The art of self employment

[Robbie260]

Right so I have a little of a conundrum these days. I went full time self employed about 2 years ago. Things have gone relatively well all things considered. I have enough work I rarely get time off. But there is an issue. I’m not making any pure profit. Now some of it is reinvested in training and tooling etc but I’m not making any wage at all for myself which is all well and good as the Buissness has never failed to cover its bills. But dosen’t exactly give me any room for other things I’d like to achieve.

I will fully admit I’m not the best engineer but I’d definitely say I’m a better engineer than I am Buissness man.

Do you all in the pool of wisdom found achievable ways to cut costs, increase profitability, etc I do realise some times you have to spend some money to make it or save it but trying to think of some budget friendly ways that I may be able to cut costs. Run so ragged at the moment I’m struggling to get the time to sit down and brain storm this bit.

I would say I do have to strike a better balance between services I can and can’t offer. And I have made some admittedly mighty stupid and terrible/costly decisions over the last two years which hasn’t helped but you live and learn occasionally.

 

[8ob]

For a few months do a spread sheet for each job, you will soon see where you need to be with your pricing.

Bob

 

[Robbie260]

For a few months do a spread sheet for each job, you will soon see where you need to be with your pricing.

Bob

I have admittedly been too low or to nice with pricing until more recently, it’s gone up a substantial amount of late after a serious review and some maths.

 

[MattF]

I have admittedly been too low or to nice with pricing until more recently, it’s gone up a substantial amount of late after a serious review and some maths.

That's generally what it boils down to. You need to charge correctly.

 

[addjunkie]

That's generally what it boils down to. You need to charge correctly.

And pick your jobs, not all work is profitable, some is just work.

 

[ajlelectronics]

Sometimes as your accountant will tell you, it is a good idea NOT to be in profit at times.

 

[Blobber]

If you're not getting a wage after 2 years I wouldn't consider that to be going well?

 

[Craig-SM]

Every quote starts with a job costing plus overheads otherwise you’ll quite easily loose money. You’ll get repeat work from not costing a job but be worse off with every one you do.
Even if a job is the same as another, make sure it’s adjusted for current prices.

Unfortunately see way too many people who a great workers but terrible at running a business and the results are always the same if they can’t change and that’s broken, both mentally and financially

 

[Dozzer]

There are plenty of apps online you can get for timing jobs, press start when you start, stop when you stop. and every time you work on each job. log it.
You will be surprised how much you under estimate the time you do on some things.
and don't feel bad about charging money for good work.

 

[tom2207]

the two hard parts to being self employed are
1 knowing how to charge / price work
2 knowing when to say no and walk away ... after years of trying to find work sometimes you simply have to say no and walk away .
You may as well sit at home for nothing as work for nothing [ I was self employed for 35 years , and its not as easy as some folk think].

 

[addjunkie]

There are plenty of apps online you can get for timing jobs, press start when you start, stop when you stop. and every time you work on each job. log it.
You will be surprised how much you under estimate the time you do on some things.
and don't feel bad about charging money for good work.

I agree with this…In my past life as a boss we used to cost jobs on 5 “productive hours” out of a 12 hour shift, scary really when you see the numbers produced by so called experts.

 

[More Amps]

Don't get yourself down about making mistakes. Everyone makes mistakes, some are big and some are small, but the key point is to look at why you made those mistakes (and be honest with yourself about them) and then take steps to avoid repeating them. If that sounds simple, it is in theory but requires time and effort in practice. It may sound counter-intuitive but have a think about changing your work pattern. Consider setting aside one morning a week for planning and thinking about your upcoming workload - don't rely on working out your costs and quotes in the evening once you get home and are tired after a hard day's graft, because that's precisely when errors creep in!

 

[500e]

Self employed or being the boss,
Been both and as @tom2207 said
" pricing is the main thing really and knowing when to walk away."
I could price accident repairs to the tenner, But my beloved was the financial brain, I priced work at what I thought I would be happy to pay, (I am known as careful some say tight) she was a lot more hard nosed and kept things together.
You have to cost overheads into the job (all of them) we had a chat with IR early on and they queried washing powder and the toilet roils window cleaner etc. beloved explained the days of oily engineers was going fast and one set of overalls per fitter/month a week was not how our business ran, this was in the early 60s
I made some very costly mistakes that hurt, all part of it

 

[Dapph2]

Do your sums double it then double it a again after relooking at things a week later . Every one in Wales tells me they can do a job for less that someone else .
OH yeah .. definitely not impressed with the rubbish these guys produce , neither at their time keeping. or attitude towards work .

I found over the years that a tradesman or company with a six week or more lead time to start the job and finish it usually gives a better outcome . Even better if they give a decent written contract & you do too.
When I was S/E I quickly learnt certain groups were not worthwhile as customers , because many wanted extra work & goods included for no extra charge , they also tried to avoid paying or taking months to pay in dribs and drabs .

Getting full payment or a decent amount upfront for all materials needed for the job is one thing I ended up doing . Anyone who bitched about this didn't become my customer by my choice .

 

[More Amps]

Further thoughts - are you trying to do everything for everyone? That way leads to disaster (financially) Take a close look at the competition, what work they're doing and what they're charging. See if you can find a niche where you can specialise and develop a name for yourself as the man who knows everything about that particular area - in the meantime it's a balancing job between getting work in the door without investing in tools and equipment that you'll only use once in a blue moon...starting a business of your own is one of the hardest things to do - that's why 90% of start-ups fail within the first five years - frequently due to under-capitalisation, failure to plan, or sticking rigidly to a plan that needs to be altered in the cold light of day. Good luck!

 

[tom2207]

Its usually not lack of work that kills small companies ,,, its lack of cash flow .

 

[Keith 66]

I spent 35 years doing that, Everyones got their hand out & gets paid first, the self employed guy gets paid last of all if there is anything left.
Today my trade boatbuilding wouldnt be viable at least round here.

 

[steveo3002]

is this called being a busy fool ? paying all the bills and got nothing at the end of it?

 

[Robbie260]

is this called being a busy fool ? paying all the bills and got nothing at the end of it?

Yeah that seems to ring true.

Further thoughts - are you trying to do everything for everyone? That way leads to disaster (financially) Take a close look at the competition, what work they're doing and what they're charging. See if you can find a niche where you can specialise and develop a name for yourself as the man who knows everything about that particular area - in the meantime it's a balancing job between getting work in the door without investing in tools and equipment that you'll only use once in a blue moon...starting a business of your own is one of the hardest things to do - that's why 90% of start-ups fail within the first five years - frequently due to under-capitalisation, failure to plan, or sticking rigidly to a plan that needs to be altered in the cold light of day. Good luck!

Thanks I think that’s maybe part of my problem I am because of my background training no specialist and I do probably try and cater to far to much at the moment. Kinda difficult due to location though so a little flexibility and juggling is required and a little too much competition in some areas for me to branch into to be worth the effort. Definitely something I need to work on.

I suppose at the moment the work you could say I specialise in is breakdown and emergency work, I do sometimes get booked out 3 weeks in advance like a lot of people here but I have generally tried to specialise in being available but that admittedly dosen't seem to be working so well. The wait to see any kind of mechanic for anything is 3-6 weeks up here, that’s, comercials, cars, plant, boats etc. though thankfully other than special tools for cars most of that all crosses over.

 

[Norsk]

If you are not making wages,how are you surviving?

How about deciding on how much you want to make per year,dividing it by how many days you want to work,then dividing that figure by how many hours in your work day. Add onto that figure your contributions and then add that figure onto your hourly rate.

You might loose some customers but the money isn't at the bottom of the barrel it's on the top.