Where do you think the failed guys go wrong? from what I have seen its either they would prefer to have the security of pay packet on the table each month or they dont want to be working past 5 each night, and dont want to spend time marketing business, I apprciate this is not always the way and in todays climate there are a number of different reasons.
What would you say is the main thing you wish you knew when you first started your business?
cheers dave.
Most just can't sort their finances out. Simple as that. They think that every £ that they make is theirs then the TAX man wants his bit or they need new van or tools and there is nothing in the kitty.
Before you start, sort out all the boring stuff. Your terms and conditions are VITAL, how you get paid immediately each time, not leaving landlords certs with tenants (then landlords don't pay because they already have a copy!), How will you invoice people? Will you have pre-printed invoices or will you write them out in full each job?
If someone doesn't pay - do you know what to do? Who do you contact? How much does it cost in time and money to chase a debt? Will you get your money if you win your court case?
How much does it cost to actually run your business? Have you done a business plan? Write down everything you can think of such as:
Public liability insurance
CORGI/Capita fees
Training for ACS every 5 years (divided by 5) (include cost for travel and time lost)
Other training (include cost for travel and time lost)
Illness and Injury insurance
Vehicle (depreciation & cost to change in 3-5 years)
Vehicle maintenance (tyres, repairs etc)
Vehicle - Tax and insurance
Vehicle - fuel
Advertising in local papers
Advertising in yellow pages
Advertising on the net (often free!)
Bank charges
Parking fines (oh yes, it will happen!)
Legal services (yes you will need these at some point!)
Accountant's fees and the time it takes to do your books
Tax
Office supplies - Printing, paper, ink, printer and PC, etc
Postage (sending quotes etc)
Printing of stuff to give out like the new Doorstep selling notices, Ts and Cs etc
Time to do office work
Mobile phone contract and hands free operation (for when you are driving)
Workwear
Time off each year for a holiday, bank holidays, Christmas etc
Tools and equipment (allow for depreciation and replacement)
Sundries - brushes, plastic rubbish bags etc
Stock (working stock in your van or garage, copper, fittings, parts, valves etc)
Time to keep up with new regulations
Safety equipment if required, hard hat, eye protection, gloves, boots, warning notices (so that customers don't slip on wet floors, touch live electric or fall down open holes)
Emergency float - a sum of money in the bank you don't touch, there for unforseen emergencies!
And a whole host of other stuff I can't remember off the top of my head right now. But you get the drift, when you add all this together, allow a bit on top then put your wage or what you need to make on as well then divide this sum by 365 and thats what you have to make per day to make a living. Anything you make above that is great. (remember - could you be on the VAT threshold??)
When you price for a job how much do you need to cover in labour? Have you remembered everything you need - do you have a quote sheet which reminds you of what you will need? It also looks good for prospective customers to see that you are taking notes and look professional.
If you work 8 hours at plumbing each day, expect to do another 2 hours of paperwork each night - that will give you an idea.
There is also the time taken ringing around for best prices, looking for cheap deals on the net, pricing for jobs and sourcing parts.
Arggg, its never ending.
Right now, I would say that if you have a secure job - stick with it for the time being. The economic climate is not good for new business but you can use this time to find out all you can about the overheads involved, what others are charging, the most effective advertising etc.
As far as dipping your toe in the water whilst still working for your employer - thats not such a good idea. Don't disrespect the person paying your wage (unless you ask them if its ok to take on your own work and they give you leave to do so), otherwise, wait and do it properly then you don't burn your bridges with your employer if you don't like working for yourself.
Good luck
