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Discussion Starter · #1 ·
Alright guys, I need some advice from you!

I'm currently working for a commerical construction company as their Facility Maintenance Manager. We are a larger company that does work all across the midwest. I currently am running the Facility Maintenance division across about 5 states and work with some rather large and very demanding clients in the retail and food industry. I enjoy my job and have learned a ton in the past year that I have worked at this location. I enjoy the problem solving, quoting jobs, and making clients happy. However, I HATE:censored:sitting in an office and staring at a computer screen all day! I miss swinging the hammer, meeting clients face to face, and being in residential construction (before this job I worked with a remodeling company). I don't mind the computer work, just not 40 hrs a week!

I have always had the dream of owning my own business and I think I could be pretty successful at it. I have the drive and desire to be a business owner and it is something I have been planning for the past 3-4 years. I currently have side work I do on the weekends and at night after work. I also have "partnered" up with an incredible carpenter, but he has no business skills. He just does jobs on the side for extra cash. He, however, is one of the best carpenters I have ever met and I have learned a ton from him and I hope to continue to learn from him. He has forgotten more than I know.

I want more than just extra cash, I want to do this and I know I can. I just want to make sure I have prepared myself as best as possible before I make this leap. I would love to be in business for myself in the next 1-2 years, (gotta get my son's adoption loan paid off before I do anything)

Okay, finally my question to you all is:

1. What books do you recommend I read before I make this jump?
2. How do you advertise when you first startout, with no money?
3. General advise. No bull..., don't tell me not to do it, because that is not an option. This is something I want and I want it badly!

Sorry for the long post

I look forward to hearing from you guys!
 

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2. How do you advertise when you first startout, with no money?
Welcome to CT. But #2 might be a problem. You can't start out on your own with NO money. You'll need to save up at least 6 months worth of "living" money since it takes some time to start and it will be slow at first. You will also need some working capital, plus prepay insurance, incorporation (or some type of entity), some prepayment on whatever advertising streams you sign on for, and the list goes on.

I'm not telling you not to do it, but the guys who start out with no money and jump in end up with even less for awhile.

For a small start up, I would say 10-15K should be enough to get you going in the right direction.
 

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rselectric1 said:
You can't start out on your own with NO money. You'll need to save up at least 6 months worth of "living" money since it takes some time to start and it will be slow at first.
I started my business with no capital (after working for a deadbeat "contractor" who ultimately screwed his customers and his two employees) but had everything in the planning stages for quite some time before making the move.

Granted, I had enough side work lined up to last me quite some time, which I was able to reschedule and get the ball rolling. I did over $25k my first month in business which also really helped me. I also aligned myself with a GC who throws me all the work I want. Things have been going very well since.

I'm not bragging, I know I'm very lucky things worked the way they did for me.

My point is that you don't NEED a bunch of money to start up, but it sure as hell doesn't hurt. If you do decide to go ahead with it, jump in with both feet. You can't just expect things to work. And know that time on the job site is only about 1/3 of the time you'll be putting into your business.
 

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Hair Splitter
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You first need start up costs covered. Then enough for you and your family to live off of for at least 6 months to a year. I would have several jobs lined up, signed and deposits in hand. You cannot count the deposits in your account as start up money or your living expense.

Lastly, some good old fashion hard work and good luck.

Remember the grass is always greener on the other side.
 

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I've never met a business owner who had 6 months of cash reserve when they started. The reason they started was because they were out of cash.

Granted, it's a good idea to have it but for most people it's impossible. Especially in today's environment.

Most businesses owners, in construction anyhow, started by doing side jobs until finally the scale tipped the other direction. That's just reality.

At one time I was down to $7 in my checking account and had closed my savings due to lack of funds. My wife was out of work.

I worked my azz off and it paid off for me. I remember driving a rusted cargo van that was empty. They really echo inside when they are empty. Just a tool box and 5 gallon bucket of parts.

I actually did start with money and I started with no job and went in to it the way a text book would recommend it. I burned through capital at a record rate until it was gone.

When I REALLY learned how to run a business was when I was flat broke. It forced me to think.
 

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Hair Splitter
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I've never met a business owner who had 6 months of cash reserve when they started. The reason they started was because they were out of cash.

