Got Advice? - Small Business Owners Please!

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I have recently embarked on launching my own small business - a small Home Improvement/Handyman Business.

Where I'm at: To get into this business in MA I need a Home Improvement Contractor (HCI) license issued by the State - not a problem. To get that I needed to obtain a Business Certificate from my local town. I just spent the last few hours working that and getting the local Zoning Officials to approve it (I'll be running the business out of my residence instead of commercial/industrial zoned lot so Zoning had to get involved).

I have the skills and tools to do the work. Any work that is beyond me or requires building permits or special licenses (i.e. plumber, electrician, etc..) I won't do.

I have work lined up. I have one landlord that owns 4 properties that wants me to do work - they have 4 projects that I could start on tomorrow. I have 2 other landlords that own multiple properties that have also expressed interest and, I talked to a plumber today who is willing to pass me work if I pass him my plumbing jobs that require a licensed plumber. At this point, finding business doesn't seem to be an issue (hopefully it will stay that way!)

So I'm "getting legal" and I have work to do. Now what? What are the pitfalls? What should I be watching out for? Tax/Accounting software is on order to keep track of teh financials. What sort of insurance would someone like this get (Business Liability? Errors & Ommissions?) to protect both myself and the business? Who else should I be "networking" with?

The only issue I've run into so far is setting expectations with potential customers. For example; I'm preparing an estimate for a woman that decided to rehab a bathroom on her own and messed it up pretty badly. The sheetrock is put up wrong and will need to be removed and replaced. She didn't bolt the toilet back to the floor, the sink is just barely hanging oin the wall, didn't put proper subflooring down, etc.. At the moment it doesn't look bad but it will in a year if I just "fix" what she's done. She seems to think that this is a 4-6 hour job but I'm calculating somewhere in the range of 35-36 hours. Plus I'll have to buy materials to fix what isn't done right. How do i tell her that the job she thinks should cost her $200 is really a $2,500 job without her hanging up on me? (I did point these things out when I was there but she wants to gloss over them.) Is this one of those things where you just take a pass and decide not to even take the job?

Anyway, I'd like to here from the small business owners out there. Any advice is appreciated. I'm flyin' solo here! Razz

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I'm no longer a business owner, but a few things to keep in mind.

Always pay your insurance premiums and taxes on time, even if you have to pay someone else late or eat beans for a month.

Get everything in writing and keep great notes.

Firemen/women are your friends, law enforcement officers are not necessarily.

Don't loan out your tools. Rent them out and bill each month - this is a great reminder to get people to return them.

Good luck.

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I can offer you a bit of information and basic advice on starting your own small business and dealing with customers like the one you describe, undermining the work

UNFORTUNATLY

i have to run right now.

if you want, you can send me an email

shewolfnm at yahoo dot com

and we can chat that way if you are not on here much..

( pssst, I just got my little business at its one year mark and basic reliable monthly income at 1000. )

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If you have employees, get a Federal Employment Identification Number. If you do not, don't get one. They will hound your for reports the rest of your life.

If you are a sole proprietor, you cannot pay yourself a wage/salary. If you are either sole proprietor or S corp, you will probably get into estimated quarterly income tax filing. Also, sole propietors are self employed and pay both employee and employer parts of SS & Medicare. The company portion is a deductable expense (not credit) on the tax return.

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When bidding a job, bid it, bid it as accurately, and competitively, as you can, and detail to the customer what you're gonna do and why ... then step back and live with the results. What the customer thinks it oughtta cost and what the person capable of getting the job done right thinks it oughtta cost are completely indepent issues ... and homeowners who don't have the skills and experience to do the job, just like computer owners or car owners who lack the skills and experience to work on their own toys, rarely have any idea of what actually is involved.

And I agree that full and adequate insurance is an absolute must - along with proper tax accounting. Those 2 issues are among the most common downfalls of the startup small business. Another thing I think bears serious consideration is incorporating the business. Your bank or financial advisor, or your insurance agent, can offer you some good advice there, but only if you ask.

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I don't have anything of great significance to add, so I'll just wish you Good Luck!

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Fishin, I have the same exact buisiness that you speak of. We can help each other. The lady that thinks the 40 hour job will take 4 hour....this is what you do; tell her you forgot something in your car, get in and take off. Thats what I do and I'm not kidding. The costomer is happy to bankrupt you if it means they can save money. I telling you this is trouble. You don't beleive me? Then take the job. Everything will be too expensive. She will suspect you of everything. She'll question what matierials you use. Look at her bathroom! does it reflect a reasonable person? For a honest hard working man their is another costomer around the corner that wants it done right and knows what it's worth. While your running your buiseness down with this lady your compition is out picking up YOUR jobs.

I'm putting in an Art Gallery right now (walls, framing, drywall, ducting, concrete repair. I'm looking forward to interacting with you. My advice and opinions are straight farward and I am looking for the same.

What kind of power tools do you use?

What kind of overhead do you have?

Whats your cellphone bill look like?

What's your company vehicle?

Have you been ripped of yet?

Where do you buy your materials?

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This is not at all my area of expertise but I have to say that I completely agree with Amigo that the DIY lady sounds like baaaad news.

I'm all for straight talk with her -- this is how much it will cost, this is why, take it or leave it. The only thing I'd add is maybe giving her some referrals for other people in your field. Gets you points with the other people (as a general concept, if she's not too much of a nightmare) when she calls them and says "fishin' recommended you," and gives you a good-faith exit gambit. So if she figures out that you were being totally reasonable, she's more likely to end up giving you that job (or another one) or at least speak well of you to her friends.

I do see some drawbacks there, but it's something that occurred to me.

Best of luck with all of this, I'm sure you'll be a great success!

