Question for the small business owners

Here's a useful link for business plan template.

Business Development Bank of Canada

:beer:

My plan has been fairly simple over the years. Keep my rates up as high as possible and my overhead as low as possible. In the end, that is all you can do. You can't charge more than the market will bare.

I don't sweat keeping up with all my numbers, but just watch them as I go. Highest expenses are payroll and vehicle expenses. Phone and internet expenses are pretty high also. Supplies, both office and field, I don't worry to much. You only use them if you are working, and if you are working they are a minor expense.

I run things about the same as Sam. Keep it simple.
It's good that you are
> fairly confident keeping my current income the same will be difficult
Owning your own surveying business can be very rewarding, for many reasons, but the money is only one of those. After reading your other post, it sounds like you do not want to move. If you have some time left with your current employer, can you do some moonlighting as a solo business owner?

> If you have some time left with your current employer, can you do some moonlighting as a solo business owner?
I actually partnered with another co worker who is also a RPLS for 2 years until we decided in march that by the time we each got our cut and then gave uncle Sam his cut it just wasn't worth working your days off to meet deadlines, as well as our lack of effort to market the business. It was more of a hobby for us, but was definetly a good learning experience since we didn't have the pressure of putting food on the table with the money we made. Even with little to no overhead we priced ourselves out of a lot of work.

Thanks all for the replies.

I can understand that.

You really can only charge what the market in your area will bear. I have respect for all the people on this forum, but the prices that people get in CA would never fly in my neck of the woods.

Alot of the jobs that I do as a solo guy, that keep the lights on, and food on the table, are those that most guys would not start up their truck for. The going rates around here are just not what they are in other areas of the country. Having said that, our cost of living is much less also.

You have to be agressive in marketing, and sell yourself to your prospective clients. I have been blessed to be in business for 5 years, and it is tough right now. It's a roller coaster ride. Some days you are the big, and some days you are the windshield.

My suggestion is that you take a couple of business courses and a couple of accounting courses. You will need those if you have to go into business. Of course you know what the overhead rate is at the company you work for since you do budgets and billing and all. I would expect that to be in the 2.7% to 3.1% range. A small business is going to have to work at the 2.1% to 2.4%. Some may even have to be as low as 1.9% to make it work where they are. Of course to get that low you have to not count all your costs and benefits or you can't get it that low.

The lower cost of living story does not really cut it very much in my opinion. Sure there are some hot spots of out-of-sight real estate prices, bit most places the truck costs the same, the survey equipment costs the same, the software costs the same, the milk costs the same, the loaf of bread costs the same and the pizza costs the same. So the real estate is less and the pay is less. That is about it. The average worker used to be able to afford a house here in Portland, but they can't any more because the real estate increased by a factor of 3 since 1997 but the pay is about the same. Oh well.

What about working now to position yourself to be the go-to guy that your company would use when you start your own business? You would not want them to be your only client, but they could be a good client for starters. You also have a year to work on marketing and your business plan to get things lined up. Many of the people on this board did not get to start their business this way. You have a big advantage on them. Best Wishes!

Uh, sorry, but the cart is before the horse. If you're going to move, you probably know where it will be. What market research have you done to the propensity to generate revenue in that area? What contacts are you making now?

Pre-planning is WAY WAY WAY more important that calculating overhead and competitive wages.

Remember, you can be proud and hungry. You don't go survey without deed research first, same with opening a business or moving a business.

> .... Some days you are the big, and some days you are the windshield.

I'm ALWAYS BIG!! But somedays I am the bug, and other days I am the windshield... Right now, I'm just a fly on the wall waiting for something to p00p.

reeeeeeeaaaaaaaaaaaaaaally slow here right now.

Carl

Sorry to hear that Carl. Flad you knew what I meant. I was beat when I typed that post!

I've had somewhat slow income from my business, because all I do is add a plugin-in for C3D, and have to keep prices significantly lower than Carlson Civil + Intellicad. But even given that, sales have been doubling each year since 2008. So my "day job" is about to go down to two days per week. Although it also has the benefit that I actually use C3D for "real work", unlike most of the people at Autodesk, so I know intimately what the weaknesses are, and what to add to my software. So working "in the trenches" helps me make better software.

That said, owning a small business can be tricky. You need a good accountant, or else you risk running afoul of the IRS, which can kill your business. Otherwise, you'll spend so much time trying to figure this tax stuff out that you won't have time for anything else. And I know that my company has started to reach the point where I need to hire more help, for customer support as well as day-to-day management of accounting, because it's started to get increasingly hard to keep track of. But I can't quite afford to hire someone to do that... I'm on the cusp. I hope to be able to afford that soon, but in the meantime, I do a lot of it myself. There are a number of these things that can happen when owning your own company. It's very rewarding in many respects, leading to a lot of personal satisfaction (and the fact that you are in control, and have nobody to answer to, except for your customers), but it takes a lot of work. It's not easy owning a small business these days. But if you can manage it, it's rewarding. I'm personally glad I started my own, rather than selling my software for cheap when it was in its infancy, or going to work for competitors of Autodesk, who seemed to want to kill my software, and have me work on their stuff instead.

