Bit bored, go self employed?
Discussion
Evening all.
I've made the mistake of reading "Rich dad poor dad". I now cannot get it out of my head that running a business is the only way forwards to progress myself.
I am an electrical engineer in my day job (senior position and good pay). However I am thinking that i should go self employed (actually limited company) and try my hand at household/small commercial etc electrical inspection/install/repairs. In my head its the only way I can actually work harder and get paid for it myself. At the moment, if i work hard, maybe the boss will say well done. However if i work hard in my own business i will actually get reward for my efforts.
Am i nuts? Speaking to those in the trade, £200 a day is normal and at present £300 a day is possible due to skills shortage. Sounds like the money is there, and i could work 3 days one week if I fancied, 6 the next if I wanted.
I'm 39 now and my career is going well, but likely further increases will only be minimal, 10-20% in the next 5 years if I'm lucky. 5% if not. I already run a small business earning well in solar and off grid systems and enjoy the ability to "make" money, take something of x value, add 20% and sell it.
Has anyone made this sort of move at this point in life? Anyone else read this book and made a change?
Thanks.
I've made the mistake of reading "Rich dad poor dad". I now cannot get it out of my head that running a business is the only way forwards to progress myself.
I am an electrical engineer in my day job (senior position and good pay). However I am thinking that i should go self employed (actually limited company) and try my hand at household/small commercial etc electrical inspection/install/repairs. In my head its the only way I can actually work harder and get paid for it myself. At the moment, if i work hard, maybe the boss will say well done. However if i work hard in my own business i will actually get reward for my efforts.
Am i nuts? Speaking to those in the trade, £200 a day is normal and at present £300 a day is possible due to skills shortage. Sounds like the money is there, and i could work 3 days one week if I fancied, 6 the next if I wanted.
I'm 39 now and my career is going well, but likely further increases will only be minimal, 10-20% in the next 5 years if I'm lucky. 5% if not. I already run a small business earning well in solar and off grid systems and enjoy the ability to "make" money, take something of x value, add 20% and sell it.
Has anyone made this sort of move at this point in life? Anyone else read this book and made a change?
Thanks.
To understand the concept and potential of self employment you must think and aim beyond what you can do alone.
There's only so many hours a week / month / year you can work and if you tally all those up, multiply the hourly rate you can charge then deduct your overhead and the hours you need to spend working but not billing (admin and new business generation), you'll find the nett to similar, same or even less than you earn currently but with added risk.
That doesn't mean you shouldn't think about it though. But you need to think and act bigger. Build sufficient business to justify building a team. Diversify. Grow and then sell. Aim for the latter from the outset.
It's these things you can't do employed by someone else and the belief in achieving them what should trigger the move to self employment beyond the ability to bank an extra few % each month.
There's only so many hours a week / month / year you can work and if you tally all those up, multiply the hourly rate you can charge then deduct your overhead and the hours you need to spend working but not billing (admin and new business generation), you'll find the nett to similar, same or even less than you earn currently but with added risk.
That doesn't mean you shouldn't think about it though. But you need to think and act bigger. Build sufficient business to justify building a team. Diversify. Grow and then sell. Aim for the latter from the outset.
It's these things you can't do employed by someone else and the belief in achieving them what should trigger the move to self employment beyond the ability to bank an extra few % each month.
Stevie, you are absolutely right. The key to business is of course to get other people to work for you and earn money for you. Otherwise I will just be earning a wage, albeit in a slightly different way to how I do right now. This is my long term plan, but based on my past experience, I wont be able to jump into this. I would need to start by doing the job myself to learn it, then take on apprentice/labourer/other electricians etc over time.
I had also had the thought that just doing electrical household would be risky, and as you say diversifying would be good. I already do solar for offgrid, so doing house installs would make sense. Speaking to the wife, we could also use our others skills to farm organic chickens or possibly child minding (wifes skills mostly). This way we aren't relying on only my income.
I had also had the thought that just doing electrical household would be risky, and as you say diversifying would be good. I already do solar for offgrid, so doing house installs would make sense. Speaking to the wife, we could also use our others skills to farm organic chickens or possibly child minding (wifes skills mostly). This way we aren't relying on only my income.
How about testing the market by doing the self-employed thing at the weekends, while keeping your PAYE job?
Obviously you can't work 6 or 7 days a week indefinitely, but it's worth a go for a few months.
There must be quite a few potential customers who are out working during the week, and would prefer a sparks who could come to their house at the weekend.
Totally different line of business, but I started my self-employment while doing a full-time PAYE job. When the business grew to the point where I was working 7 full days each week, I gave up the full-time position (put my hand up for voluntary redundancy) and went part time. Eventually I gave up PAYE completely.
Since I'm basically selling my skills and knowledge, I'm never going to take anyone else on, so I won't get rich. Loving the flexibility though.
