Google incorporate in Texas and that should provide you with lots of reading material.

 

Yes this something I think I will just have to play by ear. As I said, I'm not sure how much of my time school will demand. The forklift guy also brought it up. He said he thinks I will get a couple of years into school and then drop out in favor of expanding my business.

I came to that point and opted to expand the business. I did and made a lot of money, too. Looking back, I think I missed out on some good stuff but no regrets. The point is valid, though. If you're good at what you do, demand will rise and eventually you may have to cut back on something to maintain the family life etc. (I realized this when I was taking my infant daughter to Calc III classes in a snuglie. Turns out she's really good at math so maybe it was a good thing..)

The idea is to give school priority and, if there is time, do this work on the side. This means I will probably have to tell my customers "sorry, I'm not available" a lot.

What I did was work for a few good clients and told them that I was making school a priority but I would 'be there for them'. Told my professors the inverse thing 'class is a priority but I have some other obligations. Missed a few classes but managed to keep most things rolling. For the clients, be honest and don't make promises you can't keep. For the professors, engage them in what your are doing. They'll probably be on board.. One of mine was so jaded with his students that he tagged along and helped me on a project. Cool!

I realize this might be a dealbreaker for some, but I hope that I can keep custmers based on price. I am hoping they will call me first, and if I'm unavailable, they call someone else, but next time they call me first again because I charge 1/3 of what the other guys charge. "the other guys" in this business charge usually >1000$ just for a day (or a couple of hours) of work. They get away with this because they have a good reputation (they WILL fix it, no matter what) and they can have a technician onsite within the hour. I cannot. I am a one man operation, and I hope my customers understand that.
I realize I am doing a lot of hoping in this post, but that's all I have.

Its not a dealbreaker. If you are as good as the other guys.. charge what they do. Don't tell the clients you are going to school. Tell them what your availability is. Meet with your professors and tell them what you're class availability is and make a deal with them as well. Any prof worth his tenure will applaud and support you. Work around those who won't. (I leveled with my profs and got 8 hours of 'directed study'. Turns out they needed someone who actually knew how to get things done... They all have their pet projects.. ask me sometime about the SciFi novel on IBM baudot paper tape..)

Anyway, separate business from .. you. You have a business. From the clients view.. that's it. Run it. You have availability limits.. and will work them in (and make sure you can take care of them).. But why those limits are there are your business.. Work it. Never cheat the customer, but never give it away, either.

And never forget.. if you were just nobody.. they wouldn't be talking to you. They will incur expense to replace you. Think about what that $ value is and that's your price point. You don't discount it because your added value is that you are a known solution to their problem. Not so much the other guys.

 

Google incorporate in Texas and that should provide you with lots of reading material.

I've been googling similar things, among other things, including "Industrial Machine Repair, Houston TX", "Industrial Machine Maintenance, Houston TX", "Machine Service, Houston TX", "________ troubleshooting, Houston TX" (fill in the blank with random industrial machine) - nothing really to be found. A few lathe/mill repair, sewing machine, and vending machine companies but no dedicated companies doing what I propose to do. The only one I know of is the one my current employer used to call before I started here. I can't even find a single related business category in this supposedly all-inclusive list of all businesses in Houston.

I don't know if that's a good thing or a bad thing. Could mean - The door is wide open for me and lots of potential business, There is NO demand for such a company, or I don't know how to google effectively. What do you think?

 

Did you just provide that link for reference? It looks like beyond that page is some sort of wizard for setting up a business if you click "get started." Would you recommend going through a website like this?

This all seems a little daunting and I would like some assistance in getting started but I don't feel comfortable doing it over a web page like that. Is there some sort of agency which helps people get started, that would hook me up with a CPA, lawyer, et. al. and make sure I'm doing everything right so I don't screw myself? I always get a little antsy dealing with the government - I feel like there's always something lurking in the shadows, waiting to bite me in the apples. Something I don't know about, and wouldn't even know to ask about.

