Self employment advice

[EddieWalker]

...The great thing is that I don't need this to turn into a high paying income ...

Then again, having the ability to make more money allows you to be able to do more things. When I first got into hunting and traveling, I found the motivation to make more money so I could go on more trips. Just about everyone I grew up with still lives in the same area, works for some company doing the same thing over and over again, with no chance of ever getting ahead. The only goal they have is to party and watch sports. While there is nothing wrong with that if they are happy, I feel that their lack of motivation to do something more with their lives is what keeps them where they are in life.

When you REALLY want to do something that you cannot afford, you find a way to make it happen. I did this with getting some land, working on my land, building projects on my land, and traveling.

 

[blueriver]

Being self employed is really a great adventure ... I find it rather comfortable both in self satisfaction and the amount of money you make. Its rather easy ... if you know the value of a dollar, can manage that dollar and account for that dollar ... well there you have it.

Self motivation and dedication ... don't forget a solid advertising program.

 

[blueriver]

Being self employed is really a great adventure ... I find it rather comfortable both in self satisfaction and the amount of money you make. Its rather easy ... if you know the value of a dollar, can manage that dollar and account for that dollar ... well there you have it.

Self motivation and dedication ... don't forget a solid advertising program.

 

[Creamer]

It is great to be self-employed but there are a few things you need to watch out for - the first being the rates you charge since you have to include the cost of all the taxes, i.e. what your employer pays and what you pay, the cost of your own marketing time and non-working time (normally 30%), and the costs of whatever insurance you may need.

I would get with a CPA and have him go through the numbers with you and then decide if it is a price the market will bear.

You will need some kind of software such as Quickbooks for billing and tracking your finances. Doing your quarterly taxes is no big deal if you have everything in the software. Annual taxes is up to you but many go to a CPA for the signature as audit insurance and as well as a second opinion.

Good luck and have fun!

 

[Creamer]

Duplicate

 

[tcartwri]

When I was a contractor I found it impossible to find liability insurance. No one would cover me.

 

[Creamer]

It can be difficult! The best insurance is to get your customers to hold you harmless.

 

[ultrarunner]

Lots of sole proprietorships and family business around here... a lot of my friends are contractors too.

A couple of things I've learned...

Keep your overhead low.

Having even one "Employee" changes everything... it's a HUGE step.

Keep detailed records... don't have to be elaborate... some simply start with a separate checking account... run everything through the checking... income and expenses.

A small business oriented CPA can point our savings/advantages... also helps when filing... several times over the last 30 years I have had inquiry from the IRS... my CPA cleared/answered immediately.

Insurance can be a big nut to crack... many companies insist on it... again, much less expensive if you don't have employees.

I think it's a great idea...

 

[ultrarunner]

Lots of sole proprietorships and family business around here... a lot of my friends are contractors too.

A couple of things I've learned...

Keep your overhead low.

Having even one "Employee" changes everything... it's a HUGE step.

Keep detailed records... don't have to be elaborate... some simply start with a separate checking account... run everything through the checking... income and expenses.

A small business oriented CPA can point our savings/advantages... also helps when filing... several times over the last 30 years I have had inquiry from the IRS... my CPA cleared/answered immediately.

Insurance can be a big nut to crack... many companies insist on it... again, much less expensive if you don't have employees.

I think it's a great idea...

 

[Creamer]

Having even one "Employee" changes everything... it's a HUGE step.

So true! One employee puts you in a potential liability to state and IRS for all the payroll taxes. If they make a mistake it is your problem to prove them wrong. Learned from experience and its not fun.

 

[sparker133]

I have owned my own company for over 5 year now and my parents owned company's. It always the hardest the first couple of years. I had people the same as you that wanted me to do work for them. That is great but they do not always have enough work to pay the bills. Right now I am at the point where I am turning away work because of word of mouth about my business and my normal clients. I have been looking for a skilled worker for awhile now that meet my standards and is proving impossible. Hours can be long and sometimes you can spend every waking moment dealing with you company. I always make time for my family, it helps me keep my sanity.

One of the biggest problems is getting customer to pay. Problem is the bills still keep coming even if the customers don't pay. A line of credit can help get you through. One day your bank account can be bouncing and the next you have enough to pay all your bills and then some. I get 50% up front form my customer. That helps pay for materials and some labor, then if they don't pay I am not completely eating all the costs of the job. When I bill it is at a net 15 or I have them pay when the job is complete. As far as rates you can call some of your competitor and ask them what they are charging it will give you a good feel for the market. Also if you are bidding job you can gauge what you are charging on how many you are getting. If you are getting them all you are not charging enough and the same if your are not getting any. It can be quite a learning curve, I have quite a few jobs over the years that did not go well and under bid. That is all part of the learning experience and you learn from your mistakes and move on. Make the customer your first priority and it might cost you some profits to make them happy but it will be worth it in the end. I have had a couple of customers over the years that I lost money on their jobs and now are some of my best clients and have made that money back and then some.

I also use quickbooks and a CPA to do the year end stuff. A good attorney is always good to have you never know what can happen. With a insurance agent make sure they know the business that you are in and ask a lot of questions. My first insurance agent I thought was good did not know anything he just gave me a generic policy. After finding a good agent I found out how open I was to big problems and how much I was not covered for that could have destroyed my business.

Keep detailed records of everything it helps in the future. Have your customer sign everything keeps you and them covered. (found that out the hard way) Have your attorney draw up something that your customer signs for payment terms and lien rights.

Owning a company can be great picking your hours and your jobs if you have enough work. When I first started my company I was taking every job I could find. The pride of knowing you are working for yourself. It can also be very stressful and sleepless nights. Dealing with customers, money, taxes, and customers can have is down falls. But that all being said I would not change anything, I love working for myself and plan to keep doing it as long as I can.

Good luck with ever you decide. What ever you decide just stick with it and work hard and you will know you did your best. :thumbsup:

 

[AGRIMAN]

Along with my son, we have 3 small businesses. I'm sure you realize the amount of work required for what you are planning. As for us, we have no set hours, but I can tell you that more times than not it's all day and half the night 6 days a week. Sometimes on Sunday if it's an absolute must.

I would also recommend hiring a CPA. We run ours separately using Quick Books. We keep them up to date ourselves and our CPA reviews them and does our filing. As far as a lawyer, I had mine file for our LLC.

Insurance is a big cost for us. Some of the companies we work for require at least $4M in liability insurance and workman's comp before you even get in the gate. As for terms, most companies have at least net 30, but we have had them up to net 90. The individuals we do work for pay once the job is completed, which is nice.

Starting a new business from nothing can be scary, but the rewards can be more than worth it. My advice would be to manage your risk the best you can. A good business plan which outline your intended customer base, cost, proposed income and growth is a good idea. It also never hurts to a few contingency plans built in.

As other have said, keeping your overhead low is always good, but do not sale yourself short. You need good equipment and the materials/resources to get the job done.

A lot of business today is based on contacts, so get out and talk to everyone you can. Word of mouth and a good reputation is the best advertising. Another thing I have learned is don't underestimate anyone. You never know when someone can open a door for you.

I will also tell you that I spend a lot of time on my knees asked God for guidance. There's no door that he can not open.

 

[kevin37b]

:drool:

No worries Kevin. Sent you a PM to put this to bed.:drink:

Thank you , no excuses on my part .