I've been considering posting this thread for a few weeks. Here goes...


All the pertinent details-

My current job with a plumbing and heating contractor has me at a dead end. I've been here for 15+ years and am now stuck at desk full time, which I detest. I'm a knowledge seeker and I'm not learning chit sitting here. I've also been at the same salary for a few years while I've watched the price of everything go up, up, up.

I have a Master Plumber's license and in about 3 weeks I'll be taking a State administered test to get my Plumbing Contractor's license - a requirement in this state if you want to be in the plumbing biz. I have a good reputation in the area and have had high-end builders question me in recent years about whether I might start my own business. Stating that they'd be very interested in dealing with a subcontractor of my "caliber".

I also have a background in building. I have the knowledge to build a basic home from start to finish, not including things like drywall and electrical and unfortunately, I don't have any HVAC licensing yet. (but I will eventually) Complicated or busy roof lines would throw me a bit at first but I'm sure I could figure it out if called upon to do so.

What I'm considering is starting a one man show in the handy-man, home maintenance and plumbing business. With all my experience, working my way up from an apprentice to a journeyman, then a few years as a field supervisor and then estimating, and most recently, adding my Master's license - what I lack is the small business smarts.

I have no plans to employ anyone other than myself. There are enough guys in the area that are happy to lend a hand when I might need one that I'm certain that a one man show is viable. What I'm looking for answers on is - what steps does a guy like me need to take to have all my bases covered regarding liability, taxes, advertising, etc.

Another issue is health insurance. While my current employer has taken our health insurance coverage down, down, down, at least it's something. Retirement isn't an issue since my employer stopped our 401K a few years ago. I'm hopeful that I can do better than the current nothing that I'm putting away.

I realize this would be a huge risk, but I'm thinking of getting it off the ground while I keep my current job. That means I'd have to focus on the maintenance/handy man stuff since my boss will not allow me to operate as a plumber on the side while I work for him (understandably).

So, what say the 'fire men (and women)?

Break is over, back to work. I'll check in in a bit. Thanks for any constructive comments.

Skot,

I had to go self employed when I was laid off 2.5 years ago, and its rough.

But thankfully my wife was a good pre-planner so we got by on basically an 80% pay cut.

Lacking business in general made it hard, but if the work is there and you can do it, then do it.

I'm actually back at my old office for financial reasons (they had another employee retire, so they gave me first crack at coming back).

All things considered, I'd much rather work for myself in a good market. Even if the pay was less and the hours longer.

As a side, my boss will allow me to continue free lancing because there's not much of a chance of me stealing his clients.

Theres is no such thing as small business smarts... and I almost not kidding either....
I've been doing what your talking about for the last 30 years. Nothing smart about it my book.


Health insurance cost, or bad health, will we the only thing that trumps pure determination for me.

I do welding repair and fabrication peice work. I have some of the best customers in my town and I don't even advertise.
I can buy lunch for the whole crew at the price of a single meal!

Don't spend or borrow more than you have in your pocket.

Be versatile, humble and accomodating....If folks want a ditch dug or even the trash taken out and I have time to do it I will, it all pays the same.

Nobody knows your situation but you.

If I had to do all over again, I would do it again, but I would not wish it on anybody....
like I said, smart doesn't have much to do with it as far as I'm concerned...

But from what I read in your post,...You are ahead of the curve as far as what it takes to succeed. Don't worry about your competitors or what they may say about you, let your the quality of your work and your character speak for its self...In the end that is the only thing that will make you or break you.

If you're going to start a business, do not do it as a general purpose handiman. You'll be competing against illegal aliens and guys who can't handle a full time job so take odd jobs on the cheap and your customers will be cheap if they pay at all. Doing it right will require insurance, bonding, tools, vehicle, etc, i.e. quite a bit of up front costs and then you have to build a reputation and client base.

The key to starting a successful profitable business is to specialize. Find a niche and fill it. Figure out the market your current company isn't able to capitalize on and fill it.

Based on your plumbing experience I'd recomend going into water based fire supression systems aka sprinklers. It's a good specialty and there are plenty of markets Tyco/Grennel are not well able to serve due to their cost strucure.

