Posted on 04/07/2018 8:24:48 AM PDT by AbolishCSEU
So we are in our second year of my husband's HVAC biz. He is busy like crazy (one man band) And I have a "regular" 40+ hour job with benefits that keeps the lights on and the mortgage paid.
What is a NYS?
They lie BIG TIME! Unless you want to be up Prince Andrew’s butt by starting a solar panel business with massive “start up NY” grants.
Annnnd that’s why the taxes are so damn high for everyone else.
As one who has owned two pretty successful one man show kind of businesses, perhaps I can supply a piece of insight. Interestingly, I have just become very good friends with a fella who who has a one-man show HVAC business, and he absolutely cleans up. I believe he has between a 250k and 300K income. And I am in California so I would be right behind you in the taxation rates.
Z first as someone else said upthread , do not confuse the child support which is like a giant piece of overhead with your business operating conditions.
One of the things that happens to sole Proprietors is that they become habituated to particular ways of doing things and they may have had to have done those things in those ways when they were small but now that they are more successful, those ways of doing things may in all reality be choke points. And those habits can be hard to break.
In essence, what I am recommending is to have someone come in and look at your business as you operate it and perhaps make some suggestions. I am not suggesting a long-term relationship with an expensive Consultant. You can contact your local branch of score which is service Corps of retired Executives, and there are people in there who will advise you for free just because they’re retired, and they like the engagement of being involved and they like helping people. I have drawn on that resource a time or two and I was very surprised, there were some very sharp people I ended up meeting with and they made very pointed suggestions to me, and this was over coffee in the coffee shop. However you must bring them accurate information as to how you run your business, in other words garbage in garbage out. You are not asking them to come and live with you for a week while you run the business, so you must develop an accurate profile as it were of how you run your business. And it is entirely possible that they will make a couple of suggestions that will make an enormous difference. For example the HVAC guy I know has a rule. And the rule is is that every time he goes out on a job he makes $2,000 and if he doesn’t do that he doesn’t go do the job. It may be more complicated than that or it may not. Your husband may have run the business in a very folksy manner when he was small, to develop his clientele. And he can not any longer afford to chit chat for 3 hours with a customer while doing the job, he has to become more brutal. That’s just one idea.
can he raise prices?
Because corporate power can work hand-in-glove with the collectivist agenda, while small business power annihilates it.
Know about Dave Ramsey.
We do #3 routinely, we cut the cord a loonnnng time ago and we seldom eat out—hubs and I love to cook
#1 Acceptance (yes it’s there and kid number two who is being forced into college after mom let said kid fail all the way through High School) will be 20 this year—hubs can’t claim her on his taxes but mom will.)
#2 Went hunting for bookkeeping/tax services so that I dont’ have to do it “in my spare time” We have an accountant in the family now (my son from a previous marriage’s father-in-law) but I’m hesitant to hire within the family. so I get stuck with the job.
My profession is IT (hardware/software) and I also manage the business website (leaning PHP and MySQL). Tried to farm THAT out and that fell through.
It is like you took the words right out of my head.
The real awful truth, though, is that in theory it would be worth it if we weren’t taxed beyond reason. The new tax laws are not going to be the help to me as I thought they would because of social security tax. We pay both portions (employee and employer) and it is has not been reduced and it crushes us. That on top of all of the other taxes, regulations, fees, etc.
I wouldn’t mind the voluminous hours and extended effort if I could keep more of my earnings. I still wouldn’t go back to poisonous office politics and moronic management, but there is no question in my mind that the initiative for self-employment and success at it are punished in this country. Made all the worse by low information citizens who assume that everyone who owns their own business is “rich” and rolling in cash.
I own a small business and before I started I never realized the amount of taxes you pay in order to hire employees! Payroll taxes are the worst!
He has started to do so but every so often we run into cheap skates who question every nickel of the bill.
One of such customers came from Amazon services who thought that fluorescent tube lighting are $5 a piece (our cost was about $11 a piece) after changing out a ballast.
He also does electrical work (went to school for it) and plumbing
NY State doesn’t make it easy for small biz. They are still in love with their progressive friends and their many welfare supporters. Producers and middle class are not welcome.
All I can say is - make sure you are maximizing expenses through the company to reduce profits. Auto, gasoline, rent, electricity, travel costs, entertainment, etc... you have wide latitude on that.
Being your own boss is still the best way to go, and if he builds a regular, steady book of business, you/he can sell the business when he is ready to retire, and hopefully pocket some nice $$
My wife and I have managed our small business for 14 years. The recession, 2008-2009 , was brutal. Otherwise it has been marginally ok. We do have low spots which cause white knuckles. Whenever I have considered closing I realize 2 things. 1. At my age, 65, any job I might get would likely not provide enough income. 2. There are some financial benefits to running a business above any net profit. We benefit from health insurance, auto expenses, phone service, and others. Without the business we would really struggle to find the resources to handle these expenses on a salary.
Oh he is not one to chit chat. He is like lightning but he does tend to undersell himself and he does have an sporadic helper that he pays just as much as he earns himself.
