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I'm considering going into business for myself.

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  • I'm considering going into business for myself.

    And thought that since I've gotten good info here before from the pros, many of whom are self-employed, I thought I'd throw the topic up for discussion and see what the pros here might have to offer in the way of advice.

    I'm a 45 year old guy, a bit pudgy from too much desk work and too many beers on the weekends and evenings, but I'm physically still quite capable. No nagging injuries or health issues aside from the weight. I'm considering leaving my employer and starting my own plumbing business. I envision being a one man show for as long as possible, but understand that some jobs will require a second set of hands, which means hiring a helper eventually. I don't plan to get into drain cleaning as there are no shortage of companies in the area dedicated to that work. I would target new construction, remodels and non-sewer related service work.

    In my current job my duties are such that it's almost as if I'm running my own company. I bid it, track change orders, order materials, pull permits where needed, do a fair amount of the installations and schedule all of the work. Basically I'm doing everything I'd be doing if I were self employed except footing the bill for materials. It's footing the bill and getting the company to be a monetary success that worry me.

    I have some money in a stagnant 401K that I'm considering using to get the ball rolling. Ordinarily I wouldn't dream of touching any money set aside for retirement, but it's a pretty small amount (about 30K) and really wouldn't amount to much of a retirement anyway. I haven't contributed to the account in a number of years because, 1-my employer quit contributing to it initially, then dropped the plan altogether. And 2-I've been at the same pay rate for about 5 years and there just isn't enough in the budget to put into the 401K. One of the goals of starting my own business would be to increase my income and build a retirement.

    That's it in a nutshell. Lots of details left unmentioned, but I think I hit the most important points. Oh, I understand that business owners usually work their tails off. I already work approximately 50 or so hours each week (I get paid for 45 hours under my salary), and realize that I'd likely be working even more.

    Is anyone willing to offer any constructive advice?

    Thanks in advance.

  • #2
    it's great you want to work for yourself. and i'm sure you're than qualified. but the issue is having work and contacts. the phone doesn't ring by itself and landing a new construction job or a remodel requires contacts. that's where service work comes in to put some money on the table and make the phone ring more often. build up your reputation with the neighborhood and have them recommend you to their friends. it doesn't happen overnight, but it does happen.

    out here, drain cleaning has been very very good for me for a long long time. but it takes a long time to get to the point of turning down work and being picky of where what and who i work for.

    good luck and don't quit a paying job until you're sure there is work to fall back on.

    phoebe it is


    • #3
      Thanks, Rick. You've touched on one of my 2 main concerns. That being generating a workload (with the other being cashflow).

      The path some guys in my shoes have taken is to build up a clientele and workload through side-work or moonlighting and moonlighting is really frowned upon by most sub contractors that I'm aware of. I'm tempted to go that route, but my conscience keeps jabbing at me to remind me to be honorable.

      Thanks again for the information and encouragement!


      • #4
        45 years old with a good job fifteen years from now you will be sixty you say you want to be a one man band well thats OK when your young but as you get older it becomes vary hard to do the larger jobs which pays the monies and it takes five to ten years to build up the cliental and in that time your earnings are little which without your business will die my advice after running a plumbing business for forty years is don`t not at your age stick to what you are good at and that is an employee let your boss have all the headaches and make yourself indispensable to the boss you have now

        Last edited by AFM; 06-19-2014, 08:01 AM.


        • #5
          AFM, what you say makes good sense and definitely is a concern, but it's not as simple as sticking with the same employer for another 15 years. He offers no 401K or any other retirement plan. Benefits have been getting cut, slowly but steadily over the last 10 years and my rate of pay hasn't changed since 2009.

          The owner is a good guy, but responds much better to butt-kissers than to practical people like myself. I don't respond well to that. Plus, as he steps away from his leadership role in the business to pursue his personal interests (he's in a pre-retirement mindset) his business manager, a woman with an inferiority complex and absolutely no trade knowledge is picking up the slack. I just can't see tolerating this for many more years.

