I am new to business ownership but not to business itself. I am 23 years old and am wondering what the basics are? Any helpful knowledge I would love. I would like it if people wouldn't say "it's too hard" "don't try it". I'm also new to forums in general. So please keep that in mind as well. All help would be appreciated.
Starting a business is a lot like climbing a ladder. You don't necessarily want to jump to the top rung when using the lower rungs works to your advantage. You do, however, want to know what the next rung up entails as you will need a firm grasp of that rung to move up. One of the first decisions you may make is to determine if you want to be a administrator or an operator. One gets to sit in an office and grow fat and the other gets to live outside, stay in shape, and get the chicks... What form of business person do you see yourself as?
I see myself as a do it all. I want a small business...me and my wife are in school right now learning heavy equipment. We graduate in November and we are learning everyday. The purpose of my thread is to get as much info as possible before I go to the banks. I learn things everyday at school but nothin from the business side. I want a pickup and a trailer. I have been eyeballing a Chevy 3500 with a dump bed and a 10 ton eager beaver. I want it to be just me and her. I don't want it to expand unless necessary, but am open to the idea. I think I have a great vision in mind. I also have been in sales for about a decade now. I understand the fundamentals of business just not from the ownership side. I am trying to figure out what I need to do from getting the funds (seeing a how I am broke and have no credit....i know it might be impossible to get a loan) but yea, I wanna learn tips and tricks from everywhere to getting a business license to how to get clients and everything in between.
Well, you better have a good relationship with a banker. My suggestion would be to pick a bank, don't hop from one bank looking for the greatest deal. The chief lending officer of your bank is the person to get to know on a first hand basis. A good banker will help you with decisions and also assist you in writing your business plan. A good banker really come's into play after your somewhat established, ie, bonding, equipment aquistion, and the like. I guess you never said exactly what field of business your leaning towards so without knowing that I couldn't responsibly give you much more advise...and my advise is strictly my own opinion's on the subject, but on the other side it's the only job I've ever had so I must not have made too many bad decision's..... in a row anyways.....lol..... Grandpa
I wanna do any kid of business I can handle. I want me and my wife to start renting a skid steer and a mini excavator...and do any kind of work we can with those. Demo...septic...water and gas lines...stump removal...preparing driveways for concrete jobs and then actually pour and finish the concrete. I'd like a loan that can cover my truck and trailer and six months of ongoing expenses. I'm beginning to wonder if its even possible considering I have nothing to offer the bank
You never know if its possible or not until you try. Go to your bank and set a meeting.... there free, lol... then go from there.
Why would a bank give me 75k with bad credit and no collateral
Couple of thoughts...first, put the horse before the cart. If you approach a banker and say, "Look Mr. Banker, I'm broke, I have no credit, but I have this great idea about getting into debt and I'd like to use your money to try it out..." you're going to be wasting everyone's time. Unless you have photographs of that banker doing something he wouldn't want his mother to find out about you're not going to get a loan. Here's a better plan...take your new found knowledge and put it to work getting PRACTICAL experience. You're going to need a track record in the real world and a good way to get that is by working in the field of your choice for someone who is a pro and can show you the REAL ins and outs of the business. In other words, the doors you should be knocking on won't be mahogany. I know you don't want to hear that, but the truth is unless you can pay the cost to be the boss having your own business will remain a fantasy until such time as you can actually start, maintain, and grow a business. Anytime a banker or other business folks hear a wannabe business owner start off the conversation with anything other than "I've got more customers than I can handle working on the side..." the conversation will not lead to them loaning you money. Unless you have overwhelming collateral (which means you aren't broke), getting someone else to pay the cost of your dream is simply another dream, as well. And just so you don't feel like the Lone Ranger, there are thousands of guys just like you with ambitions who eventually learn to refocus their energies in the right direction and become monster successes. That 'success' thing is still in your future as long as you strive daily to make it happen, btw. I'm not writing this to discourage you, only to give you a nudge in a more productive direction.
So would you think putting some advertising out there and rent my equipment and have it delivered to the job site as well would be a better idea Shenandoah? That would mean I'd need little to none start up and little to none ongoing expenses? Is that a little bit better of a idea to run with?
Customers are the life blood of any business. Your entire focus needs to be on producing results that brings money in the door. Anything along the lines of what you just proposed is light years ahead of where you started this thread.
Well you never said you had "bad credit" in the beginning... now you get to be held accountable for letting you credit turn bad.
I know it's my fault for my credit. I'm just wanting input on whether or not its even reachable to open my own business without working for another heavy equipment company first. And ideas on how to go about it.
