Considering running my own carpentry business? [Archive]

JOS106

26th February 2018, 09:41 PM

Hi all

I need advice from experience chippies out

I am in Sydney Australia, specialise in framing and fix out carpentry, i used to work with a builder so i have knowledge of the whole construction process. i got my qualifications as a carpenter last year and this year i am planning to break free from working for a company and start my own business but there are a few issues that i am concern about...

1. The consistency income, i understand there are risks but at the same time there are rewards.
2. More paper work and legal requirements
3. Managing people and time
and more

I want to hear from people that has been there and done. is the risk worth it and is it better then working for a company?

Thanks

KBs PensNmore

26th February 2018, 11:42 PM

Starting out on your own is a BIG step, before doing that, I'd keep working for someone else while you gain more experience and the everdemanding money. Try to get experience dealing with people, as that is a big thing, learning not to oversell or undersell yourself, learn how to quote jobs and estimations on time, that is the big secret, time management.
While you're working, get some afterhours work, so you build up a clientele basis, word of mouth is the best advertising.
I wouldn't entertain the thought of it unless I had $100K behind me!!!
Money for licenses, in SA you need a builders license and a supervisors licence to supervise yourself:doh:, Insurances, sickness and accident for yourself, public indemnity, product liability. Money for your holidays, unless you want to work 7/52?? There will be times you can't work, raining, building site closed down, due to workers/contractors lien (they haven't been paid for 2 months). Supplies haven't turned up, or the wrong stuff delivered, it happens!! Getting a good accountant, learning basic accountancy, keeping track of purchases, and stock are all important parts of self employment, with good accountancy skills, it will save the accountant time which in turn save you money.
Workcover if you have someone working for you, even a casual, you'll need money for their wages, they don't like being paid a month down the track. Builders/homeowners pay sub/contractors when the jobs finished, not weekly like a wage. Also for your tools (theft). Then theres ATO, creditors, incase you've done the job and they don't want to pay because it's not what they wanted, don't like the workmanship, any excuse under the sun not to pay and get a free job done, believe me, it happens. Builders running into financial troubles and expecting you to work for nothing, while they've transfered everything they own into the wifes name, so they can't be touched.
Purchase of tools, because you don't have the right tool for the job, or a more efficient model comes available?
Yes, it does have it's rewards, but more headaches than reward I feel.
I hope this doesn't put you off, but you asked, by the way I'm not a chippy but have had several businesses doing steel work.
Kryn

China

27th February 2018, 12:17 AM

I would add to the above a business management course, can help a great deal, I completed one in my post trade course it can be a eye opener, and as above don't be put just be informed before you start and you never look back
it was best thing I ever did and for the first couple of years you will work harder and longer than you ever did as a employee as the saying "no pain no gain"

rwbuild

27th February 2018, 01:17 AM

All of the above is good sound comment and advice.
Time management is critical ie:
Time administration (all the legal compliance) computers are wonderful so long as you have the essential software
Join either the HIA (preferred) or Master Builders association, they are a valuable source of expertise and great for networking
Accounting, suppliers, sub trades, working capital or lines of credit BUT MAKE SURE YOU CAN SERVICE IT,it is crucial to develop a good credit rating
Yes you will work 15 hr days (including office work) but keep a dedicated day for self & family, a healthy mental and home life is crucial
ALWAYS WORK WITH A SIGNED CONTRACT and GET SIGNED variations from your client and never work on a hand shake, it never holds up in court.
Even though its tedious, accurate detailed estimating and quoting is paramount.

"Without troops all you command is a desk, without communication all you command is your thoughts"

A very little under estimated facet of building for the private sector is that for the life of the project you become an extension of your clients family, how you treat them is how you will be treated, they are the cheapest advertising agency you will ever have.

rob streeper

27th February 2018, 02:28 AM

The overall environment here is apparently drastically different from that in Australia. We have construction, plumbing electrical, zoning and fire codes but enforcement is spotty to the point of being a farce in most cases. Builders are 'registered' not licensed. Only registered builders can pull construction permits but since permit enforcement is almost non-existent we have a huge population of unlicensed operators that will do practically anything to make money. I point all of this out because it alters the labor market in the building trades and fosters the way work is done in Texas.