> > .... Some days you are the big, and some days you are the windshield.
>
> I'm ALWAYS BIG!! But somedays I am the bug, and other days I am the windshield... Right now, I'm just a fly on the wall waiting for something to p00p.
>
> reeeeeeeaaaaaaaaaaaaaaally slow here right now.
>
> Carl

What's the last thing that goes through a bug's mind before it hits the windshield????

Its A*s...:-D

Seriously though, I own a small surveying firm here in NEPA...I suppose I should use a formula...but I don't. We just try to work a little harder than the other guys...it's worked so far.
Keep in mind your hours will double if you start your own business. I usually work half days or more (half a day is 12 hours, right?).

Your time working does increase, even when your workload is smaller, especially if you are solo.

It is tough staying in top of everything.

> Uh, sorry, but the cart is before the horse. If you're going to move, you probably know where it will be. What market research have you done to the propensity to generate revenue in that area? What contacts are you making now?
>
> Pre-planning is WAY WAY WAY more important that calculating overhead and competitive wages.
>
> Remember, you can be proud and hungry. You don't go survey without deed research first, same with opening a business or moving a business.

Thanks for the input, but i believe I am preplanning In the sense that I need to know how much it is going to cost me to operate a business, given a predetermined amount of revenue, and the amount of money I need to bring home to liive as I'm accustomed to. Obviously obtaining the business in the first place and keeping the business to continue the pre determined amount of revenue is the hard part. I do have some contacts but no sense in shaking too many bushes this early in the game. Undoubtedly starting a business in any small town even if I am a local is going to be hard with competitors having been in the area for 20+ years.
If I was to be able to get all the work I could handle over night if I can't afford to operate the business and still pay for food, housing and clothes for the family it makes no sense to even start down the road marketing my services.

There is no such thing as pre-determined income. Sorry to say, but there are way to many variables right now in this economy. I can figure out what I need to make in a year, but reaching that milestone is something entirely different.

I wish you all the best. I pray every day that I get enough work to keep the bills paid. One thing I have learned, is that this business is either feast or famine.

I have been in business since Feb. Like you I put feelers out on this message board to gauge my steps. Jimmy for one was a real friend and gave me good advice. One thing he told me to do was read Dan Beardslees book. That was good advice, although things have changed since it came out, most of it relates.

I didn't really do a business plan, but I did have a few key relationships in place that allowed me to step out the boat with some guaranteed work. That was huge. If you don't, you will need a lot more cash upfront to get you paid while you do marketing. You will likely need a line of credit regardless.

What do I want to do? Boundaries and Topos. What have I had to do...Stakeout and a lot of it. Stakeout is the one area where you can set up shop and start to compete on price almost immediately, although getting hired is still tough. These guys take your price and beat up their normal guy with it.

I also believe I am trying to out-work a lot of my fellow surveyors for clients. Being on my own allows me to really talk to them find out what they want and truly be responsive. We all know contractors are a needy bunch, but I try and hold their hand.

As far as projections go...it depends on what you start off with. Do you have equipment, computers, data collectors, software, and a vehicle already or will you have to purchase those things? I bought all these things well in advance of stepping out of the boat. I knew my equipment and software worked.

Insurance will also be expensive. You should budget 5k or so for all the different insurances you will need. Seems that you are planning on paying for help. I would recommend finding someone part time. Do as much as you can yourself. I bought a robotic instrument so I could be able to go and do for myself. The constant need to generate revenue will eat you alive if you don't have capital to invest up front. It's hard enough to pay yourself. Remember when you have employees you get paid last.

Like many here I work out of my house avoiding the cost of rental space. If business grows I hope to be able to have an office in the next few years, but I can't afford it now. You will be competing with larger more established firms and working from home will keep your costs down so that you can beat them on price.

I haven't purchased a plotter yet. Like many here i work off of a brother printer all in one that will print decent 11x17s. I use a local printing company that charges me about $2 a sheet otherwise. Not convenient, but I didn't shell out thousands either. When I get a 200 lot subdivision, I'll buy one 🙂

Remember that its hard to collect the money thats owed you sometimes. Contractors routinely are two to three months behind. It is stressful, and frustrating. The house locations and boundary surveys will help your cash flow if you can get them.

How will you setup your company? Will you be a Sole Proprietor, Professional Corporation? How will you account for your money? We use intuit quickbooks online. $50 montly, handles all your tax forms, employee forms, etc. Very good software.

Where will you spend your advertising dollar? How will people find you? Yellowpages & Superbook have given me a couple of jobs this year, we shall see if it evens out. I wish I had a better website. On days when I don't have field or office work I try to go out and introduce myself to a couple of prospective clients. Stay engaged. The referral is like gold. When someone gets your name from a referral you won't have to compete on price as much. I strive to give great service for this and other reasons, but mainly this 🙂
I hope this helps. Good luck.