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

Not a car related business, but a tattoo shop here. I am on year 5 on my own and wouldnt have it any other way. After working for some really great guy and some not so great ones, I enjoy the stability of running things myself. Knowing that my boss is not going to be dead the next day is nice...(happened to my 2 times)...and a third just turned into a junky. At first costs were low, rent, not a lot of overhead....then you start to make some money and buy more things/upgrade. We bought our building 2 years ago and we are basically using it as our retirement savings instead of investing in the stock market or some other venture. So at the beginning I was content making "x" ammount of money, and now I HAVE to make "x + x" just to stay afloat. I do have things to show for it though...well, at least we will in 30 years! Just dont get more than you need and be gready...while at the same time pushing yourself and your worth so that you can retire some day. Oh, and the IRS is no joke. Pay that shit on time or the penalties are unreal.

 

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In my business...........most of the time that is not actually true and I often have to walk that tightrope and try to educate my customer because they really have no clue. Some of what I do is taste oriented, which can create problems because even if it is mostly taste oriented there are slight should and shouldn'ts. Most people have access to a computer today and that really complicates me job........ but it's all part of business. You win some and you hope you lose very little.

 

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I read a trade magazine recently about pricing your work. In that article they say in my trade the average billable time in a 40 hr work week is about 24 hrs. Keeping in touch with reality is of utmost importance, run the business, don't let it run you. There are a few times where I lost sight of that.

 

1. Debt is a shackle around your neck. Learn to deal in a cash only business if at all possible. Owning the title gives you the power to not be a slave to the one that does.
2. I make a better employee than a business owner. Right now I make a stupid amount of money doing work that does not involve sweating, sore muscles, irate customers, no customers, cold garage floors, broken a/c, inventory, salary, taxes, insurance or lawsuits. I make more money investing in calculatedly risky global investments (even in this economy) than I ever did working for myself. I have a steady paycheck and I have a retirement, awesome insurance and no headaches. I have waved off going into management because I have a LOT of time off and when I am not at work I don't think about work - at all.
3. When I don't work in the industry I love, I find I still love what I do. I do work that I frankly border between hate and indifference. I love the pay and I do my job well and I am as indespensable as I can be where I am. I love to wrench and I still love it after 30 years of my history with a wrench in my hand, working on my own bicycle I got from a garage sale for Christmas. Now I can spend good money for good parts to do what I wanted to do all along. I let someone else who knows how to run a business get my money to stay in business.

 

WOW great advise^^^^^^

 

after being in business for 18 years, i realize employees suck.

 

Biggest surprise....I am not a millionaire! I really thought all I had to do was get into business for myself, and large amounts of cash would just start coming in! Reality can suck at times!
Tips:
Communicate with everyone-employees-customer-accountant-wife/husband-fellow business owners
Communicate
Communicate
Do not extend credit to family and friends
Learn to Delegate
Get over your own ego
Screen potential employees
Oh, and communicate!

 

What surprised me the most when I was in business(not long) is that some customers wanted shit work cause they didn't want to pay for quality. Many old guys were shocked at the cost and we were the cheapest per hour in town. Fuck em!!

 

The shop is NOT a club house or a place for your buddies to get away from their wifes.

 

The BIGGEST surprize in my first 5 years was how much it REALLY costs to keep the doors open - Not just rent, but TOTAL cost.

Then you have to figure out how much you HAVE to charge to cover this.

This needs to be figured out at 40 hours per week - not 80.

Nothing is worse than busting your ass - to be broke.


Second biggest surprize - the differance in customers.

Some will be the best people you will ever meet - And some will be the absolute worst.

 

i see alot of good ones


buy your building is one of the best, and if you dont need one for your type business, get one anyway and rent it, then buy another.......

provide for retirement, it comes faster than you think and it sucks to know your gonna have to work at later years in your life....im gonna be that guy, and its not something to look forward to

always control the customer, not the other way around.

anticipate problems and avoide them.

if some one wants to hang around, give them something to do.

employees suck......(stole that one too, but its great)

skull

 

How everyone thinks that everything should be free!