The most important problem here for the aspiring construction contractor is finding skilled or even unskilled employees. This is because those workers who have training or who gain enough skills working for somebody else quickly decide that they want the profits for themselves. The result is that those people who remain in the employee/helper pool are the ones who can't or won't pick up the skills they need to become independent, i.e. the dummies. This state of affairs makes building a contracting business extremely difficult in Texas. We have professional builders but they only take on big jobs such as commercial construction or residential construction on a commercial scale. There are a very few companies that do remodeling but they are by comparison very expensive and they also have a hard time finding skilled hands.

Thus the average small remodeling contractor here works pretty much as a singleton, doing most of the work himself and using an ever changing parade of more or less useless schlubs to do things like carry trash. This is a viable but very much hand to mouth existence that works as long as you're physically able. As these guys age however the wear and tear on their bodies begins to tell. The more aware set of small contractors recognizes this and finds alternative work. Some guys get into house flipping for instance.

So once you get past all of the above listed issues I suspect you'll find that finding, training and retaining the employees that fuel the profits of your business is going to be your biggest concern. Good leaders are good followers.

ian

27th February 2018, 04:47 AM

leaving aside issues such as licencing, and do you have the requisite "documented experience" to become licensed and obtain a gold card for the trade in which you wish to practice, there is what do you want to pay yourself.

A basic calculation would go like this
The building industry generally works a 38 hour week, over 52 weeks that works out at 52 x 38 = 1976 hours
"Normal" is
10 public holidays per year = 80 hours
20 sick days per year = 160 hours
4 weeks annual leave = 320 hours
so the work year contains 1976 - 560 = 1416 hours.

If you want to pay yourself $100,000 per year (before Tax) you need to generate $71 per hour, plus 9.5% to superannuation = $78 per hour.

If 15% of your time is spent running the business (Tax, monthly BAS, accounting, correspondence, quoting, research, etc) your rate per "earning hour" needs to be adjusted upwards to account for this non-earning time. (15% equates to around 1 day a week spent running the business.)

Then it's extremely unlikely that you will be 100% busy, even once you are established -- so you need to make a guess as to how busy you actually will be.
80% utilisation is pretty much as good as it gets for long term (>3 months continuous) work in most industries, more typically it might be 65 to 70%.
So your "earning hour" rate needs to be adjusted accordingly.

Then there are your overheads.
you still have to meet your financial commitments if you are ill or injured, so some form of income protection insurance is probably a must.
Then there will be your public liability and professional indemnity insurance.
And vehicle running expenses, including providing for the eventual replacement of your work vehicle.
and essential tools of trade that can't be recovered from each client. e.g. you mobile phone account.
Together these may add as much as $5 to your rate per "earning hour"

working on the back of an envelope, all the above suggests that paying yourself $100,000 per year, requires that you earn around $140 per earning hour.

Of course these numbers will calculate differently if you decide that you want to pay yourself substantially less than $100,000 per year and/or time spend running the business and chasing work is additional to the standard 38 hour week, or that for the first few years you won't take leave -- but the building industry generally shuts down in December/January so no annual planned leave might equate to a period when the bills still need to be paid, but there is no income.

Only you can decide if the effort of running a business is worth the stress in self fulfillment

rustynail

27th February 2018, 09:13 AM

Working for yourself? Well not exactly. You are actually working for a different boss each and every job. You are also doing most of the ATO's work for them and jumping through State and Federal Government hoops. As an employee, these are your boss's worries. A good job on good wages has a lot going for it. But some, myself included, prefer to make their own decisions and run their own race. These are the people who get the most satisfaction from self employment and would probably suffer the most being an employee.
I have had the pleasure of working in both capacities over the years and still would find it difficult to make a choice one way or the other. Experience is a commodity of which you can never have too much. Inexperience can be fatal. Being a good tradesman doesn't necessarily make a good businessman - yet another skill to acquire before taking the plunge. Book-keeping and accountancy knowledge are also going to help promote survival in the dog-eat-dog world that is private enterprise. Add to this a good dose of beginners luck and you just might scrape through unscathed.

Jestar

27th February 2018, 09:40 AM

Starting a small business in the building industry is like shooting yourself in both feet. I run a small property maintenance company in WA and I will just say it has been tough going for the last 3 years.

It does not take much to fall on hard times. Late payment from clients (especially from bigger building companies), lack of work, projects going wrong, vehicles breaking down, getting sick or plain just burnt out from working your 4th 90 hour week trying to get everything done.

