going self employed should i......

[Lons]

All those years went into learning your stuff and building up a good reputation Bob. Now it's paying off.
Deservedly so. :wink:

John (hammer)

Hi John

I didn't want to come across as "blase" because you're right, it was bloody hard work and we didn't have a holiday or even a weekend away for the first 9 years.
Not that we couldn't afford to do so but because my state of mind was that I wanted to maximise every oportunity and had got into the habit of working a 60 - 70 hour week.
It was my son and daughter who said that my wife deserved some respite, and I'll always be grateful to them for saying so.

Since then we take several holidays a year and I've eased back considerably otherwise I may have damaged our relationship.

I had managed 3 different companies prior to going on my own and it was bloody hard to give up the company BMW, expense allowance, pension and a good salary to venture into the unknown. (The company went bust which forced my decision but I'd had offers from the competition).
I wouldn't go back at any price to the situation where however high you are in a company, you're disposable and only as good as yesterdays results!

The guys who said loneliness is a shock are spot on. I had 23 staff and found it difficult at first but I'm now at the stage where I refuse to accept work from anyone I don't like or who hasn't been recommended and most of my customers have become friends. Oh - and I won't travel more than 20 miles to a job either - had enough of 30,000 miles a year as a manager.

The point I was trying to make was that I firmly believe that work is still out there and you can get a premium for it if you have established a decent reputation and are honest. If I don't want a job, I say so and don't just overprice or ignore it. People respect that and word gets around. I refused a large extension last year but picked up 2 jobs from one of his mates because I'd been upfront though I wasn't told until later. They were farmers and a close comunity - you just never know.

I also occasionally do small "favours" for regulars and that means I almost always get the paying jobs from them, often without quoting prices.
It's amazing how much customers value being able to leave keys to their home safe in the knowledge that all will be well when they return. I could go on and on (already have I think).

cheers

Bob

 

[Benchwayze]

Hi Bob,

I wouldn't say you seem blasé. You seem to be a hard-working man. Giving up the day job is something I sometimes wish I'd had the guts to do. In the end, it turned out okay for me, even though my company car was just a reject from BMC and had a blue-light on it! So, I don't grumble.

Anyhow I can work in my shop at my pace, and with no pressure other than the occasional enquiry as to estimated time of completion from SWIMBO!
That's not to say I didn't break the rules occasionally and do fitted wardrobes and porches for the top-brass.

All the best.

John

 

[Steve Blackdog]

I have been self employed for some years - not in woodwork (which is a hobby).

My key comments:-

Cash is king. There will be months when all your bills come at once and you have not been paid.

Our vat is due tomorrow. In a good month it would be fine, this month it is making the pips squeak.

So make sure you have regular 'contribution to overhead' work as well as occasional 'super profit' work.

My accountant gave some good advice: you're better working for an hour at £5 an hour than sitting with nothing to do at £500 per hour.

When it goes well you will feel fantastic, so re-read the post about dipping your toe in the water before diving into unknown waters.

Finally, if you give it a go and it doesn't work, you can always go back into the job market. If you never try, you may forever be asking 'what if?'

Good luck friend.

Steve

 

[Lons]

I have been self employed for some years - not in woodwork (which is a hobby).

My key comments:-

Cash is king. There will be months when all your bills come at once and you have not been paid.

Our vat is due tomorrow. In a good month it would be fine, this month it is making the pips squeak.

So make sure you have regular 'contribution to overhead' work as well as occasional 'super profit' work.

My accountant gave some good advice: you're better working for an hour at £5 an hour than sitting with nothing to do at £500 per hour.

When it goes well you will feel fantastic, so re-read the post about dipping your toe in the water before diving into unknown waters.

Finally, if you give it a go and it doesn't work, you can always go back into the job market. If you never try, you may forever be asking 'what if?'

Good luck friend.

Steve

Hi Steve

Great advice but I'd take issue with your accountant as I think it's a case of "do as I say - not as I do." Never known an accountant work for next to nowt :lol: :lol: :lol:

That said, he's right in a way but as others have said, it can be counter productive to sell yourself too cheaply. It's very easy to adjust your prices downwards to be competitive but bloody difficult to increase them and can soon get a reputation for being cheap. Personally, I'd rather spend the time actively searching for profitable work than give it away in cheap labour. I actually from the beginning decided that very small "favour" jobs I would do free of charge as I believe that what goes around - comes around. Apart from out of pocket expense for materials I just said ring me next time you need proper work - it's paid off big time and I get loads of repeat work at decent rates.

If a genuine punter gets 3 prices, he'll rarely go for the lowest as there are likely to be corners cut and the customers know it. So middle to premium price is the way to go IMO.

I'm also a hobbyist woodworker. My business is building but I don't accept large jobs now and concentrate mainly on small extensions, conservatories, kitchens and bathrooms though I will look at anything if I think it will be interesting enough.
I rarely lose work on price alone, am always busy and my customers are prepared to wait. I'm not unique or lucky - it's the product of years of careful relationship building and meticulous standards. Once you've done the hard work, the results follow.

VAT - the bain of all small businesses :evil: :evil: :evil: modern Hitlers!

cheers

Bob

 

[tomatwark]

Hi Steve

I agree with Bob about selling yourself to cheaply, it is certainly worth spending the slow time looking for better paying work especially if you have a workshop to pay for, there is a good chance that you will find better paying work faster than doing a budget job and waiting for work to land in your lap.