Granted, it's a good idea to have it but for most people it's impossible. Especially in today's environment.

Most businesses owners, in construction anyhow, started by doing side jobs until finally the scale tipped the other direction. That's just reality.

At one time I was down to $7 in my checking account and had closed my savings due to lack of funds. My wife was out of work.

I worked my azz off and it paid off for me. I remember driving a rusted cargo van that was empty. They really echo inside when they are empty. Just a tool box and 5 gallon bucket of parts.

I actually did start with money and I started with no job and went in to it the way a text book would recommend it. I burned through capital at a record rate until it was gone.

When I REALLY learned how to run a business was when I was flat broke. It forced me to think.
You have now! :thumbsup:

And I agree there is nothing that motivates like an empty checking account, but that should never be your drive. You can get stuck in that cycle of having to have an empty, or close to empty account, to get motivated. I have seen many guys go under living job to job. Set goals for yourself and don't look back. I try to maintain at least 6 months reserves in my account to run the company and pay myself. Your motivation should be sustainable success, not starvation.

We are also apt to make deals with the devil if we are desperate.

Also, If you start off living off of your deposits, you are setting a dangerous precedent. Never live off of, or run your business borrowing from the next job. While it may happen from time to time, never get into that habit.

And I know of dozens of contractors who had a fat wad, even if some of it was start up capital from an investor or bank, before they ventured off on their own. Have some cash in hand, jobs waiting and a good business plan with short term and long term goals.
 

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I was broke and nervous with one job in the hopper and a fresh new born. The "designer" I was doing my first job for stiffed me for roughly $3k. That was fun...

I seen that bich a few months ago in a Panera bread parking lot. She was driving a crappy little geo metro. I blocked her in with my new truck and followed her into the store. She didn't see me so I let her order before tapped on her shoulder. The look on her face was priceless. I then proceeded to explain what a crook she was to her and the 40-50 professionals having lunch. She ran away like chicken little without even getting her food.

I finished my meal while watching her try and figure out how she was going to get around my truck.

I never seen a geo burn tire like she made that one when I pulled out..

Life has a way of coming full circle..
 

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I was broke and nervous with one job in the hopper and a fresh new born. The "designer" I was doing my first job for stiffed me for roughly $3k. That was fun...

I seen that bich a few months ago in a Panera bread parking lot. She was driving a crappy little geo metro. I blocked her in with my new truck and followed her into the store. She didn't see me so I let her order before tapped on her shoulder. The look on her face was priceless. I then proceeded to explain what a crook she was to her and the 40-50 professionals having lunch. She ran away like chicken little without even getting her food.

I finished my meal while watching her try and figure out how she was going to get around my truck.

I never seen a geo burn tire like she made that one when I pulled out..

Life has a way of coming full circle..
Designers, in my experience anyhow, are some of the worse people in this business. Many of them are expert con artists. It's funny really, especially looking back in time, how most of them claim to be great designers yet they live check to check. It's like they live in a fake world. But home owners love designers and they seem to get more credit then they deserve.
 

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The Finisher
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I took a 8k personal loan for my corporation, licensing, and insurance with no work scheduled. Being good with computers, I proceeded to build myself a good website with my spare time, and started advertising on Craigslist. I got a ton of leads for very little money (CL = free and website = $30.00)

My one piece of advice for the OP is ditch the partnership. Find a way to bring that carpenter on as an employee. You'll be better off for it in the long run.
 

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Here is a checklist of business/start up info. The checklist is free to view but it's copyrighted so to view...

Go to : docstoc.com

In search box type: Starting a Business :The Great Big Checklist of Everything
 

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Discussion Starter · #11 ·
My one piece of advice for the OP is ditch the partnership. Find a way to bring that carpenter on as an employee. You'll be better off for it in the long run.[/QUOTE]

I actually agree with you, I have no desire to partner with him. I just want to LEARN from him! Wish I could plug my brain into his so I could just learn everything he knows. I have a TON of respect for the "old timers" I want to learn all I can from them. Good quality craftsmanship is a dying bread, I want to be the guy taking their place.
 