          Ideally, I'd get the business off the ground with contacts I have now and continue building my business until I have 3-4 employees in the field, providing good service with professionalism and attention to detail.


          • #6
            I started my business when i was 30 and never looked back
            you just got to jump in and do it

            If i were you i would clean drains too , its good money and fills in the day
            you dont want to do half the job and some one else have to come and clean the kit drain out


            • #7
              By focusing on service and repairs you will expand your network of customers more extensively
              than construction and remodels since service work is usually more prevalent. Plus the profit
              margin is greater. I wouldn't rule out small drain cleaning jobs since they will overlap with repairs.
              It'a a good money maker. My K-60 rides shotgun...the best helper ever.
              Now...Business 101: You have 3 options.
              1. Lose money. 2. Break even. 3. Make profit.
              Since 1 & 2 are unacceptable, let's choose 3.
              It's a given that quality service is mandatory for any business and you got that covered.
              You have to know what your costs will be to provide that quality service to your customers.
              Only then can you set the price for that excellent service.
              Don't fall into the trap of being guided by what other service providers charge.
              Since you ain't no spring chicken you can't waste time trying to get it right, you got to just do it.
              This work don't get no easier. At 62, I'm more than ready to slow down.
              This is strictly personal, but if I had 30K the last thing I would do is start a plumbing business.


              • #8
                You're almost the exact example of how I started. I cashed out my $28K 401k, bought a new Sprinter, a new sectional drain machine, a few additional tools, insurance, business cards, and joined BNI. Business networking will get you the referrals. Because of that, and becoming the local Lowe's plumbing installer, I'm currently booking after-hours jobs because everything else is taken. Days average 8AM to 10PM. I've been in business for less than 2 years.

                Know what your competitors charge but dont mirror them. Know your overhead, try to keep prices low but dont be the lowest or the highest. Be honest, admit your mistakes and when you dont know something. Fix what you break. Give discounts where you think they are deserved. Expect to have a loss for a while, the first year should allow you to recoup many of the 401k taxes incurred during the cashout.. Get a good CPA. Forget having an awesome home office right away, or even a program to track your income and expenses.

                Consider bartering for goods or services. Bartering CANNOT be documented. The IRS frowns on bartering and taxes it heavily. Incorporate, it's worth the money.

                Advertising and coupons don't pay. I'm T&M but quote large jobs as flat rate.

                ... it was plumbed by Ray Charles and his helper Stevie Wonder


                • #9
                  Good stuff here, guys. I'm a bit pressed for time at the moment so I can't respond with much other than to say thank you to all for the input.


                  • #10
                    the most important thing is to get the phone ringing and the jobs starting to come in. 30k might not sound like a lot, but honestly you already have a collection of tools. speciality equipment can always be rented if needed. remember that the 30k also has to go towards your living expenses for the first 6 months until you get real busy. the good news is you'll have a lot of free time at first to canvas the neighborhood, set up your truck, and respond fast to emergency calls. the other good thing is you'll probably not show too much profit to worry too much about taxes. but you still have your self employment taxes x 2. company and employee. yes, you pay double as the employee and the employer.

                    if you can hang tight with the present job and work on getting your name out there, would be a wiser decision. at least you have a steady check. take on some small side work. and get them to refer you to friends, family and neighbors. keep track of your referrals, where they came from. i only work by referral, no complete strangers.

                    phoebe it is


                    • #11
                      Originally posted by PLUMBER RICK View Post

                      if you can hang tight with the present job and work on getting your name out there, would be a wiser decision. at least you have a steady check. take on some small side work. and get them to refer you to friends, family and neighbors. keep track of your referrals, where they came from. i only work by referral, no complete strangers.

                      I'm leaning heavily in this direction. The only problem is that the company I'm with frowns on this behavior and I completely understand why. It is the safer way to go and I've got an acquaintance who is an electrician who started this way. He had so much side work that he was basically forced to choose between his employer and going it on his own. He told me that he planned to work alone for the first six months or so, but ended up hiring a helper within the first few weeks and I just found out yesterday from a mutual acquaintance that he just put on another guy, this one with a few years experience. I'd say he's doing well for a company less than a year old.

