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

This is real a great post.

Lear form others...Not only form your industry, but other business owners. Join a local chamber of commerce or other business organization. Attend meetings and seminars, and learn from others.
All businesses have the same issues, whether your selling Bread, clothing or car-parts. And it doesn't matter is your making $1000 or million !!!
YOU WILL HAVE THE SAME ISSUES....beleve it or not !

Too many time I have talked to business owners that say they have no time for what I have mentioned above. AND THEY ARE MISSING OUT!

As my father says.....if you attend a meeting or seminar, and leave with just one piece of information that helps you, it makes the time and money all worth it. Trust me!

 

pay yourself first, and dont be afraid to get help when and where you need it....... not everyone knows how to do everything, as much as we would like to think so. remember doing it right the first time saves you way more money.

 

You will learn to hate employees. That is if you are so unfortunate as to have them. You will soon learn that NO ONE can do the job as well as you or have the same drive to work hard with the same quality as you. This part of being in business really sucks. We have been through about 20 bodymen in that past several years because of their poor work ethic/skills. It's really hard to find good help......

Good luck to you. I hope all goes well.

 

My business is a part selling business, not a shop, but the two main things:

It takes a lot of time doing all the "little" stuff; paying bills, closing books at year end, making sure everything gets out on time.

Glad my wife is my partner. She's smart, helpful and supportive and that makes it so much easier putting in the extra time and effort. We've got 4 children and they are seeing that hard work pays off, that they can do anything they want when they grow up.

 

That I was still in business after 5 years.

 

This is my 30th year in the lighting maintenance business.

Someone had posted about buying your own building. Best advice yet. I wished I had listened earlier. Paying yourself rent is the best thing in the world. There's no SS and you can take depreciation and repairs against income.

My best bit of advice is to get a substantial credit line when you don't need it. It's likely that, if you need it, you won't get it.

My life got a whole lot easier when I established a credit line. It allowed me to pay myself a salary, which eased monetary problems on the home front.

When the economy went south in the Detroit area my gross sales were cut in half. However, because I had no debt I had very little pressure.

Nothing really surprised me after 5 years. After 30 years I'm surprised that I still like going to work in the morning.

 

I think the one thing that has surprised me the most is how many competitors I have had that offer an inferior product at a low price, treat employees and customers poorly, etc., and have made a lot more money than I have with a high quality product at a reasonable price.

It seems to have become worse in the last 12 years or so, with the growth of the Walmart generation. A good example is Snap-on vs. Harbor Freight.

It seems like America has been losing it's eye for quality. The incentive for scoring something cheap seems to win out over quality more often every day. Depressing, I know.

 

Depressing yes, but gratifying when the customers come back. That's happened to me a lot.

 

I started a service business about two years ago. Plan on working more than eight hours a day until you set up up your systems - billing, accounts payable, accounting, meeting and dealing with new clients, bidding and doing the actual work.

Watch every dollar being spent. No matter how small your business is, it seems to take a lot to operate it.

Work out a budget of estimated monthly expenses. This will tell you how much you've got to bring in to cover bills. Most of they time you'll be cheering on yourself, so don't let the slow times get you down.

This is a real short description, but covers quite a bunch of info.

There's nothing more gratifying than having your own business. Best of luck.

RGV

 

I forgot to mention a couple of things- don't be afraid of hiring employees. We think we can do it all, but we oftentimes need help.

Treat employees with respect and fairly. The worst feeling is losing an employee to a competitor after you've invested a lot of time and money training him or her.

Also, no matter what type of business you have - all business owners have to deal with very similar things. I think everyone will admit that other business owners are more than willing to share their experience and mistakes. Draw from them, they want to see you succeed.

RGV

 

My family, as far back as anyone could remember, has always had heads of households that were self-employed. There is no better life.

There is a niche for everyone. I change light bulbs, my father was a one-man ad agency and my grandfather held a patent on the pourers that go in liquor bottles. I remember going to work at his little factory. My job was to press the steamed corks onto the pourer. In later years I worked at my other grandfather's mens clothing store. My job was to precisely fold up shirts that had been tried on and reinstall the pins in the same holes.

He paid me in silver dollars. I still have most of them.

 

Employee's steal stuff. All kinds of stuff, from tools to sugar by the coffee pot. I even had someone steal the new COSTCO mega size package of toliet paper the day after it was bought.

I had a friend who had tools constantly disappearing. He kept addresing it and they kept disappearing. He stopped it by doing this. Every friday morning every employee, including himself, had to put $10 into the tool fund. Anytime something came up missing, it was replaced with money out of the tool fund. They posted on a board how much was in the fund so everyone knew what they had at stake. When the fund reached a certain level, he would take 1/2 of it a split it between all the employees and have a lunch party.

