start up costs

[pennychew]

That's exactly what I was hoping for, do you have a 10k mileage allowance though?

 

[Black Dog]

QUOTE=atm84;1048473]So guys tell me roughly how much it cost you to start up your business and how long did it take to see get into the black.[/QUOTE]

I started in 2010 with nothing but £3k credit from Neweys. It can be done but it was not easy mate. Stay on top of invoicing is the key and only start jobs that you can afford to finish. I had a really nice QS that helped me and made sure I was paid on time and after a month I was earning money. I woukd say that only this year I would say I have the business where I want it though.

Indeed, at the start never take on anything you cannot afford to pay for yourself.

You must know what your costs are so you will be able to charge the proper price for your work at hand. you do not want to expose your hourly rates to the client, but you must give them a grand total price start to finish for all of the required tasks, to get the job done. In order to do that you must be sharp in calculating all of the tasks and the cost to you, along with your desired salary--DO NOT SELL YOURSELF SHORT, you must make enough to pay all taxes and the like, then make money for yourself so you can buy the equipment needed for your shop to thrive.

Charging by the hour will give the client the advantage to shop, so do not do that, Give them a grand total price with payment terms that will be to your advantage, never give into a clients demands for a discount, unless you want to be Wallmart Electric.

You must train yourself to think, live and breathe that electrical work is a profession and not just a glorified toilet scrubber.

This is a profession and we all spend UN-ending hours studying such.

Work very hard at learning to sell without being a jerk. Clients are good folks, talk to them as friends and be confident in yourself so when you are making a sale, walk if they object to your price the next client will pay it, so DO NOT SELL YOURSELF SHORT. You must make what will keep the lights on on your shop, stand up for yourself, the price you quote must be what the client pays--otherwise walk.


This is the work of a member of one the big USA electrical forums, put this tool to use you will be very happy with the results, good luckatriot:

Here’s how to figure your selling price for a one truck operation (you in the truck, no employees): Copy and paste this into Word, Excel or program of choice.

Note: This formula is for residential/light commercial service work (no new construction) using flat rate pricing.

Billable Hour: A billable hour is the actual time during the workday when income is produced. FACT: Your total billable hours for one year will not exceed 1,000 hours.
4 (hours a day) x 5 (days a week) x 50 (weeks) = 1,000 hours/yr.
Total Billable Hours/Year: 1,000 Hrs. Don’t make this higher, it very accurate.

Selling Price:This is the hourly amount you must charge as the labor component of your flat rate pricing. It does not include material. Include material in your flat rate pricing and mark it up whatever amount you desire (or not). You’re really selling your labor, so if you sell your parts & equipment at cost (including freight & taxes) it really doesn’t matter. What matters is selling your billable labor hour. Here’s how to calculate the selling price.

OVERHEAD ITEMS: Fill in amounts and total it on line 36.

A word about owner’s salary: Consider what you could be paid in a year if you worked for a reputable company, that pays what you are worth, as a tradesman and offers a bonus based on performance. It is not uncommon for some to earn upwards of 70-80,000/yr. or more. Do not sell yourself short, even in the first year of business. As a business owner you should pay yourself at least 80k/yr and more like 100k/yr. treat your salary as a business expense.

1. Owner’s Salary __________________
2. Advertising - YP ___________________
3. Advertising – Other ___________________
4. Answering Service ___________________
5. Bad Dept ___________________
6. Bank Charges ___________________
7. C.P.A. ___________________
8. Call Backs ___________________
9. Cellular Phone ___________________
10. Computer Expense ___________________
11. Credit Card Fees ___________________
12. Donations ___________________
13. Dues/Subscriptions ___________________
14. Educational Expense __________________
15. Gasoline Expense __________________
16. Health Insurance ___________________
17. Insurance – Truck ___________________
18. Insurance – Contractors ________________
19. Insurance – Umbrella __________________
20. Insurance – Workers Comp ______________
21. Legal Expense ___________________
22. Office Supplies ___________________
23. Payroll Company ___________________
24. Payroll Burden ___________________
25. Postage Expense __________________
26. Rent & Taxes ___________________
27. Retirement/401k ___________________
28. Telephone ___________________
29. Tool Repair/Replace ____________________
30. Travel & Entertain ____________________
31. Truck Expense ___________________
32. Truck Maintenance ____________________
33. Unforeseen Items ____________________
34. Uniform Service _____________________
35. Utilities _____________________

36. Total Yearly Expenses ___________________

37. Expenses Divided by 1,000 B/H = _____________ (This is your break even (B/E) price –
NO PROFIT!

20% PROFIT ON TOP OF BREAK EVEN COST: This is a standard acceptable profit, please don’t short change yourself. Enter the breakeven number from above and divide by .80 to get your selling price.

__________________Divided by .80 = CORRECT Selling Price Of______________/hour
Enter break even number here
B/E Cost = 80% Of Selling Price


The above list of expenses is only a representation of expenses and may not include all expenses. Be sure to add any and all additional expenses you may incur.

 

[Leesparkykent]

That's exactly what I was hoping for, do you have a 10k mileage allowance though?

Mileage allowance is 75000 over the 3year term, burnt tree, northgate and arval are the best places to get a quote from. Plus have a word with your accountant as I think as much as 75% of the lease hire per month is tax deductible anyway.

 

[pennychew]

Mileage allowance is 75000 over the 3year term, burnt tree, northgate and arval are the best places to get a quote from. Plus have a word with your accountant as I think as much as 75% of the lease hire per month is tax deductible anyway.

Thanks for that, I'll start making some calls next week [emoji106]

 

[atm84]

That's exactly what I was hoping for, do you have a 10k mileage allowance though?

Mileage allowance is 75000 over the 3year term, burnt tree, northgate and arval are the best places to get a quote from. Plus have a word with your accountant as I think as much as 75% of the lease hire per month is tax deductible anyway.

Can you explain why its only 75%. Why is it not 100% deduct able. Its an expense after all.

 

[Guest125]

Only if the van is solely used for business.

 

[Leesparkykent]

sorry i think you are correct 100% of the payment can be deductible. Maybe my accountant proportions this to allow for private usage, will have to check this tho.

 

[atm84]

Thanks all. Some good advice. I think, personally, if I was to start on my own I would probably buy a second hand van 5-6k max. I have most of the tools apart from test equipment and also would need a small amount of floating stock. How much did you spend on advertising at first?

 

[Leesparkykent]

you would probably best investing your time in emailing builders, plumbers(to wire there heating systems), looking on uk planning at recent planning applications and sending these people letters, etc than spending money on local rag/yellow pages adverts etc. get yourself a good website, register yourself on 192.com, thompson local,etc

 

[Octopus]

you would probably best investing your time in emailing builders, plumbers(to wire there heating systems), looking on uk planning at recent planning applications and sending these people letters, etc than spending money on local rag/yellow pages adverts etc. get yourself a good website, register yourself on 192.com, thompson local,etc

I would ignore builders until you have built up a decent bank balance as they don't like paying bills

 

[Leesparkykent]

I would ignore builders until you have built up a decent bank balance as they don't like paying bills

i suppose, but i dont have any issues with the few i work for but i have heard of some horror stories in the past.

 

[Guest77]

i suppose, but i dont have any issues with the few i work for but i have heard of some horror stories in the past.

Believe me, the advice Murdoch just gave was the best advice anyone in a new business could get, priceless advice, I know, I have been there and got the T shirt.

 

[Leesparkykent]

you could also contact other trades like conservatory installers, garden building/log cabin installers etc to name a few

 

[trev]

Or if you want to get your feet under the table with builders do it on the proviso that you bill the customer directly for your part of the job.