His big issue is organization. He tends to rebuy tools and supplies over and over again because when he packs up, he throws everything into the truck to be sorted out “later.” This adds to the cost of doing business of course. We have spoken about this but it is a hard habit to break.
New York State (as opposed to NYC — New York City).
“NYS constantly grabbing for more and more taxes,”
Sometimes taxes aren’t about making money for the State. A lot of times it is controlling the Subjects. Six cents to produce a pack of cigarettes, more than $13.00 for a pack in NY. It was meant to control/stop smoking!
Taxes on Small Businesses may not really be about the State making money? Maybe(Ha)the large Corps. don’t want competition(see Lobbyists).
Another view:
https://www.investopedia.com/terms/l/laffercurve.asp
Once I had the business set up, I made sure I covered my expenses with year-long contracts for repeat business. After that, I handled all the customers I could in the rest of the time available until I had enough to hire assistants.
Possibly if the child is over the age of 8 or 10, he or she could learn some of the skills and do some of the work because it's a family business and that's part of being a family—whether it is as a mechanical helper, distributing flyers, office work (accounting, filing) or ramping up your social media (under CLOSE supervision). Make it a fun and learning experience for a limited time per visitation period. If you pay him or her a stipend, you can write it off. If the child shows real interest and wants to work half a day or so, try to negotiate an informal reduction in child support of the amount you pay the child, backed up by a signed letter from the ex.
If your husband is trying to do all the mechanical himself, you will never make money. The main jobs of the owner are 1) sales and new client contact and 2) quality control over every job performed by workers.
If there are reasonable-cost ways to get your name around, do it. My small city has several online forums that list the names of contractors, and the higher quality ones review the lisence and recommendations, provide customer comments and award stars. The big name is Angie's List (even tho she's a liberal). There are also PennySaver-type newspapers and a company that sends color coupons in a packet or a booklet every month.
My hvac vendor sends me emails 4 times a year to remind me what needs to be checked up, and offers a discount for your next service for every new customer referred by an existing customer.
Don't forget grocery store or church bulletin boards or business card spots all over your area, the office bulletin boards of friends and family, and also make up a flyer to leave with the hardware or tool rental desks of Home Depot, Lowe's, etc. Send a fact sheet or flyer to any renovation contractors in your area, or the kinds of real estate agents who buy distressed homes for quick renovation. Also, house insurance agents often make recommendations of trusted suppliers for covered repairs. Strip mall stores are also in need of fast and reliable repairs, and they are easy to canvass with business cards and a brief chat with the manager. (You didn't say what size your business is; I'm assuming residential and smaller units, not necessarily the 20-floor apartment or office buildings, but you get the idea.)
Make a plan and work your plan! Your husband should set aside one or two days a week for sales calls on potential customers, emergency calls and advertising stops, and perhaps you, too, can work out a time when you always canvass with flyers or business cards. Map your area, identify your targets, and do territories, checking off whom you've leafleted and the date. Three to six months later you can do those again if you've done all the others.
The costs of printing and mailing are tax deductible, but if you attach your leaflet runs to another weekly trip, such as after church, you could conceivably write off the whole trip. I hope you are keeping mileage logs for ALL your business-related trips.
As for customers being cheap, don't be afraid to turn down business. Once an estimate is given and an order written, your business materials would already have listed the prices. Presumably you have a printed agreement form (that small gray type on the back of an order sheet) that details what makes an additional charge, etc. Also, if you set priorities for getting your name around, target the higher-priced neighborhoods firs.
And make sure your husband and his workers have a very clean presentation. There are companies that make polo shirts or caps with a logo for as little as $20 apiece. One of the great online suppliers of all kinds printed materials and promotional gimmicks is VistaPrint.com. I've used them for several things.
New York Socialism.
We live in NYS. Just had another small biz close. We know quite a few who couldn’t sell the biz, so just decided to close and flee the state. Albany made it impossible for them to compete.
Spelling
target the higher-priced neighborhoods firs. = first!
Even the Papa John’s franchisee’s closed all their stores here in Rochester, and even Mark’s Pizza has begun closing nominal stores.
The state is headed for a crash.....
You’re on a treadmill in the rat race.
You deserve applause for giving a try.
To be successful, your hubby needs to have the means to take in one or two younger trainees and get them to know the ropes to expand, expand, expand and automate, automate, automate.
It’s difficult I know, just as any independent business is difficult, from farming to window cleaning.
Learn insurance to smooth out the ups and downs, constantly review what the competition does, see what you do that is distinctive and is better, then capitalize on that.
Get a really good accountant or at least a very good bookkeeper.
Find a friend at Church or in the neighborhood, that is retired or semi-retired, who has business experience or is familiar with contracting. Have them help respond to RFPs. HVAC can be a very good business. Compete for local contracts, keep trying. When you win one, hire a manager from the crew you’ve trained. Then start planning your retirement because by this time you’ve made it.
Study and view Donald Trump’s inspirational business videos. His work ethic and passion are amazing and unparalleled. They are real and not full of fluff.
Congratulations for being part of independent American business. I wish you tons of success!
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