 

Excellent topic,Lenny. It hasnt been five years for me either but we are still having fun and still have a ton of work. When I worked in a factory i never wanted to put in more than 8 hours a day and five days a week,now its more like 10/12 hours a day and seven days a week.I wouldnt trade it for any factory job ever. I wish I had of started earlier in life but there are no regrets.

 

I was surprised by how many people thought I was rich because I had my own business, and therefore didn't need them to pay their bills. I got stiffed several times by people I stuck my neck out to help. I had a small used car business that was obviously not a high-dollar operation, but these people didn't care. I was also surprised how easily my partner found it to dip into the till for his own purposes and how much debt he could get the business into when I wasn't watching the books. He was a person I thought I could trust, but I was sadly mistaken.

My best move was to get out of "regular" used cars and start catering to older classic and special interest cars and parts. Unfortunately, I discovered my mistakes and found my niche too late. By the time I paid back the debt my ex-partner accumulated and got the business going in the right direction, my wife had lost her patience with the whole thing (we had been living off her income for almost six years) and convinced me to pull the plug on it. It was a tough thing for me to do, but I closed it knowing that I had paid all my debt and walked away clean.

 

I can't believe how STUPID the general public can be.

 

I just sold my business 2 1/2 years ago after 24 years. My biggest surprise in the first 5 years was how easy it was to pick up chicks and the crazy money I was making for not doing much.

 

agreed, and used car dealers are the cheapest customers you are ever gonna find. if you quote them "free" they will yell "cheaper"


.......and your chicks always think 'cause your the owner, you can leave whenever you want to take them places, or run their errands..........they must watch way too many old movies or sumpin


skull

 

so true

 

I do Custom Harley for a living, 3 in magazines this year, in business 10 years on my own, Cars before that. Lots of hard work, over time, no benifits, I pull my hair out, more money a customer has usually the tighter their wallet is, i bitch, wine and complain a lot(venders, and other businesses i count on).Never going to get rich off it... but i wouldnt trade it for another,LOL

 

That I was only in business for four.

 

Everyone says when you work for yourself you only have to work half days. Not one said the half day was 12 hours.

 

I was in businesss twice (3 times if you count farming (feedlot)First time in the automotove business I started out not charging enough. I didnt sit down and figure my expenses or fixed costs. I also thought I could produce 8 hrs chargable a day when 5 1/2 to six is all that is practical when you work by yourself and have to phone, talk to customers, get parts and make out bills. I tried working extra hours but that actually makes you less efficient and tired. I learned a lot and sold that business (after 5 years)but not for much. I dscovered i could run someone elses business much better than my own. That bothered me. Why was I not fair to myself but obviously knew what to do? Second time around I determined THE BUSINESS would live or die on its own. If it wasnt making money then it would just have to die. When I ran others shops I sat down and figured out fixed costs first. I then figured out proper profit because every business needs to make a profit. I established a group of items in other businesses and would price those same items every year . If they went up in price my rates went up the same percent. I beleif i used 5 items and always the exact same five items. This kept me in pace with inflation and normal price increases. I was assounded when running a business or shop for someone else how little it took to go from barely making a living to profitable. Often $2 per hour will make a huge difference in the profit but customers will not even notice or care. If you are just getting by now and you add $2 per hour to your work that will bring in for you $50 to $60 more per week or $200 to $240 per month. Even that small amount will improve your living and your state of mind tremendously. Maybe you need more than that. If you have to work for less than the going rate there must be something wrong with your work. I understand fully that as tradesmen we tend to give too much away. Change that. Never cheat or overcharge but charge for what you do and make sure you pay yourself well. That is probably the biggest mistake we all make when runnig our own shop. We dont charge enough and often the difference between enjoying a good living or not is just a few $ per hour.
Another BIG mistake is not having the abilty to accept credit cards. It is easy and will cost you here about $75 up front but you will never have to carry anyone on the books. Visa or Mastercard will be glad to do that for you. Yes they get a small pecentage but not having any bum receivables is well worth the small percentage it costs you. It will also increase your customer base hugely and gives your business, even if home based, an air of legitimacy. Then there is one more little rule you need to keep in your head . If you are selling all you have in time or product you are probably not charging enough. I lost a lot of good work in the eaerly years and even in the last part of my career by not charging enough. For instance i used to do a hi perf street 340 mopar engine long block for $1825 plus tax. Even at the end of my shop career we rarely charged $3000 for them . I lost several jobs to a nearby shop who used to get between $6000 to $7000 and our engines were faster and had no problems. I discovered after being called in to sort out problems on engines they had done by disatisfied customers that I had also quoted them but they thought "how could you get a decent motor for $1825 if the other shop wanted more than twice as much?" T'was a lesson I learned almost too late in my career. If you are producing a quality product then charge for it. Otherwise folks thing there is something wrong with it.
I hope you will take time to think about these things. I sure wish someone had explained it to me at the beginning rather than I figured it out near the end of my career.
I really hope you will find this helpful. I feel for you guys working your butts off and just scrapping by. I remember those days well.
One more thing. Hire a book keeper . Dont do your own. It used to cost me about 2 hours production to have all my book work done by a book keeper (I said book keeper not accountant or accounting firm) I found it to be the BEST money i ever spent. My books were always up to date, my taxes paid and i didnt have that nagging worry about "I must get to that soon." You are good a fixing cars. A book keeper will be good a keeping books. It is far easier to earn a few $ working to pay him or her than to spend all night trying to figure it out for yourself. BTW a book keeper is not your wife girlfriend of whatever. That is invitation for a strained relationship. Life is to short for that. There are lots of people in any town who do it part time and are good at it. Find one and use them. I only used an accountant at the end of the year. They often commented on how well my book keeper did her job.
Don