EDIT: something like this, I guess is what I'm talking about. Is it worth the fees?

First... Take a deeeeep breath... Better now.. This does not have to be done in one night.

First the quote: Just for reference. Legalzoom is kind of boilerplate for the masses. I did not use them when I set up my corp because there wasn't an internet when I set up my corp. If you are doing research, try nolo.com or your local library. Every store-front lawyer will have a harddrive full of the necessary boiler plate to start your LLC, file necessary fed and state forms and tell you what to do to keep legal.

What you want to do first is interview them and see what they think.. Rush to the keyboard first? Bye. Tell you what they charge and ask you what your business is about? Better. Remember, once you get running, you can always check out other attys. Its not a big deal. You can read up and do it yourself.. I was lazy, knew an attorney and wrote a check. (about 800.00 but you can get it way cheaper these days).

Getting antsy with the gvt/state whatever will dissipate when you know the ropes. Buy QuickBooks, read the tutorial then see how it applies to your business. Take your findings on your CPA search and wait for a warm fuzzy. Believe it or not, both the State of Texas and the local IRS offices have a wealth of information that they are happy to share for free.

There probably is a 'Business for Dummies' book. Check it out.

Sorry if I stirred up anxiety... Please don't let it deter you.. Big breath now.. Starting and running a business is no big deal.. Its a pretty logical process.. BUT, it starts in force when you start doing business. That's why we say to get the framework in place before you get on it. Simple enough.

PS as far as your business link all I can say is - ugly website. Don't know but what the heck? Free consultation! Start there and see how they compare to others. Don't sign anything.

Finally, you can still do some work while getting everything set up. Just keep good records and transfer the receipts/costs to the new LLC/corp whatever.

Finally, finally: When I set my TX corp up, the state req'd $1K in assets (check from me to buy stock in my case) to fund the corp. We ain't cheap in Texas!

Finally EDIT, Visit some small business that you trade with.. gourmet coffee shop, fireman's BBQ, locally owned whatever and ask to meet the owner. Tell him/her that you 1) shop here always... but 2) ask them how its done. Most will be happy to share the basics and gives them a chance to vent about the taxes, forms they have to fill out, gdmd gvmt etc etc. For the price of lunch, you can get a real education.

 

I can't even find a single related business category in this supposedly all-inclusive list of all businesses in Houston.

When you register a business you'll be asked to specify what it is from a list. This is drawn from that list..

Drilling down from the Get Started tab has some good basic advice.

I don't know if that's a good thing or a bad thing. Could mean - The door is wide open for me and lots of potential business, There is NO demand for such a company, or I don't know how to google effectively. What do you think?

I think you already have a customer who values your services. Go for it.

This is fun, yes? Yes!

 

I think you already have a customer who values your services. Go for it.

This is fun, yes? Yes!

YES!!!!!!!!

 

I 'm glad we found someone who knows what he 's talking about.

JohnInTX, I just hope you will be around when strantor comes back with more questions.

 

third party liability is what you'll need as a basic, then you want to protect yourself, and any equipment/tools you require. As a business, these items are likely not covered by your home package. Most, if not all employers, require WCB coverage for anyone on thier sites.

What do people need as far as you offering services. They need time/expertise, specialized equipment, capital assets. I would stick to time/expertise, and even that will be in short demand while you do your school thing. Activiley look around for people with technical skills that you could put to work. Why do it yourself with such limited time.

I started off doing repairs to electronics, controller, counters, etc. Little equipment required, which you probably have, and no tight deadlines. I then took on a couple of PM projects. Today I do mostly manufacturing upgrades. I have a couple of engineers, list of respected tradesmen as well as labourers. My time is best spent seeking opportunities and selling our services. Lots of networking in industry.

 

So, this being my first introduction to the types of businesses, from this chart I cannot see why anyone would choose a sole proprietorship. Wbahn, care to explain?