                      All you guys who point out the importance of getting the name out there are spot on, I believe. Now I just need to figure out the best way to do that.


                      • #12
                        30K goes away real fast when not much is coming in to replace it.

                        Check List

                        Market analysis

                        Business plan

                        Venture capital procurement plan (30 K in savings ain't going to be enough)

                        Insurances both liability and personal injury

                        State and Federal taxes

                        the big one is how much business education do you have?


                        • #13
                          At 45 yrs old and no clientel is going to be rough.It takes 2 to 3 years to get established in this trade.And to leave something that's working now for u and to dive into something else is one hell of a risk.You don't want to be twisting wrench when you're 60? Self employment tax, health insurance, taxes and liability business insurance is crazy expensive. Forgive my ignorance for only being 30 yes old but here's my two cents.If you're starting out then youre going to need everything up front at once.So what are you going to do ?finance a truck? Equipment? Tools? Materials? Everything you're going to need to get the ball rolling.because 30 k won't cut it.and to have all that money going out and nothing coming in how are you going to do it? Take this with a grain of salt. I started my own business when I was 24 yrs old.It took a couple years of working 40+hours a week working for someone else and then another 40 for myself to get established. Long nights , holidays, weekends, my kids birthdays and family events a lot of sacrifice. Now u said you want to do new construction and not do service or drain cleaning? It should be the exact opposite. I would focus 100% on service repair and drain cleaning.In new construction you will go bankrupt especially just starting out.The return on investment just isn't there .To have all that overhead constantly going out and then waiting to get paid up to 90 days is nuts.If you're set on going on your own I would take that 30 k buy a used but reliable truck.definetly Get A couple drain cleaning machines , A CAMERA IS A MUST...BEST RETURN ON INVESTMENT. all your hand tools power tools and truck stock..This way you have what you need without any payments on anyrhing.then once the money is coming in then you can start with a new truck, equipment ect..I've owned and ran my own business for almost 6 yrs now.its been good for the most part but at times it was rough.Between taking care of my family and managing a business is hell..When you are paying for health insurance. ..taxes...materials...equiptment insurance ..gasoline. .upkeep you can forget about putting money to the's just not there.i run about 4 calls a day..5 to 6 days a week...emergencies in the middle of the's crazy..but I started young..I'm finally starting to get near to where I want it to be..but if I could go back and just work for someone else and leave all this stress and aggravation with the boss ...u bet your butt I'd do it ...trying something brand new in a giant pool that's already congested with people who have been established for years ? Think about clientel and how your going to get the phone to ring? Advertising? Go ahead but what's going to separate you from everyone else? I'm not saying don't do it but you know what I mean..Being licensed , bonded and insured, pulling permits , using quality materials and doing things the right way is far more expensive than the neighborhood cheap guy flyer by nighter holding on by the seem of his pants I said forgive my ignorance I'm only 30 yrs old and your wisdom far surpasses mine but I've been running my own business for 6 yrs and it's tough.i wish you the best of luck in whatever you choose sir..
                          Last edited by sewermonster85; 06-23-2014, 01:15 PM.


                          • GreatLakesPlumber
                            GreatLakesPlumber commented
                            Editing a comment
                            I appreciate your candor. What you say makes sense and is stuff that's already gone through my mind. I've got a lot of thinking to do....

                        • #14
                          I bought everything used...truck, rodders, cameras and locators, ect..then once it got good I bought all new and then extended the olive branch to another.dont get me wrong thus business is great.just don't take advantage of people but don't let people take advantage of you..there's a lot of tire kickers out there.know what you're worth and don't give your talent away.i don't mean to sound like a u know what and forgive me if I did that wasn not my intention but n h master made a great point....there's so much unseen in this business that people don't understand. Everyone sees the money coming in but not the money going out.
                          Last edited by sewermonster85; 06-23-2014, 01:24 PM.


                          • #15
                            I wish you nothing but the best sir in all you know what they say big risk=big reward..i took a gamble and it paid off..there's money out there and the work force is strong..