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Going it alone repairing water supply pipes?

Discussion in 'Trade Talk' started by Ian H, 4 Nov 2020.

  1. Ian H

    Ian H

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    I was talking to my boss today, he is not the boss of the company so more like my line manager. Anyway, he said he has trouble with a few subcontractors that are crap even though they get paid very well.

    That got me thinking about starting on my own with my main initial work coming from my current employer. I always think we do a good job at work despite having pretty crap equipment and I’m convinced I could kit myself out better and so provide them with a better service.

    Whats stopping me other than fear of earning no money? Can anyone think of any pros and cons?

    My initial thoughts are:

    Pros-
    Being my own boss and choosing my work.
    Better money for the jobs I do.
    Could work alone with the average depth of water supply pipes being shallow.

    Cons-
    Being my own boss and having to find my work.
    Initial start up cost.
    Maintenance and calibration of equipment including the van.
    Insurance.
    Sorting out tax.
    Not knowing my salary from 1 month to the next.
     
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  3. Chris_W

    Chris_W

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    Seems like it’ll work out for you Ian, if you can get work from current employer, have they said this though? My concern would be, why would they pay you more, for what you do for them already? They may have to replace you, and then how much work would you get then? Or so you know how much they give to this contractor?
     
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  4. JohnD

    JohnD

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    When you're an independent contractor, then your customer can terminate your contract at any time, subject to the termination conditions in your contract.

    When you're an employee, the employer can sack you or make you redundant at any time, subject to the terms of your contract of employment and employment law.

    In either case, a downturn in business may cause your client or employer to go bust or to cut back.

    Security-wise, not a lot in it.

    As you will be paying your own pension, holidays, sickness, training, van, accountant and National Insurance, it is normal (IME) to calculate your charge out rate around double the wage of an employee. You will not be paid for visiting prospects or quoting for jobs. In a cut-throat environment there will always be someone cheaper. You may be able to differentiate yourself as "better" and charge more, or you may have a client who wants to see you starve.

    You need more than one client.

    You need additional business skills such as prospecting, marketing, work scheduling, estimating, quoting, accounting, billing, debt collecting, tax accounting. Some of these you may find easy. Some of them you may be able to pay someone else to do, which will eat into your profits. Any of them neglected or done badly can see you bankrupt.

    Consider how many revenue-earning days you will achieve in a year. I got on average around 200, which I think is quite a high number.

    If you take out a loan, you may lose your house.

    If you work all the hours god sends, you may lose your family

    If you fall off a ladder, you may be off work for a month, a year, or for ever.

    If it all goes well, you may be happy some of the time, and more prosperous. Don't expect it to be easy.

    I have seen all these things, and experienced several of them.

    I once visited an overdue-account, and found his office had gone.

    Not just that he had moved.

    He hadn't paid the rent and the landlord had repossessed the building and demolished it.

    it was an empty site of rubble.

    Some of our equipment had been taken away by the Receiver's auctioneer.
     
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  5. Mottie

    Mottie

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    If you do go it alone, consider running as a Limited company.
     
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  6. HERTS P&D

    HERTS P&D

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    Ian, the time is not right to go self employed. (If you get the sack then that is a different matter) Wait until at least Spring and see how the country is. There will be lots of job losses in the next couple of months. Do your job and keep your head down. (y)

    Andy
     
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  7. Ian H

    Ian H

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    All answers and advice appreciated.

    Maybe it’s not the ideal time heading into the new lockdown but something I do want to do. There are other places like mine so I would hope to sub contract for a few places. I’ll speak with the guy that recruits the subbies and see exactly what the deal is.

