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Posted By Topic: Going out on my own - Advice please

SCADA
May 24 2017 02:12

I've been doing industrial maintenance, breakdowns, installations etc for the past 12 years and I'm looking at starting my own business to go out on my own. I have no business experience and would like any advice you all could give me regarding getting setup, getting jobs, and even how to protect myself. Would prefer to continue with the industrial automation but starting off will take any work, however it's been a long time since I've done much house wiring.
   

SteveH
May 24 2017 22:08

First bit of advice: If you think working for your current boss is bad, when you become "self employed", you'll learn what a bad boss really is, and the worst bit is the buggar is with you 24/7.

(2) Consider how much time off you have as an employee, need a break enjoy 4 weeks holiday, feel a bit poorly, phone in sick and take some sick leave, your Nana finally kicked the bucket, take a day off to go to her funeral and get paid- you are probably getting a couple of days off each week known to employees as a weekend, every so often you get an extra statutory paid day off as well- Now when you are self employed,(C) none of the above applies

(3) Need tools, parts, cable etc etc etc, you have to fund everything, from the laptop/printer that you do your invoicing on, cell phone, gear etc- you name it, you have to provide it.

(4) landed that big job, worked every how God sent to get it done, mortgaged your house to pay for the gear/wire/fittings etc etc to do it, sent the bill in, it's now well past the 20th of the month and your calls/emails to the developer/builder etc have been going unanswered and you ope the paper to see that he's just gone in liquidation.........

OK, I've done my best to warn you about the pitfalls and bear traps.

(1) Get a copy of "How To Escape Quicksand"
by John Horan &Jerry Maguire (this is a
how to guide to run an electrical/trades
based business effectively

(2) Get some additional training in small
business administration

(3) Build a team of advisers/mentors

(4) Get Public Liability and Professional
Indemnity Insurance

(5) Don't rush out and lease a big flash 4X4
ute, cherish every cent that comes in and
only spend them where spending 1 results
in 2 more coming in
   

oldspark
May 25 2017 00:35

Study th above and believe every word
   

AlecK
May 25 2017 07:19

Give serious thought to joining a trade org such as ECANZ.
Some serious mentoring available, where you can get the benefit of others having trod the similar path. Assistance with both trade practice & business practice; things like insurances, employment contracts, how to get paid, running HSW, and all the other things we have to get to grips with.

You'll be working twice as hard for half the money, and spare time will be at a premium, but worth going to meetings - the other members may be your opposition, but they'll also give you a hand when you need one.

   

GPower
May 25 2017 10:25

I would highly recommend the book the E-Myth by Michael Gerber if you are looking to go out on your own. Also using a business mentor can really help for the first year or two. Joining your local BNI (Business Network Group) is a great way to generate and grow your business and the people in there are all business owners so great to get advice off if required. Also do not under sell yourself to get work you will just burn yourself out and make no money whilst doing it. GST is and income provisional tax you will want to read up on especially in your first couple of years as this can make or break you. Then comes the employees and apprentices on top of this and this will be a another challenge with PAYE, holidays ACC Kiwisaver etc. Good luck.
   

bakinthegame
May 25 2017 21:44

From my experience you'll never look back.
Although I'm based in Auckland & there is a lot of work.

I could never go back to working for an employer.
Yes it's a lot more work, quoting, organising, office admin etc - but it also gives you freedom both financially & physically being able to take time off/start whenever you want.

If you're good at what you do, are self-motivated & customer focussed you won't have a problem.

Be wary of people that talk big & promise the world - they will bring you down - pretty soon you get a feel for people & what they are about.

Be positive - you can do it & lots of people are DOING it & for the simple reason that it is worth it.

Also you are building a brand & lots of goodwill - after 5-10 years in business you could have a sustainable business with a good customer base that you are able to sell on its own (without physical assets) for $200K + ....a great nest egg to add to your retirement.

I started out simply hand delivering flyers, grew from there & have never looked back.

It's more rewarding both mentally, financially & spiritually...

Many other perks such as LOTS of free airpoints, rewards points, profit on gear supplied, freebies, bonuses for buying in bulk, claiming 'business' expenses, All my gas & vehicle expenses are paid for by the business - the list goes on......

DO IT!

You'll regret it more if you don't try at all than if you tried & failed.
   

AlecK
May 25 2017 21:58

Biggest risk for failure is failing to make provision for tax.
In first year, you pay none, In 2nd year, you pay tax for what you earned in first year, plus tax in advance on what they exoect you to earn in 2nd year .
They've lifted the kick-in point for this "provisional tax" system, but it's a trap that has sent many start-ups to the wall.
So make sure you put aside (suggest separate bank account)a percentage of all takings (not profits) so as to have a fund available when the taxman comes calling.
Once he's taken what he wants, anything left over will be a nice bonus.
   

bakinthegame
May 25 2017 22:05

Also best piece of advice - deduct monthly & put aside into a dedicated account 15% for GST & 15-20% for tax so when tax time comes your don't get any nasty surprises.
I actually look forward to TAX time as using this system I've always put too much aside & always get money back!
I can't believe the lack of people that even neglect to put aside the 15% for GST on each invoice - they complain come GST time about the big bill - but in reality it wasn't your money to spend in the 1st place - your merely collecting it for the govt!
   

bakinthegame
May 25 2017 22:09

Turns out whilst writing this piece of info Aleck beat me to it as above.

Sound advice!

Also if you can try & marry an accountant
   

SteveH
May 26 2017 06:51

"Also if you can try & marry an accountant "
Or at least someone who is computer literate, can use spreadsheets, and Xero/MYOB etc otherwise you'll get to be the office bitch as well as the boss :)

(6) Ditto re Tax & GST, transfer it to a
dedicated account and ONLY pay the taxman
from it.

(7) Put money into your Kiwisaver Account,
enough at least to qualify for the Govt's
$500 each year

(8) If you own a house, start a family
trust,consider implications of your
spouse being a shareholder/director in
the Limited Liability Company you are
going to form after you have established
your trust
   

SCADA
Jun 06 2017 01:52

Thanks for the advice everyone. I'll definitely check out those books, and do a bit of research on trusts and the tax side of things.