Business owners.

[zapster]

Business owners thread is now OPEN.

Any funny business and we all know what happens next.

...zap!

[galencwi]

I'm from Portland. I thought about doing a mobile Bike welding business. Lol. My friend does all his carpentry business with an electric bike, cordless tools and a bike trailer.

[user 9328330]

I had been really hoping for a business subforum. But.

Nice to see a sticky here. Maybe a few links to some past discussions are in order as we happen to run across them. Off the top of my head, here are a few bullet points in no particular order related to business that might be worth discussing in our non-subforum as people get the time or inclination:

1) Insurance
2) Salesmanship
3) Estimating
4) Licensing
5) Taxes
6) Vendors
7) Customers
8) Safety
9) Personal Finance
10) Business Finance
11) Regulations
12) Invoicing
13) Accounts Receivable
14) Accounts Payable
15) Bookkeeping Programs
16) Short, Medium, and Long-Range Goals / Planning
17) Flexibility
18) Business Life Cycle
19) Balancing Business vs Life
20) Hours Worked: Reality Check
21) Gross vs Net: Reality Check
22) Likelihood of Getting Rich: Reality Check
23) Dealing with Employees
24) Handling Screw-Ups
25) Judging Readiness to Jump In by Questions Being Asked
26) "I'm starting my own business, what welder should I buy?"
27) Working in the Residential Sector
28) Overhead, Fixed and Variable
29) "How much should I charge?"
30) Working for Friends
31) Business Classes, Are They Dumb?
32) "Should I blindly trust business advice given on the interwebz?"
33) "Who is Stick-Man, and why does he steal from tbone550?"
34) Working for Farmers
35) Net 60, or, "Why don't I have my money yet?"
36) 2%10/Net 30, or, "Why should I pay some of my bills promptly?"
37) "Why do you guys own your own businesses if all you do is complain?"
38) "It's 12:05 a.m., why is tbone550 typing this crap instead of sleeping?"
39) Vacation Time
40) Sick Time
41) Personal Time
42) How to Quit Working for the Man Without Burning Bridges
43) Politeness: Is it Important?
44) Skill at Welding vs Skill at Business
45) The Golden Rule Applied to Business
46) Mobile Work vs Shop Work
47) Timeliness
48) Hiring and Firing
49) Drug Testing
50) USDOT and Other Regulations on Mobile Welders
51) How to Figure Break-Even Points
52) Buying Equipment: Used vs New, Basic vs High-Tech
53) Understanding Your Market Segment
54) Advertising, or, "Did I just smell a Unicorn Fart?"
55) Reputation, or, "What you do and say Matters."
56) How to Deal with your Competition
57) Doing More with Less, or, "Was my old boss right sometimes after all?"
58) Why Isn't the Grass Greener Over Here?
59) Statistics, or, "Figures don't lie, but liars figure."
60) End of the Year Quandary: Spending to "Save" Tax Money
61) Emergency Funds
62) Risk vs Risk Aversity in a Business Owner
63) Cash Flow, or, "Will I eat today?"
64) Budgeting vs Blowing Money on Frivolous Crap
65) Retirement Savings, or, "Do I want to be doing this when I'm 80?"
66) Entrance and Exit Strategies

OK, that's all for now. Should be enough there for some discussion to get rolling anyway.

[OPUS FERRO]

tbone550

19) Balancing Business vs Life
I'm fortunate - I was born 'afflicted' with terminal welding - and have no life . . .

33) "Who is Stick-Man, and why does he steal from tbone550 ?"
How can I steal from Stick-Man . . . ?

38) "It's 12:05 a.m., why is tbone550 typing this crap instead of sleeping?"
You can't sleep - because your 'daily deliberations' are scrolling through your mind . . .

66) Entrance and Exit Strategies
We all exit the same way - obviously, 'your entrance / to exit' - is grander than mine . . .

tbone550
Your template is the most comprehensive 'opener' - for a new thread, I have read - on
my time on the forum ^ ^ ^


Opus



.

