This business amazes me, It goes a little like this, employee makes the employer lots of $$, thinks its time he goes on his own, gets a pickup and a cell phone, starts husselling some clients, that originally wanted to pay him the hourly rate he was making as an employee, he thinks, well thats ok for now!
Has a spotty season at best, getting use to being an entreprenur, end of the year comes and the slow season, comes round, now its panic time, works for half of what he did when he was an employee,
Seasons start to change and wow its busy season again, now hes getting a little familiar, with the routine, Tax Man calls and is asking why he hasnt submitted his income taxes, he thinks, one more good paying job and he'll be able to pay off his taxes.
Reality is, the day you left your job as an employee, you hourly rate should have jumped by, 33% to match what, your past employer was paying for you, now you have year end surprises, income tax, hst to submit, accounting to pay for, maybe a lawyer if you had a rude awakening of a customer, tool expences, storage unit for extra building material, you've paid for and cant return.
SO the next time a job gets posted, and you reply, remember YOU can not work on cost plus $1k per week, you will have HUGE suprises, at the end of the year, and your riding right along the bankcruptcy line.
Wouldn't it be nice to have made enough money during hay season, to have some extra for the 14 weeks a year this country DOESNT allow us to work outside, to buy a little special gift for our love ones, and not look like a salami at Xmas time to our familys??
WAKE UP This business is potentially extremly lucartive,
The MEN that made this country are slowly retiring or dieing, the younger generation, relys on computers for all the answers, so Generate X is in a Super position, to change the income bracket of us hard working, skilled trades men, There should be a minimum of 20 to 35% on jobs less than $100k, slightly less than that for jobs over $100k
Theres is no reason why, as a indeptent contractor, with maybe 1 employee, you cant make $10 -15k per month, work 8 months and take the winters off, toasting you feet inside, its there, waiting you.
If you low ball a price, in the long run your only ##@$%% yourself,
I have to agree with Joe. I think a lot of people don't understand how to factor in all of their overhead when they put a price on their skills. Eventually it catches up to them and they may not be able to recover financially.
Looking forward to other opinions on this matter.
(typically) Working out of a white van, with no signs, no posted licenses, bad rust and blue smoke with tinted windows can generally mean:
a) no license
b) no insurance
c) no WSIB
d) no HST
e) no proper business place or office
f) no long term business plan
g) no warranty
h) no commitment to long term service
i) cash payments only, no receipt, no taxes claimed, no taxes paid, no invoice, no warranty...
Get it in writing and keep a copy! stop accepting cash payments.
If people are proud of their company name and what they stand for as a contractor, post it and brag about it!!!! unless you have something to hide....
Good points gentlemen. But the bottom line is always going to be saving money. A huge percentage of everyday working folks are struggling to to hold onto what they have, but houses will always need repair.
Often time things fall apart when we least expect it, so paying for renovations can become very worrisome to most when their hard earned dollars are already stretched beyond the limit, so these guys in the white vans become a blessing. To label them all as crooks is wrong- what if they are just starting out? Like we all did.
I was also the employee for years until I realized I could & would run my company much better than my past employers. My clients count on me to steer them in the right direction, and many have been with me for years.
As for overhead, keep it as low as you can- I see a lot of contracting companies with the fancy rigs & advertising- this just tells potential clients that it's going to be expensive. Less overhead means you can pass on savings to your clients- who in turn pass along your name to all that ask, eventually eliminating the need to advertise because you'll have built up a large clientele.
I never planned on becoming rich from renovations, but I get by & sleep at night knowing I gave my clients the best I have to offer at fair prices.
I agree and to start a business one has to be competitive, work on baby steps, build reputation, spread word of mouth, build clientale, and gradually one can increase pricing as you get busy and busy, but in initial stage every one has to survive and move on.
At the end customer has to be satisfied and your trades has to be in good books when you finish the job and they should be ready to work on other project for you.
Money is required but NOT every thing, once you are established and name is out customers will chase you, give a fair price, do your best and honesty is the best policy. There will be less work in recession but will not be out of work.
Just my 2 cents!
As a homeowner, user of services I can honestly say that with homeprices at what they are gen X and GenY including myself have no money therefore even a reasonable rate would be out of reach.
We are forced to hire what we can afford which is almost nothing or do it ourselves, which in our case have been fortunate enough to master basic skills. After puting life savings as downpayments and raising kids the emergency fund well is dry. So the super position I am not convinced about.
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