Obviously you can't work 6 or 7 days a week indefinitely, but it's worth a go for a few months.
There must be quite a few potential customers who are out working during the week, and would prefer a sparks who could come to their house at the weekend.
Totally different line of business, but I started my self-employment while doing a full-time PAYE job. When the business grew to the point where I was working 7 full days each week, I gave up the full-time position (put my hand up for voluntary redundancy) and went part time. Eventually I gave up PAYE completely.
Since I'm basically selling my skills and knowledge, I'm never going to take anyone else on, so I won't get rich. Loving the flexibility though.
OP - sorry but you really need to rethink this. Your thread title, plus the "i could work 3 days one week if I fancied, 6 the next if I wanted." doesn't give the impression that you have the right motivation.
Self-employed/running your own business is (unless you have something unique) often a lot harder than working for someone else. It has it's advantages (and disadvantages!), and you need to be 100% motivated to make it succeed.
"£200 a day is normal and at present £300 a day is possible due to skills shortage" - I set up my own business back in 2001. Back then I calculated that I needed to average £500 per day (allowing for 50% of this going toward tax, NI, costs etc.).
Apologies if I've misinterpreted your post, and good luck if you decide to go for it. I don't regret it for a second, but I'd urge you to think it through before you take the jump.
Self-employed/running your own business is (unless you have something unique) often a lot harder than working for someone else. It has it's advantages (and disadvantages!), and you need to be 100% motivated to make it succeed.
"£200 a day is normal and at present £300 a day is possible due to skills shortage" - I set up my own business back in 2001. Back then I calculated that I needed to average £500 per day (allowing for 50% of this going toward tax, NI, costs etc.).
Apologies if I've misinterpreted your post, and good luck if you decide to go for it. I don't regret it for a second, but I'd urge you to think it through before you take the jump.
Don't use day rates as a guide, the only time you think about those is if you're contracting for someone else, if you're only going to do conrtacting then you're not really self employed.
Base your calculations on what you can charge for a job, what you can mark materials up by, yes you need to think about how long it will take and quote, but you need to make a profit over and above your expected 'day rate'.
I don't give day rates or even state how long he job should take, I quote a price fora job, it's then down to me how quickly I get it done.
Base your calculations on what you can charge for a job, what you can mark materials up by, yes you need to think about how long it will take and quote, but you need to make a profit over and above your expected 'day rate'.
I don't give day rates or even state how long he job should take, I quote a price fora job, it's then down to me how quickly I get it done.
StevieBee said:
To understand the concept and potential of self employment you must think and aim beyond what you can do alone.
Not bad advice, but not universally applicable. Having managed teams most of my working life I craved the freedom of being responsible only for myself. I’ll never employ anyone. When I need help I tap into a network of associates. No interest in building something to sell, only in doing rewarding work on my own terms.OP, as others said you need to be prepared to work on your business as well as in your business. Only about 40-50% of the average self-employed person’s time is spent actually doing chargeable work. The rest is sales, marketing, accounting and admin. If you’re doing three full days of client work that’s a very full week.
Do you have a good network of clients already to tap into? Are you organised, good with time management, willing to take on the business side of things as well as being good at your trade? How much cushion of savings do you have? I built up two years’ living expenses before I took the plunge, but managed to get to my target income level after just one year, sooner than I expected. That’s with decades’ worth of contacts and me pounding on doors relentlessly. You have to make it happen - and it’s never as straightforward as you expect. It’s easy to take for granted how much is done for you when you’re employed by someone else.
As someone else has mentioned above, best to try to get something going as a side gig first if you can, although that’s not always possible for competitive reasons.
megaphone said:
I don't give day rates or even state how long he job should take, I quote a price fora job, it's then down to me how quickly I get it done.
Precisely what I used to do.It's important to avoid giving clients any timings or figures they can use to compare you with anybody else competing for the job or subsequently hold you to if you get the job. The only thing that frequently works is a little bulls
t and brinkmanship about how busy you are which always creates a good impression of your abilities and that in turn lets you nudge the quote up a bit as well as pick and choose when it suits you to do the work.I used to sub quite a lot of work out and never agreed a day rate with my subbies either. They were always on job and finish.
If clients insist on a day rate rather than a job quote then take that as a strong warning sign that there's going to be grief about exactly how hard and how long you've been working every day and petty little disputes about going off site to buy materials or taking calls or even getting stuck in traffic on your way in.
IME those are the clients to avoid. Let somebody else have them instead.
Edited by Jaguar steve on Tuesday 18th May 09:38
plenty said:
StevieBee said:
To understand the concept and potential of self employment you must think and aim beyond what you can do alone.