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1. You need to decide what kind of entity you're going to be. Sole proprietor, corporation, LLC, partnership, etc. You should consult with an attorney and tax advisor. Depending on the type of entity you choose, you may need (an attorney) to create entity documents and file them with your State. You may also need an entity Federal ID number and State sales tax permit.
2. Open up a business checking account and either write checks and use a bookkeeper or buy a computer program like Quickbooks. If you're not a computer person, don't waste your time with a computer program, just use a business checkbook and be sure to provide a description of the checks and deposits.
 

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1. You need to decide what kind of entity you're going to be. Sole proprietor, corporation, LLC, partnership, etc. You should consult with an attorney and tax advisor. Depending on the type of entity you choose, you may need (an attorney) to create entity documents and file them with your State. You may also need an entity Federal ID number and State sales tax permit.
2. Open up a business checking account and either write checks and use a bookkeeper or buy a computer program like Quickbooks. If you're not a computer person, don't waste your time with a computer program, just use a business checkbook and be sure to provide a description of the checks and deposits.
Also, if you set up a corp or LLC, NEVER EVER co-mingle your funds since you will lose your "corporate veil".

A corporation for example sort of becomes an entity all by itself, sort of like a personal identity.
 

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Also, if you set up a corp or LLC, NEVER EVER co-mingle your funds since you will lose your "corporate veil".

A corporation for example sort of becomes an entity all by itself, sort of like a personal identity.
In most instances, the financial corporate veil is already gone. The majority of accounts require a SSN as a personal guarantor for business credit. My business checking, Amex, Sherwin Williams all require your social. You cant even get a sunoco gas card without providing your social.


The vast majority of small business fail and creditors banks lose their money as LLC and INC's close up shop. They've wised up and now hold your personal finances to debts incurred under the business EIN.


But to your point, a separate business entity is a must. In most states, a sole prop carries far more risk
 

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In most instances, the financial corporate veil is already gone. The majority of accounts require a SSN as a personal guarantor for business credit.
Yep. I actually can't blame them either. I'm still listed as a guarantor on several things with my business.

You just gave me an idea. It's probably time to run a credit report on my S-corp to see if it can hold it's own. The credit must be flawless due to my/it's payment history.
 

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The cash reserve is huge.

If I could go back a year and start over I would definitely want to make sure I had more money allocated in different areas(well, duh). My wife has a lot of student loan debt and together we have some credit card debt(again, duh). I was focused on trying to pay down that debt to increase our cash flow, but having started a business this year what I should have been doing was building a cash pool that I could use for anything as opposed to paying down debt. I know that probably seems obvious, but it wasn't to me at the time.

RS was pretty spot on with needing 10-15k to start out. That goes out really quick. Insurance will take 10% of that, if not more. Getting legally recognized(depending on state) will cost you several hundred, not to mention the time. You're going to need a lot of tools that you probably didn't think of. I also worked residential construction and there's a lot of things that somehow got left off my list of needs. Basic tile and masonry tools for that rare occurrence where the carpenter needs to patch in some concrete or grout. More tarps. Always more tarps. I'm sure you know, but I'm trying to give you an idea of how a $15 dropcloth can really chip into your savings.
On top of that, you NEED to have that business account as fast as possible so that you can get an account opened at your lumber yard. This will save you having to pay out of pocket for items while you're waiting for a check.

Well that got long.

Lastly, if you're going the residential route, advertising is mainly word of mouth. I haven't spent a dollar past business cards. At the end of every job ask your customers if they belong to any community organizations or if they post on any area-specific messageboards, then politely ask for a testimonial on there. Probably 30% of my business I would say comes from a New Jersey Mothers messageboard that one of my customers was kind enough to put my info on.
 

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Discussion Starter · #17 ·
Okay, I set myself up as a sole proprietor this past week, I just wanted to get the ball rolling. My goal is to turn it into an LLC next year at some point, once I feel work has picked up enough.

I also got myself a business bank account set up so I can start utilizing that benefit.

My goal is to have my contractors license and get myself insured before the end of this year. I would do it now but I just don't have enough work lined up yet to pay for it. I have a lot of irons in the fire just waiting for that first big break. I might/ probably need to get the insurance and license before i ever get my break. I have been doing mostly small handyman jobs at night and on the weekends, nothing consistent enough yet.