Now if they stole...they stole from themselves. He claims he never has had anything stolen since.

FWIW
JJ

 

If you set up a system of rewarding employees, for the growing of the business, and find the right avenue for them to share in it's successes, it may turn in a better direction. A friend's shop has two employees, and they do share in the success they have created over 10 years time. Each owns their tools, and they each work hard to build their client base.

 

Numbers lie .. and liars number..

Checks can be voided after days in the bank..

Everyday is Friday and everyday is monday ..

 

thought I'd bump this up- had some good info in it and maybe others can benefit since the first time it was posted...

 

My first 5 years...Mmmm. It was around 1977 when I started sidelining and don't remember much except that I was just a dumb 20 year old kid, just married, no idea what I was doing 'cept I did not want to work for someone else. I was striping and sign painting everything I could get my hands on. All those Houston guys in the Houston Heights, 59 east Little York and Main St areas and at Int Dragstrip on I-45 Gulf frwy were lining up at the car washes for $20.00 stripe jobs.

Those first 5 years were hard but I never quit. After 5 years into it I had 3 body shops, a custom shop, commercial sign and paint biz doing refineries and offshore rigs and still striped in between all the headaches.

Now after 30 plus years of self-sufficiency (not always making money), I can honestly say that I would not do anything different. If you want to work for yourself, go, man go. And remember, to succeed it isn't just about working hard or smart...it's about workng Right!

Mikey
Striping and
www.HotrodConsulting.com

 

I learned that your biggest customer isn't always your best customer, you have to know your costs, all your costs, to the penny.

 

just curious - at what point (if any) did you stop working 100 + hour weeks? I know I love what I do so I dont mind it-(plus sometimes its on my own stuff) just curious when you got to 'that' point in the company to feel OK walking away at night.

 

I just past my six year mark, but quickly realized it is not the American dream to own your own business, it is Uncle Sam's American dream.

 

I have a sign posted in 3 or 4 spots in my shop

UNLESS YOU HAVE
DOCUMENTATION
PROVING OTHERWISE
IT IS NOT MY FAULT!!!!

I DID NOT;
BUY IT
BUILD IT OR
BREAK IT
MBOG

there's another one haging as well

YOUR LACK OF PLANNING "DOES NOT" CONSTITUTE AN EMERGENCY ON MY PART!!

I live by the first one.
Then there's the taxes PST, GST, PAYROLL, WCB only in Canada EH!
Get a good book keeper and good luck

 

In the past 20 + years I have found that...

5% of the customers CREATE 95% of the problems/issue that make up most of our "wasted" time.

This applies for sure those of us who desire to run straight up anyway...

 

The most surprising is how people can just abandon cars and/or go incommunicado for great lengths of time. I remember having cars there for years belonging to people we just never heard from again.

 

When i reliazed my kids were in jr high and i had no recollection of their childhood! I missed out on some of their best years and regret missing it, from then on it is family first and everything else second.

 

I've been running a retail & service business for 20 years. Here are a couple of things:

1. More business isn't always better. Frequently people chase marginally profitable business because the big gross numbers feel and look good, but of course it is net that counts. Most small retailers could chop off the lowest netting 20% of their business and be better off because that 20% costs more than it'll ever make.

2. In retail at least there is lots of margin improvement available in buying well, and taking advantage of supplier terms. Take advantage of all supplier discounts. In my industry 2% 10 days/ net 30 days is common. That means that the 20 days in between in effect cost you 2% of the total amount of your invoice. Do you know any bank that'll pay you 2% interest on a 20 day investment?

On longer term invoices 1% discount per month is common. That's 12% per year. You're not getting that on any CD. This is what cash flow is for.

 

Some good advice on here. Most people don't make it 5 years. Best advice i ever got was 1.don't have a partner 2.stay small I've found the ratio of jerks to good people is one in five, keep it small enough so everyone likes each other, and the rest sort of falls in place.

 

If i can ever get this house sold and moved, i'm planning to open up a small auto related shop, more for retirement income. Now in today's economy, that probably means 50 hr weeks till i'm in the ground. I really needed to read all the comment here as there were some that took me by surprise and some i just didn't really think about. Anyway, this thread has give me a lot more to think about when owning a business, besides the work.

