tips from business owners!

[Czlowiek Drzewo]

Couldn't agree more Tom.

 

Should be making enough money to buy a new rope when you need it or some fancy gizmo for climbing. Doesn't mean you need to though. keep profit high and expensies low should always be a the goal.

[weldersunited]

Agree good post there by Tom. I would also make sure you have a decent accountant, provided you're doing things right at your end eg pricing, winning work etc they'll only ever make you more money and save you tax as well. Biggest mistake I made was cutting corners here and using a bookeeper who although very good and thorough didn't really have a scooby when it came to the taxation system and I literally ended up paying £000's more in tax than I ever should have.

 

Also, don't suffer fools unless you absolutely have to.

[Hodge]

Take your business bank statements for the last year and add up ALL your outgoings, (you can do this on line and export it into an excel sheet to add it up if you know how, just don't ask me) then divide that figure by 200. this gives you an accurate break even day rate figure, then add £200 to that and you have a proper day rate.

 

It breaks my heart when I see how cheap some of the people on here work, If you are one of them, take heed, you will either end up giving up and going back to work for someone else or leaving the industry altogether. This is a great job and you should be able to make a decent living from it, if you are one of the ones who posts up that you are saving up for a new rope, hitch climber, chainsaw or other small piece of kit THEN YOU AREN'T CHARGING ENOUGH.

 

A two man team should turnover 80k minimum, any less and you are doing something wrong, if you work part time or look after your kids some of the time thats different, but if you are out there working full time then you should be making a decent wage.

 

I disagree, if I turned over 80 grand I would have to be vat reg, I would then loose most of my customers, I would then have no work. In an ideal world maybe your right but in reality it's not like that. To say we are doing something wrong if we're not turning over 80k is a daft statement.

[WorcsWuss]

Microsoft Excel is your best office friend.

Learn how to use it, even just to a basic standard and you will have one piece of software you can use for ACCURATE built up quotes, invoicing, tracking overheads, producing management figures [essential for your bank manager if you want his money] even flyers & posters. Everything is interchangeable with each other book or sheet.

I took a while to become a fan but now I'm a convert, I turn to Excel more than anything else.... an incredibly powerful tool.

 

I even have an Excel spreadsheet for comparing the price of my purchases across retailers....!

 

Incidentally, if anyone would like a tailored costing spreadsheet let me know, I'm more than happy to help you out.

[Matthew Storrs]

I disagree, if I turned over 80 grand I would have to be vat reg, I would then loose most of my customers, I would then have no work. In an ideal world maybe your right but in reality it's not like that. To say we are doing something wrong if we're not turning over 80k is a daft statement.

 

I agree, I think toms right in that a 2 man gang should be turning 80k but I doubt many do, even longtimers. Depends on your outfit too. Back to the thread I would take care on where you spend your advertising, ask your customers where they found you, as its easy to waste money on advertising with minimal returns.

Edited January 25, 2012 by Matthew Storrs
missed a bit out!

[Gareth Dalzell]

work out what you need not what you just fancy ,as far as equipment goes

 

This is the worst piece of business advice I've ever heard - if I can't have my toys whats the point in the stress:001_tt2:.

 

(You are of course right )

[Mark Bolam]

Really good post Tom, but I agree with Hodge about the VAT thing.

 

Some good stuff on here generally.

 

My advice would be don't make any major purchases without thinking it through properly and at great length (ballsed up there a couple of times) and buy once, buy quality on tools and gear.

[Matthew Storrs]

Whilst i agree that buying major kit needs a good think through, I wouldn't call it a balls up if you find your not using it as most decent kit holds its value well, sometimes you just have to take the plunge and buy it, only then will you realise how much you needed it, I have brought fairly substantial bits of machinery in the past not really knowing how much it will work out, turns out now i couldn't live without it. If it didn't work out i would just sell it on. no biggy!

[luftwaffe]

Making money is only half the story, the other half is more important, that is what you do with it once you have it, ....... remember you have worked to get it...... and then it must work for you.

[WorcsWuss]

I disagree, if I turned over 80 grand I would have to be vat reg, I would then loose most of my customers, I would then have no work. In an ideal world maybe your right but in reality it's not like that. To say we are doing something wrong if we're not turning over 80k is a daft statement.

 

I think that VAT reg versus not VAT reg debate is an interesting one.

When VAT went up to 20%, did it make that much difference to most people? No, they know they pay VAT, 2.5% wasn't a deal breaker was it, another 25 quid on every thousand, not a fortune.

So with most customers who don't want to pay someone who's VAT reg'd, surely it will cost them the same? Because a non VAT reg'd business loses out on claiming VAT back on purchases etc, so their costs are higher.

 

I'm pretty sure that if you worked out what it actually costs you in lost reclaimable VAT against how much business you would ACTUALLY lose as a result of having to work VAT into your quotes, MOST people would find that going VAT registered pays off.

Additionally, larger firms who are VAT reg'd prefer to employ VAT reg'd sub-contractors, I know I do in construction, keeps everything running smoothly.

 

My advice is don't be afraid of VAT registration, it can have some massive advantages....