Everybody –
I live in Tennessee and I am going to start my own business. I am curious what kind of jobs you did starting out and how you got your financing. Also, how much experience did you have before you started your business.
Did you get a loan or maybe you didn’t need financing, did you start doing small jobs on the side or start contracting houses right away. Please give me your input. Look forward to reading all of your comments.
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Replies
There have been dozens of thread here by guys talking about going out on their own. A search of the archives should bring up a truckload of reading material for you.
If you need a loan to get started, you're not gonna make it.
Joe H
Whats the loan for? If its for tools then you better take cover from whats to come here?
Couldn't be for advertising cause that doesn't require loans.
You best be more specific.
Be well aware
a...
The secret of Zen in two words is, "Not always so"!
When we meet, we say, Namaste'..it means..
Fellas all I want to know is how you got started...Was a parent in the industry, did you have a difficult time getting started, etc...
Any business needs money to get it started and to keep it running. How did you achieve a profitable business and what got you started in the first place is what my question boils down to.
"Any business needs money to get it started and to keep it running."
Ya start out living hand to mouth .... under bid a few jobs and U learn real quick. And the goal is to livfe less hand to mouth each year ... and someday actually have some money in the back so U don't have to take that loan U never took.
me, I remodel. Don't build houses ... don't wanna build houses. Started small ... got all the materials costs up front ... never paid for a job out of my own pocket.
finally got to a position where I could qualify to take loans .. did for a bigger job ... and am just now finishing off the debt I never shoulda took on. Doing much bigger jobs now than when I started ... but back to the basics ... no loans.
no debt is a good thing.
Jeff
I don't think loans are a good idea. Buck Construction
Artistry In Carpentry
Pittsburgh Pa
Jeffs words are much wisdom
Seems the majority of people I know that take loans to start a biz are people that are already in and know the business.
I am far from an expert on the subject of running a good business, but after 9 years I guess I survived
but I took loans to get started. I had been an employee and then lead dog for years, then went independednt, took out small loans for yardsigns, truck signs, a few tools
but they were small loans, very small, that could be paid back quickly
but if your new to the business, I would listedn to Jeff
Did you get a loan or maybe you didn't need financing, did you start doing small jobs on the side or start contracting houses right away. Please give me your input. Look forward to reading all of your comments.
Yes. NO loan (no capital, either :() first time out. My second start, I secured aline of credit against a lump sum of cash and other collateral.
What I did not have, either time, was what Ireally needed, a business plan. It may sound trite, it can sound complicated, it's certainly not glamorous. It's needful, though.
You have to draw some lines, and the BP helps you do just that. The little things like paying your own salary; your fixed costs, that sort of thing. It also helps for the variable costs, too--you have to know what too little is as much as too much.
You need to know what your costs are to hire an employee, and how much per employee. You also need to know how much it costs to hire subs, too. You also need to know what it will cost for licensing, you may need local contractor licensing as well as a city business license, on top of state-level licensing (and income/sales tax stamps, etc.)
Do not forget to add in the cost of records and book keeping. Sure, you can do some of that yourself, but, somewhere about that 11th or 12th hour of the day, every day, hiring a book keeper makes you money (if only by being able to spend time with your family instead of your work). That, and the dead forest of regulations can require you to hire some things out.
Doesn't mean you can't do it, or shouldn't. All I'm saying is to not try to do it the way I did (while it was fun, and some real good work everyone was proud of was done, the working 6-70 hour weeks for $5-6 an hour, net, was less rewarding in all senses of the word <G>).
Start small by doing part time jobs, don't get in the position where you are putting money out of your pocket. Take a small business course, {It will explain the paper work that you will be involved with.] These courses usually don't cost that much. Try the SBA. Luck.
one more thing
paperwork
I hate it, want to wipe my &^&^* with it, hate it
dont underestimate paperwork if your going on your own
bids
contracts
receipts
bills
payments due
payments
time cards for help
insurance
licence
it never ends, never, for a small guy, at least in my state wher you have to cross every "i" and dot every "t"
oh and did I mention permit games and inspections, and you need to be there and
and
and
and hold the hand of about half the homeowners you work for adn say to yorself, I should be pounding nails
but you smile and say yes sir, yes mam as it eats the time up in your bid
and if your rude, that travels like the wind...........he does ok work but hes an asphole
sounds simple doesn't it
guess what, it is not
unless you hire it out, when ever I hear a contractor say, oh paperwork is nothing, they dont do it, someone else does
wife, girlfriend, bookkeeper
or they specialize, 1 countertop, 1200 bucks, pay now
but you cant , for very long, pound nails all day long and do paperwork all night long
Im a chump myself, make tons of mistakes screw up a bunch, just look at all my threads and youll say..............oooppps
but this is one thing I know, you cant do it all, you cant
tried that all day all night stuff, still do it, adn it still nails me all the time with simple but costly mistakes
or subs that walk all over me because I cant follow through
but what I laugh at the most is guys that say, man you make it look so easy, and go on their own, and a few months later, they are calling me up saying, can I come back to work for you
nope
anyway, I do wish ayone that goes on their own the best of luck, working for yourself is the dream of a lifetime
even the guys that leave me I tell them, chase your dreams, or die wishing or thinkig what if.....
