Ok, the following is my opinion. It has worked for me all the way back to the beginning except for a period of time when I got too big for my britches and thought the economy was always going to be great and fell for the credit trap.
This is a common trap of new business owners. There are a lot of contractors in my area that had just built huge new facilities because the bubble would never burst. I met one of them working at a convenience store because that was the only job he could find. He lost everything because he was so over extended
This method has worked for us, my son, and is now working for my nephew Cameron. None of us owe a dime on any of our equipment and we've got plenty of backup equipment to stay running even if we meet lean times.
First off, (I know a lot of people are going to disagree with this) a new guy should get his feet wet (literally) with whatever equipment he can afford to start with, that won't hurt him too much financially if he doesn't like the work or if he just simply fails. Most of the jobs we do can be completed with a cheap pressure washer. It won't be feasible in the long run, but just to get a handle on the work and see if you even like the work, a person can save up from their job and get a cheap one to start.
that is how I started. It is only best to pay cash and go small. Remember that the vast majority of the contractors out there are going to fail in the first five years of business
A surface cleaner isn't even needed at first. Wanding can be just as effective as surface cleaning but it will just take a LONG time. But that's what a new entrepreneur has....time.
And there is plenty of lucrative, repetitive work that a surface cleaner would have zero benefit for.
Once you have that cheap equipment now it's time to research. Day and night. Every new contractor should spend every spare minute at first browsing through the forums learning terminology and techniques. I spent almost 6 months reading about ultrasonics before I bought my first ultrasonic machine for filter cleaning. There's even a thread on PWI on how to get up gum using a $30 propane setup if you don't have hot water.
I am of the opinion that anyone that finds work they love to do, and that is consistently doing everything they can to learn more, is going to be successful. Levels of success will vary, but you will find a level of success in your profession
Now that you've researched at night, learned how to not damage property, and you have the equipment you can afford, you are ready to try to get some business. Use the knowledge you have learned from the boards to set fair pricing. It might take you all weekend to make $150 with that equipment. Just realize better days lay ahead.
My first major job was one where I worked four hours with a cold water machine and earned $200. I thought I was making bank 25 years ago. I kept that job for 15 years. I am still friends with the owner of the company and use their services whenever I find myself in need.
At first the easiest and least expensive way to do this is through contacts you already know through your work, church or friends.
This is a lot tougher if it is a commercial job, and really depends on who your friends are. I have a good acquaintance that made it a goal to be golfing with a particular pro basketball player within 90 days, and actually made a bet with a friend that he could do it. He won the bet, but he is a natural salesman that is very good at making friends. What is crazy is he is actually very good friends with that same NBA player, twenty years later
YOU ARE NOT GOING TO MAKE A LIVING AT THIS FOR MONTHS. So keep your day job or your other business and put every single dime you make into a box so you can move up to the next level.
I agree. It took me a few years. I had some objections to overcome, and had to prove that I would be able to provide for my family before I could quit, but once I quit, I never looked back. My life is pretty darn good
Meanwhile, if you don't like the work. Stop. Don't go any further.
only a fool keeps doing what he doesn't love.
If you don't feel like you will ever be comfortable making sales. Stop. Put your pressure washer in the garage and use it to clean your patio every now and then.
I am horrible at cold calls. So, I make every effort to make people my friend. Then it is a pleasure to make the calls, because you are just calling a friend.
Once you've gotten a few little jobs under your belt, get on the boards and ask questions. I've seen it many times on here. New guys with junk equipment. They get on here and ask about what the next step is and there are plenty of guys here willing to help.
Every job is a small job. You just need to break the big job into manageable sizes and run it that way. In my opinion, if you need to ask extremely basic questions on how to do a job, you are probably not ready for a large job. If it requires a sizable crew and have never run more than you and a helper, you might see challenges that you are not expecting.
If you still think you have what it takes to make it in this business, now is the time to go down to your courthouse and get a business license. Usually you will have to have the license before you can open a business checking account and move up to accepting checks and eventually credit cards.
You can research this with your local officials. Not every area requires a business license
Next you will need business insurance. If you are lucky you live in a state that allows you to opt out of workers comp as a sole proprietor till you get more income coming in and need employees.
i think you should understand the costs of insurance from the gate, and would think it advisable that you get insurance as soon as possible.
Once you've saved up a little money buy only the equipment you need to make your work better and more efficient. Keep putting the rest in a box. Set some money aside for repairs. Get some business cards.
A lock box on extra money is important. It is not funds for the next family vacation or your wife's new dining room set, and yes, there might be a confrontation about it, and maybe a night on the couch.
Make some flyers on your computer and print them out yourself or take them on a thumb drive to Office Max and choose paper that looks good but costs little.
Take the time to make them look nice. A nice flyer will get more attention.
At first make your own soap. It won't work as good as EBC or other good soaps, but it will do the job till you build up enough clientele to support ongoing expenses like that. There are plenty of guys on here who can help you with that.
