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Solo Business??
Posted by NSTEYB on October 4, 2019 at 3:16 pmSERIOUSLY tossing around Idea of leaving my cozy Survey Dept. Manager position and go out on my own as a Solo business owner…..boundary, topo, small layout, etc. Licensed in 4 states with 25 yrs behind me.
Problem is it terrifies me to give up insurance and a “regular” paycheck.
My area has the need currently….
Has anybody done this with (later) regret? Or is it a “Go For it!…you’ll never look back!”
samizdat replied 4 years, 1 month ago 32 Members · 74 Replies- 74 Replies
No regrets here, but be aware that timing plays a role in the outcome. If you believe that we may be on the cusp of a significant recession, now might not be the best time to leave the warm embrace of an established firm. If you think the good times are going to keep on rollin’ for a few more years, then there’s no time like the present.
I went out on my own for personal rather than business reasons, and I did so at a time when the regional market was slowing. Fortunately, I had enough saved up to carry me through the first year, because I needed it. The good part about that is that I had plenty of time to set up my office and field operations without having to worry about getting work out the door, because there wasn’t much of it at first.
As long as you’re a self-starter, you’ll likely never look back unless your finances are so thin that you can’t weather a down period. I can’t imagine what my life would have looked like for the last 26 years if I hadn’t made the jump.
Being a “freelance” surveying consultant is extremely rewarding. I gave up that “steady paycheck” almost thirty years ago and no, I’ve never looked back. I really can’t say I’ve known anybody over the years that actually fell on their face and washed out in doing so. As an employee if you have ever sat at your desk (or behind the steering wheel) and wished you had more input on putting a job together, or wanted more time to investigate things further, you need to do your “own” work. But doing so has its unique qualities.
Be prepared to put in more time than you’ve probably given your day job. I’ve burned up barrels of midnight oil cranking out work, doing research and bookkeeping. But in my mind it is so worth it.
Let us all know what you decide. There are many brothers and sisters here of the same ilk that can offer experience and guidance.
- Posted by: @jim-frame
No regrets here, but be aware that timing plays a role in the outcome. If you believe that we may be on the cusp of a significant recession, now might not be the best time to leave the warm embrace of an established firm. If you think the good times are going to keep on rollin’ for a few more years, then there’s no time like the present.
This is probably the most important advice you will get.
Jim
If it terrifies you don’t do it.
What you can do while you are employed is start acquiring all the non-perishable survey items and begin building your inventory and such. You can knock out a lot of the must have items while you are currently employed. Setup a business under a nondescript company name, like XYZ Land Services, (not land surveying) and that will allow you to begin purchasing stuff. The reason I say (not surveying) is because if you incorporate a survey business you will have to have a PLSRLS as its registrant and you don’t want to do that yet. Heck, you could even make it a handy man business it does not matter so long as you can write off the cost.
Once you get closer to actually making the leap then you can change the name of the company and register it with the board.
Before you make the plunge, know what the market is. Go around to every survey company and quiz them on their prices. The worst damned thing you can do is run you business without know what the cost for various things are. A lot of folks here who get their ticket immediately quit their job and set their prices based on the salary they were making at their last job. So they quit their job and immediately start offering up cut rate discount prices because they think that they were making $75k at their last job and they want to make the same for themselves and they go broke, starve and drive prices for services even further in the gutter.
I have a solo business that I work on the weekends while still keeping my M-F job. The main job I make machine control files and do earthwork calcs for a heavy highway/site contractor so there is no conflict of interest. My solo practice I do physical improvement surveys mostly for a local title company. I can do a bunch of different types of work, but will not do construction staking. Don’t need the headaches and the 10x factor for E&O ins. As the solo business picks up to where I can comfortably transition over to full time, then I’ll evaluate my situation.
The actual question guys is insurance. When I first started my business I got insurance through my wife??s company. If that is not an option for you I would look to joining an organization where you could get in a group policy for small business owners, ex. Chamber of Commerce (not all areas). If that doesn??t work you will need to purchase a personal policy. Insurance is my largest expense.
