Thinking of starting a business

Morgan3820

Morgan3820

Ejection Handle Pulled
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Jun 29, 2013
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New Bern, NC
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El Conquistador
Looking to retire from my soul sucking job in a couple of years and thinking of selling my modest skills in boat carpentry. I have been working on boats for myself for 3 decades. My marine
mechanic friend says that there is a big demand for custom marine carpentry, particularly replacing cabin soles, head liners, custom cabinetry. He offered to refer me to customers. He has seen my work and does not do woodworking.

The pluses are, I live in a marine community with several hundred yachts, sail and power, within walking/bicycle distance. Multiple times that number within a half hour drive. There are several specialty lumber suppliers nearby. I have a well equipped, climate controlled workshop, attached to my house with a dock to slip a boat if needed for the bigger projects. So, low/no overhead. I am not talking about boat building, just improvement/repair projects on existing boats.

The downside are my fears. I have never worked for myself, luckily, I have always had that steady paycheck. Financially, the retirement check will cover the bare essentials, utilities, taxes etc., but no extras. Also, fortunately, affordable medical insurance is included with retirement. While I am good for an amateur, do I have the skills to make it doing it for other people? This really concerns me. I have had no formal training/apprenticeship. If there was a quality boatyard nearby I could go work for them, but there are few, and those few that there are, charge astoni$hing :eek: amounts. I would be happy to get a third of their rate. My own projects include rebuilding a 38 ft. sailboat from a derelict, to include new engine install, deck core replacement, rigging, completely rewiring the boat, equipment installs. But time was not an issue. I will be on the clock with other peoples boats.

I know that many of you work for yourself. How did you get started? How do price your labor? What if the customer is unhappy with your product? Should I offer to do a few beginning jobs for cost? I would like to have something started before I hand in my retirement paperwork.
 
I don't think you have much to fear if you're just working for yourself, and doing that kind of carpentry, most of the work you're doing on site or you can do in your garage, so there is no leased space overhead plus you probably have all the tools anyway. Once you start taking on employees, then the complexity skyrockets.

As far as the mechanics of pricing and accounting, it might be worth your while to read up on contracting, particularly carpentry, as that is essentially what you will be doing. There are some other issues you need to think about. If you were doing residential or building commercial work, you would need to have a contractor's license. That should not be an issue with boat work, but for decent size jobs, there are still may be bonding and insurance issues.

You mention that you would be happy to get a third of what other people are getting that do this for a living. In the consulting field, we generally use a multiplier of somewhere between 2.5 and 3 of salary to arrive at the billing rate, and skilled labor rates are typically a little less of a multiplier than that. The people that are good at carpentry, or building stuff in general, are good about finding inexpensive supplies, and not wasting them.
 
Morgan3820 said:
I know that many of you work for yourself. How did you get started?.
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Allow your hobby turn into a job. ? buy a boat restore it sell it. rinse and repeat
 
Turn a pleasure hobby into a profession and what you loved becomes a job. That changes everything. If you're good at it you'll end up in an office with a phone and a computer while paid employees are in the shop doing what you started the business to do. It isn't a bad way to go but beware of the advice given by guys who've never done it. :)

I don't think I slept for my first 5 or 6 years in business. Too many things to worry about!
 
Go for it. Keep your costs down, incur no debt, be confident in your skills. Keep good business records, don't lose money expecting to make it up on the next job. In your business, estimating is key, and your word will be your bond. And if specs change, get it in writing. Do not forget to set aside your quarterly tax liability.

If your buddy has enough confidence in your work to send you business, others will too. Half of being successful working for yourself is having the guts to try.

Been self-employed for 25 years, and started with far less cushion than you are.
 
Morgan3820 said:
but there are few, and those few that there are, charge astoni$hing :eek: amounts. I would be happy to get a third of their rate.
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Up until this statement, I was all set to encourage you to go for it. Of course, I had other questions for you, but if you can't get over this major stumbling block, you may make a "living", but you will never get ahead. Once you perform a few jobs for a low rate, you will gain a reputation as someone that does good work; cheaply. That is a hard reputation to overcome.

