One Man Shop need advice

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I will be spending some time looking through the forums, but. . . . Do you have a successful one-man business? Would you please share how you achieved it, sustain it, manage it. I have a family member that is struggling to get some business on the schedule. He has standard manual smaw, tig and mig shop equipment, and nice Ram 3500 outfitted to do mobile work, torches, nice trailer. He has tested in most all positions, but is not certified in pipe welding, yet. Has done mostly structural type projects over the last four years. Very creative, and educated beyond welding. He says his next big leap is to get a good plasma cutter, then an automated cutting table. I do not know the business, only what I can read and pick up on, here and there. He has a great technical education but, did not get the business savvy. Thanks.
Reply:Originally Posted by g.t.taylor2 He has a great technical education but, did not get the business savvy.
Reply:do anything you can to keep the overhead down.    one man would be hard to justify a real shop.   unless your a recently released felon or a new import that getting some type of gov't grant to start a biz.    but if your a law abiding citizen born and raised here, well haw,  just figure 30% of your net for the gov, 8%+= for state, + all other dmv and misc. fees , gov't med ins. whcih isn't a write off, + licenses fees, ins. if needed/wanted, utility/elect. and standby fees, .    don't forget when your sick, winter time biz, being burglarized/sued/collecting from customers , and the great economic forecast ,   then subtract that from your cost to live.
Reply:I agree with DSW ... IMO you can be the best welder, fabricator out there but with no business sense you will struggle. Personally I think advertising, marketing, selling both you and your products or services is on the top of the list.Located In SE OklahomaLincoln Mig 135Hobart Ironman 230 Mig5x10 CNC Table with DTHC & FTHypertherm PM65 on the tableMiller Bobcatwww.caneyagequipment.com
Reply:One day we should really make this a sticky.  This type of question comes up SO MUCH!  And the answers are almost always THE SAME!  I'm a one-man business and have been since I started 10 years ago.  Agree that the actual work is the easy part.  Understanding finances has also been relatively easy for me.  I know the gov't is going to take a combined total of 46 percent of everything I make (federal, state, SS/Medicare), and insurances, licensing, etc bump it well over 50 percent.  So if you want to make a median income in my area (the same as the people who work 9-5 jobs without another thought for work until 8:45 the next morning), you had darn well better gross at $100k or better, NOT COUNTING MATERIALS COSTS.  That's a stiff number, especially for those of us who started our own businesses when we were making well under half that working for the man.  It feels like an unattainable amount when you start out.  But in my opinion it's just reality for this day and age.The other thing on finances - don't be stupid when December 31 rolls around.  If you've made money and are going to owe taxes beyond your estimated ones, it's tempting to get online and spend, spend, spend so your taxable income is lower.  Just remember that you if you spend $10,000 on a piece of equipment, you're not getting taxed $10,000 less, you're getting taxed $4,600 less.  So if you hadn't spent the money, and had instead paid the taxes on it, you'd have ended up with $5,400 more in the bank than you did by buying whatever it was.  This is basic tax 101 and a lot of smaller guys don't understand it.  Sure, if you know you're going to *need* something next year, go ahead and spend the money a little early and essentially get it for half price.  But don't go hog wild blowing thousands on things you *might* use someday.  The thing I've always had the most trouble with is selling myself to potential customers.  Luckily, there are certain 'focal points,' if you will, of information in any business community.  If people need to know where to get a welder, they ask one of these people or businesses.  Usually long-established with a good track record.  These are the places you want to develop a relationship with.  Facebook, etc may be great, but most business deals in my area are still based somewhere in the good ole boys' club.  You can hate it, cry about it, etc....but you had also better find a way to join it.Insurance is a big one.  Customers who will be paying the big bucks want to see proof of General Liability and they will often want their names added to the list of insureds.  Shop around for your insurance -- major differences in cost out there.Hope your family member understands that a businessperson is never 'free' from the business.  If you've ever read Thoreau's Walden, he had it right.  The business rules with an iron fist....and if it doesn't, you probably aren't going to make it.  I physically cannot enjoy days off or vacations because they feel like being lazy.  I have a certain "gross income not including materials costs" amount that I strive for every week, and to meet that means I have to drive myself forward, forward, always forward.  There is no neutral, always forward or reverse.Alright, that's all I have time for now.  Celebrated Memorial Day for about 2 hours and now I have to go to work.  Hope you all enjoy your holiday, and eat a hot dog for me.