You will need to invest time and money into learning Building Codes and Australian Standards. The NBC is free but the standards cost money. For building there is around 70 different standards.

There is also making sure you have a full suite of SWMS/SWP/JHA documents to cover your type of work. Doing this yourself takes a lot of time and it can cost a fair chunk of money to have someone else do it. But if an accident happens on your work site, these are one of the first things Work Safe will ask for. SWMS are also required if you start subcontracting for bigger companies. You will also need to make sure any of your employees/sub-contractors read and understand these.

But it's not all bad. I enjoy the freedom running my own business has given me. I get to see a lot more of kids school stuff. If I want an early finish the only person I have to answer to is my wife.

Regards

Dane

Chris Parks

27th February 2018, 12:10 PM

rob streeper

27th February 2018, 12:18 PM

Small quick jobs would be where I would go, get it done, get the money and move on. I have done both the employer/employee gig and the back end office work these days to have employees is totally out of proportion to the rewards. No way would I ever employ anyone again, keep it small and compact. This ensures you have no obligations to employees, you can work to suit your self etc.

That's the Texas method. You can make a living, particularly if you have a string of regular clients who have the money to pay what you're worth but if you get hurt, get old or get sick you're toast.

Simplicity

27th February 2018, 01:45 PM

Small quick jobs would be where I would go, get it done, get the money and move on. I have done both the employer/employee gig and the back end office work these days to have employees is totally out of proportion to the rewards. No way would I ever employ anyone again, keep it small and compact. This ensures you have no obligations to employees, you can work to suit your self etc.

This is the bases of my small handy man business
Get in work we'll get out.
That means cash flow we want invoices going to clients every week.
I don't work for builders(sorry if I upset anyone here)$$$$$
Small jobs kitchens decks extra,
Clients get grumpy after seeing you for months and what they see as no progress.
AND KEEP UP ON THE PAPER WORK AND TAX

Cheers Matt

rob streeper

27th February 2018, 02:13 PM

Clients get grumpy after seeing you for months and what they see as no progress.

Funny that isn't it? Most of them last about 3 weeks before they start getting anxious.

I have a client, my last, that I've been semi-continuously working on for near three years. The last bit I signed on for is a few cabinets in the kitchen that are due to arrive day after tomorrow. This phase (kitchen) has been going for a year. Total tear out, expansion and complete re-fit. 6 months solid at first and sporadically since as the client sources in bits and pieces.

tonzeyd

27th February 2018, 02:54 PM

There's a concept in the investing world that says the greater the risk the greater the reward. This applies to running your own business. However the "rewards" isn't neccesarily financial. It could be being your own boss, picking your own hours, working from home/closer to home etc etc. So its entirely up to you to determine whether the risk is worth it. Plus what works for some won't necessarily work for you.

Working for yourself isnt something that you can take light hearted as others have touched on, there will be times especially early on when you'll be struggling to put food on the table. So make sure you've got a safety net, have heard of plenty of stories of people having to sell their cars, wedding rings etc to stay afloat. When i say early on its because a significant number of businesses go bust within the first 12 months of operation.

Chris Parks

27th February 2018, 06:55 PM

If I was to think about a carpentry building business I would have one rule....No sub contract work at all. Cash flow is the name of the game, no debtors or creditors. A mate of mine was a fencing contractor and he used to get the material delivered and the customer paid the supply and delivery, all he needed to get from the customer was the labour he put in and payment for filling the holes with cement. Working this way simplified things and he did not have big material overheads he had to effectively finance even for a short period and the customer knew there was no added margin for material supply. Working for over $100 / hour there is no way you want to be standing in Bunnings trying to organise materials. This way also means you never have to walk away from a job without full payment. These days I would go so far as having the facilities to accept CC payments which would make progressive payments easier to accept on site.

Simplicity

27th February 2018, 08:30 PM

JOS106

27th February 2018, 09:33 PM

Thanks guys so much for the replies, Advice in capital letters well noted

Even though majority seems to be against then for but after so many years of working for someone (not just in constructions) i want to challenge myself and want to explore this running a business venture. Ofcourse i know there are more then meets the eye.

Back up Finance - I have a investment property that i will be selling just to give my family an ease of mind when the going gets tough

Accounting - My wife is an company accounting so i am giving her all the paper work and eventually take some calls when she gets settle into her new routine

Australian Standards - I did a course in CERT IV building and construction (builders course) so that has given me some insights or atleast where to gather information so the work meets AS.

