myself super thin. I do a good amount of remodel work for a reliable builder, a good amount of septic work, mini splits, panel upgrades, all those types of things. I’ve missed out on several projects (storage facility, hanger, campground, new build multi families) that would’ve been handed to me on a silver platter and I’ve had to pass up the opportunity due to still working full time. I have money stashed away and would be able to keep myself a float if I had to go with no income for a while building a business. I’m all about working hard for a better future. I guess my question is, do I go all in and bet on myself? I feel I have a good contact base and if I were to invest 40+ more hours into my own business, I could build something good. I’m not looking for any get rich quick dreams. The lows and slow times are what scare me, but I overthink every decision I ever make. Another contractor has mentioned that they could push work my way if I hit slow points in the beginning to alleviate the stress and also take some stuff off his plate. Looking for input from others that have been in a similar situation.
 
If you have a contractor who's willing to push work your way, that's a great safety net.

I've been on my own since 2007, and I met a contractor who did that for me. He didn't toss leads my way, I freelanced on his work.

I don't need it anymore, but occasionally I will still go work for him for a week or so if he's overwhelmed. He scratched my back for quite a few years and I try to return the favor for him.
 
You're in a far better position than I am, having recently opened shop.
How competitively are you pricing your time when it's side jobs? Are you pricing appropriately to market rates, or are you just throwing numbers out that feel okay to you? Are you catching the work simply because you're super cheap, or is this a sound base to build on?

Since you have the work lined up, it's a question of whether you want to be independent and have a much higher ceiling, or keep doing the stable, low-stress thing. 100k with bennies isn't bad.
It seems regardless, you're drifting hard into self-employment, and that's where your passion lies, especially when it's on top of a normal 40.
 
James L said:
If you have a contractor who's willing to push work your way, that's a great safety net.

I've been on my own since 2007, and I met a contractor who did that for me. He didn't toss leads my way, I freelanced on his work.

I don't need it anymore, but occasionally I will still go work for him for a week or so if he's overwhelmed. He scratched my back for quite a few years and I try to return the favor for him.
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That sounds extremely similar. We’ve talked in good detail about if the time comes, we will come up with a figure where we each win, since we’re essentially helping eachother, just in slightly different ways. I appreciate the feedback! Love that you’ve been doing it since 07! Inspiring
 
NoahsArc said:
You're in a far better position than I am, having recently opened shop.
How competitively are you pricing your time when it's side jobs? Are you pricing appropriately to market rates, or are you just throwing numbers out that feel okay to you? Are you catching the work simply because you're super cheap, or is this a sound base to build on?

Since you have the work lined up, it's a question of whether you want to be independent and have a much higher ceiling, or keep doing the stable, low-stress thing. 100k with bennies isn't bad.
It seems regardless, you're drifting hard into self-employment, and that's where your passion lies, especially when it's on top of a normal 40.
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What made you personally want to open up shop? The opportunity? Building something of your own?

I’d say definitely the past 2 years, I’ve really tried nailing my prices, just to be in the mindset. I have a business opened already for my side work, all the insurance & all that good stuff… I try to read as much as I can on forums & Facebook to keep the rate similar to other contractors. I usually shoot for $125/h, and have been putting it all into the business, if I have a helper, I’ll bill them at around 70-80/h. I’m trying to just go for flat rate pricing / quoting to make my efficiency make me some money. Pricing is still a road block in the sense of I let my heart get involved in some jobs, but every job I do, I keep a solid record of notes, time, material, profit, just so I can keep adding and learning to the future jobs. I actually do know that I charge more than my current shop, but I’ve read many people say to “charge for the business’s future”. Majority of guys I do work for, are other business owners that I’m actually friends with, they never bat an eye at any price because we essentially want eachother to win, I do the same for them, I’d rather pay them. The more I hang out and see the lives of the business owners, I know how long and stressful the days can be, but years later, I see them reaping some awesome benefits.
 
readydave8 said:
I started my own business because I never liked having a boss, not realizing that now I had many bosses
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A lot of people I’ve talked to have felt very similar. I personally am not bothered by it, maybe because I’ve always had a good amount of freedom and not micro managed. With that said, I am a person that enjoys working with other people and bouncing ideas off others, but I’m starting to realize if I can do all this by myself anyways, why not go all in..
 