Reply:Good afternoon, Taylor2,Your post caused me considerable thought. I really wonder how best to help you with your difficulty. I perceive there to be quite a possibility that even having armed yourself with all the "nuts and bolts" of HOW to run a successful one-man welding business that it may not really change matters with the family member. The reason I say this is because it is "you" who is asking for the help, and not "him".  That being said, I would be glad to talk to you over the phone, if you would like, as I will quite likely be able to answer any question you may have, including some you may not be aware that you have Private message me if you would like my telephone number. I certainly wish you well, no matter what course you decide to take.
Reply:Originally Posted by tbone550One day we should really make this a sticky.  This type of question comes up SO MUCH!  And the answers are almost always THE SAME!  I'm a one-man business and have been since I started 10 years ago.  Agree that the actual work is the easy part.  Understanding finances has also been relatively easy for me.  I know the gov't is going to take a combined total of 46 percent of everything I make (federal, state, SS/Medicare), and insurances, licensing, etc bump it well over 50 percent.  So if you want to make a median income in my area (the same as the people who work 9-5 jobs without another thought for work until 8:45 the next morning), you had darn well better gross at $100k or better, NOT COUNTING MATERIALS COSTS.  That's a stiff number, especially for those of us who started our own businesses when we were making well under half that working for the man.  It feels like an unattainable amount when you start out.  But in my opinion it's just reality for this day and age.The other thing on finances - don't be stupid when December 31 rolls around.  If you've made money and are going to owe taxes beyond your estimated ones, it's tempting to get online and spend, spend, spend so your taxable income is lower.  Just remember that you if you spend $10,000 on a piece of equipment, you're not getting taxed $10,000 less, you're getting taxed $4,600 less.  So if you hadn't spent the money, and had instead paid the taxes on it, you'd have ended up with $5,400 more in the bank than you did by buying whatever it was.  This is basic tax 101 and a lot of smaller guys don't understand it.  Sure, if you know you're going to *need* something next year, go ahead and spend the money a little early and essentially get it for half price.  But don't go hog wild blowing thousands on things you *might* use someday.  The thing I've always had the most trouble with is selling myself to potential customers.  Luckily, there are certain 'focal points,' if you will, of information in any business community.  If people need to know where to get a welder, they ask one of these people or businesses.  Usually long-established with a good track record.  These are the places you want to develop a relationship with.  Facebook, etc may be great, but most business deals in my area are still based somewhere in the good ole boys' club.  You can hate it, cry about it, etc....but you had also better find a way to join it.Insurance is a big one.  Customers who will be paying the big bucks want to see proof of General Liability and they will often want their names added to the list of insureds.  Shop around for your insurance -- major differences in cost out there.Hope your family member understands that a businessperson is never 'free' from the business.  If you've ever read Thoreau's Walden, he had it right.  The business rules with an iron fist....and if it doesn't, you probably aren't going to make it.  I physically cannot enjoy days off or vacations because they feel like being lazy.  I have a certain "gross income not including materials costs" amount that I strive for every week, and to meet that means I have to drive myself forward, forward, always forward.  There is no neutral, always forward or reverse.Alright, that's all I have time for now.  Celebrated Memorial Day for about 2 hours and now I have to go to work.  Hope you all enjoy your holiday, and eat a hot dog for me.
Reply:Honestly, the advice so far rings true with my experience in another field and what I felt in my gut. Thanks so much for taking the time out to write.
Reply:I've had more than a few businesses. Never sold one for a loss but just like owning a boat or an airplane the happiest days are the day you get it and the day you get rid of it. What I've found is that when you own it, you really own it. No body is going to do you any favors and if they do you need to be very wary. Unless you can be the only guy who does what you do then someone else will undercut you. If you ARE the only one you won't be for long. Someone else will figure it out and undercut you. Just because you are the greatest at what you do does not mean you're the greatest at running a business and that most of the time is what kills whatever chance you might have had. I discovered that if you find the people who know how to do what you don't and let them do what needs to happen, even when you're sure they are wrong you have a reasonable chance. It was more the teams that I sold than the hard assets although the people are assets. I also found that after you take care of everyone else nobody is standing there taking care of you most of the time. I would say that if your family member can market himself to someone who can appreciate his skills and commitment that might be the way to go. I did very well contracting others with their own setups so long as no one gets greedy it can be very profitable for everyone. I had the office staff, and a real place of business. Having to have all the trappings that go with having a business can be daunting but if you can get in with someone who already has all that and is looking for reliable, competent help it might just be the ticket. I think the best advise I ever got was from a guy who told me that when you work for someone as an employee all the money you get paid is yours, taxes and insurance are already deducted so the number on the check is 100% profit.Trailblazer 302G12VS Extreme Miller SD180Coolmate 4Miller 251Miller 175Victor OAHypertherm 380Milling MachineLatheBandsaw
Reply:Originally Posted by big wormYou weren't alone brother my day started at 6:00 this morning and only ended because dinner was at my house. I know I'm going off course but I really enjoy your contribution to this site and you are one of my heroes haha! I like the always forward man keep it up.