Personal wages - I am not expecting much for my first year of running a business, i would be happy if i can make just the minimum wage not a lost. My first year would be just a leaning year where i need to adapt to running my own business and building up my clientele, so i am not expecting to be hitting the 100k mark (maybe on my 2nd yr :q)

rwbuild, youre right about doing everything with a signed contract i have gone through the correct channels to gain my licensing and along the way i've met many dodgy tradesmans/builders so i want to do everything right by the books. Just in case if there are any issues, things can be dealt with accordingly (thats not to say i cant bend the rules every now and then......to suit the client :U)

I am currently working for a company, so my plan would be to get all my business informations together, build my branding. registrations etc then either
I come out and sub contract myself to someone on a few days a week base so i can look for my own jobs, doing this will give me some base income just to keep myself offloat for awhile, and not have to commit myself to a fulltime job.
Or i will wait until i get a big job, then jump ship

The hardest part i think will be the transitioning period and getting myself settle in to the process of running my business, i have contacts of builders where i can call to see if they have any form of jobs if i do get dry, and like some of guys have mentioned, the best jobs would be the smaller ones where the turnaround is quicker and get paid quicker. I know its going to be tough but i am determine to go for it, reading all you guys replies i realised the issues i was thinking about is actually real. So i ll make sure i get all my stuffs together and have a back up plan.

-----------------------NO GUTS NO GLORY---------------------

Now lets hear from any trades business owners who is making a killing just to give me that motivation :U

JOS106

27th February 2018, 09:41 PM

One other small thing are you a peoples person.
Can you comfortably talk to clients and do quotes.
You may be a gun on the tools but you need to be able to sell your self to clients as well(without sounding cocky)
Before I started my business I worked as a panel beater.
I regularly saw bosses put there best guy on the tools into management,not always the best decision sure the guy was great with his hands,but not always great with his mouth.
At the end of the day your selling your self.

Cheers Matt

This might be another area i should be concern about.... i am an honest man and i know sometimes an honest don't always get the honeys. I am not good with sugar coating everything but i am hoping some people will appreciated my straight forward and honesty

Simplicity

27th February 2018, 09:47 PM

This might be another area i should be concern about.... i am an honest man and i know sometimes an honest don't always get the honeys. I am not good with sugar coating everything but i am hoping some people will appreciated my straight forward and honesty

There good attributes do have.
Honesty is the best course, but also choose your clients.
If you don't think you can work with them don't.
Hunt the ones you can work with and don't waste your time and effort with the ones you can't.

rwbuild

27th February 2018, 10:31 PM

One other thing which is important when quoting, state exactly what you are supplying and doing but also make it very clear what you aren't supplying or doing and what the client has to supply or do, I have seen it all to often where one party assumes the other will supply/do. I only ever made that mistake twice, soon changed my quoting policy.

A technique I often use is I insist that the client pays for the material at point of purchase but give them the benefit of your discount at preferred supplier (you specify material type/qty). The advantages of this are obvious and your client can see that you are genuine and if there is a hiccup its only your time and not a supplier putting the heavy on you and they won't balk at you labour rate which can now be adjusted in your favour.

ian

28th February 2018, 01:44 AM

Accounting - My wife is an company accounting so i am giving her all the paper work and eventually take some calls when she gets settle into her new routine

Personal wages - I am not expecting much for my first year of running a business, i would be happy if i can make just the minimum wage not a lost. My first year would be just a leaning year where i need to adapt to running my own business and building up my clientele, so i am not expecting to be hitting the 100k mark (maybe on my 2nd yr :q)
I used $100k just for illustration.
if you would be happy with the basic wage in your first year solo, that's fine, just build into your business plan how you will transition your first year rate to your later year rates.
Happy clients from year 1 or 2, will balk at paying $134 per hour when they ask you for a quote in years 3 and 4.

Remember if you are only working 50% of the available time, in year 1, your hourly rate needs to be large enough to deliver the equivalent of the basic wage over the full year.
On average, construction labourers earn about $22.64 per hour or around $45,000 per year. Using the methodology I outlined above, that wage scales to around $65 to $70 per hour if you're only earning for 50% of the available hours each month.

Also, don't forget to pay your wife for doing your books.