@ZachHane
Why?
Health actually. Have had some health issues and earlier wasn't really able to run 40hr a week at a production pace. But also I really like the independence of it, and getting to build something myself. I don't think I can go back to a W2 now with my health improving.

Setup
Looks like you have the hard part down. Doesn't hurt to have a sit-down with a lawyer who specializes in this sort of thing. It'll make you reconsider your own pricing too!

Price
Whether that's appropriate, depends on the work. Guys will scream $250-300/hr for smaller jobs. Seems you're doing a lot of smaller service type jobs, you might actually be very cheap at that point. Commercial pricing, sure, $125 is competitive, but on small jobs, often double it, or else tack on every last incidental hour you spend on it hands-off-tools.
But if your market research says it's fine, then so it is.
 
zbang said:
Will the job income support the full-time business overhead, including things like health insurance, that's you'd lose otherwise?
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Very good question, that’s always been in the back of my mind. I think I’d be alright taking a pay cut essentially. My living expenses are very minimal, I can get insurance through my wife, if we ever had to, we could live off 1 income. I’d like to continue to max my 401k, my Roth, and everything else yearly, but I could definitely put it on pause if need be to make a bigger dream / plan come true.
 
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A wise? man once said, "Being self employed is one step below being unemployed".
I was a hair's breadth of becoming self employed when I was hired by the city to become an inspector.
Pure bull luck? I don't know and I don't care. It served me well until retirement.
Good luck!

Ron
 
  1. @ZachHane so how many hours have you spent over the past year including all incidental labor, and how much have you netted? There's your new hourly.
  2. Can you actually work 2000 hrs/year doing that, or what is a more reasonable estimate for your first few years?
  3. How much work do you anticipate during the cold winter months? This past winter I just left the country because it was pointless sticking around, but others have businesses where they're printing money 12 months a year.
  4. General advice (about all I'm qualified to give) is you get to charge 1,000 hours per year if you're a mature one-man business. Doing that you first year or two will be a challenge probably, but you do have relationships already built up for repeat work, that's a good start, assuming you're getting paid well (see #1).
You can still make decent money at $125/hr and <1000 hrs per year, but it will probably take time to grow up to $100k, and I'm guessing a lot of guys never reach that milestone. If you're fine with a moderate pay cut for a more dynamic life, worth a shot isn't it.

You clearly have financial stability and don't need to sweat the decision too much, but will there be an open door for you several years hence if you realize you made a mistake, or will you be dropping down a rung or two if you resume your 9-5 career?
 
ptonsparky said:
I never made 100K in wages working for myself, let alone the bennies on top of it.
I lost my job on Friday and needed one on Monday. That was my business plan.
Your hours will go from 40 per week, to 60 - 80. No overtime pay. Ever.

Still, it was a good ride, mostly.
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I’ve heard the good, the bad, and the ugly, and loving the input from everyone! Take the good with the bad, right? From what others say, you may not make the most, but you gain some other perks, such as the freedom part or building your own dream that hopefully you can look back on and say it was all worth it!
 
rc/retired said:
A wise? man once said, "Being self employed is one step below being unemployed".
I was a hair's breadth of becoming self employed when I was hired by the city to become an inspector.
Pure bull luck? I don't know and I don't care. It served me well until retirement.
Good luck!

Ron
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I appreciate it! Can’t beat those benefits and all that matters is you made it to the finish line and now you can hopefully sit back and enjoy what your work has provided you with!
 
NoahsArc said:
  1. @ZachHane so how many hours have you spent over the past year including all incidental labor, and how much have you netted? There's your new hourly.
  2. Can you actually work 2000 hrs/year doing that, or what is a more reasonable estimate for your first few years?
  3. How much work do you anticipate during the cold winter months? This past winter I just left the country because it was pointless sticking around, but others have businesses where they're printing money 12 months a year.
  4. General advice (about all I'm qualified to give) is you get to charge 1,000 hours per year if you're a mature one-man business. Doing that you first year or two will be a challenge probably, but you do have relationships already built up for repeat work, that's a good start, assuming you're getting paid well (see #1).
You can still make decent money at $125/hr and <1000 hrs per year, but it will probably take time to grow up to $100k, and I'm guessing a lot of guys never reach that milestone. If you're fine with a moderate pay cut for a more dynamic life, worth a shot isn't it.