Reply:I remember an advertising man stopped by the shop and talked to me. He said at the size of my business that I should be spending around $4500 a year on advertising. I thought about it and told him that I would just do that much worth of free work because as every one knows, word of mouth is the best advertising. Not long after I bid a job for a hippo therapy place that was a non profit. I got the job because I told them I would do it for half price on the labor. That was 25 years ago and I still get work because of it. Just some thing to think about.
Reply:As stressed out as my employer is, I'm scared to death to start my own thing up. I'll be in a better position but I fear I won't have the tools to be as versatile and that will hurt me. We'll see what happens when I sell my house and move. Maybe welding needs to be a hobby.....
Reply:My advice to anyone starting a business is to first....Take a good business related course at your local community college. Learn about accounting and pricing your work and the actual costs per hour of running your business. Learn about the cost per employee hour.   I was clueless when I had my shop. That was my biggest mistake...I knew the work end of the business...But nothing about the accounting and front office.
Reply:When the economy wasn't completely FUBAR I had people bugging me to do work all the time. I did quality work for a fair price, plus I didn't squander money trying to buy new cars, bigger house, implants for the trophy wife, etc. I have worked for a company where the owner would practically start sweating and break down in tears if a request for a $50 tool, but had at least 9 personal vehicles, a wife who never had a public job, a motor home, a mansion and other displays of opulence, and now wonders why he can't retire. Robbing Peter to pay Paul is not conducive to successful business.It's hard to weld when you can't see.
Reply:The 4 P's of marketing - Product, Price, Place, Promotion - google it.  Everyone that is self employed should know this.  Tim9 is right on, the family member should take a course on line or business workshop at a tech college.  Painful I know, but ?  Depends on how successful they want to be in the end.Product:  Welding and metal fab.  This is your product (service) - equipment - what do you offer that the competition doesn't and so forth.Price:  Hourly rate in your area - do you know?  Bid jobs?  Place:  Mobil rig, shopPromotion:  This is where most start up business fail, or at least have trouble.  It is common knowledge that a business should spend some percentage of the gross income (10 - 30%) on advertising/ promotion.  Web site, (expected these days) Linkedin, local paper, networking, nice business card, email brochure - on and on.  Gotta spend some of your time and $ on this or you will fail.  If people don't know you exist or know your capabilities, they won't call you.  Hire professionals to help you.  Good luck - its a dog eat dog world out there!
Reply:I've been self-empoloyeed now for 20 years, and the sole bread winner for the last 15 years. I just want to add some caution about business education and advertising. Just because it is taught doesn't mean it is worth learning. I have yet to meet any college professor teaching business who is also in business. If you don't understand what I just said, you shouldn't be in business.Second, be very careful on what advertising you do, and make sure you track that it is bringing in paying business. You can have the phone ring off the hook, but no money coming in. Beware of the Walmart shopper. You need to find buyers, not shoppers.Business is very basic and simple. It's just simple math, and bookkeeping. The thing I find the most is people get lazy in doing the work of running a business.Unfortunately, all of this I have had to learn the hard way, and paid a lot of stupid tax. I believe in sharing though, so if anyone wants specifics, just ask. Learn from my mistakes.
Reply:been running mine for 8 months now. Going well, its a struggle with start up cost but hanging in there. I am very good with numbers but still have a good cpa and bussiness planer. I suggest you do the same.
Reply:Originally Posted by Baloo2327Second, be very careful on what advertising you do, and make sure you track that it is bringing in paying business. You can have the phone ring off the hook, but no money coming in. Beware of the Walmart shopper. You need to find buyers, not shoppers.
Reply:Originally Posted by Baloo2327I have yet to meet any college professor teaching business who is also in business. If you don't understand what I just said, you shouldn't be in business.
Reply:Your location is most important.I could have done  in an area with more population.Im 78 now so it dosent matter now.