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Two things - write a good contract. I prefer a basic contract that is as non legalistic as possible in the wording, but that covers the legal points you should want covered. Have it reviewed by an appropriate attorney. Worth every cent.

and - if your instincts tell you the client will be a pain in the ass, listen to yourself. I would give the diy woman a straightforward bid, with clarity re what is involved in the work - which she will probably reject. In her specific case, I wouldn't give a referral to others. That might well be a cause for later resentment.

I don't know if there is a ontractors' board in Massachusetts - but if so, there may be some handy guidelines they put out; there may be some contractors' association that has helpful hints too.

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I just thought of something else -
back when I studied for my landarch boards, there were books about Professional Practice. They were a combination of boring and useful, with lots of pointers on contracts and mechanic's liens, etc. That was a long time ago - by now there are probably a lot of books like that available for contractors. Plus, I know there are books that are helpful on various kinds of estimating.

You can probably find all this online, or else you may have a local building bookstore like we did in Los Angeles.

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Yes....get away from the woman as quickly as possible. Seriously.

That's the type of business my husband had for years and years, and like Amigo, he's seen it all.

Many people have absolutly NO idea what it takes for a job, the costs, time and skills involved.

Customers like her will haggle you down to a nickels worth of profit, and still think they are paying too much. Plus she'll complain about the workmanship. Don't let her waste your time.

Give your bid, make it fair, and business will come your way. Over the years the bulk of my husbands work came from either repeat business or direct referrals from customers...oh, that's another thing, make sure you make a portfolio of your work to show customers.

Speaking of your time (above), people thought nothing of calling on Sundays, holidays, nights to see if he was available to come out and give an estimate, or even do "a quick job" Rolling Eyes

One time this woman (a stranger) somehow got our home phone # and I answered. It was a Sunday morning, couldn't have been past 10am. I told her he wasn't in, and she pretty much demanded I contact him and tell him she needed him out there THAT MORNING, between 10:30 and 11:30am to give an estimate. She made it very clear it couldn't be past that time because "It's Sunday, and I've got a church function that's going to take all afternoon."

I told her. "Well, you know, it's Sunday here too."
Her: Yes! That's why I need him to come out right away.

The other thing are the people that will be working for you....oy vey. I hope you have a dependable guy or team set up.
That's a whole 'nother story....Amigo, I'll bet you've got some good stories to tell.

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Boy do I have stories. How about being half across the country in a motel 6 when you find out your crew is a bunch of ganster convicted murder tweekers when it all goes bad.

I have nerves of steel now. (and a nearvous tick)

Don't hire anybody. Don't buy **** you THINK you will need. Don't try and be a big company. This is you advantage. You don't want an army to do the job of a green barret.

Alright....NOW WHO NEEDS SOME WORK DONE?!?! (just kidding, check with me next year)

Go month by month. Pay your bills show a profit and pack your lunch.

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My last employee, was a special one indeed. He was really cool, and fun to work with....about 6'2, skinny as a rail, very much like a white Snoop Doggy Dogg...and would always do whatever I asked of him, no hesitations, and that's a major plus with me. But....

He had been in some trouble, and was wearing one of those ankle braclets, {house arrest} so he had to be home at a certain time each day. Which was a bit of a pain, but he was worth it...a solid worker, and the braclet was temporary. When the braclet finally came off, happened to be on a Friday, I payed him and didn't hear from him again until the next Wednesday. He had bought some kind of pills...Zanex?....like 120 of them, and had eaten all of them, then washed it down with a gallon of Vodka. His friends basically moved him around for the entire weekend...from couch to floor...to a bed...etc...he didn't move on his own accord for several days. After he explained all this to me, I decided that I no longer needed any help, and have done without since.

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I can agree easily on the no employee bit... if only re the ease re paperwork and various workman's comp aggravations.

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Amigo wrote:

Boy do I have stories. How about being half across the country in a motel 6 when you find out your crew is a bunch of ganster convicted murder tweekers when it all goes bad.

I have nerves of steel now. (and a nearvous tick)

Don't hire anybody. Don't buy **** you THINK you will need. Don't try and be a big company. This is you advantage. You don't want an army to do the job of a green barret.

Alright....NOW WHO NEEDS SOME WORK DONE?!?! (just kidding, check with me next year)

Go month by month. Pay your bills show a profit and pack your lunch.

Right, right....now sometimes you need an extra body for the lifting though.

About the other stuff...yeah, this type of business is for the practical type of person. Of course you'd need good business cards, a referal sheet, a portfolio, but those aren't much.

I'm not sure if fishin' even needs any fancy schmancy software. The Man worked off a legal pad all those years. If if was going to do this starting now, I'd just do up some forms and calculators in Excel for him. That's all those software stuff for figuring is anyway.

He already had his work van, a Ford Econoline, and about a million tools he'd collected over the years.

He had some nice polo's monogramed for when he was doing estimates, but sure didn't wear them doing the dirty work.

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Oh, yeah... insurance to include the tools for sure.

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oh yeah, no doubt....that's your main asset.

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I'm not a contractor, but have contractor friends who have had their tools stolen more than once...

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Re: Got Advice? - Small Business Owners Please!

fishin wrote:

How do i tell her that the job she thinks should cost her $200 is really a $2,500 job without her hanging up on me?

Start by getting her payment for the quote up front.

If she doesn't like the quote, at least you've got your quote time paid for.

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hmmm....I don't know anyone who charges for a quote. Charging for a quote I'm sure would cost him business.

I sure wouldn't pay for a quote, knowing there's other qualified people out there who won't. The guy could make money just charging $20 bucks for an hour of his time, and give a ridiculous figure, just to make the quick cash. Believe me, there's plenty out there that would do that.

"Free estimates" is a real big thing.

This woman is really ignorant of what needs to be done.

That's how her bathroom ended up in such a state in the first place.

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