The other need will be E&O, general liability, and workman??s comp insurance. If you are surveying for engineering firms, topos, ALTAs, or layout for any projects with substance from larger corporations this is requirement. The good news is the first year is the cheapest, but it will sting. Budget $5k or so.
- The other major hurdles are equipment, software, accounting, availability of work, securing work, collecting the money, and your over all health and fitness. Owning and/or running a business is not for everyone and this decision is unique to you and you alone. I began surveying in High school and always planned to have my own surveying operation, no regrets with that. ??Solo? is difficult though. I found as a solo operator I was much more efficient with two sets of hands, i.e. hourly guy that you need when the sites get nasty and the money is right.
It’s not so much what you know about surveying that will be the concern, if there is one. It will have far more to do with your ability to deal with ABSOLUTELY EVERYTHING that goes into running a business. Time management is a really tough one to get under control when you don’t have a standard work day in a standard work environment with standard co-workers and all sorts of things that you have available to you every day in your current position.
You will be in charge of buying your own toilet paper and having it available when needed. Now change “toilet paper” to ABSOLUTELY EVERYTHING ELSE you need to function. From software to people skills. From servicing the copier to who you gonna call when the survey chariot develops a problem in a very bad spot at a very awkward time. Seriously, nearly all of the little support systems you have surrounding you every day now will be gone.
Today is a good example. I shut the alarm off at 7:00. By 8:00 I had gone through the usual morning list of checking things on my computer, grabbing some food to go with my morning round of pills, sorting through yesterday’s pile of things that did not get done, then coordinating with another survey firm via telephone, text and email to wrap up a key portion of a joint project. By 9:00 I had sent and received emails with an attorney for a client, that client, that client’s architect, the contractor who is in desperate need of my files for that client’s project and another survey/engineering firm who will be using my information to create the final civil portion of the design for my client’s project—plus attempting to contact my daughter who is on vacation in Italy while celebrating today as her 40th birthday. There were some texts back and forth with my wife on our scheduled departure about 4:15 today to head 100 miles to her school’s football game where she assists the football coaches. By about 10:00 I finally looked through my computer again for feedback from early communications, did some drafting on two other small projects, did a bit of research online for a new survey job and made a point to recharge my cell phone. At 10:30 I decided I really should probably take a shower and put on some clothes so I could leave the house/office to run to a courthouse for a bit as they will be closed on Monday. By noon I was done at the courthouse but stopped to chat with the County Road and Bridge Supervisor as he was looking for some advice on a bridge project application he must submit by next Friday. Stopped in the County Clerk’s Office to learn who had been selected to be appointed as the new County Clerk as the old one is retiring next week. Also stopped by the office of the Superintendent of Schools down the street a bit to pick up my packet of information for our School Board meeting on Monday evening. Was caught on the street by a client with a project three blocks from where we were standing that I have not been able to fit into my schedule yet. Then crossed the street to have lunch and discovered a fellow School Board member there so we spent our time chewing and cussing and discussing school business. By 1:00 was enroute back to the house/office. Grabbed today’s mail out of the box, then tried to avoid running over more than a dozen cats who were attempting to remind me that I had neglected to provide them earlier with their daily dosage of bribe food while parking. Had driven past a few of my soybeans fields on the way back that reminded me I definitely need to buy a big truck within the next few weeks to haul grain. Finally back to my desk and a chance to respond to several messages on a couple of projects before taking the opportunity to look in at this wonderful site to see if anyone might need some sage advice or, at least, a good story.
One thing to keep in mind at all times is life is far more important than money. If you have a kid participating in some activity, go to it. Don’t say to yourself, “Gee, I could have billed out $200 dollars if I had stayed at work.” That work will still be there and you can work on it at 2:00 a.m. or 5:30 a.m. or on Saturday or any other time than when you are watching your kid do something that is important.
P.S. Heading in to take a one hour nap in the middle of the afternoon.
Do solo operators generally make more money compared to working in a larger company?
- Posted by: @bstrand
Do solo operators generally make more money compared to working in a larger company?