Spend time researching what it takes to run a small business. What makes or breaks businesses typically isn't the ability to perform whatever service they are geared for. It's the overhead costs that kill you. You need to be extremely efficient and frugal.

for someone doing what your looking to do, lack of "business smarts" can mostly be taken care of by getting a copy of Quickbooks and learning how to use it well.....most the time when i see guys fail is cause they do a piss poor job at the book keeping end and arent keeping track of their costs.....learn to use quickbooks and use the reports like profit/loss statements and look them overe atleast monthly and you will go a long ways towards succeeding......part of the reason we do well is we keep our records pretty well and keep an eye on those P&L reports to know where we are having issues and what areas are hurting us....

x 10,000

just cause your always busy doesn't mean your being successful in your business..
and if your going broke,..you might as well just go fishing instead...

Excellent input, guys. Just what I'm looking for. Thanks and keep 'em coming.

good advice from rattler, and good luck on your plumbing contractor's license test. Get the HVAC license asap.
I agree with shying away from the 'handiman' gig. There's too many of them, and the expectations of 'something for nothing' from your clientele is high.

It's very satisfying being your own boss. I found out a long time ago I was not cut out to anyone dictating my job to me, and set out on my own. It's been trying, but very satisfying.

just keep in mind the reports are also only as good as the data put into the system......we break things out in alot of ways so we can see just where problems are.....we dont have just a "sales" input.....we have newsstand sales, paper sales, display advertising sales, classified advertising sales, legal advertising sales, print shop printing sales and computer printing sales....ect

while you can go to far and get obsessed with splitting to the point the reports get huge and a pain to get through, you will do well to break up stuff in to numerous categories as makes sence so that if you start wondering what areas you are doing great at and what areas need help you can go to a report and find out and not just have you sold X amount in services total.....and we do the same with costs, each area of the business gets kept track of.....

Be careful of growing too fast as well. Growing pains hurt. Me and a buddy started the business I am in now seven years ago when I was busy practicing law. It only took off last year after six years of losses. Now I do not have the time or inclination to practice law, nor could I take the pay cut.

That is never gonna change for 98% of the folks out there.


I have folks wanting to market my business all the time. Guaranteeing me 15% more business or they won't charge for thier service. I tell them I don't need 15% more business nor do I want 80% of the market...

I just want my cut from the top 2%....and they are not the ones that can decide who that is, I am the only one that can make that decision happen.

Rattler, just curious, how "small" is your business?

Skot...

Some great advice here, especially Rattler's bit on Quickbooks. My wife was trained as a book-keeper and what she can do with Quickbooks and Excel for our home finances is amazing. I've never seen such a healthy balance sheet for personal finances, my whole life!

Other than watching your books and hiring a good tax accountant, the only other advice I'd pile on is that you should form an LLC. I've found that the tax advantages of forming an LLC are well worth the minimal cost.

ok, how do you want me to measure it cause people "measure" by alot of different ways....number of employees? 5 full time(myself and my wife being 2 of those), 3 very part time when we have a full staff.....

I'm still here at work-wish I had time to answer each post individually. Maybe later this afternoon I can.

My wife has some background in book keeping and is a numbers junkie, so I've got good help there. I think she knows quickbooks, too.

I need to learn more about LLC's. Sounds like a good way to go.

Not many illegals in this area except during landscaping season.

Already have the majority of tools needed and will use my own truck. Would be nice to get a utility trailer outfitted so that I don't have to load and unload the truck when swapping from work to personal mode.

I'll check back in in little bit.

the other important thing about something like a LLC is keeping your business separated, legally speaking, from your personal stuff like house, savings account ect should the worst happen and you wind up in court....

Thats kind of what I was asking thanks.

A motorcycle wreck that left me out of work for 18 months and plus a tanked economy, both in 2007, pretty well took its toll on my capital finances.