There are plenty of formulas out there, but make sure you test them before you use them on a customers property.
Once you have enough in the box go ahead and buy whatever equipment you need. If you are handy with tools you can buy a used skid on craigslist. I spent almost $6000 too much on my first skid because I didn't realize how easy they are to work on using the resources on this board. Use the craigslist app and get notifications for every pressure washer that come up for sale in your area in seconds. Be ready to jump when that good deal comes up.
Amen! A very common mistake.
If you don't already have a good truck, keep putting money in the box and find one on craigslist or even a used dealer. If you have gotten used to putting money in that box you will find out quickly that even a $2000 transmission job is a lot cheaper than a $600 per month payment and the $400 full coverage insurance that goes with it.
As an owner operator, payments suck. Having unreliable vehicles and equipment sucks, too.
Work out of your house till your neighbors can't stand it anymore. There is a LOT of wasted money on shops that are bought or rented before the need is actually there.
Amen. I operated out of my house for years and many of my neighbors never even knew. Just make sure you are courteous. Put your equipment away when you get home, and don't let the front of your house look like a junk yard.
Once you have a decent running truck and a decent skid and more than a few good completed jobs under your belt it's time to start looking for the big jobs.
There are $5k and up pressure washing jobs that come up all the time. Don't be afraid of it. My son bought a lot of his stuff from an $8k job that he was scared to death to bid on. He finished it in 4 days and paid cash for a lot of stuff he needed. That helped jump start his business.
see what I said above. Not everyone is equipped or able to run a large crew.
Look for recurring work. Once you've got recurring work you can start calling yourself a sustainable business. Use the recurring work as a gauge as to where you are going with the business. Once you have enough recurring work to quit your other job it's time to make that tough decision.
You can make big money on large, one time jobs. You will make bigger money on recurring jobs that may not make as much money.
Meanwhile put ALL your one time work IN THE BOX.
You will need it. You will need it for upgrading, You will need it for repairs. You will need it for blitz sales promotion material. You will need it for FUEL and SOAPS and RECLAIM if that next BIG paying job requires it. Don't lose out on a big job because you failed to put that one-time money IN THE BOX.
USE TEMP labor. It is not only economical, but if you are still working the field and you can keep an eye on them, you can go through a bunch of them and sometimes hit up on a diamond. You don't have to worry about workers comp or any taxes because you just pay the temp agency and they take care of all of that. Most agencies will bill you on 30 days so you don't have to pay them till you've gotten paid by your customer.
This is not something that I have ever done, I know Tony believes it, but I usually hired people that were just a little short on money among my acquaintances.
If you keep putting money in that box, you will really be surprised at how fast that box fills up. Use it wisely. You will be happy that 30% of your income isn't going to the bank in the way of interest. You will be happy that 50% isn't going in the pocket of an investor.
it does work best if you finance yourself. Unless you have a large, sure contract, I would not finance anything.
Once you've reached the point where your income tax starts hurting you, then it's time to start thinking about wise tax moves.
Regardless of what anybody says, there is nothing wise about saving tax money just so you can put it in the pocket of a banker. It's stupid. If you find yourself owing so much it hurts at the end of the year to the IRS you are not spending enough money on advertising, labor or cash equipment purchases.
But don't spend money just for a tax deduction. It does not make financial sense to spend $100 to save $40 on taxes, because it is still costing you $60 out of pocket.
It is much more cost effective to wisely and economically buy a backup for everything, including your truck and skid, than it is to buy a new one because it "has a warranty". That warranty won't be doing you a bit of good while your truck sits in the shop for 4 weeks waiting on parts. It's much easier to call the wife to bring your spare cheap truck when one breaks down so you can keep on working than spend $600 a month on a shiny payment that sits in the shop and shuts your whole business down.
keep in mind you have to pay insurance on that backup. I have twenty wash rigs, and only one of them is a backup. That is usually sufficient. That is also one of the large advantages to having a large operation.
One wise tax move is making sure your most used truck or sales vehicle is on the Mileage deduction instead of Actual expenses. I first learned this when we had the delivery business. We bought cheap, reliable, economical vehicles and drove the crap out of them. We paid as little as $3500 for some of them. We were doing around 50k miles per year on a few of them and the writeoff was astronomical compared to the actual cost of running them. It was a great move.
i am not sure, but if you have more than three or four vehicles, the mileage deduction doesn't work for company owned vehicles. When I worked at the dairy I had to use my own vehicle to follow drivers, etc. they reimbursed mileage. I paid $900 for a Honda Accord. I would get a check for mileage of about $1500 a month. That little Honda made me about $12k of untaxed income
Those are some of the things I've learned over the years.
I'm sure others will come to mind. I just hate to see contractors fall for that credit trap. And I just shake my head when I hear contractors schooling others on the benefits of getting in that trap.