    I’ve been there 16years today :eek:
     
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  8. Gasguru

    Gasguru

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    Are you paying a mortgage or intending to at some point...
    When you're SE as a "Sole Trader" most lenders (in my experience) require 3 years evidence of earnings...thats self assessment tax returns and often evidence of tax paid too.
    I wouldn't know what evidence is required if you set up a Ltd Company, other may advise but I'd guess it will likewise be onerous.
    Any slight dips in earnings and it can scupper the application, even as little as a £1000 drop from the previous year. The banks and lenders really are clueless when it comes to the realities of self employment.
    If you've currently got a mortgage give yourself a chance of keeping it by having a 5 year deal so at least you don't need to re-apply until you've got some stable income.
     
  9. Mottie

    Mottie

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    One 'con' you may not have considered. Getting the work and doing the job are the easy parts. Getting paid, especially if you’re a subbie, can be a whole different ball game. Many years ago, my wife started work in the accounts department of a building firm. She didn’t stay long. They used many different subbies. More often than not, when a subbie was pestering for late payment the question was asked “Will we be needing to use him soon"? If the answer was no, then they would make them wait. Quite often until they would go out of business. One subbie, getting fed up being given the run around, phoned up to speak to the manager and was told yet again that he was 'unavailable'. He was asked if he would like to leave a message. "Yes", he said. "Tell him that if I’m not paid in full by this Friday, I’m going to come round his house, cut his cock and balls off and stuff them down his wife’s throat". He was paid promptly but they never used him again.
     
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  11. HERTS P&D

    HERTS P&D

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    I know a 'friend' who was owed 6 weeks money but was kept at the back of the queue, he went round to the bosses office. The boss went to shake his hand and my friend got him in a head lock and made him write a cheque for full payment. (approx 18 years ago) He told him if the cheque did not clear in 3 days then he would be back. The cheque cleared but as above he never worked for the company again.

    Andy
     
  12. Ian H

    Ian H

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    The guy who recruits the subbies says they are paid 60 days after submitting the invoice :eek:

    After speaking to him it sounds good but not great, the money is good but the cost to set up with decent equipment is high and there is still the risk of no work.
     
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  13. Mottie

    Mottie

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    And that will probably turn into 60 days before you have to start pestering. You can do a lot of work in 60 days and anytime they go bust, you lose!
     
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  14. Gasguru

    Gasguru

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    The public can be a pretty dishonest lot and sometimes you can't be nice to get paid...taking them to the cash point, threatening to take the massive TV to the pawn shop, using MoneyClaim online is all part of the service :)
    As for business to business late payers deserve what they get.
    Only ever loss £60 in 20 years...
     
  15. gasbanni

    gasbanni

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    Stress as an employee ? it's suprisingly stress free ! When you go home the job stops and you don't think about work you can relax, the wages come in like clockwork. .......problem with the van they sort it. No stress no worry

    Working for yourself ? 24/7 you think about work ......well nearly ......I need to do this that or the other. They owe me this, they owe me that.
    You might earn more money it's true but when you take everything in to account is it worth it ...... vat returns if your turnover goes up.
    Paperwork and paperwork pita.

    What if the contracts change and they decide to give all the work to a single big contractor. ...Where would you be then ?

    If your doing well you should count your blessings ........The grass may look greener and all that.

    Make sure you can offer various services in the same field experiance is all, being able to efficiently offer various services in your field is a big thing, see what training your current employer can offer ....It WILL stand you in good stead.
     
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  16. gasbanni

    gasbanni

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    One more point you need cash flow.......I work for national companies and sometimes it can be six weeks before you get paid.
    You've got loads of invoices in but your still forking our money for gear and materials and you've still got your family finances.

    Being owed thousands but having no money because you've maxed out isn't a nice pisition to be in ........and that's more common than you may think.
    It's no good being owed £20k being self employed but you've got little cash.
    AND if you subcontract what if they go bust ? ! Don't put all your eggs in one basket either ! You're say owed £18k by a company they still pass you work you dont want to turn it down in case you don't get paid, but your getting in to a deeper hole by spending more cash on time and materials.

    One company I worked for as a subbie .....I got a phone call....... get all your invoices in ! I got paid then POP ! Happened twice now.

    Go in to it with your eyes wide open !
     
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