I'm current a sole prop for a few reasons. When I started it was ultra simple. Basically zero paperwork (in Colorado, you have to file a tradename registration if you use anything other than your name as your business name, but that's a one page form and cost about $10). You have no separate tax filing requirements for the business, but do have to do a Schedule C for the business that's part of your personal filing. When I started, I was only doing a single project for a start-up and didn't plan on doing anything beyond that and in many of the intervening twenty years I have had just side-line income from it (it's been primary income for perhaps five of the twenty-one years). So the Schedule C has usually been very simple (and I make decisions about what I do in part to keep it simple, which is a pretty sad state of affairs when you think about it -- business decisions being driven by tax policy instead of market and other business factors, but let's not go there). The work that I have done has extremely little risk in terms of getting hit with a lawsuit, so the liability protection of setting up an LLC wasn't really there, especially since I carried a $2 million umbrella policy.

I am looking at going in a direction that will have a lot more customers and while the chance of getting sued is still very remote for the service I will be providing, 'remote' multiplied by 'lot more customers' works out to an unnacceptable risk. So we will set up an LLC when we push out in that direction, probably next year.

But one thing to keep in mind is that an LLC is not recognized as a type of business as far as the IRS is concerned, so if you go that route (to get the liability protection that goes along with it) you will have to make an election about how the LLC is taxed. I believe the possibilities are as a Sole Prop, a Partnership, and an S-Corp). Being taxed as a Sole Prop has some advantages because you can scour the tax codes and strike an optimal balance between your business expenses and your personal tax situation. For instance, in one of the few years that I itemized deductions, I elected not to write of any of my mortgage interest or state property taxes as a business expense and, instead, put them on the Schedule A. This kept me from having a loss for the year on the business (so that I didn't endanger the presumption of profit seeking). I checked with the IRS specifically to see if that was legal and they said there was no problem at all; as long as I didn't expense/deduct the same dollar in more than one place it was always legal to choose not to classify something as a business expense (though, in the case of depreciation on real property improvements they may treat you in subsequent years as though you had taken the allowed depreciation whether you did or not).

In the years in which my business was a sideline affair, I would make a point of incurring expenses (primarily equipment and software purchases) that would result in the business profit being close to, but less than, $400 since this is the most you can make before you have to pay self-employment tax (and on the whole amount, not just the amount in excess of $400!). For a long time I thought that this would be a red flag setting me up for an audit, but I have since seen info from numerous 'experts', as well as having raised it with IRS folks on several occasions, that this is seen as a common and normal tax strategy for many small Sole Props if there is sufficient other income to live on evidenced on the return. In essence, the owner is doing nothing more than saying they don't need the profits from the business to live on and are choosing to reinvest all profits back into the business to expand its capabilities and using the tax code as the basis for setting the limit at which they choose to stop doing that.

 

Well said WBahn.

 

When I was 20, I did house calls for Sears, repairing TV's, TV antennas, air conditioners, clothes washers and dryers, etc. When I got off work, I'd go do some calls on my time. $16 for a house call, $16 an hour. I kept my rates like that for 20 years as everybody else raised their rates. I figured I would acumulate loyal customers, year after year.

I was completely wrong. Right now, I have about 2 loyal customers, and that's because their husbands used to work with me, but they died. Low prices did absolutely nothing to build my business. I can see now that the right thing to do is get paid properly NOW! I don't know what the psychology is that would make a person decide to pay double, triple, or quadruple what I was charging, but they did. Pretty much every customer hired somebody else for a higher price than I charged.

I can't believe I pist off every customer I ever had. I can't believe that my average time to get to the job was less than 90 minutes and they didn't like that. I can't believe my work was sub-standard after 40 years with no complaints filed against me. I also can't explain why great service at low prices didn't create a customer base. I can only say, "I was wrong". I recommend you don't do what I did.

 

Heres an old story we tell our kids. A man owns an orange grove and sets up a stand on the right side of the road saying Oranges $1. Then he set up another sign on the other side of the road saying Oranges $3. When his kid asked him why would he charge $1 there and $3 across the street. The grandfather replied, well, some people like to pay $1 for oranges, others like to pay $3 for oranges.

