going on your own? or starting your own shop.

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My son is a professional welder and has worked in a number of shops over the years, currently he is the sub shop Forman in his shop, they are building tanks for the oil fields, but he has worked in smaller jobber shops, on millrite work,  and in some Rail car repair,  he has a good back ground and is very talented, can build or fix or fabricate nearly any thing he sets his mind to,   we live in farm country, the simple is he wants to start his own shop or at least be his own boss, Currently tool wise he is limited, basic tools, used 250 amp wire feed welder, cutting torch, chop saw, a home made pattern table,  and basic hand tools.He started to put up a small building 20X40X14  that can be expanded when money is more plenty full, even if in time I would give him my shop tools, (mostly farm shop things, but I am more established),  small press a few  old metal lathes, old Bridgeport,  and a metal band saw, 4 x5 capacity,  ( I do have a old welding truck and portable welder  and it is set up to work)any way yes I have built many a thing my self, I guess my question is  would he be better off buying out some one wanting to retire, that has a full client base,    or starting from scratch, I think he would have to learn "business"  not that he is not careful with his money, but I know there is a lot more to running a business than putting your shingle out, what advice would you give a young man, with about 15 years of experience under his belt?  I think he would not mind repairing things,  small fabrications, some small manufacturing of some items,  he has even talked about what it would take to build the oil tanks the current shop is building,  but I would think that starting from scratch would be expensive and risky, (oil field is either 100% on or dead)
Reply:I think if he buys someone else out he may not get there full client base,because a lot of people only shop at one place based on the fact thier friends with the owner or something like that.Lincoln pro core 125 14''chop saw7 inch grinder,2-4.5 inch grinders,electric die grinder.Half inch drillAnd alot of hand tools
Reply:Farm country is always a problem in terms of getting paid and the seasonal business is not regular.  If he works in a tank shop then he will understand about certifications.  Even a guy with a portable will be more successful if he has some sort of company certification.  This opens doors to jobs involving pressure vessels or building structures that he can bid on.   If the type of work is farm implements and rolling stock repairs then dealing with people and getting your money can be a problem.  In my career I worked for a couple of small shops serving farmers and truckers.  I never even entertained going into that kind of business after seeing all the trials my employers went through.   I don't see any great advantage buying out another small welding outfit other than for the price of the equipment.
Reply:Doesn't say what state you are in? Local economy is important to help base assumptions on?Buying out a soon retiree would help on the business location visibility plus some clients.Work with the guy have him help to establish you as his replacement.15 years under his belt should have helped with the maturity level.He should be Stick besides Mig capable as "Mobile" repairs are not always in windless conditions.Shop work only?I would definitely be looking for established client base.
Reply:I'd recommend he sign up for and take some small business classes at a local community college if there's one nearby.  I forget the exact numbers now, but something like 7 out of 10 small business startups don't survive the first 1-3 years.  I'd expect this is less due to the owner's inability to do the work, than due to the owner's inexperience with everything else that goes along with running a business.I would generally recommend against trying to start out as a manufacturing business, such as the oil tanks you're talking about.  Tremendously capital intensive, often globally competitive markets, semi-homogenous products, and all of that means generally lower profit potential and increased risk.  Very similar to farming, actually.  Another thought:  Customers are number one, full stop.  It's taken me years to develop the customer base I currently have, and they've all come through word-of-mouth.  Not that I didn't try media advertising, but in my area it just doesn't reach or affect the real buyers of my services.  Different customers are impressed by different things.  Some are looking for the lowest price, which I can sometimes offer if they're willing for their equipment to be down for an extended period until I reach a slow time.  Some are looking for fastest service, which I can often offer if they're willing to pay the price it takes for me to burn the midnight oil after my normally-scheduled work for the day is done.  Some are detail-oriented and want to analyze every part of a particular process I need to perform for them, and since I'm a detail-oriented fellow, I'm fine with that.  Others call up, tell me the problem, and just want it fixed in whatever way I feel is best.  These are generally long-time customers and I already know their expected price points and preferences.  I grew up on a farm, too, and didn't have much in the way of social skills when I first went into business.  But I've found that a person's social skills can make or break them as a business owner.  There are certain suppliers in my area I won't do business with, just because of their attitude.  I don't owe them anything, and I'd rather spend another percent or two with the likable guy down the road.  Customers are the same way.  So even if your son does buy out a retiring welder and end up with some references, he'll still need to stand on his own two feet in order to keep them.  Quality and promptness of work, attitude, and professionalism are necessary to keep customers.  There'll never be an end to the line of guys who just came up with the bright idea that they want to be a self-employed welder.  They'll go and spent a few thousand on a machine and some tools, charge their services out at $20/hr less than what I can afford to, and go into business.  Heck, I expect most of us, including me, in the business probably started that way.  Along the way they learn that there are a lot more expenses than they expected, more rules and licensing than they expected, and that customers are harder to get and keep than they expected.  The lean years were just that for me, YEARS.  A lot of humble pie was eaten, and most likely there's a lot more to come.  I have found that the keys to my particular success were in my faith (yes, I'm a Christian), in not giving up, in picking and doing my best to achieve numbers- and time-based goals, and in valuing my customers as much more than just a source of income.