You clearly have financial stability and don't need to sweat the decision too much, but will there be an open door for you several years hence if you realize you made a mistake, or will you be dropping down a rung or two if you resume your 9-5 career?
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To your point of my hourly, there was definitely some smaller jobs where I shot myself in the foot quoting what I thought it would take vs how long it actually took. The incidental labor definitely adds up, but I was able to make things better with the material markup, kind of helped “bail” me out. Those were the learning curves I was hoping to figure out a little better while not having to rely necessarily on that as a paycheck. I think I’ve definitely grown from it, but still learning! I’ve been looking more into flat rate pricing to hopefully ditch the hourly nonsense. I rarely do t&m and I think that’s worked benefited me with efficiency.

That has been a huge question I’ve asked myself. Sure I feel busy, and sure I’ve passed up opportunities, but what if things slow down, and what if it takes me a while to get to that 2,000+ mark? I think that’s something I’d always wonder and probably wouldn’t know until I got my feet wet.

The cold months is another thing that has crossed my mind. Being from the north east, sometimes outside work can be limited along with opportunity due to builders holding off for some months. Sure there’s opportunity, but could definitely be less than the thriving spring & summer. I’d like to think Id be able to keep my finances in line to ride the highs and the lows to be well balanced.

I’m loving and appreciating your input, these have all been thoughts that cross my mind daily… That is what brought me to this forum. Again, another thought to add to your response, sure, right now I have opportunities and things sound great, now, 5 years, 10 years, 15 years, who knows what that looks like, another thing that scares me! But I’d like to hope that I can keep relationships and build them as I go. I’d like to think I have strong morals and value my relationships, that would helpfully keep me going in a good direction work wise.

Thank you for the responses!
 
What will being 'self employed' give you that you don't have now? You say you're content with your full-time job-- boss is good, terms are good, not overly stressed... Your work on the side gives you a decent addition to your regular salary-- you say you've spread yourself super-thin-- if that's your major source of stress, you need think about how much that stress is affecting your life-- and should you ease up a bit!
When you're self-employed, things like vacation and savings tend to slip away as you do things to boost your business...
One thing that was mentioned is the benefits-- you have income, hopefully a decent health plan, probably vacation time...
I have no answer... just things to think about. :)
 
Not only from here, but there have been comments about "The Boss--" and some people are determined to never have to submit to a boss!
I would like to suggest that the ideal working situation is more of a partnership-- you bring skills to the table that the boss appreciates, and you both use those skills to advance both the boss's reputation, your reputation, and your talent at your work. Ideally, the boss takes care of all the paperwork, finds work for you to do, and knows enough not to over-commit either of you!
If you're not happy with The Boss, and you have the skills, you should be able to find another boss, hopefully one who matches your goals.
 
PaulMmn said:
When you're self-employed, things like vacation and savings tend to slip away as you do things to boost your business...
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To be fair, I took 4 months of vacation this past year and never could have done that working for someone else, so vacation can either slip away or expand exponentially depending on the person. Some people just want more money, and OP you sound kind of like that given 100k wasn't enough. Do consider the general warning of Paul here, if you're getting sucked in and spread thin on a side gig, what's a "this is my sole income" gig going to be like?
 
NoahsArc said:
To be fair, I took 4 months of vacation this past year and never could have done that working for someone else, so vacation can either slip away or expand exponentially depending on the person. Some people just want more money, and OP you sound kind of like that given 100k wasn't enough. Do consider the general warning of Paul here, if you're getting sucked in and spread thin on a side gig, what's a "this is my sole income" gig going to be like?
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I’ll be completely honest, i don’t think I have one, other than something unrealistic. Sure if I hit the lottery, I’d be fine doing nothing. Not ever going to be the case. I’m honestly someone that just wants to always strive for more and not settle. I want to always level up with everything I have, I truly enjoy working and being busy. Sure, I like my golfing, fishing, time with my dogs and friends / family but the thought of building something that I never thought as a kid was possible, sounds pretty awesome. Who knows, I could fail, but I think I’d like to try it out… I think some of the drive comes from being the stereotypical “you didn’t do good in school, you won’t do good in life” type thing. I never excelled at anything, maybe this is my calling, and maybe it could scale to help other people and families too. Also It’s cool to put the “hard work pays off” into action.
 
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