Contemplating Career Change - small business networking questions

[Robert_in_NY]

Eddie, the comment about the people with money being good customers was about trust not paying. I have keys or codes to all of my high end customers homes, businesses and cabins. This way I can go to work when something comes up and not have to meet with them to let me in. They just call up and tell us what they want or need done. Yet, I can't get into most of the poor peoples homes unless they are right there and they won't leave until after we leave. If they take off while we are outside they lock the doors. Comfort wise it is more fun to work for the higher end accounts (at least in this area).

 

[EddieWalker]

Good point. There is always the trust issue with clients that usally takes awhile to develop. If it's my first time working for somebody, they like to hover around and keep an eye on me. But after a day or two, they are leaving the doors unlocked or giving me the key to the house and we're all good. If it's a new client that had a friend of there's recomend me, it's almost always instant trust. There friend or family member said I'm OK, so they just let me in the door and leave me to do the job.

It's the same with bidding the job. Once I've done one job for them, or a friend who's recomended me, there's never a question about price. I've found that they happily pay whatever I tell them it will be.

My realtors that I work for are really good this way too. They have clients who have either just bought a house, or are trying to sell one. They need things done to it to help it sell, or make it more livable. They ask their realtor for somebody to do these things and they call me. I've never not gotten a job that a realtor has recomended me for, and I've never had anybody question what I charge. With those clients, it about getting it done right away and that they don't have to do anything.

Eddie

 

[hockeypuck]

Hazmat,

Having made the same transition in 2000, (I was a mechanical engineer and went back to being an electrician, partnership co owner) I will give you a few of my thoughts.

1. Career changes do not always bring satisfaction. If you are anything like me, I suffer from ADD ( I say that with a smurk. I do not believe in ADD as a disease, I just believe that it is a symptom of our modern lifestyles.) There are days that I am glad I made the change and others (like the very cold ones) that I wish I were still indoors.

2. Owning your own business is great because it gives you more flexibility in your hours of work. It can also be a bad thing, because it is easy to get sidetracked onto things that do not make you money. Long story short, make sure you are focused.

3. One of the hardest things about being self-employed is medical insurance and the extra 7.5 percent of social security taxes that you have to pony up, because you no longer have an employer paying them. You also have to be disciplined enough to set aside 30 percent of your pay for taxes and social security. That is a pitfall that many first time business owners get into. Quarterlies are a pain, and if you are not fiscal conservative now, you will be after you start paying quarterly taxes. It does not hurt as much when your employer takes out taxes every week from your paycheck, but when you have to sit down and write that 3 or 4 thousand dollar check every quarter, it makes you think about congress spending your money.

4. Save as much as possible and do not buy every tool you think you may need. Rent the ones you will use less than once a month (ie hammer drills, cement mixers, ect.)

5. I have found that local paper ads are they best bang for the buck.

Puck

 

[LarryRB]

I have a friend in MAss that does exactly this,. Talking and even stopping by some of his job sites, I have learned,,
MUST have a license to start off with,,. If you think you are starting this without a license in MAss,,, think again,, He obtained his masters capenter, then went back to a specially offered class in Southbridge MA which I believe was like 8 nights or less, that allows you to upgrade that state license to "remodel authorization".. With this,, he obtained special insurance for remodels and the costs was actually reasonable. I don't follow this in exact detail, however, the remodel insurance is a group option somehow through the commonwealth. Many hours of work and many more thrown away while getting started, applying bids that never come through, etc, etc... Your in a great area though and with the building and monies floating around that greater area,,, you should do quite well.

 

[dmccarty]

The latest JLC has an article about Lead Forms or some such. The guy is a remodeler and over the years he has come up with a form with a series of questions he asks the potential client. I think he said the initial conversation might take 45 minutes!

He uses the forms to focus on the clients that will lead to a job. The form/questions also work as well as filter out people who will just burn time and expense and do not lead to a contract.