I find myself haveing to get ready to head into a differant self employed work stratigey myself.
Long term business growth/expantion never was really my primary goal. I have always pulled top money and bigger just was not always better to me. but I am haveing to re-evaluate alot of things at this point.

some good info in this thread..

with those 8 people we run 2 small town weekly newspapers and a print shop....they are all under "The Herald-News, Inc." but we keep track of everything separate and each gets further broken down so i know where costs in each are hurting us and where in each we are doing very well.....

like with bruin, if he is going to do both plumbing and HVAC work he will want to separate them out in quickbooks, doesnt matter that he may be doing both at the same time on the same job out of the same truck, he will want to keep track of costs and profits for them separately so he knows how each part of his business is doing independently.....least it would help him tremendously if he does....

What do you do now?

Lawyers make decent ching.

laffin...
I don't know who your talikn to but I know that I'm to old and dumb to go to law school!!

Handyman work is OK but it's not always well paying. Bathroom remodels are a niche that one person can do and get paid very well. Having skills with tile, installing tub surrounds, drywall, texturing, painting, countertops, sinks, flooring, and plumbing work ... start to finish one stop shopping for the home owner is a big plus.

People spend thousands of dollars on bathrooms.

Another good niche is bathtub refinishing. Give or take, it's about $400.00 to refinish a tub and it only takes about four hours. It's possible to do two in one day.

Plumbing should be similar to the type of contracting I do in some key ways. I'm 26 years into it. If you charge plumbers rates for yourself, instead of taking a wage from your current bosses plumbers rates, the money will come in much faster than you're used to. You will not be able to charge out 8 hours a day, with the inevitable inefficiencies of running a business, time spent doing unproductive things, like dropping the van off at the mechanics and meeting your insurance agent. But day in and day out, it's as simple as charging the going rates, or even higher for quality work and humble service, and covering your expenses. Mark your parts up 20-50%, cover your mileage at the cost of fuel, and make your wage as many hours a day as possible. Be frugal with spending, don't get behind on taxes, reinvest wisely, shop smart and take the long view. It doesn't all have to happen the first 6 months you start.
Be careful with yellow page advertising that costs several hundred dollars a month. If you rely on service work from the yellow pages, don't name your business Zeke's Plumbing, and end up in the back of the book. If you plan on working for builders, skip the ads and have coffee or lunch with every builder you can, even the ones you don't work for now, market yourself as someone who is in it for the long haul, will watch out for them, and expects to be treated fairly and PAID on time! Join the local chamber of commerce and go to the monthly meetings, to introduce yourself to the other business people in your community, who may end up the lifeblood for your startup. Business people make and SPEND money, and will help you if you present yourself as an honest, professional, humble businessman. In the short term, buy a van or whatever you need, shop Craigslist, garage sales, whatever you can to get what you need to get rolling, don't worry how it looks, just that it actually works. Start making your rates ASAP, it will build your confidence and give you some much needed cash to cover startup costs. Avoid monthly payments that suck the blood out of you in the off-season. I could just go on and on, there's so many little things to get right. PM if you'd like. Bottom line, get the cash coming in, BEFORE you get too much going out. It's a confidence thing...

Thats some good advice....
Another thing,...stick to commercial or industrial work as much as you can...When somebodys got several folks bitching about the ac's out or production is halted they have no problem paying better than top dollar out of an over head account just to get it taken care of NOW...where as residential you'll for ever be competeing with the bottom line of new braces for the kids or the up coming vacation....

Guy that lives beside my FIL went Yellow Van HandyMan franchise route. Doing pretty good for his second year. FWIW.

If you're a self-starter, YES.

Be honest, I mean very honest in accessing that seemingly simple question.

No schat....
which deems another question...What the hell am I doing settin here right now?!..
I got to go....

If you are going to use your personal truck for your business make sure you get a commercial auto insurance policy on it. If you are in an accident on the way to a job and only have personal insurance on the vehicle more than likely the ins company will not pay. But every ins company handles this a little bit differently so read your ins policy and or call your insurance agent to make sure your vehicle is covered appropriately.

Was in the OPs' shoes 9 yrs ago, was working for a building contractor 50 hrs/wk and roofing 30 hrs/wk weather permitting. No insurance, pension, 401, holidays, but 2 wks vac. Thought about going on my own, but @ 45yo a pension was looking tempting. So I got a building maint. job with the state, decent ins., 75% pension after 30 yrs, 12 holidays & 3 wks vac. The initial pay was 60% of what I was making, my side work & the wifes' job kept us alive.

