Search This Blog

Thursday, October 13, 2011

MONEY: Great Idea....But, Are You Self Employable

    Starting your own business first requires and idea.  Then you have to evaluate it to determine if it is a viable idea.  Will it make you money or do what you want to do.  Sometimes ideas are not about making money but about getting recognition for whatever reason.   My focus will stay with the making money aspect.  Being self employed requires a lot of self motivation.   No one is going to tell you when to go to work.   No one is going to tell you to knock off for the day.  Until you get started it is doubtful anyone will advertise for you.  A good business sells itself, but it takes someone who can follow through.  If the job requires tools you have to get them.  If you are smart you will take care of those tools so you get the maximum life out of them.  When planning your business budget and pricing you have to allow for the time you know you will spend cleaning up from a job.  If a tool only lasts for say twenty jobs the price of that tool has to be divided by twenty and figured into the job.  When I started my first landscaping business after I got out of  the Army I had no tools.  I started by doing yard work and I always gave my customers 110% and did little extras and cleaned their tools they let me use.  I did the maintenance on their tools and they saw I took care of them.  As I expanded and changed to landscaping from yard care I often borrowed tools from customers.  I developed a good working relationship with the local rental center and rented bigger pieces of equipment like backhoes, trenchers, chain saws and other power tools.  When I did rent a tool I often got it over the weekend if possible.  The local company let me pick it up Friday night and return it Monday morning.  They only charged me for one day.  Some machinery like that has a meter for how many hours it runs and you only get so many hours.  However you will find ten hours on the machine may take twenty hours to use up.   You have to do other things and make preparations that require time but not machine time.  It will be sitting.  My goal was to line up enough work to maximize that usage.  It might mean working twelve to fifteen hours or more a day on the weekend.  That is one of the hazards of self employment.   If you only want to work 8-5 or 9-4 and no more.  I do not recommend being self employed.  Someone has to do all the running around to get the materials before you even start a job.  That means you have to spend hours and hours planning to make sure you have everything you need to do the job and that you allow for the cleanup after the job.  The trick is figuring all that into the price and giving a fair price.  My preference is to give a flat fee for a job and if I go over or come up short I bite the bullet.   Some things you do will require a contract and believe me make it as specific as you can.  If a job takes extra stone, gravel or time because the customer makes changes as you go along you need to specify who pays for it.   Customers love to make changes as a job proceeds and that is no problem as long as it is not coming out of your pocket. 

     Some jobs take more planning than others.  I knew a guy who made good money buying pop cans.  He had a simple system.  He bought an old semi trailer and bought the plates for it.  He negotiated a site to set it up and bought himself a nice scale.  He set up 10-3 four days a week.  He was in a small rural town of several thousand people and he bought pop cans at about 25% of scrap value.  People bought the cans to him rather than go to the scrap yard in the big city.  When he had enough cans he paid a guy a flat fee to haul the cans to the scrap yard and bring his empty trailer back.   He got the best price possible and got the bonus for having over three hundred pounds at a time.  He made very good money for his efforts and spent many hours sitting and reading and following the markets.  What made it work for him was he paid cash on the spot and most of his business was kids who wanted a quick buck to play video games or some other thing they needed a little money for.   He expanded into batteries for cars, trucks and tractors and found and outlet to get rid of a semi load at a time.  Again he made good money and provided a need as no one else in the area was taking batteries.   The trick is to study and know your business and how it works.  Some people do scrap paper and cardboard.  The opportunity to make money is out there.

      Two of my favorite stories are very simple but they show what you can do if you think hard enough.  The first one happened during the great depression.  A man down on his luck came up with an idea to furnish packing materials to moving companies.  Moving companies have to pack dishes and glasses and other items for shipment.  They usually do so with paper which they buy in roughly fifty pound bundles.   Well the guy went around the neighborhood and made arrangements to pick up all the used newspapers from his neighbors.  Then he would take them home open them out flat remove the colored pages and adds.  When he got fifty pounds he would roll them up.  When he got enough he would take the bundles and sell them to the moving companies for about half what they could buy new paper for.  He turned it into a steady business and survived the depression.  It took thought and creativity on his part and the ability to see noy only a need but and opportunity.

      The second one is my absolute favorite.   A guy invented a product and was very successful nationwide.  He built his business over several years and had the market cornered.  His only drawback was that he was in a very old run down shop and was very limited on how much he could expand.  One day a person from a major nationwide chain came into his shop and offered to buy the business lock, stock and barrel and even take all his employees and he could walk away with several million dollars.  It was a blessing and an answered prayer.   He had invented a new and improved version of his product and wanted to put it in production but did not have the room or equipment.  After the deal closed he went down the road built a brand new building with plenty of room to expand, bought all new equipment and went to work building his new and better product which made his old product obsolete.   He also hired all his old employees, gave them all raises and sold his new product to all his old customers.  A very, very shrewd business deal.  The old company tried to sue him, but he had a new separate patent and won his case.  Which got him several more millions for his hassels.

    While these are some neat stories, or at least I think so.   They show you can get ahead no matter what the circumstances.  You have to find what you want to do.   If is is already being done that is not a problem.  You just have to do it better or offer a better deal.  The two tricks are that you have to be able to figure "all the costs" and you have to be willing to do the work yourself without anyone pushing you along.  If it does not get done the only one you can blame is the person in your mirror.   Learning to understand "all the costs and all the details" are the secrets of success and being willing to put in the hours.  In my years in business I think my record was a 117 hour week.  My average week was 70 to 80 hours.  Was it worth it?  Well that depends on how long I live and how much the cost of living goes up.  Right now I think it was worth it, ask me again in 10 to 15 years and if I am here to answer it the answer will hopefully still be yes.  I retired at 57 and can now do what I want.  Part of what I want to do is share my experiences to help others accomplish their goals.  My life is comfortable, but certainly not fancy. Pursue your dreams, but don't forget to take enough time to enjoy life and family along the way.  Dreams without memories don't mean much.

No comments:

Post a Comment