 

The post on 100 hr work weeks:
I quit working extreme work weeks the day after I collapsed in the morning getting out of bed, I was a one man home builder working 7 20 hours days a week for 90 plus weeks to get a customer in a house. The customer was a complete jerk .
A extremely accurate bookkeeping, during the time above I survived two audits from my ex-wife's lawyers and two years ago 5 years of audits by the state of Minnesota- ( BUDGET SHORTAGES ) I had no problem because of my bookkeeping.

other than no-money or time life has been good for the last 30plus years of self employment.

jim h

 

a few random thoughts. It seems that every time you pay of an expensive tool and think "next year i'll make some money for me" You suddenly discover that you need another expensive tool (more payments) this only goes on for about 10 years but then it's time to start replacing those expensive tools you bought 10 years ago. That big balance in your company checking account is not your money! It belongs to the electric, gas, insurance, parts, and all your vendors, so don't spend it on something stupid. A friend of mine told me 2 rules employees use. The 6 month rule: If you leave a tool in the same place for 6 months without using it then you don't really need it so it's FREE! th rule of 2: if you have 2 of anything hten ine of them is FREE!

 

How about some advice from a little different perspective? For many years, part of my job with the Ministry of Transportation of Ontario was to license and audit garages that did safety inspections. On many visits I witnessed instances of poor management skills, unrealistic expectations, bad marketing, and other failings that virtually guaranteed failure, and all too often I had to licence these shops knowing fully well I’d get a call a few months later to close them down. I had to suffer in silence because of my position, so this thread is a welcome opportunity to get this stuff off my chest, for what it’s worth. I realize this thread is all about the “first 5 years”, but many of these rules can be adopted even after you go into business if you recognize your shortcomings soon enough. Some of these have been mentioned already and that's great. Hearing if from many sources only strengthens its value. Here goes:

• Learn some generic business management skills. I encountered many operators who thought that just because they were good mechanics working for someone else that they knew how to run a garage business doing the same thing. The ones who succeeded realized that managing a business is a science on its own and has nothing to do with any other technical skills involved in the rest of the business, no matter what the business was. The best ones took courses in small business management (offered by many cities and local colleges), and the ones who didn’t usually crashed and burned very quickly.
  
  
• Avoid partnerships like the plague, even if you think you know the other partner really well and you get along great. Things might start out OK, but one partner always seems to get greedy or lazy and the other partner has to work like a dog to take up the slack, and I saw many friendships destroyed in the process. Most partnerships I licensed ended in breakups, with the hardest working one going on their own afterwards, but it was always messy. I recommend that you operate as a single proprietorship or an incorporated company and hire the person who was to be your partner as an employee, because there should be only one boss to make important decisions – the worst decisions are made by committees, not individuals.
  
  
• Start small and stay that way until you absolutely have to expand. I’ve witnessed several newbies who went crazy in debt with brand new equipment and facilities and staff, only to lose everything when things didn’t work out the way they expected. (what happens when the water main in front of your brand new mortgaged-to-the-teeth shop bursts and the city takes a month digging it up - no customers, no income, blame the city? – nope). The operators who succeeded used their first years building up their customer base and then moved into bigger digs only once they were sure they had enough business to pay the bigger bills and that their customers would follow them.
  
  
• Learn to say “NO”. As said before several times, family and friends will shaft you the quickest, regardless of how good you think your relationship is. Any favors you do for customers will usually come back to bite you in the end, either financially or legally.
  
  
• If you hire staff who require technical certification like a driver’s licence or mechanic or welding ticket, take the time to check them out ahead of time, especially in any business where such qualifications are a legal requirement. Don’t take their word for anything. I know that bureaucratic rules like these aren’t a favorite topic with some of you, but if an unlicensed driver causes an accident with your delivery truck or the brakes fail on a vehicle that your unlicensed “mechanic” worked on, some lawyer will retire on your nickel, never mind what the government does. Don’t hesitate to demand to see their licence and photocopy it for your records, and periodically recheck them to make sure they’ve been renewed. Use the rule “no papers, no job”.
  
• Customer service is EVERYTHING – just read the threads about vendors who treat their customers like dirt or like gold. If you mess up, admit it and make it right even if you have to take a loss. It’s been my experience that a satisfied customer will tell 10 people, a dissatisfied one will tell 100. And, even the most difficult and obnoxious customer still can be right, and they can cause you the most trouble if you push them into it. Don’t waste time on deadbeats but don’t throw your business away either.
  
  Sorry to sound so bureaucratic, but I’ve seen too many shops (and other businesses) fail because the owner was blinded by unrealistic ambition and couldn’t see what reality actually looked like, and they forgot or never learned that running a business requires special skills that have nothing to do with being a mechanic, welder, printer, whatever. Good luck.

 

I was most surprised by going out of business in the first 5 years of business.