From what I've seen, successful small businesses are those where the owner pays themselves a straight salary, rather than a dividend from the business's profits.

Time to find a good accountant and have a long talk.

auscab

28th February 2018, 09:52 AM

I think if you price yourself the same as the rest and not cheaper.
Always do a little more than expected for your client. Just a little like " you can have these door knobs at cost price" or what ever.
Clean up every bit of rubbish when your done.
Even go a step further and be the first bloke to take along his own vacuum cleaner!
Instead of all the rest Ive seen who walk off and leave things for the owner to clean at the end.

The clients will rave about you and you will never need to advertise and you will always be busy.

As long as you do the standard good quality work expected.

Rob

Chris Parks

28th February 2018, 10:13 AM

When I went into my own business the first time I remembered what my mother had told me from her experience, if it can't pay a living wage walk away and get a job that can. We set a wage into our business plan and never varied from it except to increase it as things got better.

Gabriel

28th February 2018, 10:45 AM

Whilst I haven't read through all the comments here (sorry if I double up on advice) the main problem I know of is this. You're effectively being a labour hire company - bit being able to bankroll/manage the jobs like a builder so can't make margins on the materials and other trades. This means you're making your wage and running cost on top of whatever carpenters you're employing/subing out to. So the guy working for himself will always be cheaper than your costs. I know a few fellows who have tried this but got out because of the headaches and minimal payoff at the end of the day.

Sorry to paint a bleak picture, but I only mention this as a warning and food for thought....
I still wish you all the best!!

FenceFurniture

28th February 2018, 12:11 PM

A different spin:

Anyone under the age of about 43 has never lived through a recession (in their working life), so they have no idea of the misery that a recession brings, particularly to business owners and self-employed people. Up until 1991 they have always been cyclic, occurring every 8-10 years. We have now had 25 years of uninterrupted GDP growth, even during the GFC.

This will not continue forever. The last 25 years are not the norm (yet, anyway).

Recessions are mean. If you start seeing an increase of To Let signs on commercial properties then it's time to beware and buckle up for the ride.

The Building Industry is usually one of the first to suffer even in an economic downturn - a level better than a recession, where there might perhaps be one quarter (3 months) of -ve GDP. Two consecutive quarters of -ve GDP = Recession, but the quarters either side of it won't be much cop either.

woodPixel

28th February 2018, 01:39 PM

Sturdee

28th February 2018, 04:29 PM

woodPixel

28th February 2018, 06:32 PM

...

JOS106

28th February 2018, 09:25 PM

First advice I would give would be 1) set it up as a company with only one director --> A blind discretionary family trust.

The company distributes all income to that.

Depending on your family and children, there are very significant tax advantages.

I was keen on this post

Be very, very careful about distributing income to children for tax purposes for it could go very bad for you.

I have seen a few cases where this was done and when the children had grown up they demanded the moneys that had been distributed but kept in the trust. In each case it caused family break ups and in one case caused bankruptcy.

Peter.

Then i saw this reply ....

...

and then this LOL

I might just leave things as is
--------------------------------------------------------

I know most business don't need to advertised to get jobs, its all word of mouth otherwise its just 8/10 people ringing you up chasing for quotes. So to earn the clients trust is a big deal in this business. Also I am planning to write my own contract with quotes on what work is to be carry out, so everything is in black and white, i hate for the client to come back to tell "you said this, i said that"
@auscab i always clean up my mess after a job, but i really need to learn to stop after the job i was paid to do is finished..... I am all for helping people and doing just a little bit more at their request but it will never stop, and when i refused to do it, they think bad of me.

Ive heard it twice already about letting the client directly pay for the materials. A small profit margin can be added to the material so letting the client pay for it, i'll loose that bit of profit? i know there is no out of pocket risk there. is this best practice? Some would rather pay for the job and not care about how the materials and labour cost are divided. Doing this way, some client might grasp at the labour cost if its more then say ..... what a lawyers get per hour
Have anyone here requested a 50% deposit if the cost of the job requires alot of materials, and collect another 25% at the time of delivery, and the rest after the job the done?
I know its a big lump sum but i guess if the client was serious about the job carry out, they would be okay with the big deposit. (i know kitchen guys collect 50/50)
-----------------------------------------------------------------
Still, where are all those successful business venture stories??? or are they trying to sort out their quotes/bookkeeping at this time of the night:oo:

Simplicity

28th February 2018, 10:03 PM

We work on 50 percent before we start a job over $800
Last 50 percent when the job is done.
Bigger jobs 50 /25/25

That way I'm always covered for materials.
We seldom do big jobs so I don't need to worry about that so much.

