What surprised you the most in your first 5 years of business ?

I'll tell you one thing I've learned and still learning, is to figure out how to bid some of these jobs, I mean sometimes its impossible to know whats behind door #2 and beyond, and thats where you almost always have to go Time & Material, but your average guy that wants work done..has to know the price, and I'm cheap for the quality I put out, but fuck, I want the business, and the stuff I do, takes lots of time. Still feast or famine though, no joke.

A wise elder that I respect said, "Your either eating chicken...or feathers!"
How true that is. Anyway, my advice..get that money, and treat every customer right!, even if they are a prick.

 

Not five years yet for me, but I'd say how much you have to "live" your bussiness. I talk in my sleep...about wheels.

My dad says his biggest surprise when he first started was "the flat-dick help" He thought everyone would be as hard working as he was. (He's 67 now and still works all day in the shop with me.)

Jimmy

 

How CHEAP people really are, and no matter how loyal you are to them they will turn on you in a quick minute to save a buck.

 

Definition of a business....something that can make money WITHOUT you.....if it ONLY makes money when you are sweating, its JUST A JOB where you have 27 bosses instead of one!

BUY the appreciating assets, and LEASE the depreciators.....anything else is ass-about....and cost me over half a million

Would you trust an accountant to tune your motor?????
Would you trust a plumber to do your accounting and make your business decisions?????? then why the f@ck do us tradesmen insist on making the spending,ie business, decisions???????

While you're under the bonnet, who's running and growing your business????

If you set up the business around You doing everything....guess who will end up doing everything????? Assigning tasks is MANAGING.

I got a million of em

 

this all reminds me of my SBC biz i had in the late 80's. so true.

 

Got that right!

oh....and EVERY customer is a PRICK (even more so if you know them)....so dont be shocked when they show that side. The others are just hiding it.

Judge every soul who walks through that door buy how freely they spend their money......they want to drop 30 Gs on their 98 Hyundai.......RESPECT THAT...they are the best guy you met this month

And if you can still smile doing it when you're 80, Then you're a frikkin legend like GENE WINFIELD

 

have a solid business plan, pay people to do what you arent any good at so you can focus on what you can do well. an employee is only as honest as you keep them, understand basic accounting and have an excellent accountant (taxes arent AS bad then).

Oh an dont sweat the small stuff, take time for yourself and family and enjoy the wild ride. Save for retirement too!

 

I've been in business now for 28 years and the thing that surprised me the most the first 5 years is that even though you can work at something you really like it's all the stuff you have to learn that keeps the business running. The mountains of paperwork, I had no clue how to keep books or file taxes look for suppliers. Thank God for my wife.

 

The first surprising thing is finding out how many of your "good" friends start thinking "now that you aren't working, do this for me, help me do that, and since we are friends you won't charge me..."
When I hand them a wrench or a saw and say "this is what you do... I can help, but you do this..." I find out quickly who is serious and who is mooching.

Like some of the others said here... keep it lean, and spend very carefully.
One thing that comes later is noticing that most of the shops you wanted to farm out some of the projects to, and who turned you down because you weren't worth bothering with, have all gone out of business, have been replaced by others who are now gone too, and once again most of the new new ones again act as if your business isn't interesting enough, so you watch them overspend, overdecorate, over-borrow again, and then fade away with the others.

The principle of starting out with the "look of success" that they teach in school, believing their own hype in the goofy "business plans" that banks like so much, and the false feeling of prosperity that a bank loan can give you, has doomed many. They think they are preparing for great success. Building too big, trucks too expensive, machines too elaborate ($$$$), bank loan too big. That is the weight that drags them under.

I guess what surprised me the most is how I could have held on and held on while the ones I thought were better prepared had folded, and the ones that I thought had looked the best prepared had folded even quicker. Maybe they were dragging too many ball-and-chains.

I hope you make it.

 

work out of your house for as long as you can. build more space on your property if need be. keep costs low and keep it yours.

health insurance. what killed my motor shop was a skateboarding biff that broke my wrist with no insurance. you can't build engines alone with a broken wrist. who would have thought?

 

Read this guys 6-points of advice and commit it to memory. I can vouch for everything he says, and wish that I hadn't learned it the hard way too. But maybe that's the only way to really learn it.

