What You Need to Know to Start Your Own Business

May 31, 2001
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Second of Two Parts

Here’s a very brief list of some of the things you need in order to start to become a successful contractor:

  • Knowledge of bookkeeping;
  • Knowledge of corporate law;
  • Knowledge of marketing;
  • The ability to generate cash flow predictions;
  • Occupational license;
  • You’ll probably need a contractors’ license;
  • Knowledge of disposal of hazardous materials;
  • The ability to recruit loyal, dedicated personnel;
  • Good business managers;
  • Knowledge of materials management;
  • Cash;
  • Good credit rating;
  • Knowledge of insurance requirements;
  • Knowledge of sales tax laws; and
  • Knowledge of income tax laws.


  • Hourly Wage Laws

    There are also a few more obvious things you need to be well versed in, including hourly wage laws, employment regulations, and safety requirements.

    Believe me, there are so many rules and regulations regarding the pay and treatment of hourly wage employees, it is next to impossible to do it correctly. But you have to. If you don’t pay your people correctly, you can run into trouble with the state and/or federal government.



    Employment Laws

    Do you know what questions you’re allowed to ask and what questions you’re not allowed to ask someone during a job interview? How would you like to be dragged into court to find you are being sued by someone you don’t even remember meeting, but who says that one day they came into your office, asked if you were accepting applications, and you said something that offended them?

    One lawsuit like that can destroy a year or more’s worth of profits. You went to the trouble of starting your own company and worked your tail off for nothing.

    Here’s another thing about lawsuits. I have a contractor friend who was sued by a large corporation that was a competitor of his, for nothing. After he spent $100,000 defending himself, it was ruled a frivolous lawsuit. Now the other side is appealing that ruling, and he knows he’ll spend another $100,000 defending the appeal.

    I sure hope nothing like that ever happens to me, because I’ll never have $200,000 to blow on lawsuits. And if you start your own company just to undercut everyone else’s prices, you won’t either.



    Safety Requirements

    Do you know that there are so many safety requirements that, if you followed all of them, most service techs would be unable to do their jobs? OSHA could come in, if they wanted to, and shut down just about any service contractor out there, even if they were trying to follow all their regulations. For one thing, they make them up as they go along anyway, so there’s no way you can satisfy them once they get on your case.

    So bottom line is, no matter how much profit you’re making on service, when you’re running ahead of the game, you’ve got to save your money, because you never know what an employee, the government, a customer or some total stranger is going to do to you.



    So, What's My Point?

    It’s not my intention to scare you out of going into business for yourself, but if I do, that’s probably a good thing.

    If I had to give one reason why so many companies go out of business, I would have to say it’s because the owners started their company under false beliefs and assumptions. For most people, owning your own company is not a gold mine, it’s a way to go broke.

    Owning your own company does not make you the king of your own small kingdom, either. It’s not a promotion and it’s not a shortcut to getting into management. Owning a company is, in most cases, a demotion, literally. How is that?

    Well, who do you think is going to take out the trash, sweep the parking lot and clean out the toilets? You, that’s who.

    Open your own company and you’ll learn that, with the shortage of qualified help these days, you’re not the boss — your employees are the boss, your customers are the boss, even your suppliers will boss you around. In fact, just about everybody but you is the boss.

    So, if I’m not trying to discourage you from going into business for yourself, what am I trying to do?

    I’m trying to get you to get real about your job and your career as a service tech. I don’t want you to hold up this lofty ideal of some day owning your company under incorrect assumptions of what it’s all about.

    Personally, you couldn’t give me a company, and I can prove it. As a consultant to the service industry, I have people trying to give me part ownership in their companies all the time, just to get me to come to work for them full-time. But I won’t do it because of all the hassle and liabilities involved in owning your own company.

    As a rule, you can accomplish your career goals working for someone else more easily than you can in owning your own company. And that’s the point I want to make.



    Make a Commitment

    You see, unless you’re an exceptional individual, you’re not going to excel at your job until you become committed — first to the profession itself, then to the job you have now.

    You’re not going to be a mediocre technician for a number of years, become a company owner one day, and overnight convert to a great technician. It doesn’t work that way. If you’re a mediocre technician right now, you will, at best, be a mediocre contractor. Being a top-notch employee is the first step toward becoming a top-notch employer.

    So, I want you to commit to the industry you’re in, and I want you to commit to excelling at the job you now have.

    Greer travels the country running calls with hvacr service technicians, demonstrating his methods in the field. He’s the instructor for the “HVAC Closers Academy” held in Ft. Myers, FL. For information call HVAC Profit Boosters, Inc. at 800-963-4822 or visit www.hvacprofit boosters.com.

    Publication date: 06/04/2001

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