Later,
Dan

 

[jmc]

Hazmat,

The guy that does our remodeling says he only has about 5 families that keep him and his one employee busy. To get that loyalty, he proved his competence, reliability, and honesty. Like another poster mentioned, he does write out a detailed quote. We give him our business without a competing quote and so do the other 4 customers, I suspect. Having a small, loyal clientele avoids many of the contractor's problems other posters mentioned and probably more than made up for him bending over backward to keep them satisfied.

But there is one problem with businesses like his: He worked hard his entire career to build this business up, and when he quits, the business is only worth the auction price of his equipment. If he had structured his business so that it was a going entity without him, the next owner would have paid him a lot more than auction value to step in and continue a profitable operation. This may not be an easy thing to do in the traditional remodeling business but since you are starting here with a clean sheet of paper...

John

 

[cmhyland]

Hazmat,
I'm wondering why, with the engineering degree and Six Sigma certs why you would opt for a handyman or contracting business..

You should be able develop a consulting practice with billable rates in the $125.00 to $150 per hour range.... Add a project management cert from PMI and you may be able to get engagements up $200 per hour for short term ( 3 month) and $100 to $150 for long term.

You have skills which demand greater dollars than you'd pay for a contractor.

I'd seriously rethink what business you should startup...


Best of luck,
Chris

 

[hazmat]

Hazmat,
I'm wondering why, with the engineering degree and Six Sigma certs why you would opt for a handyman or contracting business..

You should be able develop a consulting practice with billable rates in the $125.00 to $150 per hour range.... Add a project management cert from PMI and you may be able to get engagements up $200 per hour for short term ( 3 month) and $100 to $150 for long term.

You have skills which demand greater dollars than you'd pay for a contractor.

I'd seriously rethink what business you should startup...


Best of luck,
Chris

Chris - thanks for the "reality check" - I realize that the cash flow will be a bit less than as an engineer while on my own, but assuming I can grow the company, when I have a handful of guys working for me, it is potentially more lucrative.

 

[EddieWalker]

Having a group of guys working for you, making you money, is allot easier said then done. The headache factor doesn't just increase with each guy, it also increases with each job, each paycheck, each mistake, each no show and everything else that happens. I agree the potential for larger gains increases with more employees, but so does the risk and stress. You might consider highering or running subs instead of actualy having employees. Especially to start out. Later on down the road when you're networked in and have some clients, then it might be a good idea.

I had a crew in to hang sheetrock, bed and tape it, then texture it. The guy I use doesn't do anything himself. He hires others to do all the work and his job is to organize them and be sure they know what they are doing. Three different subs to get the job done with one phone call to him by me.

Eddie

 

[mjncad]

Hazmat:

My brother-in-law is doing pretty much what you want to do. He was laid off from the local electric utility after 21-years there. He hated that utility and now he is happier working for himself.

He is a sole proprietor and has no desire to make a boatload of money, and is content to make a decent living for himself and his wife. He also doesn't want employees and the headache of having them. As he puts it, having employees makes me a manager and I don't want to be a manager.

Like any self employed person, he has times where he is booked solid and other times when jobs are not to plentiful. He specializes in home repairs that don't require a license, and he enjoys painting. He paints by brush instead of spraying and does a better job in about the same time as a crew of unskilled monkeys do with a truckload of masking tape and paper, and a sprayer.

He also does some custom woodworking, which he enjoys very much. The elderly people like him because he does good work, charges them a fair price, and is genuinely concerned about them.

He and I converted a loft in my last home to a third bedroom so the place would sell. He and I raised the garage doors in our current house from 7' to 8'-6" so I wouldn't have to fold the ROPS on my tractor. We redid my Mom's bathrooms and kitchen by gutting them to bare studs and starting over.

There are more things he is capable of; but you get the idea.

His advertisement consists of word of mouth, and a simple web site his son made for him.

In any case, whatever you decide to do, I hope it works out for you. I know all too well what it's like to be stuck in a job you no longer enjoy and are not challenged by. It makes for one long boring day.