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

What surprised me most was that I was still capable of working 12 hr days, 7 days a week. That was about eight years ago...I've backed off a little now...looking to just cut the harness by middle of next year.

dj

 

I never realized that people will TRY to change your business to a loan office .

Im always wondering why , if someone gets into money issues, people dont come forth and be honest? Why cant people just tell the truth and say ' I ran out of $$$' or 'I spent the $$ for something I needed at my home'

Having their boiler break down or needing $$ for the ER can happen to any of us. I just hate when people make up excuses.

But then again- they probably dont know what its like to have to go down to 2 meals a day for a few weeks because the $$ isnt there for more -cuz they didnt pay up....

Still couldnt get me to go back to a desk job or traditional 9-5!

 

Businesses can last over 5 years?!?!

 

Sad to say in this economy -many are going south.
Im on an advisory board for a trade school and half the shops that came for the annual meeting last year were out of business this year.
OUCH. Good luck to them - I hope they come out of this OK..

Well- gotta go create billable hours...

 

Been self employed for about 7 years now. Own 4 businesses, average about 80 hours a week. Not making enough to keep all 4 a float. Sometimes I ask myself is it worth working myself to death? My last business venture I got myself into is a powder coating business. Started that about a year ago. Thats the one business that seems to be bring in $$$$. I do have a business partner for 3 of the businesses so that helps. He has 11 years experience in powder coating so that really worked out good! When you have to dish out $$ for advertising, supplies,equipment,upgrades it doesnt leave much rod building money not to mention time needed to work on your projects and finish them. The thing that really surprises me is that one of the businesses I own "Relic's Vintage Exhaust Gasket's" sales have been mostly from Ebay. We spent a load of money in advertising on mag's like Ol' Skool Rodz" and maybe averaged 10 calls the whole time we advertised in about 6 issues. The powder coating business is a local business and we have not done any advertising, just word of mouth and it's kept us busy! I live in North Dakota and we have been getting a lot of out of state customers bringing us product to powder coat, we just had a guy the other week come down from Illinoise to have us coat some cycle rims?? Dont know why he drove all that way to bring them to us, said he heard about us from an old friend living here and that we did good work, so I guess that means something! So we will see what the future brings us, North Dakota has one of the best economies in the country and the city I live in (about 80,000 people) seems to be plugging along, so that might lead to a good couple years coming up!

 

wow- good luck with that...!

 

Lenny,

This is an interesting question for sure. I left high-tech in June 2004 after almost 30 years in that industry. Since I held a senior management position for a smaller high-tech company I was well prepared about how to run a business, so I thought. I am not so sure that there were any real surprises but there were a lot of learning experiences and missteps along the way. This is my list of discoveries.

* I took a year to figure out "what" our business was. We thought in one direction but went in another. Be prepared to "tune" your business to the customer need and your ability to deliver.
* We found that most "techniology experts" were hacks and didn't have a clue how to address our needs. That also holds true for marketing experts.
* Money always goes faster than planned but don't get indebted to the bank. They will want to know, and own, too much of your hide.
* Traditional sales and marketing methods are out the window in our digital world. Forget blowing money on print media, it no longer works. Learn how search engines work and tune your web site accordingly.
* Customer service is still our #1 focus for without happy customers you don't have a business. Be extremely helpful to your customers and prospects. They will appreciate it.
* Keep your expenses low. Don't spend a lot on frivolous stuff.
* Only sell or offer the absolute best products and services. Leave the crappy products and lousy service to your competitors.
* Don't trust anyone with your financial records and management systems.
* Give back to the community, your customers, friends, and those in need.
* Be prepared to work a LOT of hours
* Take courses or self-study to learn what you do not know or are uncomfortable with.

And finally .....

Have fun doing it.

Regards,
Joe germann

 

I have been in business for about 23 years. It has definitely changed over the years, but i can't remember it changing much in the first five years. If one thing I guess the "worry" wore off a little.

One thing I think is the biggest surprise is how big of an asshole a customer can be. After 23 years I think I have seen it all when they come up with something new.

(broke people scream the loudest and accuse you of the most chit)

 

On the first day that I opened the doors to my business, my first customer walked in. He said that he had been doing business elsewhere and he was fedup with the other shop. I was more than happy to help him. Needless to say he stuck it to me. I was only paid a fraction of what was owed. Now when someone comes in that says I'm their new shop to deal with I am more cautious and make sure it doesn't happen again.
Also had a lady walk into my sign shop and order a large pizza. After telling her three times that my shop was not a pizzeria she finally realized she was in the wrong place.

 

Have been in the hot rod upholstery buisness since 1980. Have had the shop big & small. Keep it small, it's not how much money you make, it's how much it takes to get by. It's better to have lot's of small job's then one big one. The small job's will bring you more work in the future. Yes you work alot of hours, but if you still enjoy it, it's worth the effort. If friends want work done, charge them the same. They should be coming to you because of your quality not cause your cheap.

 

bttt

 

I think this is really good advice. Thank you to everyone that posted and i hope i am fortunate enough to use all this advice some day.

 

I second that- even better is that your clients can become friends but most friends dont make very good clients. Its that 'line crossing' that almost always bites you in the ass. And once they becoms friends that line gets crossed a lot -even if they are still clients.

I think people forget this is how we put food on our table, gas in our trucks, pay our bills (or try to), keep our children clothed and ourselves warm. Ultimatley we need turn a profit to stay afloat- Im all for helping someone out at any time (and you all know that) but when push comes to shove , I cant put my family's needs aside for someone's toys...