Let me ask you question..."How many mistakes are you going to make?" I've asked this question to almost everyone I've ever hired over the last 35+ years. They always give me that ***? look. Then I tell them they're going to make "all of them". The reason I say that is because good judgment comes from experience, and experience comes from bad judgment. So even the best of the bunch has a lifetime of screw-ups that led them to be leaders in their field. Now here's another question... "Do you want to make those first massive mistakes on your dime or someone else's?" I know that sounds strange, but the reality is a newbie in business who takes on the financial burden of paying for all their mistakes when they first start out is at a considerable disadvantage to someone who made their initial blunders while associated (working for) someone who could bail them out at a fraction of the cost through experience and staying power. When you're working along side someone who knows the ropes life is a lot easier in most trades. When you're by yourself and something drastic goes wrong you won't have the resources to cover your butt and that's when things permanently unwind for a lot of entrepreneurs. Many of them dig such a deep hole they can never recover. Don't be one of those guys...
I see where your coming from there. But if I make a lifetime of mistakes working FOR someone wouldn't that lead me to the unemployment line?
The trick is to learn from your early mistakes so that doesn't happen. And you won't be making a 'lifetime's' worth of mistakes working for someone else, what you'll be doing is making a 'lifeline's" worth of mistakes. In other words, you'll be using your boss'/mentor's experience as a springboard to growth.
I understand. Maybe I'm just expecting to much or something.
Ok, let's start planning for the future. Job #1 - rebuild your credit. The cost of your insurance is tied to your credit rating. Unless you actively work at rebuilding your credit rating the cost of insurance may be so high you won't be able to afford it, assuming you can even get it in the first place. And having a business where 'stuff happens' without insurance to cover those pesky D'oh! moments is suicidal to your future. Job #2 - work on Job #1. I can't stress this enough.
Welcome to the Forums Khancart!:drinkup You've gotten some really good advice in this thread. The last thing you want to do starting out is be saddled with debt you have to pay. It doesn't matter if the work is not there, the bank will send you a monthly "love note" and expect it to be paid with no excuses. First of all you need to do some local market research if you want to start your own business. Find out what aspects of the construction market are flooded and where there is a demand. Talk to local GC's and ask them what subs they are lacking in, you might be surprised by what they tell you. In my area, there is no money in renting a skid steer or mini-ex and working them. There are plenty of very experienced operators/business people out there that are running skids and minis that are paid for - already they have an advantage over you that makes it very hard to compete. In this economy I know of many people that had large companies when times were good that are pulling an old skid steer around doing hourly work. You stated that ultimately you would like to get into placing and finishing concrete, that may be where you need to start. If I wasn't in the site work business I would be in the concrete business. The upfront capital to get into basic flatwork is much, much less than an excavation business. Learn the ropes of how to form, pour and finish drives and slabs and progress from there. If you need any equipment then rental fits nicely into this type of business. There is good money (relatively speaking in this economy ) in concrete, especially commercial and industrial. Just my $.02 and where I would be looking if I was just starting out - of course this is in retrospect using the knowledge I have gained over 20 years in the construction business. Tell us a little more about yourself and your capabilities.
I have a business degree so I understand big business and the money aspect. I just don't understand the small details that go into starting SMALL business. I can do anything and everything when it comes to concrete. Have been doing it for a while. Why do people have a advantage when they own equipment? Wouldn't rental be cheaper? No maintence...no monthly payment. Just figure the rental cost into the estimate you give your customer...or at least that's what I'd think would be cheaper. I can do a good bit of stuff with a skid and excavator....reg or mini. I'm not the greatest of bulldozers. But I'm really good at shooting grade with a laser. I've put in a few ponds helping my neighbor run a backhoe. I don't have many connects tho. Just don't know who to talk to or how to go about it.
The reason you will not be able to compete with companies who have there equipment paid for and you renting is because they charge a foolish rate which would not be substainable(if they had a payment) otherwise.basically they are working for less than you can rent the equipment for.you could be competitive renting if you line up a good amount of work and then rent the equipment and go straight from job to job,reason being (I am using local rental rates)a mini ex (8500 lbs. machine) rents for $219 for 24 hrs. 8 hrs. meter time,or for $700 for 7 days 40 hrs. meter time. And if you can line up for a month solid you can cut rental cost again by roughly 30%.Best of luck.It can be done but you will need enough capital for insurance,fuel,business license,contractors license,first several rental fees,any tools needed you dont already have(shovels ,rakes,laser level,etc.etc.).It would be beneficial to learn on the other mans dime but if you just half to do it buckle down and dig hard.
Small details that you don't learn in college that go into starting, maintaining and hopefully making a profit in a small business: 1- Forget you ever even knew what free time was, your time will be consumed by the business. If you are not physically working in the business, then you will either be doing estimating, marketing, accounting, maintenance, repairs, etc, etc.. 2- Your small business will consume more money than you ever thought, period. Overhead will creep and add up even if it's just the two of you. Adding an employee takes you to another level. 3 - At the end of the year any money you have in the company account will be consumed by the tax man and the insurance man. Happens every time, every year. 4 - In order for your business to be successful you must absolutely love what you do, if you don't you will get burned out and not put the time and care the business needs to be successful. 5- Most importantly is having a spouse that understands the 4 things above.