Reply:Just because he can do the work doesn't mean his business will be successful. I've seen a lot of guys who can do great work, whose business fails simply because they can't handle the business end of things.As far as buying someone out, if he can work a deal where he works with the current owner for a while and learns the ropes and gets himself established, he'll have a better chance than if he just buys the place and goes on his own. By working with the current owner, he'll get a chance to learn the business end of things as well as become familiar with the client base.Right now in this economy I wouldn't give up a steady job to go out on your own. Don't expect to start off making money. Expect to spend quite a bit of time doing 12 to 14 hr days 7 days a week for little to no pay for quite a long time. Even if you do start out with steady work, I'd be putting away every penny I could to help cover the slow times. You just never know when they are going to hit the way things are right now..No government ever voluntarily reduces itself in size. Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we'll ever see on this earth! Ronald Reagan
Reply:I started my own business 3 years ago. There are pros and cons of going either way.Before he buys another company out, make sure he talks to some of the "better" clients to see if a new owner would be a concern to them.In my opinion, being your own boss is great most of the time, but there are sure some lean times. Plan for them.And the farmers around here pay their bills on time..........they like to count on you to come back when neededMiller 252Miller Bobcat 225Lincoln MigPak 1801959 Hyster forkliftHarris OA torch
Reply:going into business is a commitment on the same level as matrimony with the same chances of long term success. i hate to be a wet blanket but in these troubled financial times i would advise you/him to think twice. having great metal skills does not automatically translate into good business acumen.i.u.o.e. # 15queens, ny and sunny fla
Reply:I thank you all for your comments, I know he would succeed in the work part, but my concern is the business end as well,  much of the things you have said is what I have suggested as well, and to try to start out big, I think is nearly a disaster in the making,  and trying to encourage him to take a few smaller bites and learn as he goes to where a simple mistake will not sink him, (business wise).thank you,
Reply:On a side note,Alot of people have told me I have great people skills and am an awesome fabricator and welder.They have suggested I do it full time. I know I have mediocre business sense so am smart enough to not go on my own.Would it make for easier hours? Maybe?I have a full time job with insurance and right now a new floor pan in a drag car welding project and a guy wants me to re-skin the floor of a dump truck. Both these guys insisting on buying the steel, they always have been that way.I am waiting which would be bad business but if I was to invest in the materials, then maybe they couldn't afford the fab/weld hourly rates. So I am in a waiting pattern plus we are sliding into another blizzard/cold spell.Your son should look at that aspect also.Maybe he is willing tobill on 60 days but the suppliers are billing on 30 days.Not a good combination!
Reply:I agree with DSW, don't quit a job you already have, just to start another one that may not last. I recommend keep the job, but do a little separate work on the side. Just to get your name out there, and built a reputation and client base. Let it build its self. Too much growth, too fast will kill a new business. Some business classes would be a good idea, it'll be worth it in the long run. I'm going to collage for Marketing and Business Management. But, at the same time I'm running a company that my grandfather started 35 years ago, he started from his 15' x 20' garage with just an old Craftsman Arc welder and an Atlas lathe. Common sense and a heart, will take you far. We've done a lot of work that, (unfortunately) have never received payment for. But, that's the nature of the game, no one ever said it's gonna be easy. Get to be friends with local steel suppliers, and get to know your local welding supply shop. A lot of work will be small, but over time, your name will grow and so will your client base. It's the same way with my company, right now we've got a contract making a certain something that I'm not exactly supposed to share. (  *wink*wink*)Proverbs 4:23My company welds.
Reply:Originally Posted by BuzzBoxI recommend keep the job, but do a little separate work on the side. Just to get your name out there, and built a reputation and client base. Let it build its self. Too much growth, too fast will kill a new business.
Reply:Set up his own shop, start going after work. Don't quit working for someone else until nights and weekends are completely full of his own work. Don't go into debt. Sounds like he has what I had when I started my own place 7 years ago. Good luck.
Reply:if it was me, I'd hold onto that good full time job and start my own business part time. run it part time until you gain your own clientele(this could take years). that way your reputation for quality work will be known.Start small, and work to a larger future. buy second hand gear to start and save $$$.running in the evenings and weekends might actually be a good time for field repair work, et al. Even better if the local 'shops' are closed after 6pm and on weekends. this 'could' be a niche' for him. farmers will need repairs on their equipment ASAP; they have a business to run, after all... in todays' economy, I'd never give up a steady paycheque; steady work is hard to find these days.
Reply:Fear and doubt needn't be deal-breakers when you are in the process of getting a small company going. Tame that animal and take control with a few time-tested recommendations that can lead not only to small company success, but individual growth.