I can??t speak to ??generally,? but I??m my case I??ve made- in two years- more money than I made as a partner in four years of that plus the last probably three to four years of the project manager job before that. So, easily, in my case.
That said- I operate in probably the most opportune market in the country over the last twenty years, in terms of land development and surveying work. Seriously- it has hardly let up here since I was first learning how to run a gun. 2008-10 were kinda slow, but it wasn??t hard.
To the broader question there??s already been good advice, but I??d add this: your lifestyle can have a lot to do with the decision. If your day-to-day consists of nice wardrobes, new cars, craft cocktails, and lots of toys- I??m not sure right now is a time I??d be making the leap. But, if you??re happier/more comfortable living more frugally and austere, then why not go for it? Tough times are tougher for those with more to lose. I just paid off all the debt I took on to start this deal, so even if work stopped dead in its tracks tomorrow all I have to do is cover the mortgage- and I??m neither too proud nor too far removed (mentally) from scrubbing toilets, waiting tables, and pushing lawnmowers to keep me from doing it again if need be.
Dont know where you are or what the conditions are like there. What I know now is any and every survey ??job? I??ve had or been offered (which still happens daily) means making- at best- 50 cents on the dollar relative to what self employment has brought.
You just knew I would chime in, right? There are two big factors involved.
One is your ability to be a good surveyor in your niche, and there are two parts to that. In my opinion, trying to do everything is a mistake. Construction staking, fine. Boundary surveying, fine. ALTA surveys, fine. But not all three mixed together. And you had better be a good surveyor in your niche because everything is going to depend on you, personally. I know several surveyors who have been before the SBTR repeatedly because, frankly, they don??t know how dumb they really are. Just because you have that license doesn??t make you a good surveyor, so don??t deceive yourself. Sorry to be blunt, but I??m telling you the way it is in the real world.
The second factor is your ability to run a business. Turns out I??m good at that, probably because my first major was accounting, with a lot of management classes, marketing, finance, you name it. That taught me what I needed to know on the business side. You??ve never taken business classes? That makes it iffy at best. Very sadly, I know too many excellent surveyors who had to fold their business. And I do mean sharp land surveyors, but running a business is a separate skill.
Do solo operators generally make more money compared to working in a larger company? I don??t know about generally, but I??ve done both and my experience is I tripled my income. Bear in mind I??m also frugal, as anyone who has seen my 19-year-old jalopy of a Camaro work car can attest.
Looking back, zero regrets at going solo. None.
Here is a question that applies to virtually anyone. How much money do you really need to have what you want?
If you think it takes fancy, high-dollar Eye-talian suits and the latest “hot” car to impress others in this world you probably aren’t a surveyor to start with. Most surveyors are far more down to earth than that. For some, making $800,000 per year is inadequate if your next door neighbor is making $900,000. As for me, I don’t really care what my neighbor makes. Some of the richest people I know spend at a semi-basic level on their own needs and give the rest to some number of worthwhile entities that help others in this world. They don’t need to have the biggest headstone in the cemetery.
As a solo operator, you have nearly unlimited opportunities to make money in front of you. But, what are you willing to sacrifice to get the largest cash flow? Some, like Bruce Small, have found the best niche for their own lifestyle and do nearly everything by themselves. Others have found they can manage the efforts of several others and make a tidy sum off of the work performed by the others, but, that means having a much higher overhead. Those with the proper business skills can make either option work out very well. Those with poor business skills will end up in trouble eventually with either option.
Many business people have $100,000 pass through their hands on the way to having a true net amount of $10,000 they can spend on themselves. If they are looking at the big amount all the time they may feel rich, but, in reality, they need to pay attention to that little number. Those of us tied to agriculture can truly relate to this. The dollars of expense to own or rent, till, plant, fertilize, cultivate by various methods, harvest, haul, store and deliver a specific number of acres of a crop is huge compared to the net left after paying all of those expenses. The check received when selling the crop looks very attractive until you do a true accounting of all the input expenses. A survey business is similar in many ways. In agriculture an extended drouth may make the net income a negative number. In the surveying world one significant error can do the same thing. The opportunity to make that error increases with an increasing number of projects. And, errors will happen. I will never forget the job where we got caught in a downpour and a bit of water found its way inside the total station. The repair bill was more than the entire invoice for doing that simple survey.