Not bad advice, but not universally applicable. Having managed teams most of my working life I craved the freedom of being responsible only for myself. I’ll never employ anyone. When I need help I tap into a network of associates. No interest in building something to sell, only in doing rewarding work on my own terms.Despite my initial reply, your scenario matches exactly mine!
I think in my hamfisted way, I was trying explain to the OP that going self employed offers little opportunity for growth if it's just one person. The difference between being employed and going solo is that with one you have a job and with the other, you own a job.
Hi eniacs,
I trained as a factory E&I tech
In 1997 I took redundo from Tate & Lyle, spent a year pissing it up the wall, then came back and started contracting.
I no longer contract as am a partner in a successful consultancy, but some thoughts:
My peers who are still on the tools are physically broken, so I'd advise getting into design and verification, and estimating/project management.
Avoid domestic and concentrate on niche industrial, such as CompEx for ATEX installs, or fire/security/access/data.
Get a website, telephone and email enquiry answering service, a decent SME accountant, a decent HR and HSE advisor, and onto trade/NICEIC directories.
It'll take you at least 5 years to get established, in which time you'll have gone through several employees...
A good friend of mine in the northeast started out self emp in 2005, now he's running 40 techs and into offshore skid builds.
You just need 1 good contract!
I trained as a factory E&I tech
In 1997 I took redundo from Tate & Lyle, spent a year pissing it up the wall, then came back and started contracting.
I no longer contract as am a partner in a successful consultancy, but some thoughts:
My peers who are still on the tools are physically broken, so I'd advise getting into design and verification, and estimating/project management.
Avoid domestic and concentrate on niche industrial, such as CompEx for ATEX installs, or fire/security/access/data.
Get a website, telephone and email enquiry answering service, a decent SME accountant, a decent HR and HSE advisor, and onto trade/NICEIC directories.
It'll take you at least 5 years to get established, in which time you'll have gone through several employees...
A good friend of mine in the northeast started out self emp in 2005, now he's running 40 techs and into offshore skid builds.
You just need 1 good contract!
StevieBee said:
[I was trying explain to the OP that going self employed offers little opportunity for growth if it's just one person. The difference between being employed and going solo is that with one you have a job and with the other, you own a job.
This is a key decision that one needs to make up front. Do you want to build a business with growth potential and the possibility of a lucrative exit? With all of the stresses that this will bring. And requires you to have management skills and the desire to use them - this is actually more important than being good at your trade, as you can always hire people with trade skills.Or are you happy to maintain a "lifestyle" business that's simpler because it's mainly just you doing your trade without the need to deal with employees and investors? But has no such sale potential and once you quit working the income disappears.
Your business strategy and how you spend your time will be vastly different depending on which route you pick, I can think of a few examples of people who thought they were building a business to sell only to realise it was actually a lifestyle business. If you expect to build a business it needs to contain saleable assets like IP or brand and have the ability to survive beyond the founder. Some folks think just because they have clients that they have a saleable business, not realising that once they leave, so do the clients.
Your post OP was me 1.5 years ago. Same reasons etc. So I quit last January and went contracting.
SE changes your whole outlook on work. I was having a early mid life crisis and the companies imcomptentence were wearing me down.
Now I wake up enthused, more driven, and your effort directly correlates to your earnings. I like being able to walk way from crap clients, but also going the extra mile for the good ones. The work is less stressful (construction politics) but weirdly better pay (if you can get price work).
Work I crazy busy everywhere I look, any sparks out of work atm are either lazy or crap.
Do it now!
SE changes your whole outlook on work. I was having a early mid life crisis and the companies imcomptentence were wearing me down.
Now I wake up enthused, more driven, and your effort directly correlates to your earnings. I like being able to walk way from crap clients, but also going the extra mile for the good ones. The work is less stressful (construction politics) but weirdly better pay (if you can get price work).
Work I crazy busy everywhere I look, any sparks out of work atm are either lazy or crap.
Do it now!
I looked into this myself, same sort of electrical work, having done 16th edition many years ago, it'd be quite simple, BUT it's all the additional training and qualifications that put me off, I totalled it up to around £5000, and it's just certificates and job cards and that sort of stuff, it's ok if you can guarantee you'll have work, but if not it's a lot of money, when you could earn similar in a mundane office job with absolutely no qualifications at all.
Carbon Sasquatch said:
I thought Rich Dad Poor Dad was all about unearned income rather than being self employed.
It's about having assets that produce a return - or employing other people and making a margin off their work.
Going self employed would be a good start, but that's not the point / end game
Me too. The whole premise I thought (and their is an app which is a game) of being able to eventually earn money when you're sleeping. A world away from charging from your time.It's about having assets that produce a return - or employing other people and making a margin off their work.
Going self employed would be a good start, but that's not the point / end game
Gassing Station | Jobs & Employment Matters | Top of Page | What's New | My Stuff