As others have said it is often being in the right place at the right time, but it is also a case of not being afraid to put your self forward and ask around to see if there is work out there.

After being in business up here for five years now I am now finally in the situation that the work is coming in without a lot of marketing but it does not stop me asking if I think there if I see a chance of a decent job.

Bob

Don't mention VAT, this is a term the moderators should automatically replace with pineapple.

Cheers

Tom

 

[Scouse]

VAT - the bain of all small businesses :evil: :evil: :evil: modern Hitlers!

For a small business is there an advantage to being VAT registered? I'm self employed, but don't get anywhere near the VAT threshold. I know I could register voluntarily and claim back VAT on tools etc, but would it just be a hassle and another accounting expense?

 

[tomatwark]

Scouse

This is the hundred million dollar question.

I registered before I was anywhere near the threashold, I did it mainly because I make a fair bit of furniture for the trade and was losing out on bigger jobs because my trade customers could not claim the VAT back on the material costs.

The down side is my non trade customers now have to pay VAT on my labour.

I can now however claim the VAT back on tools, machinery, rent, heat and light and also motoring expensives etc.

What it really comes down too, is whether most of your work is for joe public or if you are doing alot of stuff for other businesses, if it is the former it is probably not worth your while.

There is also the point that in some peoples eyes a business who is registered is more credible, which is of course is not really true.

Being registered in my case has not really made any difference and has certainly helped me gain more trade work.

The jobs I have lost from Joe public are generally from customers who wanted something for nothing anyway.

Tom

 

[spannermonkey]

My problem has a hobby wood worker who makes things for a few extra quid is knowing what to charge, I have tried selling items but the folk here in North Suffolk don't seem to want to buy anything. I work two days a week at home for making items to sell but they just dont!
sell.

 

[Scouse]

Thanks for that Tom, I had more or less come to the conclusion that it was not worth my while, but it is always handy to hear the experiences of someone else.

 

[petermillard]

What it really comes down too, is whether most of your work is for joe public or if you are doing alot of stuff for other businesses, if it is the former it is probably not worth your while.

This. Also for a self-employed sole-trader/one-man band the current £73K threshold isn't bad; for a couple of guys sharing a workshop doing custom cabinets, furniture, kitchens etc... it isn't much at all, so your hand may well be forced even if most of your customers are private individuals...

Personally, having been self-employed all my working life and VAT registered for 20-odd years, I de-registered as soon as I started cutting up bits of wood for a living 10 or so years ago. As a side note, it's also worth bearing in mind that whilst you can claim back the VAT on equipment purchases while you're registered, when you de-register you have to send the VAT back to HMC&E on all equipment you still own…

Cheers, Pete

 

[Steve Blackdog]

Being vat registered makes you an unpaid tax collector for the government :-<

 

[Benchwayze]

Being vat registered makes you an unpaid tax collector for the government :-<

Yebbut thoughbut...

Quite agree, however;

I was an unpaid decision maker for the Government on Thursday! (Though I'm not supposed to tell anyone what decision I made. In true Westminster fashion!)

John :wink:

 

[Benchwayze]

My problem has a hobby wood worker who makes things for a few extra quid is knowing what to charge, I have tried selling items but the folk here in North Suffolk don't seem to want to buy anything. I work two days a week at home for making items to sell but they just dont!
sell.

Hi SpannerMonkey

I empathise, but you don't say what you make for selling.

When I tried to sell my paintings, years ago, I found the main reasons for no sales were;

Too expensive. (Or seen as such.)
Not fashionable.
or there's no market for them where you are trying to sell. (This was the most telling point for me.)

Experienced marketeers might give you reasons I missed, and it all sounds glib. But it's true. It's also difficult to find the balance. Unfortunately, what we as woodworkers like to make, isn't always what people want or need. The usual reason for no sale at craft fairs though, is that ignorant (or shrewd? ) customers just don't appreciate what work has gone into your goods. So even if they like your work, and wouldn't mind buying, they expect you to almost give it away.

Have I ever bought any crafted items at a fair? Yes. I once bought three light-switch pulls, because I couldn't have turned them myself. Also the exotics they were made from looked much better than the plastic ones I got from Woollies! But I didn't pay the earth for them. And I still have them. :wink:

Hope your luck changes soon.

John

 

[Scouse]

when you de-register you have to send the VAT back to HMC&E on all equipment you still own…

That bit I DIDN'T know! :shock:

 

[doorframe]

Finally, if you give it a go and it doesn't work, you can always go back into the job market. If you never try, you may forever be asking 'what if?'

Steve

This is true, but jobs are scarce. I'm lucky enough to be in one but I hate it. I've been applying for jobs for nearly a year now and the money on offer (if I get far enough to discuss money) has been falling continually. The jobs I've been offerred equate to a massive pay cut up to 25 - 30%. (I'm very qualified in my field)

If a guy on 30k and 25 days holiday leaves his job, the company will advertise for his replacement. But they'll offer 22k and 20 days. That's if they replace him at all!

This is happening where I work. AND the new guys are only on 3 month contracts!

Think LONG and HARD before giving up a job in the present climate.... even a lousy one!

Roy.