If you can run a survey department well, meaning you already run the survey side of someone else??s business, than you should be able to run your own survey business well.
…but, take a hard look at your self. Ask yourself, can I realistically get the work I need? Can I manage/perform all of that work? And, can I COMPLETE all of that work? If you can answer yes, go for it!
I was in the same situation as you and I did it and can honestly call it a success less than two years into it.
I disagree with that entirely. In many if not most multi disipline firms there are layers of protection and support built in to protect from mistakes. Some of those protections go unnoticed like budget reviews and basic oversight while others like insurance are equally unobserved.
Just because someone manages a survey department does not mean they have a handle on the economics of running a business and from my experience the overwhelming number of people who hang out their shingle rapidly attain a reputation of undercutting their peers simply because they are clueless about the costs of business. They may be good surveyors or good managers but they are usually terrible at business and for that they should have remained an employee.
And something else, I am cursed with working in an area where a lot of surveyors have had a survey business for decades. One would think they would be a successful and thriving business having been at it for so long but that is as far from reality as you can possibly get because all they have done in those decades is work for wages and they don’t have squat to show for it and they are dying broke and penniless. One had his house repossessed, one had to have a collection plate passed around at his funeral to pay for his funeral. The ones still standing is a pathetic sight to behold as they struggle to do field work in their elder years because they never charged enough in their prime to pay for their retirement.
So……no, just because someone can manage a survey department at a large firm does not qualify them their run a business and make a profit and the only reason a business exists is to make a profit.
If one is running a survey department they should be:
acquiring work based on their own connections; writing their own proposals; setting the budget for the job; lining out a field crew; reviewing the work of a field crew; performing their own comps; maintain the operating budget of the department; line up drafting; review the final product; ensure the client is happy; and invoice.
About the only thing I didn’t take care of, as a department manger, was insurance and general office maintenance.
Some companies may not give their mangers enough autonomy to actually run the department themselves so you may have a point in that regard.
A good manager has a very good grasp of how much money it takes to run a business. They should know better than to undercharge when they go out alone. I, for the most part, charge just as much as a solo operator as I budgeted when at a big company.
The number 1 and 2 reasons to be cautious:
It is now YOUR license and reputation on the line every time. Those are your ticket to make the big bucks. Lose those and the money disappears.
It is now YOUR money, not someone else’s, that is at risk.
So long as a surveyor is tied to a company with deeper pockets than his/her own the liability for professional errors is normally minimal. Handling someone else’s money in no ways compares to managing your own. I sit on a school board that has an annual budget of about $20 million and over 100 employees. I sit on a board for an educational cooperative that has an annual budget of around $100 million and nearly 500 employees. Voting to authorize payments that are several times my annual income is common place. But, watch me at the supermarket comparing prices on different cans of pork and beans. Operating a business is vastly different from your day to day living expenses. Trying to nickel and dime things and doing “make do” type repairs may be perfectly fine for household life but will get you in trouble eventually when operating a serious business.
Another item every independent operator faces is to identify all of the things you will pay for that were covered by your employer in the past.
First, a big chunk of your income tax was paid by your employer. Now, you get to pay the full amount (over 15%). Plus any other taxes where they may have paid a fraction. Definitely no contributions going towards a retirement plan paid by someone else.
No one pays you for holidays, sick days, vacation days, bereavement days, etc. So if you want to take that time off, you either work those hours outside of the standard work day or you simply take on less work (less income).
Lost work time due to your physical condition (broken leg) or the necessity of caring for a family member is lost income that can be a major issue. Note: you are now the family member with a flexible schedule so others will expect you to cover for them while they are tied down by their own jobs or school.
Thus, you must build these higher expenses and fewer “work” hours into setting your billing rate. No one is going to give you a raise, but you. The guy in the mirror has control of everything.