[achirdo]

Unless you like dealing with cheap homeowners and putting up wrought iron fences don't pay to get on home advisor. That was the quickest $1000 I've ever spent and got nothing in return.

[Insaneride]

34) Working for Farmers

T Bone, I dont know about working for farmers but if they are like working for pastors at non denomination churches; stay away.

[tapwelder]

My experience with churches is varied. Some good. Some comical. Couple documented here.

Ironically there is a church have seen for near 20 years. I haven't been able to essentially give my service(material and minimal labor) away to repair a botched/abandoned rail job by a contractor 20 years ago.

[user 9328330]

Yes, results with churches depend greatly on the type of people making up the finance committee. The more people involved, the more likelihood that lowest price will be the deciding factor or the more likelihood that someone's cousin's uncle's son-in-law with a welder will end up doing the work.

A lot of churches don't have tons of money sitting around in an account, so the decision to spend some is hard-fought within the congregation. I give work to my home church, like I give work to my friends and family. None of these have seen fit to abuse the relationship, and sometimes they give me help when I need it, too.

I have not had any luck with requests from other churches to quote work for them. This work has involved fences, handrails, and stairs / platforms, both repair and new construction. I quoted my standard rate for this work. In most cases, a member of the congregation ended up doing the work. In others, once my quote was received, the entire project was modified to reduce costs.

Of the latter, a memorable one of these involved a desire by the local Catholic Church to have a SS fence like the one I'd built on the adjoining property. I tried to give them an idea beforehand of how expensive this would be, but the clue wasn't taken; they had "plenty of money" to do this. So I spent a half-day on the site measuring, calling for materials pricing, looking at and suggesting / estimating demo work to existing structures in addition to the fence buidling, then handed in the quote soon after. My ideas for demo work were done by someone else, and a chain link fence went up instead.

You win some, you lose some.

[Willie B]

Unless you like dealing with cheap homeowners and putting up wrought iron fences don't pay to get on home advisor. That was the quickest $1000 I've ever spent and got nothing in return.

My sense is Home Advisor will, (for a handsome fee), give my name along with anyone else they have found desperate enough, to bargain hunters. Bargain hunters will in turn, request bids from me and all the other names on the list. If my bid is lower than all the other candidates, I likely will lose money. If it is higher than any other candidate, I have wasted my time bidding.

My goal is to at least break even on all jobs. I believe Home Advisor, and Angie's List exist to extract money for little service to anyone. They aren't going to help me attain my goal.

Willie

[downhand]

Older gentleman saves money most of his life with a dream to get into business. Travels to the big city and soon meets some nice men who said they could help set him up in business if he had start up capital which he did. Three months later the nice men had the money and he had the business.

[Louie1961]

Number one rule of business, to me, being a CPA is keep records. You can't figure out your true costs without records, and you can't maximize your deductions without records. You don't need a shoe box of receipts either, but that will do. You can always snap pictures of your receipts with your phone and store them digitally in the cloud with something like Evernote or OneNote. Heck you can even do it with quickbooks on your smartphone now too. Keep track of all the miles you drive too.

[Baloo2327]

For me the key to business is knowing your limitations. You can't please everyone. And when your gut tells you no, even though your brain can't see anything wrong, it is always best to listen to your gut.

[achirdo]

My sense is Home Advisor will, (for a handsome fee), give my name along with anyone else they have found desperate enough, to bargain hunters. Bargain hunters will in turn, request bids from me and all the other names on the list. If my bid is lower than all the other candidates, I likely will lose money. If it is higher than any other candidate, I have wasted my time bidding.

My goal is to at least break even on all jobs. I believe Home Advisor, and Angie's List exist to extract money for little service to anyone. They aren't going to help me attain my goal.