Now we're in a budget crunch, so no raises, we have a small pay cut, and the insurance isn't quite as good. I'll trade the money for security.

in 2004 I would have opened my own computer/network service company. Health Insurance is what stopped me...

PM sent

Maybe it depends on the location but most people I've seen that hire people under the "handyman" label really want to pay the absolute bottom of the scale.

Another thing I have noticed is that only a tiny fraction of people in this world really care if something is done "the right way" and even fewer want to pay the premium for it.

Not talking you out of it I would just keep it in mind.

In that type of work I would imagine you would have to make money on every job because of the lack of repeat customers in the short term. In our business we make real money on about 20% of the jobs and that is the profit for the entire year but we do the other 80% to get that 20% and keep the doors open the rest of the year. Something to think about if you are going from a larger company to a one man show.

Thanks for all the input, guys, and the PMs, too. As soon as I get some time this evening I'll start responding.

Thanks again!

Thinkin you have the personality, drive and smarts to be successful.

Good luck Scott!!!

The most important thing for a business is finding customers. You may know the work but you won't have a business without customers. You need to figure out how to find customers and the rest is relatively easy.

Can your wife help by focusing on getting customers for you?

Don't you mean an S corporation? That way your not subject to double taxation.

+1, but when you do find customers put them on a qtrly flyer with all your services offered. Marketing is the key in the service industry.

You obtain a few clients over the next year/two, they will keep you steady working. I don't blame you for going out on your own.....I've spent 95% of my like self-employed. Find the clients, do a good job and keep in touch with them using mail flyers.

You fail to do this....you will fail.

you need to understand how to keep books aswell, seen a couple busnisess loaded with customers fail here because the owners didnt think they needed to pay close attention to the numbers.....

but ofcourse having the customers is a very important part.....though going by his post he seemed more worried by his lack of business sence.....getting quickbooks and learning how to run it and then running it properly will take care of the vast majority of business sence cause it will show you where you money is coming from and exactly what your spending it on.....if you have the numbers there infront of you to crunch it makes most of the rest of it easy to figure out .....biggest mistake i always see is not keep track of good books.....

when stuff gets tight, having the numbers there infront of you to help you figure out why goes along way to keeping food on the table and a roof over your head......cause the numbers aint gonna lie to you that the part of the business you may love doing the most is whats killing yah financially and stuff like that where without them you may keep making the same mistake over and over

even though we are pretty small and my wife sees most the checks that come in and every check that goes out every once in awhile that P&L has something on it we didnt realize as far as a part of the business that was doing very well or poorly....

I did this stuff for a long time. Made a good living until the tendonitis forced me into a desk job. This is the kind of business you market through real estate offices that need FHA improvements, inspections satisfied, and details done in order to save deals. Also through hardware stores and local lumber yards that regularly get folks in asking for help with a new mailbox/toilet/sliding door/dead bolt etc etc etc
Keys to profitability are getting a deposit before starting work, having a minimum charge, and marking up the labor & material & travel for a profit.
Avoid debt, and build a cash reserve & you can make a decent living. You won't get rich, but setting your own hours & doing work you enjoy is a beautiful thing.

I have been on call for 12 years straight. I'm my own boss and I will never need money. If that's what you want, good luck.

At least when you are a company of one you avoid the number one pitfall I have seen over 20 years of business and recently doing consulting to help a business. Not getting rid of dead weight in a timely manner lol.

Plumbing ... ? It doesn't matter if it leaks.

Handyman work ... ? The post rots out before the posthole.

[/quote]

Talus Monkey?

I worked in management for several large electrical manufacturers & own (with my wife) two small businesses. I would suggest first talking to a financial expert to determine if a corporation, LLC, or single proprietorship is the way to start. For a new business record keeping is a nightmare. There are many small accounting/bookkeeper services available for a small fee. As your business grows & you learn more perhaps then you could think about keeping your own records. As was stated finding some niche business is the key to success. Good luck.

Had some extra running to do last night so didn't get home until well after dinner and by the time I wolfed that down it was bath time for the twins. By the time they were tucked in, I was about whupped.