oh yes, one more thing, dont go on your own if your thinking, hey Ill be rich
aint gonna happen with that attitude
let the riches sneak up on you
for right now just think about
hey Ill pay my bills and eat top ramen twice today
pay your bills
and then one day go,,,,,,,,,,,,,wowie I got an extra 50 bucks
ok I lied one more thing, dont try this if your a young buck with young kids and you think for a minute your not gonna miss one imprtant school meeting, one imprtant camput with scouts, one important fishing trip
cause you will miss em , more then one and before you know it, they are in collage saying, where were you dad
ok , one more thing
you got to do what yo need to to feel you are a whole person
as willie nelson said,
live the life I love and I love the life I live
ok Im done
Edited 7/28/2005 6:08 pm ET by Isamemon
Edited 7/28/2005 6:13 pm ET by Isamemon
Edited 7/28/2005 6:15 pm ET by Isamemon
you and diesel are on a roll baby!!!!!!!!!!!!!!!!!!It's Never Too Late
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Man you said some great things. I dont have kids and that is why I want to start now. Many people have already told me I cannot do it...I wont make it and I will admit I am scared to start out on my own. Question haunt me such as "You dont know enough" ...That is the biggest one. But like you said, I dont want to be kicking myself later because I didn't try. I agree with you and dont expect to become rich over night. I just want to be happy doing what I am doing. Currently I work for a large GC in the commercial industry. It is a great company but even before college I wanted to start my own business. I feel like now is the time to do it. Thanks again for your comments.
Oh, I definetly know what you mean about paper work. It never stops. There is no doubt in my mind there is even more when you have your own business.
The way I started and still run a part time remodel biz---I am retired and just wanted something to keep me busy----that minimizes out of pocket losses is to require material money up front. Until you get to know certain customers, that minimizes any loss----just your labor and gas. Once you get steady customers, you can start buying materials without the added hassle of doing detailed cost research and bill on hourly time/job bid plus materials/overhead/etc.
James,
No family business. Nobody in the trades. I had one year of tech school for cabinet making and carpentry, and 6 or 7 years working for 3 different employers, when I went on my own in April of '91.
I didn't take any loans, as I sold a rental house before I started on my own, so I had money in the bank. Good and bad thing. Good: I didn't have money worries. Bad: Didn't have to get serious about business because there was money in the bank. Less than a year later the money got shallow and I had to get more serious about the business end of things.
Started with small jobs and still do some of them, but also additions, but no new houses. I subbed the finish work for 1 new house, and finished a house where the owners fired the builder.
Had the basic hand and hand power tools. Added nailers, brake, scaffold etc. as needed and $ were available.
Some of the things that saved my butt in the begining:
1. Reading and learning very basic sales stuff, including taking a short part-time job selling airplane fuel.
2. Having what I would call "angel/mentors". One in particular was a cabinet shop manager. He fed me steady work, but also in the begining would review my "Guesstimates" and if he felt they were too low, he would say, "I don't think you can do it for that, let's bump it up to $xxxx.xx." The other mentors were a lumberyard salesman, and a family owned flooring company. Both of them fed me leads, and some of those small projects, eventually blossomed into larger jobs.
An example of how important the business end of things can be: One of my employers was a few credits short of a degree in accounting, and had worked in sales for about 5 years. He never worked for anyone else, just remodeled his own and his in-laws house, before he went on his own. However he is now one of the most expensive and one of the wealthiest contractors in our area, because he understands the numbers, and has the ability to sell them.
Good luck to you,
Bowz
As the others have said, when you start out you will lose money. At the end of the year you will have less than you started with. If you can't afford to be in that position, then you need to continue as an employee and build up some reserve.
Borrowing money to cover the difference is not a good idea, as the lenders will want repayments right away, and those repayments will only add to your costs
John
For me, I happened to marry a CPA, so I have to do 'zero' paperwork. I mean absolutely nothing...just hand her the receipts and email her the contract content. She sits down with me, from time to time, to go over the 'financials'. I have a quicken and quickbooks credit card (one for home and one for work) and I charge everything....EVERYTHING. You wouldn't believe the reports she does for me. I'm a lucky man!So, if paperwork is not your thing, either marry an accountant or hire one.jocobeView Image
jocobe.... can't marry them all...i married a travel agent...
she loves telling me where to goMike Smith Rhode Island : Design / Build / Repair / Restore
Thanks for all of your comments. I know that all of you had to start from the bottom which is the case for most people but it is good to hear it from you guys.
What I have learned is to start out small and dont expect to become rich overnight. DO NOT TAKE OUT A LOAN! This will only cause a lot of unneaded drama. But tool, hire people as your finances allow. It is almost better to know more about business that about construction when owning your own business. Be courtious to all the people you come into contact with. Networking will get a person far in the game.