Willie

Sounds about right. Their leads are stupid expensive also. The one that sent me over the edge was a homeowner that wanted a 20x20 carport, and a 2'x20' extension added onto his concrete driveway. Their budget? $2k ������

[achirdo]

Number one rule of business, to me, being a CPA is keep records. You can't figure out your true costs without records, and you can't maximize your deductions without records. You don't need a shoe box of receipts either, but that will do. You can always snap pictures of your receipts with your phone and store them digitally in the cloud with something like Evernote or OneNote. Heck you can even do it with quickbooks on your smartphone now too. Keep track of all the miles you drive too.

Quickbooks is worth every single penny I've ever spent on it. I don't know how I could even operate my business without it.

[downhand]

Sam Walton said its a thousand times easier to keep the customer you already have than it is to bring one new one through the door

[user 9328330]

Sam Walton said its a thousand times easier to keep the customer you already have than it is to bring one new one through the door

There's some truth to that, but then again, most of the customers that most of us started with, were cheapskates; people so cheap that they were willing to toss whatever loyalty they had to their previous welding service supplier in order to get a cheaper product. Come to think of it, that's how Wal-Mart got their customers as well.

The issue with Wal-Mart is that they need tens of millions of customers to stay afloat; they depend on economies of scale. If you're a little guy, you are going to have a hard time making ends meet by being the price leader. You'll work twice the hours for half the pay, and you'll die an early death. Better to have a price that's fair to you and your customers, let the ones go who can't seem to stomach more than $35/hr, and choose customers who will allow you to make a living wage. Plenty of people in the welding business never get their rates to where they're actually able to live because they're too stuck on satisfying a group of customers that demand fast, cheap, and good. As we all know, those are the three things that cannot be supplied indefinitely.

Once you move up to a level of customer that can sustain you, that's the time to fight tooth and nail to keep them. I know it sounds harsh, but it's what I've found to be true. As you grow, you shed "certain" (not all) customers. Let the cream stay with you.

[Willie B]

There's some truth to that, but then again, most of the customers that most of us started with, were cheapskates; people so cheap that they were willing to toss whatever loyalty they had to their previous welding service supplier in order to get a cheaper product. Come to think of it, that's how Wal-Mart got their customers as well.

The issue with Wal-Mart is that they need tens of millions of customers to stay afloat; they depend on economies of scale. If you're a little guy, you are going to have a hard time making ends meet by being the price leader. You'll work twice the hours for half the pay, and you'll die an early death. Better to have a price that's fair to you and your customers, let the ones go who can't seem to stomach more than $35/hr, and choose customers who will allow you to make a living wage. Plenty of people in the welding business never get their rates to where they're actually able to live because they're too stuck on satisfying a group of customers that demand fast, cheap, and good. As we all know, those are the three things that cannot be supplied indefinitely.

Once you move up to a level of customer that can sustain you, that's the time to fight tooth and nail to keep them. I know it sounds harsh, but it's what I've found to be true. As you grow, you shed "certain" (not all) customers. Let the cream stay with you.

I pay my bills by providing electrical expertise. My field is one where every sixth grade graduate believes himself to be my equal. Three people a week on average tell me about their expertise with electricity. The fact is: I have no loyal customers. Repeat customers believe that in some way, I provide more value than others. I did nearly all electrical work for 19 years for one builder. The last summer was insanely busy. I notified him that the second full week of August, I would be going on vacation with my wife, and sons. As the weeks elapsed, he surprised me with one after another jobs not fitting into the schedule. I knocked myself out, but was proud that I kept up with the work load. On the Thursday late in the day I was soon to leave on vacation he announced he was going to gut a house on Sunday. I could have the week to rewire. I reminded him I would be away, (it had often come up in conversation). He chuckled: "Go on vacation when there is no work to do". I responded that my wife is a teacher, this is the last week she can go. These were immensely fussy homeowners, they were not planning to live elsewhere while their house was under construction. Leaving them in a gutted house for a week while no progress was made would be unthinkable. "You'll be here" he responded. That was 12 years ago.