Thanks again for all the input. I have read each and every post and appreciate them all. I'm pleasantly surprised - I expected more negative responses, but other than expressing caution I don't think there was a negative post in this thread. The positive, if cautious, responses gave me a bit of a boost and even though yesterday was a long day, I wore a hint of a smile thanks to all the help offered by you all.

Thanks again.

plumbers are one business where its not as hard to go it on your own if there is work available in your area.....most plumbers i know are their own bosses....the book keeping part is just the big area cause nothing is going to be more frustrating than 8 months from when you go it alone knowing you need to cut costs somewhere and your staring at a box that has your whole business in it as far as receipts, invoices and such and no way to make sense of it all in a timely manner.....the P&L reports on quickbooks make it a simple matter to quickly and effectively look stuff over and not frustrate the hell out of yourself....we look at ours monthly, and we run different time periods to compare the first quarter this year to first quarters for the last 5 years and things like that so we can see trends and concentrate on what does make us money....

i really cant understate just how helpful that damn program is when used properly....

I'm with yo on this, rattler. I spoke to my wife last night at the dinner table about your suggestion to get quick books. I wasn't surprised when she told me that she already has it and knows it quite well, so that'll be a big help if I go through with this.

wow you on a roll!! I would think a good plumber would stay in business, I know down here in Louisiana plumbers are not cheap and the only ones out of work or LAZY ones.

hey you know what makes good money here? the plumbers with the pump trucks for treatment systems, when a house sells it has to be pumped and thats 800.00 to 1200.00 and it took the dude less than one hour, his wife was his helper too and he stated she was his book keeper and she wrote the bill and collected my check.

good luck dude!!

and if you do HVAC work to break it out separately.....most contractors are gonna want an itemized bid anyway so its just another step to break them out separately in your book keeping aswell.....that way, if down the road you find you like the HVAC side of the business better and want to concentrate on it more you have the separate numbers there to look at to see if it will float on its own......

this also helps when trying to isolate money pits within your business cause instead of seeing that you keep to much money locked up in parts inventory, maybe its just the HVAC pats or the plumbing parts you have to keep less of and things like that.....its why we break our sales down so far, so we can see trends in what is making us and costing us money in the business instead of just having one ad category.....

Not in the business myself, but my wife ran a front office and did book keeping for an electric/plumbing team for years.

From the thread it appears you're motivated and a thinker. If the market is there, and one does quality work, it sounds like a no brainer to me.

An issue with the team my wife worked with was a few customers that ordered up and received substantial work/parts/equipment and then mentioned they'd have to figure out a payment plan on the back end. Some inquiries from other service providers can often reveal the habitual elements. More often than one might think, they're often perceived as high rollers in the community.

Good luck,

This is excellent advice that's worth repeating. It's amazing how many people simply form an LLC without ever knowing about other options. You're way better off to spend a bit of money exploring the options before you get started, because changing course later can be quite expensive.

Hey bruin, it seems that you are mentally motivated for this task and seem to know enough about your industry to make it work.

Now, being good at what you do just isn't quite enough. You've got to be better than most of your competition in order to get customers to even begin to think about you.

I'm far from an expert, but I can tell you that I also own my own small business as an auto repair facility for over 33 years now. I also have an MBA in business mgt, so I've got a hint how a successful business works.


Here are some points to consider........

-Incorporate for limited liability.

-Hire an accountant, they are not very expensive and are the professionals. Tax rules are a biotch.

-Primarily helping people(customers) should be your main policy. This is the most important advice I'd give anyone who is self-employed. Following this rule will tend to always enable you to operate honestly and to the best of your ability. Money & profit will then come naturally.

-How tough are you? Sick, lunch, aches & pains, 9 to 5, coffee breaks, etc, are not words which can be in your vocabulary.
33 years and I never took a sick day. Doesn't mean I was never dead sick, just can't think about it.

-Liability insurance is a must.

-Warranty all work & all warranty work takes preference.

-Be nice. As tough as it gets, and it gets real tough with certain types of people. BTW, this is my 2nd most important hint.

-Have a game plan with a future forecast and follow it.

OK, just a few hints here to get you started. There is much more, but I could literally write a book.

Best of luck if you decide to go forward with the venture.

-Ken