 

I know its all been said before, but the biggest for me is feast or famine. It's like Im always so close. I have a pretty well known guy bringing his car in for paint and body so I keep telling myself "this is my chance". I've been at it for four years and none of them have been easy. I now have a 6 month old daughter and can't be just scraping by anymore. Every day could be the big one or could be the last.

 

The amount of assholes that I had to kiss ass to to make a paycheck

And not much has changed.

Been in business for 27 years now.

Oldmics

 

If it was so easy, it wouldn't be cool...

LOL @ Oldmics,... tellin' like it is

 

Biggest surprise: Two recessions. If I get my overhead any lower, I wont be able to stand up and every job will have to include a chop, just to get it inside!

 

Getting the x wife out of the business so I could finally do what I wanted to do and turn it around and make money ! Get a good book keeper because she wasn't ! Buy a building for retirement ! Opened in 1985 and sold in 2006 Now I have my hobbie back and just Play !!! I am retired now @ 55

 

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Isn't that the truth................and the sad part is............. 95% of my competition does exactly that...... and because of that I'm the bad guy...

 

Here is a strange thing that I noticed when I had my 1 man operation. I started closing the shop 1 hr a day for lunch and left the building. When I did this I found I got much more accomplished than those days then when I skipped lunch to "get more done". When I came back from that break I was ready to attack the work that needed to be done. Everybody has their own level of energy. Figure out what yours is and try not to exceed it.
I have seen many small business owners brag about how many hours they put in and how miserable and tired they are. They are actually proud of it. So don't kid yourself that if you work 100 hrs that week that you are accomplishing 100 hrs worth of work. When you work long hours, you become very inefficient. If you are exhausted, you get little done and you will make costly mistakes. It's just a business there is no need to be a martyr.

 

I have not had a job in 17 years, since I sold out ,so being in business for your self will work. I learned there is never an 8 hour day if its your business..No one will work your business the way you work your business,.Pay your bills, taxes and all the other crap when its due if at all possible. Espicially Sales tax, property tax employee tax, and income tax..Do not give all related people to these taxes the reason to come in your door to check related books..There is all-ways something they can and will find..After 10 years some one flips a switch and it gets easier,,After 15 years easier yet, and you can start having more time for your self and family..If you can, give your kids,,not your wife a job working there also..They need money of there own, and they will work there to have more than an allowance..Key to the whole plan is Find a sucker that will buy and pay your price after 20 years in the business...Worked for me...