He hasn't asked me to do a job for him since. NEVER COUNT ON LOYALTY FROM YOUR CUSTOMERS!

Willie

[user 9328330]

I pay my bills by providing electrical expertise. My field is one where every sixth grade graduate believes himself to be my equal. Three people a week on average tell me about their expertise with electricity. The fact is: I have no loyal customers.

As I'm sure you can imagine, the welding field is similar. EVERYONE you talk to has been a "certified welder." From the guy greeting you at Wal-Mart to the dude behind the wheel of the supervisor's truck.

I've been lucky, and picky, with my customers. This past fall I put in a 38-hour "day" in order to keep things going for multiple customers who were having simultaneous emergencies, and working from 7 a.m. to past midnight isn't unusual for me. Like you, I let my customers know weeks in advance, and continually remind them as the time approaches, if I'm going to be gone for an extended amount of time. One of my customers recently bent over backwards in order to help me when I had some trouble of my own. The only thing it took was for me to gently remind him of a few late nights I'd spent on some of his equipment to keep him going. I certainly don't EXPECT them to do anything out of the ordinary for me, but it's nice to see it when it happens, and it does.

It could also be a general difference in the quality, expectations, or type of people who live in my area.

[camjeep3]

T bone. Your first post was great... I'm sure people thinking or just getting into business haven't thought about a majority of the things you listed.

As far as customers go... I agree 100% I have been in business for about 1.5 years now... and I am starting to see a shift in customers. when I started I was fixing the stuff that should of been scrapped years ago for farmers and individuals. occasionally get a decent fab job. As things progressed, I started getting into some companies, You find out quickly who is just making the rounds with your service, Expecting you to bend over backwards for them and then forget to pay you. But Finally I am getting a few solid REPEAT customers who are easy to work with but make a point to pay QUICKLY. THat is huge when you are starting out.

[dosswelding]

Not really a question, just wanting to talk about it so i can draw a conclusion for myself and see if I'm on the right path for me or not.

It has always been my mentality that a business must grow and evolve to survive?
Well ive been doing my share of both here lately and it scares the hell out of me and gives me a thrill at the same time . So what I'm asking from the experienced people is , does an average exist or is their "sweet" spot anyone has found on how "big" to grow a business? Many , many variables to consider, what are some pros and cons of remaining a small one , sometimes 2 man operation , versus letting this thing continue to grow .

[Willie B]

In my case I have always had a fear of growing too big. My father ran a two man operation, I ran one man 20 years. Fact is those were more profitable years. I put in longer hours, didn't find time to spend money. My son joined me, two households to support, more down time between billable times. Customers who pay slow are my biggest hardship. Collecting my money is a big part of my world.

Willie

[camjeep3]

Not really a question, just wanting to talk about it so i can draw a conclusion for myself and see if I'm on the right path for me or not.

It has always been my mentality that a business must grow and evolve to survive?
Well ive been doing my share of both here lately and it scares the hell out of me and gives me a thrill at the same time . So what I'm asking from the experienced people is , does an average exist or is their "sweet" spot anyone has found on how "big" to grow a business? Many , many variables to consider, what are some pros and cons of remaining a small one , sometimes 2 man operation , versus letting this thing continue to grow .

I Think it depends... It will eventually come to a point where you would have to make a BIG jump to take the next step. Are you wanting t otake the risk, or stay where you are.
As an example, I know a guy who owns a machine shop. started in his garage by himself, grew into a probably 8k sq foot shop 10-15 guys. THings slowed down, so he downsized, now works in a home shop with 2-3 others. still very successful at that scale.
I know another machinist who has a 2-3 man shop. He could probably hire 3-4 more guys and keep them busy, but. He doesn't want to.