Be patient and be smart.
Thanks to everyone.
You've had some great advice from folks who have learned things the hard way.
I would add one bit. Do a few side jobs to get your feet wet. These will help you figure out some of the business angles and will keep your mistakes small and relatively inexpensive. In the worst case you will find out that being in business for yourself is not for you. This is nothing to be ashamed of. The construction business has chewed and spit out a lot tougher guys than you or me. If you find this out before you are committed without a backup, it will be a lot less painful.
I got started the right way I think. Was workign for a big, well known general contractor. He started complainign about the overall unknowing labor cost. Told him in passing one day that I would sub it from him. "give me a number" I put together the number and he said "to low". Showed me what my cost was going to be, helped me get set up. Introduced me to some young bucks for framers. I did not lose any money the first year. I worked soley for him. The second year I was confident and lost money. Been at this five years now. I have seven full time employees and could never of succeded without the help of my former boss who didnt have a clue how to drive a nail. He tosses me work all the time. When somethign comes in to big for me, I call him.
On another note. I miss 60% of school and family functions. Either bidding, looking, or loading things for the guys the next day so they don't have to wait and spend my money loading trucks. Or I stay out laying out so there is no down time in the morning.
Self employed is the way to go. Chase your dreams, you will catch them someday. Save money for when thigs get slow. If you have employees, treat them great. Remember the azzholes you have worked for, don't be one. Listen to the customer, for they are always right. And when you don't know, ask here at breaktime. THose are things I have learned.An inch too short. That's the story of my life !
bstcrpntr --- I hope to grow into this name.
bstcrpntr,
not to pick on you----but you are shortchanging yourself AND your family if you are missing 60% of family/school functions.
MONEY---you can always get later----but those school events, your kids sports, birthdays etc.----they are gone in a flash----the blink of an eye.
In my case---I missed virtually NONE of 'em. If there was an event comming up----I made an appointment---like any other---on my calender.
Despite missing virtually NONE of those events---that time eventually ends. I just entered all of my sons cross country races on my calendar----his final high school season-----can't believe they are almost over. I have nothing to regret in that department---and I STILL can't believe how fast the time went----but it went just the same.
for your sake--- i hope you change the way you schedule things----- I would hate for you to be looking at a high school senior wishing you had been there for his forth grade play
no customer is more important than your wife and kids.
On the other hand---the press of business is GREAT for getting out of going to the wedding of your wifes' former co-workers' second cousins' neighbors' godchild that she wants you to attend. LOL----- THAT'S perfectly OK. !!!!!
Stephen
Decide what you want.
Start small, just you.
Be conservative.
Keep overhead low.
Do not go into debt to buy tools.
Work out of your house or apt, and garage.
When you are starting to make a little profit, dump it back into the biz.
Be open to change.
Keep asking questions like you are now.
Learn the books.
Learn the taxes.
Do both yourself.
When you can afford it, hire a helper.
When you can afford it, hire an accountant.
Keep the help legitimate.
Keep money above the table.
Become very skilled.
If you're good, you won't really have to advertise.
After you're established, hire only good subs to do at least 85% of your work. They gotta be good though.
Eventually you will decide on what phase of construction you will want to go into. (Commercial, residential, new homes, old reno, new reno, restoration etc)
Eventually you may want to specialize. (only bathrooms, only kitchens, drywalling only, only trimwork etc.) Don't think that you have to do it all and that it is going to make you more $$. I have seen many guys work for themselves just out of their car with not that many tools doing handyman jobs, and they make a hell of a living. Not glamerous but hey...!
Try to find a copy of the movie The Pawnbroker, starring Rod Steiger. Watch it, and listen carefully to the monologue he does about how one turns money into more money and the history of his people. Watch it again, it was made in the 60's and is still ahead of it's time.
"Neither a borrower nor lender be...this above all, to thine own self be true." Shakespeare
Forgot one,
Learn how to listen.
Good luck. J
Was working for a fella who liked to get abusive to people.
Tried it one time to many with me and I left. Was self employed the following minute.
No savings
Had lotsa tools but not nearly as many as I should have. As money became available or the screamin' need dictated I got more.
Didnt borrow. ( well, small fib, borrowed 1000 bucks from my wife for 2 weeks to span a lean spot )
While working for the asphole I got to know the folks at the timber yard. Always say howdy etc.
within 48 hours of being my own boss I had an account at former employers discount, a sparky, plumber, plasterer and tiler.
Do good work
CLEAN UP
meet lotsa people, archies, landscapers ( mine has handed me a fortune in top end work for seriously rich folks ), bathroom supplies outfits, kitchen outfits, flooring outfits.....
Doing a shower rip out and replace, 2 days tops. Nice folks. Got talking to Mrs Owner, then 'would you look at these plans and give us a quote.......?'
50k addition minimum. Uh......ok!
BE NICE TO THE CUSTOMER
Keep paper work and TAX up to date cos if ya dont the gubbermint is gonna savage you worse than a pack of wild dogs.
Whatever it was.................I didnt do it.