One other thing that stood out to me is your evident lack of self confidence. But both of these deficiencies can be overcome if you really want this.

I'm sure you know this, but you need to really think about it: Starting a business will be MORE than a full time job. A HUGE part of you new job will be as a salesman. You must sell yourself and your product. You also need some accounting acumen. If you don't already have that foundation, perhaps a few Quickbooks courses and basic accounting courses at a local community college will hlep. I found that to be a tremendous help when I started my business.

Get in touch with SCORE. They can help you establish a business plan and also help you research local regulations. It sounds like you live in a nice, upscale area. Unfortunately, those types of areas come with all sorts of rules. For instance, can you have a business license using yoru home residence as your business address? Can you run a business out of your home?

I don't want to sound negative. I think this is a great idea and I want to encourage you. But sometimes, being your own boss is not all it's cracked up to be. The time you spend on "paperwork" and administrative tasks may outweigh the time you spend actually working. That may be part of the reason for those "astonishing" fees you mention.

If you find yourself getting angry at me and saying that I don't know what I am talking about, that is a good thing. I don't know you. But I do know a little bit about running a small business.

My parting words:
I hope you go for it, and I wish you great success. It is within your grasp if you make the effort.
 
Chip Sylverne said:
Go for it. Keep your costs down, incur no debt, be confident in your skills. Keep good business records, don't lose money expecting to make it up on the next job. In your business, estimating is key, and your word will be your bond. And if specs change, get it in writing. Do not forget to set aside your quarterly tax liability.

If your buddy has enough confidence in your work to send you business, others will too. Half of being successful working for yourself is having the guts to try.

Been self-employed for 25 years, and started with far less cushion than you are.
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+1 to all of this!!! Be Confident in your Skills!!! Your skills are valuable, don't sell yourself short.
 
16 years self-employment and loving it. Don't come in being the low-baller. You'll have a difficult time raising your prices later and many potentially good customers will question your low prices. There are reasons those other guys are charging 3X as much. You should at least be at 80% of your competion. Get plenty of liability insurance. Get everything in writing. Collect 50% before ordering materials and starting the job. Collect remainder when finished, don't be bashful. After you drive off, paying you is not as much of a priority. Check with all your local banks on how to verify funds after hours, keep that info with you, that is when most bad checks are written. Find a good CPA. Use the best quality materials and warranty your work for 90 days or 1 year, yep that warranty work is included in every estimate. Warranties have priority. Hand out plenty of business magnets and advertise on your work truck too. I started out with yellow pages, radio advertising, restaurant menu ads, but no longer needed due to great referrals. Be very careful working for "friends", family or other businesses. Many guys have came and gone since I have been here. They were the low-ballers, and then all went bankrupt. Good luck! Your customers can be some of the best bosses you have ever had. Choose them wisely.
 
Does the zoning for your home allow you to operate that type of a home business ?

Unless your soul-sucking job blocks you from doing so, get started before you 'retire'. Take on small jobs, see if it is a viable business before you stake everything on it.
 
Start doing some side jobs while you are still working to try it out. And I definately agree, done be the 'cheap' guy in the business. First off, you wont make any friends in the industry, who you may need something from down the road and second, you may get the wrong reputation.

My wife and I ran a tshirt and embroidery business on the side. Thats a cut throat business there. Lots of people out there whi are willing to work for next to nothing just to undercut the other guy.
 
Make a business plan. Project revenue and margin. Does it cover overhead and pay a return on investment? Simple arithmetic. Being a good carpenter is very different from being a good businessman.
 
I think I agree with @Tom-D. Pick up a project, work it at your own pace, and then when you're ready for paint/stain/upholstery/electronics find a buyer who can 'make it their own' by picking those (factor those into the final price of course).

There's plenty of people who would like to buy a boat that way, and you won't have the time pressure for the bulk of the work.
 
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