[dosswelding]

Willie b , i agree in my few years of experience running a business is like a pinball bouncing in a triangle . The three points of the triangle are getting the work i have in front of me done , finding work to do next week and lastly collecting for work that is completed. The "bigger" you are the faster the ball will haft to bounce between the three points in the triangle.
If something happens to break the triangle while playing a big wheel it is hard to get it going again before the other two points of the triangle catch you and put you under.
I am learning this lesson at the moment while playing the game of growing a business and i have realized i need to increase my operating capital by another 10k of money in the bank at all times to cover the unexpected if I'm gonna continue to take the work I'm taking at the moment. Learning lessons come hard and quick running a business, good credit is a must for anyone planning to start a business, cash flow will always be a concern, a person must always keep plan b for when that big check don't come on time.

Camjeep3 , i have learned their is no 100% guarantee in anything. But there are certain things a person can do to protect themselves against times of downfall . The biggest thing is to live well within a person's means and save save save . Also i don't know how it will work and i hope i dont ever haft to find out if it will work. But i have been pushing my business towards public utilities such as power , water and sewer , because in a poor economy infrastructure will be the last thing to go . Hopefully this plan can keep me going thru hard times , even if i have to scale back it hopefully wont be a total loss .

[Willie B]

If I responded to every request for a bid I could easily spend 50 hours a week. In the same sense that I don't buy lottery tickets, or patronize casinos, I try very hard to avoid gambling on bids. It is an inexact science to figure out how serious a potential customer might be. The customer wanting to know how much to budget is to get some leeway. The bargain hunter soliciting bids from six or more providers I can't be bothered. I want to provide a quality job, undercutting all the competition will not serve that goal.

Recently a wholesaler had an event to find the fastest electrician. A lady employee there encouraged me to compete. I replied that speed was not my thing. "Well, your son might be fastest" she replied. "He better not be!" was my comeback.

A big majority of electrical fires are associated with arcing. Almost all arcing is the result of shortcut workmanship. I don't want the person who packs my parachute to be the fastest. I wouldn't want my electrician to be fastest either.

Willie

[user 9328330]

Not really a question, just wanting to talk about it so i can draw a conclusion for myself and see if I'm on the right path for me or not.

It has always been my mentality that a business must grow and evolve to survive?
Well ive been doing my share of both here lately and it scares the hell out of me and gives me a thrill at the same time . So what I'm asking from the experienced people is , does an average exist or is their "sweet" spot anyone has found on how "big" to grow a business? Many , many variables to consider, what are some pros and cons of remaining a small one , sometimes 2 man operation , versus letting this thing continue to grow .

I think the answer to this is greatly dependent on your life goals, feelings on risk, desired standard of living, ability to handle stress, etc. I've been the foreman of a welding shop before, and that convinced me that I NEVER wanted to deal with employees again. So for me, I'm set on figuring out ways to maximize profitability within the confines of what I can do by myself. There is definitely a bright line beyond which you need to majorly invest to go to the next level in any business, whether it involves computerization, opening a first or second brick-and-mortar location, hiring back office personnel, etc.

I think maximum profitability for any particular business size is probably just a little ways before that bright line has to be crossed, the very definition of "doing more with less," which I HATED to hear when I was an employee. I HATED to run old equipment, to do things by hand that were done more efficiently with a certain machine that we didn't have, etc. But there is often a whole range of things that need to be upgraded at the same time to move to the next level in a business, and that's something I didn't understand at the time. Once you buy all that stuff, then you're stretched thin financially while you get things up to speed at your new level of productivity. Then you reach an efficient point and go beyond it before you reach the next bright line where you MUST spend more money.

One ace in the hole that I have is that while welding is my primary income provider, I have other skills that are often needed on the same sites, and I'm actively listening to what my customers want (as in vendors or service suppliers), and running this stuff through my head to see if it'd be something I should pursue.

Finally, a previous poster mentioned something akin to keeping your work recession-proof. That's something I also have worked toward, and very few of my current customers are going to have much trouble in a downturn.

One nice thing about welding is that it's basically a brainless activity. You get TONS of time to think about stuff like this while you're burning rods or wire.