Transition from wage earner to self employed....

[LexTech]

I have posted a little about myself and ideas, but regardless of what my business model will be or how I plan to run a business, theres one topic that really scares me... And Im not sure how its done, or if I can do it at this point in my life.

 

I am the main bread earner for our family. Im married with 2 children, ages 10-12. I provide the income and health insurance through my employer and need the paychecks that are coming in to pay the bills and everyday living expenses.

 

How do you go from one to the other without losing it all...

 

Which leads into my other question that I have read a number of different opinions about. When I do start a business, how do I pay myself? (I think alot may have to do with how the company is set up) I know I cant just take money out of the till to pay my electric bill at home....

 

Maybe others can share how they did it when they satrted out...

 

Thanks for the advice!

[Joe Marconi]

I have posted a little about myself and ideas, but regardless of what my business model will be or how I plan to run a business, theres one topic that really scares me... And Im not sure how its done, or if I can do it at this point in my life.

 

I am the main bread earner for our family. Im married with 2 children, ages 10-12. I provide the income and health insurance through my employer and need the paychecks that are coming in to pay the bills and everyday living expenses.

 

How do you go from one to the other without losing it all...

 

Which leads into my other question that I have read a number of different opinions about. When I do start a business, how do I pay myself? (I think alot may have to do with how the company is set up) I know I cant just take money out of the till to pay my electric bill at home....

 

Maybe others can share how they did it when they satrted out...

 

Thanks for the advice!

 

Starting your own business is a huge step and to answer all your questions at once will be overwhelming. But, through ASO, I am sure that we can help you with key points and give you valuable and life-saving advice.

 

After 30 years in business I can tell you that the most important skills to being successful will be your skills to manage and run your business. I was a great mechanic, but knew very little about business. After struggling for a decade, I realized that I needed to become not just a man in business, but a businessman.

 

I took seminars and classes on business topics: accounting, advertising, marketing and other business related courses. I read all I can on business and leadership.

 

To be successful in the auto business, you need to be proficient in technical aspects of the business and in the managerial aspects of the business. Too many shop owners have failed because they were great techs, but poor business people.

 

Let’s keep this conversation going, there is a lot I can tell you. Do you have any specific questions?

[CARMandP]

I couldn't agree more with what Joe just said. I went from Tech to business owner about 2yrs ago. Man, what a challenge. DO YOUR HOMEWORK!!! Take the time to do a little business learning. Just cause you may be the best tech in your shop doesn't mean you are ready to start your own business. Get some business management training before you start. Also make sure you have a plan for what you want to do and how.

[LexTech]

Thanks guys, I can see there is a wealth of knowledge and experience here on this forum. I am I thankful I found it.

 

I know i might be throwing a bunch of questions out there, but I am just in the beginning stages of learning all I can about starting a business, my head is spinning with questions and what if scenarios..

 

I guess my biggest decision I have to make is when (not if) to do it. If I do it soon, with my family relying on my income to live, could it be to much of a financial risk to struggle with a new business and pay the bills, insurance..etc.. Or should I wait until my kids are older and less dependent on me (maybe even out of the house) when it would be easier to take a risk like this.

 

I truly am tired and fed up for working for someone else, not to mention I am ready to put down the wrenches.. Im at the stage as a tech where you start looking around to see where all the old techs are, and what shape are they in.. its a pretty bad thought.... If I never try, I may be doing this literally, till the day I die. There is no such thing as retirement for me as a tech. Its a hard way to make a living, as Im sure you all know.

 

I guess what I was hoping to find out when I started this thread was, is it possible for someone to start their own business and still earn at least what they have been earning as a tech. Even if it will be more hours and work. Should I expect a pay cut when I start my own business?

 

I know thats a hard question for anyone to answer, there are so many varibales.... but in general, if a tech openes his own shop, do they typically take a large paycut to keep the business going?

 

I dont want to sound like all Im doing this for is the money.. Im not. I know those who have been succesful have worked their ass off for it. I just want to be able to plan for my familes future at the same time. Im willing to put the work and effort in, I just want to know what to expect.

 

Thanks again for the advice, I will be reading books and learning as much as I can in the near future.

 

If theres any good resources or books you would recommend I would appreciate it.

[xrac]

I am not a tech and never was a tech but was in a different business entirely. However, I took a $10,000 per year pay cut to purchase our franchise and open our business. For the first 5 years it was iffy if we would survive. It was seven years before I could give myself a pay raise. We have a successful operation now but if I had to do it all over again I think I would have pursued a different business (probably insurance). I could have probably made more money doing anything else during the period of time although now I have a successful business on a prime piece of property that we own.

 

You need to do a serious business plan. Figure out conservatively what it would cost to get into business then add 25%. Figure out what your monthly expenses would be and add 25%. Figure out what you have to have personally to survive. Especially figure out what health insurance will cost if you are not covered through your wife. Figure what you are grossing now and add the value of FICA, health insurance, retirement matches, etc.

 

I have seen a lot of people jump into business without having everything thought out. They do it because they are burned out and tired of what they are doing. Mid-life crisis is real and affects all of us guys somewhere between 35-50. Some guys buy a motorcycle and dump their wife. Others quit their job and start a business when they don't understand what is involved. They choose and invest in a poor business location. They spend money for stuff they don't have to have and spend too much money. They cash in 401Ks and burn through the money. They hire the wrong people. Not very long ago in our town a guy who worked for the Government quit his job and bought an All Tune and Lube franchise. He had plenty of money from his 401K. He did everything I said above and burned through it all and was out of business in a year and a half. My guess is he burned through at least $200-$300 thousand.

 

If you are serious contact SCORE in your town and have someone experienced in business help build a business plan and mentor you in this process.

[DewayneP]

All of the above is great advice. Here's my take: Can you start out part-time and still work at the dealer? You said you are willing to put in the hours, this would allow you to continue to draw your pay from the dealer and slowly build your business. This is what I have been doing for the past 3 years. There was some talk that the company I work for would close so I started a repair shop on the side. It's hard and a lot of work but it has allowed me to slowly build clientel as well as getting the necessary equipment without any loans of any sort. If I were to call it quits today I could sell all of my equipment and put that money in the bank, not use it to pay off a loan. This would also give you the wiggle room to make a mistake or two without causing undue harm to your family. If it takes off, then you quit your job. If not, you still have an income. Just a thought.