EXPERIENCE= something you really wish was happening to anyone else but you.

 

After 2 years I know one thing all too well..

The state and local gov't agencies always have their hand out wanting money. I would have no problem with that if it actually did any good for my business.

I'm getting killed from all the bootleg non licensed wreckers and tow operators.

I would seriously be better off going under the table. When I complain to the various agencies about this issue of illegal operators, they say they dont have the staff to chase them down.
They do have the staff to tell me if I dont do this or that, or pay this by this date, they will pull my license.

I say fuck'em. State of Ca is losing another business. I'll be done by January.

Oh, and no partners. Especially family. If you cant go it alone, then wait till you can.

Its not all bad, all the time, but its not what I expected.
I learned alot.

For the guy opening a tire shop...do your homework. LA County hates tire shops.

 

I am sure it was said, but I will say it again... Only because I watched my parents flourish, and now I am paying the piper for their mistakes... My dad is a printer... well, he has ran his own business since he was 12, and was in the garage when I was little. He got one, ONE big account that required more space. So he bought a shop. All was well in the world, money was great, had some little eggs.. then he for the first time bought a 40000 press.. then the BIG egg decided to change their format... Meanwhile, the taxes were 12000 a year, the press payments too.. so right off the bat thats 2 gs in revenue needed to stay alive. He refinanced the shop on the house, so the shop was paid for, and in 2005 in the middle of winter, we had to move all this big heavy printing equipment out... all over the place...
Now, he is working for someone, hating it, and doing a little back out of the garage with a killer overhead (from refinancing).
All I am saying, if the ship sinks, let it go. Don't try bailing it out because it will get you further and further in. If it can maintain itself (financially) and put something in your pocket then keep it. If you find yourself pennyless, but have a shop (I understand in the beginning its rough) then think twice about your venture, or spend more time selling.. that was my dads problem. He didnt know how to sell, and has cost me at least 8 grand in the last 2 years.

 

ditto

 

wow- this stuff is good stuff. The thread has turned into more of a 'what not to do' but still all great information.

So much has surprised me these first few years. I know Im gonna make it ( I dont fail at anything- both a good and a bad trait I guess) but what twists and turns are so much more than I expected (both good and bad)

 

My biggest surprise what finding out how much i didn't know... and not even knowing what question to ask at times.

There are tons of city/county/state programs available for new business owners. Do some research and take advantage of them.

Keep doing what you do best. Things like payroll can kill a couple hours a week. You can pay for services like that while you are out making real money doing your thing.

Keep the customers happy above all. Treat each one special. We have a philosophy about customers. Everytime you make one happy, you make a deposit in their "account". When you screw up (and you will) you make a withdrawl. The key is to keep your customers "account" in the black. With that in mind, remember that happy customers tell their friends... so do unhappy customers.

 

Biggest surprise in the first five years ? That were not indistructible. You believe you can do all by yourself and put in the 14 hour days 6 days a week. Over the years I've chalked that up to youth but unfortunately paid the price with my health. Made lots of changes over the years now things are good. Remember " if you''ve got your health you've got the world by the ass"

 

One thing that has kinda been touched on but not really discussed is that there is a HUGE difference running a one man shop and a shop with an employee or employees. I have a one man shop, but have thought about hiring. After looking at it, it appears to me that if you have employees you don't do much mechanic work yourself. And if you hire one employee, it takes about as much time for the extra bookwork, supervising and "stuff" as it would for multiple employees (unless you find the 1 in a 100 guy who doesn't need ANY supervision). So it kinda comes down to work by yourself or go big.
Larry T

 

Reputation is everything, you may have the golden ticket but if the world hates you you will die with it... You will never make everyone happy but you can try.. I have bent over backwards for customers some love me for it and some I just can't make happy..

Price point.

Don't get in too deep of debt....

Marry a girl with a good job and insurance and understands that 40 hours a week are not in her future, my girl is in the shop boxing and shipping a few times a week.

 

Lots of scary stuff here. We have been selling online and at swap meets for a few years now and have been hoping it will turn into something that we can make a living at. We also have a couple of deals in the works that will allow us to expand into other markets besides automotive.

The wife has gone from full time to working 3 days at her other job and 2 days at home to take care of our business. She does all the shipping each day and packages the product on her two days at home.