I have wrote out my business plan and I'm trying to get as organized as possible so that hopefully I'll be ready for this first big break. I'm also working on a webpage and coming up with a design for the business.

I might be crazy but I really want this and I'm willing to do anything to a achieve my goals.

Let me know any more advice you guys might have, I appreciate all the insight so far.
 

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Okay, I set myself up as a sole proprietor this past week, I just wanted to get the ball rolling. My goal is to turn it into an LLC next year at some point, once I feel work has picked up enough.

I also got myself a business bank account set up so I can start utilizing that benefit.

My goal is to have my contractors license and get myself insured before the end of this year. I would do it now but I just don't have enough work lined up yet to pay for it. I have a lot of irons in the fire just waiting for that first big break. I might/ probably need to get the insurance and license before i ever get my break. I have been doing mostly small handyman jobs at night and on the weekends, nothing consistent enough yet.

I have wrote out my business plan and I'm trying to get as organized as possible so that hopefully I'll be ready for this first big break. I'm also working on a webpage and coming up with a design for the business.

I might be crazy but I really want this and I'm willing to do anything to a achieve my goals.

Let me know any more advice you guys might have, I appreciate all the insight so far.

Estwing

You keep mentioning the "big break". It probably won't happen. 28 years ago I went on my own. I worked for one of the biggest home builders in town. He was alcoholic and I couldn't take the abuse any more. I had 3 days of work and winter coming.

I thought I would take on small jobs until I could work my way up the big jobs. I am still doing small jobs. 1/2 day to 3 week jobs are common. The fact of the matter is that some home builders are not making money like the remodelers because there is too much competition in new construction. But it sure looks good to be building homes.

Sometimes you are better off doing small jobs. Get them done and get paid. Waiting for payments from bank loans can really hurt. Don't disdain the handyman jobs. Learn to make them profitable.

Learn to estimate. In the sticky at the top of this section I explain how I do it. Not that I am perfect, but it is a start for you.

Don't let customers get too deep into you. If you work for a customer on bigger jobs bill them at the end of the week. I work Monday through Friday and expect a check on Monday morning. I usually e-mail them an invoice over the weekend.

When you finish a job figure the invoice and send it out right away.

Record your hours and material purchases each night. Again see sticky.

Get an account at your lumberyard and get a commercial credit card. That will give you some money to work with.

Rich
 

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Hair Splitter
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Okay, I set myself up as a sole proprietor this past week, I just wanted to get the ball rolling. My goal is to turn it into an LLC next year at some point, once I feel work has picked up enough.

I also got myself a business bank account set up so I can start utilizing that benefit.

My goal is to have my contractors license and get myself insured before the end of this year. I would do it now but I just don't have enough work lined up yet to pay for it. I have a lot of irons in the fire just waiting for that first big break. I might/ probably need to get the insurance and license before i ever get my break. I have been doing mostly small handyman jobs at night and on the weekends, nothing consistent enough yet.

I have wrote out my business plan and I'm trying to get as organized as possible so that hopefully I'll be ready for this first big break. I'm also working on a webpage and coming up with a design for the business.

I might be crazy but I really want this and I'm willing to do anything to a achieve my goals.

Let me know any more advice you guys might have, I appreciate all the insight so far.
Sorry but if you are working on people's homes and the work requires you to be licensed, you owe that to your customers. But more important is your insurance.

You should not touch someone's home, the place that they have worked very hard to get and maintain, unless you have insurance.

You also owe it to them to have WC, even if you choose to be owner exempt. The policy renders the HO not responsible if you are injured at their home, even if you have a private health insurance policy. If they find out you were injured on a job they can and will go after the your client's HO policy.

If you don't have enough money to do it properly, then don't do it until you can afford licensing and insurance.
 

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Check out the book "Guerrilla Marketing" by Jay Conrad Levinson.

Keep your shirt and truck clean and neat looking.

Figure out where you want to go before forging your path. Develop a niche for yourself. As a woman, I specialize in helping little old ladies, they love the whole "woman power" thing and don't feel like they need to hide "girlie stuff" before I come over. As a bonus, they talk me up to their friends.

Not saying you should get a sex change, just think outside the box.
 
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