I've only ever had one potential client say no
And we said no to quoting them.

Gabriel

28th February 2018, 10:06 PM

I have in the past required an upfront payment (which would usually cover materials - not that the client knows this) and then completion payment. You are correct that some clients don't care about the small percentage out on top of materials, but other clients will try and squeeze every last cent out of you....I'm sure you already are, but you will become a master of reading people and their expectation vs reality which will help a lot in the future.

rwbuild

28th February 2018, 10:32 PM

The following link is aimed at the client but it does clearly define pitfalls and legal requirements.
Check the legal allowed deposits with Fair Trading

Contracts (http://www.fairtrading.nsw.gov.au/ftw/Tenants_and_home_owners/Home_building_and_renovating/Contracts.page)

FenceFurniture

28th February 2018, 10:34 PM

Have anyone here requested a 50% deposit if the cost of the job requires alot of materials, and collect another 25% at the time of delivery, and the rest after the job the done?You must NOT be afraid of stating your terms of business - you may lose some jobs through it, but it may also save you from going under.

Big labour jobs: 25/25/25/25 or 25/50/25 and choose your timing of payments.

Big materials jobs 50/25/25 or even more upfront if the materials cost justifies it (e.g. custom made/milled stuff might be 60/20/20 or even 70/10/20).

You need to ensure that if you get stuck with materials (for whatever reason):
1. They can be easily used again (so lower upfront)
or
2. They are fully paid for if they can't be used again (custom/odd stuff).

Stick to your guns, have some pre-prepared arguments that will justify it ("If you drop dead and I'm halfway through....who will pay for the custom benchtop that I have ordered and paid for, and that I can't use anywhere else unless I design a house around it? My creditors won't have the patience for your will to be read". If your clients are fair dinkum - and they want YOU to do the job - they will have no problem with it.

That kind of strategy doesn't just help your cashflow, it can preserve you from bankruptcy. It also sorts out the wheat from the chaff: you may be surprised to learn that wealthy clients are the most likely to leave you in the lurch - and their jobs are always the most expensive materials.........so if they don't want to play ball, it's very probably a good indication that they are not to be trusted.

FenceFurniture

28th February 2018, 10:53 PM

And the nitty gritty: your USP (Unique Selling Proposal) aka why people should hire you instead of the next guy.

This is a bit hard to define, and somewhat esoteric - you either get it....or you don't. You either have it...or you don't. The bottom line is making people want YOU to do the job. You only get one shot at this (with each client), maybe with a follow up. It's all about selling yourself, being personable, conveying competence, good humour, easy to get along with, adaptable, engendering trust. Getting the potential client to think "This is the guy I want for the job".

Selling is quite an art that not enough people understand. It is subtle; it is not in-your-face. It is applicable to everything, even the Federal Budget gets sold to us. The master salesman can vanquish all comers - but he also has to deliver the goods - no hollow promises like the Kemlani Loans Affair with Rex Connor. That leads to referral business, and I can absolutely promise you that there is no easier business to close than a referral.

Don't be scared to ask for referrals either (or a written reference).

If you do not understand what I'm talking about - that you just don't get it - then don't give up your day job, and let other people bring in the business. There are plenty of people who can do the job, but very few who can win the job.

Chris Parks

1st March 2018, 09:56 AM

Who pays for the materials is a good question, if you have to finance it with an overdraft or a CC then it becomes less obvious due to the overheads associated with that financing. I used to work in the interstate trucking industry for a while and one of the contractors there had 14 trucks that got filled with diesel every day, he used a CC to do that as he paid the sum owing before interest became chargeable and he reckoned he had enough frequent flyer points to go around the world 6 times first class. He was working in a mature & established business that had a good cash flow and it most probably would not work for a start up which was struggling for cash flow due to the requirement to pay the outstanding debt at the end of the month but it is something to think about and I believe commonly done.

Glider

1st March 2018, 11:12 AM

I'm not a chippie, far from it, but I still own a significant business which I started 30 years ago. I worked nights for six years prior to that to save enough to support my family for a full year plus a grubstake to finance the early months. It takes at least a couple of years to get the enterprise out of the intensive care ward to the stage where people start calling you for work. Leaving customers sufficiently chuffed for word to spread is the ongoing task. They are your new bosses.