Hi Khancart, I have been working for myself for many years, now almost 65, the experence of working for owner developers help me a lot. They had the capital and i had the shovel in hand. What i started was labor contracting, i did anything that they wanted done, and ended up with 10 guys working for me. What i think you shoud do is go to the court house and register your bis. name, then go get revenue stamp and fed tax no, go to your bank and open a bis. acc., Deposit every dollar you make into that account, your banker will look at your record of deposits when you ask for a loan. Look around for older bus. people that may be thinking of a project to do, they will want a good deal on the work from you, say yes, but try to put a small bonus in if the work is finished in a timely manor. When you find work do not mess around or get there late, the money guy will be watching. A good work ethic and record of deposits will be your ticket. Over the years i have hired and fired a lot of people for smoking, being late, or just plain lazy. Look sucessful and dress sharp, no slopy crap, go to the job even if its raining cats and dogs, because the money guy will. sam.
Sam That is some of the best advice right there. Khancart Before you get to a point of getting a loan, you have to have a track record. You may be able to do small jobs on weekends or whatever free time you used to have, and like posted above, put all the money into your business. Put it in the bank, and start making contacts at the bank, pointing out what you are doing, and setting the groundwork for when you come back to them asking for a loan. As CM said above, if you are going to make it, you will have no life but for the business until you get established, and even then it is hard. It is a great business if you love what you do though. In tough times, the ones that make it are the ones that work harder and smarter that the rest. This business is built largely on a combination of who you know, as well as what you know. being young and trying to sound like you know it all is a fools errand. Spend time developing relationships with people in positions to help you aquire work. Getting leads on work will be the one of the important things you do. You can't just run an ad in the paper of yellow pages and then sit waiting for the phone to ring. Nothing about what you are going to do is easy, but if it is truly what you want, then it can be very satisfying. It will also be hard, and there will be days you just want to quit. Getting past the hard days separates the men from the boys. Another important piece of advice I have is to pay attention to the details of managing the business. You can and will make mistakes in the field regarding the work you do. You can overcome any of those, but the mistakes made in the office on the management side of things are usually what cause companies in this field to fail. Best of luck to you.
Don't make same mistakes again and again that would question your talent,If you different mistake every time then you can learn so many thing from those mistakes. ___________________________________________________________ I would love to have rachael ruddick cuff ,That is really a stylish one....
I spend A LOT of time driving around (240k on a 2006 p/u), and most of that time is spent listening to someone like Zig Ziglar, John Maxwell, or Dave Ramsey on CD. I offer so many people the opportunity to listen to Dave's "Entre Leadership" CD set. It covers so many things that I never, ever thought about, and really, put me in the mindset that I didn't have to go into debt to start up a company and earn a living, and that sometimes, simple is better. Those CD's might be the best $30 I ever spent in my life.
khancart , so whats happening with your business? I don't know why I didn't jump in here a when you first started but here I am. first I want to say there is a ton to learn on this forum for nothing but your time. two self employment is the ultimate when done right. three there is no bad time to start a business I started in 2008 there couldn't have been a worse (or best) year since the great depression................update..............TIO
Banks are funny. They give money to those that don't need it (good credit and lots of assets) and none to those that dont. Shenandoah said it great. Their going to look at you like your going to throw their money down the hole. Everything Shenandoah said is spot on. Some possibilities might be: -Start a partnership with someone with a ton of cash and experience -Start a S-corp. Their like a corporation but less paper work. Their easier to raise money because you have alot of people on a board. You can also issue bonds and what nots to people. It's alot of work but may be needed if you want to hit it big. Use a backhoe to dig for buried gold. I really wish you the best. We need more go getters like you http://allaccessequipmentrentals.com/
Dont mean to bring up an old thread but I see a lot of good advice in here. I personally went to school for welding. I worked for a larger trucking outfit stretching semi's and building things, then I went to work for a stainless shop I left there hoping to start doing mobile welding focused on logging equp. and docks ( Northern WI) Insurance shot me down I have the welder and do small jobs for local farmers. I do as much as the work I can at my place or in the open where I wouldn't start anything on fire. I also watch for things that would start on fire very closely. my full time job now is running a loader feeding a wash plant in a frac sand mine and I'm thinking with in the next two years I'll be moving north because of my relationship. I really enjoy playing in the dirt, I wish I would have went to this mine many years ago. I bought a 2007 PJ dually dump trailer, I got it for a few reasons one it can do it all. its 20ft long and has ramps, the sides remove and it dumps. almost anything and everything I could or would ever want to haul I can haul. I got this on my own. I did it so that way in a few years when it comes time to get a mini hoe or something I don't have to ask for as much money. I know it takes a lot to start up something but I think the biggest thing it takes is know to make due with what you got and when to up grade. and knowing what size is the right size....