Contemplating Career Change - small business networking questions

[ronjhall]

My son went into business a couple of years ago. Worked OK. But it was hard to be the person that does the quotes, worker, orderer, pickup material, bill collector and all other things required to get a job completed and be a family man.
He now works with a small company that does the same things but works is divided amongst all. Here is a link to the business. May help with your decision.
Husdand for a Day

 

[MikePA]

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.

We just had a first floor laundry room built, gutted our 1940s kitchen and remodeled it. We also had to replace our breaker box since the breakers were no longer made and caused fires.

The GC who did the work primarily builds custom homes, but takes on remodels to 'fill in' between home building. He has a small number of employees to manage the jobs and as head carpenters. The rest he subs out. He spent a lot of time identifying high quality sub-contractors and suppliers, e.g., rockers, plumbing electrical, etc. then he schedules them.

 

[Reg]

It can be either a total DRAG, or an exciting adventure to create a business.
EVERYTHING; from getting and doing the work, to managing the money and maintaining the equipment is YOUR job.

In addition to what I wrote to the original poster, another thought is to find local interest groups in your area that have (what used to be called) bulletin boards on the web. I havn't researched this, but would guess that DIY groups have discussion topics about contracting out the parts of jobs that "take 3 tries to get it right". My tactic would be to post advice in those threads and thereby attract DIY'ers to "the guy that knows about this stuff".

\R

 

[MossRoad]

One of the things that I have heard from friends that have done what you are contemplating is that they end up spending all of their time running the business and very little time doing the work that they love to do. So, I ask the old question...

Are you an indian or are you a chief?

Which one will make you happier, the physical hands-on work or the generation of the original idea? For example, I have a sister that owns a costume shop. She loves to design original costumes and work with her employees on their creation. But then knocking off 20 more identical costumes bores the heck out of her and is tedious labor, as is the book keeping and office work that must be done. She has to force herself to do the things that she does not enjoy doing in order to keep the part that she loves to do.

Good luck in you thought process. Really think it out. Get a grub stake in the bank before you quit your existing job. Make sure you have and can afford health insurance for yourself and your family, as well as life insurance to replace your income should you get hit by a bus, etc.... all that fun stuff.

 

[dmccarty]

And don't disability insurance.... And liability....

Later,
Dan

 

[MossRoad]

Oh, yeah... like Eddie mentioned... debt free is nice, too. We've been that way for a long time and the thought of taking on debt for a new house scares the bajeebers out of me . So I look at my net worth over all and then it's a pretty sunny picture. Add up everything you own and subtract everything you owe. If you sold it all and put the money in safe investments could you live off the interest income? If yes, go for it. If no, work to get in that situation before quiting your job.

If you do not enjoy your current job, but it pays well, consider changing your conception of your job. Try to think of yourself as a contractor to your company, not an employee. That detatches you from the decisions the company makes. Think of them as a customer that tells you what they want out of you and you delivering that for the negotiated price (your salary). Then use the money to do the things that you enjoy doing with your family during your time off.

One question, and I know nothing about owning a business, so please forgive me if it is a stupid question.... Is there a way to insulate your business from your personal so that, should the business fail or suffer a catastrophy, your personal finances are safe?

 

[hazmat]

Moss,

I'm a chief. Great food for thought though. Much like your sister, I enjoy the creative / problem solving part, but will tire if it becomes repetetive. One thing that attracts me to the remodel / building business is that every job is different (except for tract housing).

I don't mind being the indian as long as I'm the chief who gave the directions...

I'm fortunate that I'm in a good place financially that I can afford a substantially reduced salary for a year to get the business off the ground.

Initial plan is to carry the medical insurance through my wife's employer, but I'm pricing high deductable insurance as part of the business plan (as well as liability, disability etc.) I already have term life (I'm worth much more dead than alive ).

You can minimize your financial risk by incorportating or LLC (Limited Liability Company) - Personally you are only at risk for the money you put up to capitalize the company - truck, tools. working cash etc. A sole proprietor is personally liable.

The idea of "contracting" for my current employer is interesting. The problem is that in my current role they would have hired me to improve their business, but aren't willing to make any changes... It's as if you were paying me to build you a new deck, but wouldn't let me start.

reg

JLC & finehomebuilding have online forums - though they aren't as good as tbn is at tractors.

Everyone

I'm meeting one of my networking contacts tonight for dinner - I'll report back.

 

[MossRoad]

Thanks for the answer on the LLC VS. sole proprietor. After I retire (in 20 years or so) I would like to buy junk houses, repair them and sell them again. Not for too much profit, but just for something to do, as I enjoy that kind of work.

The idea of "contracting" for my current employer is interesting. The problem is that in my current role they would have hired me to improve their business, but aren't willing to make any changes... It's as if you were paying me to build you a new deck, but wouldn't let me start.


That was the only way for me to keep my sanity when I had a very difficult boss several years ago. I just took the attitude of hey, if you're willing to pay me for advice and don't want to take it, that's fine. I will help you out of any jam as best I can whenever needed for that price and I won't say I told you so later.

 

[mjncad]

In my case, the things that soured me on opening up my own business are all the boring; but necessary bureaucratic administrative things to running a business.

Let me do the creative stuff and let someone else do the boring junk...oops, I don't have someone else to do the boring crap.

I swear that governmental regulations at all levels (federal, state, county & city) are the biggest hindrance to entrepreneurship in America. I don't advocate doing away with all regulations; but there are so blasted many to keep track. I wish I had the answer for this part of the equation.

I wish my brother-in-law would set his business up as an LLC, as it's easy to do here in Colorado and he can be the only person in the business. Thank goodness he has a 1 or 2 million dollar umbrella insurance policy.

 

[rox]

Hazmat,
Do not be surprised when your material suppliers require you to sign a Personal Guarantee of all debts due from the LLC. Most people think the way you do, "I don't want to accept the risk personally so I'll form an LLC or corporation." That is all good and dandy, however your suppliers will likely not want to take on your risk either, and require your personal guarantee thus punting the ball back into your personal at risk court, and most certainly for new businesses.

I hope you are reading up about the Construction Lien Laws in your state. You will want to get Lien Releases for all major materials used on jobs. I was a credit manager for a multi divisional company one of which sold a lot of irrigation equipment and pumps. We always delivered so we had the delivery address, if we were not paid we filed our legal lien notices which goes against the property (really upsets the property owner I may add).

Plus if the person who hired you does not pay you you will want to know how to throw out a construction lien which will aid you in getting paid.