I have been at the same 12-16 hour a day job for almost 30 years and have worked my way up in salary to a point to where its hard to quit.

Good thing is that our home and shop are paid for and the kids have been doing better at supporting themselves. Another thing is my wife is encouraging me to take the plunge and both of us are willing to do without a lot of the unnecessary items we have.

She said that if necessary the first thing to go would be her Chrysler 300c and not my Harley Ultra Classic. I see it the other way around but we could live without both.

Since we both have jobs we dont have to operate on borrowed money right now. We keep our business money totally separate from the rest so we can keep track of what its doing.

I certainly cant give any advice here since I haven't jumped in with both feet here but its good to hear some real advise and not the "make millions at home while working 4 hours a day" crap that you see on TV.

The one thing that will make it work is my wifes support. She knows how my job is wearing on me phisically and mentally and is willing to go back to work full time if it means I'll be happier and we will have more time together.

 

I've had my Architecture firm for 8 years now, and for me, there are a few things that stand out-

Overhead. Keep the overhead low, because it will creep up and eat you alive. At some point there will not be enough hours in the day to service the dept on the overhead if you don't keep it in check.

Management. In my business, time=money. And there are only so many hours in the day. It doesn't take long as a one man band to be tapped out, working your self into the ground, and reach the maximum amount you can earn by working every hour in the day. Figure out a way to leverage your time, like hiring an employee to do things for you, pay them a reasonable wage and bill them out at a reasonable markup. You make money on their time and yours, increasing the amount of money you can make in the same number of hours. You can't do it all no matter how much you think you can. Once you reach burn-out from trying, you won't want to get out of bed and go to work anymore, and you won't be productive when you are at work.

Marketing. It's easy to relax when a big job comes through the door, because you have some work to get through the month. It's also very easy to forget that once you have finished the job, you will be wondering what the hell to do for the next job if you haven't been working on getting the next one from the beginning. Dedicate a portion of your daily routine to getting the next customer.

Savings. Put enough of your income away for taxes and rainy days. My business is a roller coaster, feast or famine. If I didn't put the money from the feast away, there would be nothing for the famine that is around the corner. And there's not much worse than borrowing money to pay your taxes because you didn't plan ahead...

My 2c.

Pete

 

KNOW THIS LEARN IT LIVE BY IT!
It works. This is how my father did it and what he preaches to me and others. Just because you can work on cars, doesn't mean you should own your own business.
Too many people go into business thinking...I can do the best X, but fail to realize that Being the best at X, is the least they need to know.

 

I enjoyed reading this post. I started my own engineering buisness in January of this year and am learning as I go. I would reiterate what some others have said, at least in my type of business and clients, about the importance of cash flow or the concept of feast or famine. It can take me 2 or 3 months to negotiate a project scope and contract and then 2 or 3 months to start getting reimbursed for my services. I didn’t take a salary from January through September this year to get the “machine” running - a bit nerve racking to say the least! I haven’t fell victim to working long hours. On the contrary, I am working much less now that I did in corporate America. I love getting to call the shots. Today, for example, I am attending my 6 year olds parent teacher conference. This is something I could never due when I worked for others.

 

I have no reason to share what to do or what makes it work.

If your lasting 5 years you still need to hold your breath. The whole 1 year thing is a lie, 1 year is easy as pie.

-Jason

 

Not true. Oftentimes the customer is not right.

But if you keep in mind that the customer comes first, you dont have to worry about who is right and who is wrong.

 

VERY important quote here....


After being biz for myself for the better part of 17 years, I have learned that what you need and what you "want" are different. People make big money and spend even more, I know as I fell victim to this years ago. Now it's, any profit goes into the biz and any left over goes into IRAs. Toys (hot rods) come last!

...

 

Almost true. Treat everyone with respect, but the business and your employees come first. Sometimes you have to cut clients loose because you cannot meet their expectations or the cost to keep them is too high.

 

the people who thought you accually did that job for them for FREE!

you know the bastard (s) im talking about..the no payee..oh i will have the money to you next week, checks in the mail bla bla
oh you really charge for that?

 

I disagree - I think it is completely true - employees are really "customers" too - they are just buying a different product.

 

OOPs - I misread part of this - you are right - my bad. Business has to come first. sorry.