Tradies and business/self employed

[Tradie]

Do you think its is good idea for tradies to rush out and become self employed ? Please share your reason for your answer.

[Blurock]

If you are a master of your profession and can deliver a superior service it may be worth going on your own.
But if you have not mastered the basics of business and do not have the discipline to manage finances, procurement, staff and customer relations etc etc then rather stay where you are.
Remember that you will be forfeiting a regular salary, possible bonusses, annual leave and the back-up of your team when things go wrong. When the truck breaks or the manure hits the fan you will have to sort it out yourself.

Working for yourself can be very rewarding (not only financially) but there are many pitfalls, so do your homework and be very well prepared before taking the big step.
Will you be able to compete with the existing businesses in your industry? Price, service & quality?
Have you sourced reliable and cost-effective suppliers? Do you understand the basics of accounting?
Do you have enough capital to carry you for at least the first 6 months?

Do you have a basic business plan? Have you done some market research? Who is your market? What are their needs? How much are they prepared to pay?
Who are your competitors? What will their reaction be if you take their customers? What are the risks in the business? What is the cost of premises, insurance, staff, transport etc.etc.
Business plan? You don't go on holiday without deciding where to go, where to stay, what clothes to pack, means of transport etc etc.
So how can you start a business without planning everything in detail?
Talk to friends and family and see if they support the idea. Working long hours may not suit your family life.

All the best and Good luck with your venture. If you have a passion for business, pursue it, but make sure that you tick the boxes first.

[Tradie]

I decided many years ago that as a qualified tradie, life would be much more profitable, being self employed. With no trust fund, no rich daddy, no savings, no business plan and really no idea what I was getting myself into, to make it even more difficult We had just starting a new family, boy was I about to enter a chapter of my life that was going to teach me many lessons, would I do it again, and what would I have changed? I didn't even have a vehicle to carry a ladder, just a motorbike and the will to survive. Yes, I would most certainly do it again.

I had friends and family, that should keep me busy, this people, is really what it is all about, right? I am sure many of you who have tried can relate, you just need friends, family and be part of social groups, like running or cycling clubs, member of a Church, scouts or something, if you get the word out, people will support you.

I sold my bike, purchased a cheap VW golf, roof racks and a 6 ft ladder, I was ready to enter world of being self employed.

My first job, I quoted R2500 to rewire an entire house including material. I would make a decent profit to prepare me for the next project, well that is what I thought. I lost R6000 on that job, so now I had to borrow money to keep going.

For the record, I was rewiring houses on the weekend as a sideline job with a mate, we were making some decent pocket money we would start at 6pm on a Friday and work late into the night, then Saturday up early back at it, get as far as we could working thorough till early Sunday morning to get as much finished as possible, so that Sunday would be an easy day, it worked on some weekends and others we worked right through until early hours of Monday morning, but always finished.

This house was a lot bigger than the weekend projects (small face brick railway houses) and I was working alone, if you have ever tried pulling wires into conduit on your own, you will understand the challenges I faced, but eventually a couple weeks later, I completed the job as promised and got paid the R2500 quoted, the customer was not interested in paying more. The pay back for me was all the advertising he was doing for me to all his friends, family and every person he spoke to, he was bragging to everyone about his score. within a week, I was booked up for the next 2 years

[Blurock]

I completed the job as promised and got paid the R2500 quoted, the customer was not interested in paying more. The pay back for me was all the advertising he was doing for me to all his friends, family and every person he spoke to, he was bragging to everyone about his score. within a week, I was booked up for the next 2 years

You created a customer!
Although you paid school money, he was happy with what you have done and his word-of-mouth advertising was worth more than the money lost by underquoting.

Your experience is also why you have to do your homework properly before venturing on your own. You have persevered and are reaping the results.
I salute you. You can only grow from here.
Best of luck!

[felyn443]

Going self-employed can mean more freedom and the chance for higher earnings, but it also means taking on more responsibilities-like managing paperwork, finances, and finding your own clients.

[Tradie]

The question I get asked a lot, what advice can you give to others, who are considering starting out on their own?

There is not one most important lesson learnt in the past 30 plus years, but here are a few I can share from my experience.

* Be the best at whatever it is you want to do.

* Learn just enough about stuff, that people cannot bullshyte you (very important), there is a much higher percentage of bullshyters than real people who you can trust.

* Understand that you are going to pay school fees, it is what you learn and how you adjust to the challenges that will make or break you.

* Buy a property and use it to create a platform for you to access funds/security when you really need it, the longer you have the property the higher the value as you grow. (I wish I had done this for the business 20 years ago). If I look at what the house, I live in is now worth, compared to what I paid for it, I will have millions for security for bigger projects as you grow.

*Expensive equipment does make you look good, but unless it is covered in the contract, get what works at the best price, and invest the money where it has a better return. I have lost a lot of money from this mistake. On paper my equipment is worth a lot of money, but the resale value, it's pretty worthless.

* Open an account which is used to keep the taxes safe until they have to be paid, those days of SARS freezing your bank account are long gone (2011) now they go in take what you owe. I had it happen in the past, where they go in and cleaned out all the business bank accounts due to an outstanding VAT payment. It was money that was due to them, and they are not interested in your business challenges and outstanding payments to the business, they just want what is due. I am sure we all wish we could do it to people who owe us money.

*Always have a backup for wages, staff want their money due to them, they have no interest in the challenges the business faces, be it customer nonpayment or the comment above, a lesson you don’t want to learn, especially when it is happens at month end or a Friday when you have wages to pay.

The notice will look something like this - "Kindly note that SARS has issued a Third-Party Appointment letter to Standard Bank in terms of section 179 of the Tax Administration Act No. 28 of 2011, obliging the bank to withhold and pay over applicable funds to SARS." You get the email the day after they remove the money

* Taking loans or large overdraft facilities through the bank is not the way to fund the business projects, there are lots of people out there who want a piece of the action and understand the risks, rather look at getting people to invest in the business or the project if it is too big for your to fund.