 

What I learned from the 9 years of contracting my services and watching a close friend of mine run his small business, was how many people were willing to stiff you on your billing.

 

Hmmmmm . . .

Ran my performance automotive engine and machine shop fulltime through the 80's

I guess I did not know that the world had so many crybabies and whiners.

Was lucky I guess, did not get $tiffed for much money.

Could sell a fuel injection system to someone across the country and give them five things they needed to do to get it running right.

They would do three or maybe four and bitch . . . til they did that last thing I told them to.

Went back to Welding Inspection and Engineering Consulting to make some pretty good $$$.

Now when I go in my machine shop, it is to do what I want to do . . . , to clear my mind.

Works great.

K

 

"Buy your own building" is not good advice, it's hindsight.
It works as long as you know, in advance, that the business will be at least as successful as you think.
For every person who succeeded and leased, and thinks "I could have had more money", or who bought, and thinks "that was a good plan", there are 3 that bought, got a 200% increase in property tax, had the land claimed by the town under eminent domain, zoned out of existence, or simply found that a 10% drop in gross sales brought their net below the monthly payment.
If they hadn't bought, they could have at least walked away and started over. Instead, the mortgage kept them there, and killed them.

3 fatal errors:
1. high overhead
2. under capitalization
3. starting up: can you run dry and take no money from the business for 2 years? "Pay yourself" is another good idea, like "be successful" and "have lots of money". You can only do it if it all works.
If it's not going that well, every $100 you take out is a day closer to failure.

 

Undercapitalization has killed two previous businesses with me and my team. Cash is king!
We formed a seperate corperation to purchase our building, and lease it back from ourselves to keep the debt off our books. It's legal, ethical, and smart. If this business fails, which is quite unlikely, we can still lease the building to someone else.
Do not forget to invoice! My team loves what they do, and we actually had a problem of doing things for customers and no one was generating an invoice! you gotta get paid! If you're in the automotive industry, don't get weak kneed if a "big name" comes to you to have something done, we've been screwed by, and had many rubber checks written us by some of the top names in the auto industry (tuner and race shops)
Expect to work very long hours, but if you're doing something you really love, it never seems like it at all.
The four most important people to have on your team are your banker, insurance man, lawyer, and acountant. Talk to them; listen to them. Don't think you know it all, you may know cars, or whatever, but they know business.
Next to your personal character and integrity, the most important thing you must possess is perseverance. Never, ever, give up.

 

There is no such ting as personal time. People will call you Sunday night if you let them.
The harder you work doesn't always pay off. But at least it keeps you busy.

 

When you have the time you don't have the money, When you have the money you aint got the time.

 

Learned 7 different ways to make Top Ramen.......only 1 way to cook a T-Bone.

Become a student of your own buisness. (this is number 1)

There are only 10 bad people on the planet. (they will find you) be ready.

life is wonderfull ...People are terrific....buisness is great. ( repeat this daily
It helps when those 10 show up)

Keep a good attorney on hand

after 20+ years in buis I could on and on, but i am old and tired and need a latte...wah

 

How many suppliers would start you out with low prices and then gradually raise them after they figured out you were not getting bids from other supliers.

 

I have a few businesses, one of which is a consulting firm that's been around for 13 years. I'm also retailing some car parts for fun, mostly Billet Specialties wheels.

1) Try not to borrow (too much) money.

2) If you have partners, make sure they/you all understand how the numbers work.

3) IMO, (labor) pricing is a commodity. Goes up when you are busy, goes down when you are slow. If you have a 3 month backlog, you should have been raising prices. If you have no backlog, discount, get busy and sort out your profitability in the near future.

 

the tax wright offs ..

 

amen!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

 

Control your spending.....

For every dollar spent it took me four dollars to recoup it back...
(as ex tool salesman)

cheers bt

 

I started on a shoe string out of necessity because all of the jobs that paid anything were a 80 to 100 mile round trip per day. I began building hotrod chassis almost 30 years ago and was surprised how many people had the confidence to hire a new guy. I was also surprised that I survived doing what I was doing in the middle if nowhere. My business grew quite a bit thru word of mouth. I have always stayed a 1 to 3 man shop over the years, and am still a 2 man shop. I have been blessed to stay busy during the recession. It seems that everytime we have a different president business changes for a while. Even though I could retire I have no plans to do so. Health allowing I plan on doing this until I am at least 70. I still enjoy going to the shop allmost every morning.

 

CHOPSHOP...the thing that surprised me the most in 5 yrs. is that i was still there. yea man it took me 7 yrs. to go broke, but i finally made it...POP.

 

wow- keep 'em coming guys- this is great advice for ANYONE who has or wants their own business!

 

Down time from Pr work and friends wanting to stop by and BS !!! Gotta have the first and I wish the second would find my house !!! No really I've been in Buusiness for along time and wouldn't trade it in for nothin ! ... worked behind a parts counter for a few years... that sucked !! no one wants to be there !! it's like going to a dentist cost's to much and it hurts when it's broken !! except the hotrod customers of course !!

 

it very difficult to find good employes with skills and dedication. we hire 10-12 people before we find a keeper.

i agree with most ,a consistent policy on pricing and customer service.

and yes sometimes you have to walk away from a customer and suppliers when they become to difficult, but be carefull some difficult customers are good, some have gotten there opinion heard so well ,that we determined they were right and we
changed our policy, so never stop learning.

what i hate the most is guys returning parts cause they changed there mind, exchanging for something else is ok (part of the biz) even with a restock charge it is a pain of a process.