To be fair:
There are many advantages to being an independent operator. One of the biggies being tax write-offs. All sorts of tax-deductible tools and supplies for your business might be used on “rare” occasion for household purposes. Hammers, drills, tomato stakes, etc. You might be surprised how many different work items might come in handy for other uses, from time to time. Simple things like printer paper and rolls of stamps from the post office. Borrowing money to support your business is deductible. But, the business loan may free up your ability to make purchases for your non-business needs. I can’t remember the last non-business loan I have had. Make sure to be honest at all times.
Having a specific structure on your home property or a specific portion of your house that is used as your office can provide tax breaks as well. You can deduct a fraction of some expenses as being business related, because they truly are. Meanwhile, you aren’t putting mileage on your vehicles for the commute to and from work. Stopping by the grocery store on the way home from a job adds no non-deductible mileage to your life. Little things can add up quickly.
Flexibility with your time is another biggie. You know when you can be the most productive. That does not necessarily mesh well with rigid work schedules demanded by employers. Once upon a time I had an employer who had fixed hours of 7:45 a.m. to 4:15 p.m. You were expected to only be in the building within those times, plus or minus about six minutes on each end of the day. So, at 4:00 you are really making progress on some critical project and “BAM” 15 minutes later you and everyone else in the place is headed to the parking lot. What a waste!
It depends. I know great surveyors that didn’t do well because they were not even half way decent businessmen. I’m not saying it requires a business degree but you will need to learn the ropes for sure. Look into SCORE in your area. I went to them and received some insight. If you were on hear talking about opening a business making pizza I would have immediate concerns but you are a surveyor with many years of experience and solid licenses (in hopefully contiguous states that you can easily travel between???). If you think you have the contacts (most important) then why not go for it. Here’s my list for your consideration. Will look back later to see if you have any questions. I have work to do!
- Do you have contacts that will provide work?
- Surveying is not a very marketable business.
- It’s who you know. Unless you just want residential work. Would not want to count on that.
- Do you have enough saved to get through more than half of a year?
- My best clients pay between 60-90 days from invoice. That’s just the way it goes.
- So you need to get the work, do the work and wait on the check.
- Do you have money to purchase insurance?
- My best clients will not consider anyone without insurance. You will need General Liability, Workers Comp, Auto, Professional Liability and probably an Excess Umbrella to meet higher requirements on certain jobs.
- Do you plan on incorporating?
- You should. It protects your personal assets.
- Do you plan on having employees?
- If you do, they need to be paid and have some level of benefits if you want to keep them.
- Be very careful with just bringing in help unless that individual is a sub with insurance that meets your clients requirements. If they are, they will not be charging a typical hourly rate you would pay an employee.
- Are you ready to put some long hours in at first and maybe for years?
- After the field work is done, you will have time to eat dinner, get a shower and then it’s time to put your businessman’s hat on and answer emails, do calculations and drafting, billing, etc…
- My wife was very helpful in some of that stuff but she was limited to “non-surveying” stuff.
- Will you be handling your own taxes, payroll, etc…
- I wouldn’t if i were you, you will be very busy with just the surveying stuff. Therefore you will need a payroll company and of course an accountant.
- Good advise is to use a credit card for everything. They categorize your expenses making book-keeping a bit easier. Just don’t put anything on the darn thing you can’t pay by the end of the month.
- Do you have equipment?
- of course you will need that and software. The immediate expense can be high but get what you need to be efficient at what you do. Hopefully after that, it’s just sticks, nails and paint.
- You’ll need a reliable vehicle.
- A vehicle in the shop cost money to fix but even worse costs you the time you can’t get work done. In others words.. a $300 repair will cost you $$1600 to $2600 depending on what work you could have been doing.
- There more but that enough to chew on for starters but…….
All of that said, it’s the best thing I ever did. You are your own boss and once you learn how to get yourself in order and are rolling, it will be one of the greatest things you will ever do for yourself and family.
- Do you have contacts that will provide work?
and forgive my misspellings and grammar.
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