I was just wondering about loans in particular. Mainly, I want to know if there are loans available to just the normal person. Like, if you are going out on your own, with little or no money, how are you supposed to "get started" and pay for utilities, rent, etc.?? I was thinking of opening a carpentery business with a friend, and I will need around oh.....well whatever I can get. I was thinking in the area of 3-5-7k.......that would get me the rest of the tools I need......and possibly a small trailer.....and have a bit more cash for living expenses. I've got credit I know.....not sure how much.....but every month, I've been paying off about $150-200 on a credit card for gas.......and I pay it on time, every time......for the last 2yrs....so that should give credit right? I dunno.......I'm just kinda wondering how all this stuff works......any help/suggestions/advice????


Thanks,
Brad

 

Student loans are a great way to start a credit score. If you are starting a business, they are A TON of grants out there if you can write (they are EASY). Major thing is it can't be in your home, but if you have a shed that could be the business location with no problem. Oh, and if you are married have your wife be 51% owner for even more free money. My wife and I are starting up her business now, a dietitian and fitness consultant. [img]i/expressions/face-icon-small-happy.gif[/img] Going after $200,000. 5-7 is nothing, ask for more!!!

 

ok.......I see what you've said.......now......mind being more specific. Like where are these loans? How do you apply for them, and are they just available for certain people? Or...is there a website I could look at? Thanks.

 

Go to your local bank and apply for a business loan.

 

Bradracer18 a friend of mine just went out on his own a couple of yrs ago.
Before he did he talked to many people.The best advise he said he got was
go to the library and research small business.

Are you going to try during the winter or are you waiting till spring.Around here
business gets real slow about mid feb then picks up mid march.Id hate to see you start
your business and then run out of work.

 

Well I feel I'm fairly informed on business, I've been around it for a while. But I will try to learn more at the library. Anything can help. I probably won't be actually getting started until mid april......if at all. This is kinda a plan in the making. One guy around here does all the new construction, and I'd like to do some of it.....at a cheaper rate, for the people in the town. I think a lot of people would want newer houses if they knew someone else would build them. I don't mind remodels or odds&ends either......so that will give me some more business, cuz he doesn't do anything but build new stuff. I'd just like to get people going on their projects, by showing them that there is more than one guy that knows how to do it......and may do it cheaper.

 

I've been a general contractor since the late 80's. I started my business with the $360 my former company paid me for stored up vacation days that I got when I left. Some basic advice:

1. Start small and work your way up. If you already have a credit card, you can use it for your material purchases for a project. The key is to make sure that the money that you take in from that project is used to pay off the credit card debt from that project. Take projects that you can do with most of your current tools. Take projects that can be completed quickly or ones that you negotiate interm payments so that you have money coming in. Cash flow makes or breaks a business.
2. Most suppliers will extend you some credit, even with little credit history. Here too, make sure that you pay things off in full every month. Time out the scheduling of your projects to coincide with your suppliers billing cut-off dates. Order your materials after the cut-off (usually around the 25th of each month and you'll have a full 30 days interest free to earn the money to pay the bill.
3. Go to www.omeda.com/rm and get a free subscription to Remodeling magazine. They have many articles on how to set up and run your business.
4. It's fine to think that you can undercut the competition and in some ways you will be able to do it - for a while. Cutting your price back is an OK stragity to use to get your business started but it will come back and bite you eventually.
5. Make sure that you check out the licensing and insurance regulations in your area. Some parts of the country are highly regulated, while some have little or no codes at all. If necessary, start small. GC licenses require you to have liquid assets of 1/10th your building limit. If you expect to build $300,000 homes you'll need to have 30 grand on hand at all times. There are lower level licensing types available that do not require as much or any cash assets. Check local community colleges - many around here teach a contracting licensing course.
6. Except for cutting your rates to get started, you do not want to just work for wages. What that means is that if you are making $15 an hour working as a carpenter for a contractor, then you do not want to charge just $15 an hour for your labors. You are taking all the risk, if you are making the same money you might as well play it safe and work for someone else.
7. Don't ignore all the hidden costs of being in business - overhead is a killer. (Right about now you are probably thinking, "I'm going to run this so that I have hardly any overhead") - wrong, wrong, wrong! If you don't figure the cost of your cell phone bill, your gas, your broken tools, your licensing, your insurance and all the misc. things that it takes to run a business and roll that money into your billing structure, your business will die an ugly death.
8. Insurance, particularily workmans comp. insurance - sucks. I could say pages more but have no doubt that our moderators would ban me from the forums forever if I did.
9. Fun Fact: 96% of ALL construction business fail within two years. Most because they do not follow much of the advice above.

Good luck, If you do it right you can have a decent living.

Jaybee

 

Thanks for the great advice. I understand many of the points, and have thought out most of them already. I come from a farm, so I understand that stuff breaks usually when you need it most....and that things happen against you that hurt you when you are most vulnerable.


Question on #4......how will it come back and bite me?? Thing is, that I figure anyway....is that around my parts there are no younger(under 35-40) carpenters. The older, more experienced guy like to charge more on jobs that aren't the most fun to do......so they don't have to do it...or make a killing if they do. These guys also are basically a shoe in on the new construction jobs.....which I'd like to get the town away from. There are only 2 major carpenters around here......but both know a considerable amount.


I also understand what you are talking about when you say not to be paid the same as your labor.....or that of what you could be paid working for someone else. I personally, have framed for about a year now.....very hard. I was paid $9/hr the whole time.......no matter cold or hot. I worked my butt of for them, as hard if not harder than the rest of the guys.....and I was never complimented nor offered a raise. I felt $9/hr was ok to start, because I didn't know much.......but I figured if I learned quick(which I do.....I'm very fast at learning stuff, and picking up on how to do it quickly and efficently)......that I'd get a larger pay check eventually. It wasn't until my last month of working that this company decided to offer us OT because they had a lot of project deadlines comming up. I think I'd just rather be on my own that put up with that crap. These guys were horrible to work with too.......and I just kept my mouth shut and kept on working, hoping for a raise. We were framers.....and we practically had to beg them for 2x4's and nails!!!! I'd shoot 1.5-2 boxes on a good, long day......

 

All great advice.A friend of mine didnt take into account all the overhead and lowballed some
prices.Hes still digging out of that hole.

(Shoot 1.5-2 boxes on a long day)
We hand drive that.My boss still doesnt believe in useing framers for walls.[img]i/expressions/face-icon-small-shocked.gif[/img]

 

Expanding on comment #4

Unless all the competition in your area is gouging everyone, if you cut your prices the only way you can do this is to cut your profit. If you cut your price below a competition that is charging a fair price, then you will not make enough profit to survive. In this business, there are jobs that go well and jobs that don't. Even if you charge on a cost plus basis (like I do) there still can be unbillable mistakes or inefficiencies that cannot be billed out and become costs to you. Basically, the profit in carpentry is not all that high to begin with, if you cut your rates you will eventually get caught by one of those projects that could burn you even if you were charging full rates - if you had cut your rate to begin with you could be really hurting. Trust me, there are few things that tear your guts out like working as hard as you can, as well as you can and then figuring out that you would have been more ahead financially if you had just ridden your ATV for the past three months rather than build that project that went so bad.

It sounds like you have the right attitude to be self employeed. I quit my last job and started my own company for many of the reasons that you just mentioned. While being self-employeed certainly has it's share of major headaches, I wouldn't, couldn't go back to working for someone else.

Just be smart about what you do and try to learn from others rather than reinvent the wheel. Concentrate on the areas that you are skilled in first, and learn and expand as you go.

Jaybee