Debt is your enemy. You need to understand terms like cash flow, effective administration, customer expectations etc.

If a customer has a problem, fix it immediately. Frequent communication instigated by you will set you apart from the mob. Too many tradies will take the easy way out and tell people they'll be there tomorrow, don't ring and just don't turn up.

When you're ready to strike out you'll know it yourself. Try to line up your first job beforehand to get the ball rolling.

Good luck,

mick :)

rustynail

1st March 2018, 05:46 PM

I would be looking to line up a lot more than just the first job, particularly if it's a small one. When we kicked off our building company back in 1971, we had twelve months worth of work signed up. We made every effort to keep this continuity of work, but to no avail. Within a year of our company set up, the Whitlem Government was in power and the building industry was besieged with strikes and material shortages. Cement was unavailable, nails were hard to get, fibro was in short supply and many other items were trading on the black market. In 1975 we had twelve homes under construction. All waiting for eaves. That was a dark year. Totally beyond our control. We would have been better off having no work on the books and just doing bits and pieces until things got back to normal. Moral of the story: Don't get too far in front of yourself, but try to keep a reasonable amount of work ahead. Put money away in the good times to cover the down turns.

JOS106

1st March 2018, 09:16 PM

Thanks guys for the replies...... as i am reading through all your responses i respect that they're honest and matured. Hearing it from people who has been there and done that is much appreciated.

I just got a call from a popular builder around this area who offered me some small jobs, minor adjustments, touch ups, granny flats etc since i am starting out and he knows i dont have a big crew yet. Its not my target but its a start. Also spoke to a handyman who i worked with years and asked him if he can lend me a hand if i need people, he sounds cool about it.
@FenceFurniture.... yes selling yourself plays a big role, i think being well prepared, looking professional can earn the clients trust. I haven't had much experience in talking to clients yet but i believe first impressions is vital, if it starts out well then it ll end well, if i can deliver my promises............... i think

I realised from the start that when we have a business, customer service is the key to keeping a company going, nowadays with the internet and online communications, it only takes a few people to leave a negative feedback about you to potentially loose your reputation and future customers. I like to think that i am a people person and straight forward talker. But still there are plenty of things to learn, like not putting to much trust in a client, ive seen many client who have turn nasty towards the tradesman over money at the end of a job.

Chris Parks

1st March 2018, 10:26 PM

Tell him nicely what your payment regime is before getting involved. He is very probably a nice bloke but you need to be aware of what you need and how you want be paid to meet your personal commitments.

Chesand

2nd March 2018, 06:57 AM

I don't remember if it has been mentioned in earlier posts but you need to factor in holiday time for yourself. You might be able to work without a break for 18 months to 2 years while getting set up but remember that if you are employed you get paid holidays so your business should be able to support the same.

MrFixIt

2nd March 2018, 02:52 PM

Hi

Having done three renos as an owner builder, the first two were all my own work so no problems. The last reno was using subcontractors which for the most part was a nightmare. So my advice to you is, if YOU are GOOD at what YOU DO, can do it PROPERLY and EFFICIENTLY then you will succeed. So many people with whom I have had discussions on their renos ALL report the same problems, too many mistakes or errors (the contractor doesn't know what he's doing), poor work for a high price etc., etc.

If your word of mouth advertising spreads, you will always be in demand. As I state above if you are GOOD, EFFICIENT and on time, charging a fair price, your prospective clients will wait for you to be available and keep you in work. Communicate with your client, it helps the client feel important to you and that you are on the ball. Perhaps do the first few jobs at a "lower" price, maybe while you are employed, and tell the client your price is lower BECAUSE you are trying to build up a business. Oh, that brings up another point ALWAYS, ALWAYS be HONEST with your client. If YOU "stuff up" say so DO NOT try to pass the buck! (it will come back and bite you). If you misquote on labour or materials let the client know, be honest, the client will appreciate your honesty. You may lose the job (probably unlikely), but you will retain a potential client. Honesty is a commodity that is becoming rarer by the day, good clients remember the honesty. We have paid more to a worker because he has been trustworthy (and a good worker of course).
Best wishes for your future... :-)
Finally if you can give that little extra touch to a job (at minimal cost to you) DO IT, the rewards will flow.