 

When I was 20, I did house calls for Sears, repairing TV's, TV antennas, air conditioners, clothes washers and dryers, etc. When I got off work, I'd go do some calls on my time. $16 for a house call, $16 an hour. I kept my rates like that for 20 years as everybody else raised their rates. I figured I would acumulate loyal customers, year after year.

I was completely wrong. Right now, I have about 2 loyal customers, and that's because their husbands used to work with me, but they died. Low prices did absolutely nothing to build my business. I can see now that the right thing to do is get paid properly NOW! I don't know what the psychology is that would make a person decide to pay double, triple, or quadruple what I was charging, but they did. Pretty much every customer hired somebody else for a higher price than I charged.

I can't believe I pist off every customer I ever had. I can't believe that my average time to get to the job was less than 90 minutes and they didn't like that. I can't believe my work was sub-standard after 40 years with no complaints filed against me. I also can't explain why great service at low prices didn't create a customer base. I can only say, "I was wrong". I recommend you don't do what I did.

Also you were in a diying industry. Much like the maytag repair man most of those object you said you were repairing are throw away objects for most people. When my 5 year old $300 LCD tv goes out I pitch it and buy another. Same with washers and driers, microwaves, etc.. Our build quality had dropped so low and our abundance of new supply has made repairing things nearly worthless.

 

I don't know what the psychology is that would make a person decide to pay double, triple, or quadruple what I was charging

maybe it's the "you get what you pay for" mentality. They think if they pay you half what others charge, you're going to do a half ass job.

 

In the world of retail, this is mostly true.

Except for the groceries...

 

In the world of retail, this is mostly true.

Except for the groceries...

Right. I was looking at perfumes with my wife at the mall. Some were 120$+ for a couple of ounces, carrying big designer names. Then we went to dollar tree and they have 6oz bottles of perfume for 1 dollar. The dollar perfume actually smelled good and not like prostifume. I figure the dollar tree perfume reflects how much it actually costs to manufacture perfume, and the designer perfumes are marked up 36000%. It couldn't possibly cost that much more to slap a designer label on it. But people have this notion that if they pay less than 120$, they are buying bottom shelf perfume. If, for example, Bvlgari lowered their price to something more reasonable, like 30$, it would threaten their image as a high end designer product.

 

I found this on the internet ... an hourly rate calculator ... http://freelanceswitch.com/rates/

There are also task based rates. Automotive techs use the average times to do a task times the shop hourly rate. Say 60 per hour SHR * 15 minutes is $15. So if your very good, you'll beat those average times easily.

You'll get the idea of a Shop Hourly Rate from the link above.

 

Also you were in a diying industry.

One thing they don't throw away so fast is central air conditioning at $2000 and up. I fix them almost exclusively now...probably for exactly what you said. Nobody pays for a repair on a dishwasher, microwave oven, or clothes dryer. They're just too cheap to repair.

I do get the occasional, over a thousand dollars, side-by-side refrigerator-freezer to fix, but I haven had my nose in a TV or a microwave oven (except my own) for 20 years.

 

One thing they don't throw away so fast is central air conditioning at $2000 and up. I fix them almost exclusively now...probably for exactly what you said. Nobody pays for a repair on a dishwasher, microwave oven, or clothes dryer. They're just too cheap to repair.

I do get the occasional, over a thousand dollars, side-by-side refrigerator-freezer to fix, but I haven had my nose in a TV or a microwave oven (except my own) for 20 years.

Your dealing in a bullet proof industry. Trust me I'm from FL. We learn at a young age if you wanna have a job 24/7/365 and never have a depression, get into AC work.

 

When my 5 year old $300 LCD tv goes out I pitch it and buy another.

and I have a 9 year old, 31" Sony CRT TV, which I repaired a few weeks ago by re-soldering the vertical drive chip. Guess I'm just a cheapskate

too bad my customers aren't