This is the start of my 5th year in business.  While I have built alot of cool projects over the past 4 years and a good reputation around town, I have no really made any money.  If I was not 23 and living home with my parents I clearly would not of made it.  What kills me the most was towards the end of 2008 I was really starting to get the hang of things and saw the light at the end of the table and then the economy/obama happened.


How long did it take you guys to really get your business off the ground?  I have a decent amount of equipment/assets just really have not made any money yet.  I really shouldnt of bought that 40k excavator out right last year.  I guess you could say we put every dime back into the business.


I am just really getting down about things and feel like life is passing me by.

I've been into mine for 3 years.  $500,000 worth of equipment and thousands of hours later things were rolling along great.  But, right now i'm just happy to pay my bills since my competition and other small businesses are dropping like flys.  Trim the fat, hold tight and just try to weather this storm.  If a small business  can make it through this shit storm, well come out WAY on top when the dust finally settles.

ETA:  If that excavator is hurting you, you could look into a lease buy back.  It's not the BEST thing to do, but it will free up A LOT of capital and give you a payment every month.  Depending on your situation it might help you out quite a  bit.

I tell you what its people like you that has kept this country running, I wish Obama can focus on entrepreneur like yourself instead of big businesses. Look at IBM the want to layoff over 5000 workers in our country because those workers make too much and it cuts into there earnings.

I have prepaid legal company but I havent made a penny yet of of it due the lack of time and money.

20th anniversary is coming up in May...  It took about 5 years to really get "stable".  
A good reputation and the willingness to put earnings into growing the business were part of the magic formula for us;  of course, we didn't have an Obama.  

As it stands, after 20 years, I am wondering if we will make it to 22 years.  About 40% of our business is support and equipment for manufacturing (with 35-40% of that in automotive/automotive parts).  The last 5-6 years have seen a large portion of manufacturers move offshore, and that had already impacted us.  With the economy down/shrinking, I am anticipating that most of the rest of that part of our business will suffer.  Hopefully another sector will step up (universities and research labs).

Good luck on your business.  Most of the time, patience and attention to customer service will feed success.  I hope this approach will overcome the Obama effect.

8 years. Building contractor. Just a one man band.
Every year I've made more money than the last. I'm not feeling real optimistic about this year though.
I've found that being honest, thorough and try to put the customers interest first, has paid off. Not only do they call me for the big stuff but more often, the small stuff. The best thing is, a lot of people trust me. I have a ring of keys to peoples houses and their alarm codes.Most are several million dollar homes. I know their kids and have watched them grow up.
I'm not rich but comfortable.

The first few years you build your reputation and your equipment, I've run several construction-type businesses over the years, I know exactly how that goes.

If you're at the point where you're buying excavators outright you're making money, how much has your net worth increased since  you started the business? How about your customer base? That's worth more than you think, as is a good reputation.

Have you consulted a tax attorney about depreciation and so on? Might be able to find some money that way. It's a tough time, you might consider changing focus to repair type work if you've been focused on new construction projects as that's where the money is right now.

I'm about 10 years ahead of you, and I've semi-retired, doing the SAHD thing and am planning on a second, different career once my kids are in school, I benefitted greatly from the boom and got out before the bust had a chance to hurt me.

I've always liked running equipment, but the only piece I've ever owned was an old beat up Case 580 I bought for a project and then sold when I was done, and my old farm tractor...I'm sure things will work out for you, even if you have to change the nature of your business in changing times.

Hang in, I wish I'd had the opportunity to build a financial position while living with parents. I had to move out when I was 14, made for a difficult adolescence. I didn't get my business started until I was your age after an enlistment and burning my GI bill.

You're young, and it's hard when you're young, once you get your feet under you everything gets easier, just keep at it, you'll be fine.

How did you guys choose what business to start in? Family thing or had a job before in that field or what?

6 months.  But I had a head start with an established customer base that my old boss allowed me to take with me.  They wouldnt have gone to her anyway.

The first three months were brutal.

$15K in expenses and $5k in income.  

Spent way over $100k of my own money.

This is the first full fiscal year and we are $50k ahead from the same time last year.

My business is landscape design/build.  In high school I always worked for general contractors and I learned how to do pavers, walls, etc.  The first two years in business I did only small jobs. Like 5,000 dollar jobs.  Then In 2007 I got my first 100k job.  After that things just went to shit (belive it or not).  After that point we just did big jobs.  Largest one was 275k.  The learning curve kicked my ass.  While I knew how to build things, I had no idea how long things would take.  That is really my biggest down fall.  

If payroll is 3500 a week and overhead is 1500.  Every week you run over on estimated time is a 10k loss.  

My next biggest proablem was not knowing what could go wrong.  But as time went on I got better with that.  Unforseen circumstances also kicked my butt.  Ofcourse I have a page in my contract about bad soil, etc, etc.  But I always wanted to be the contractor to finsh jobs 100% on budget.  So I would eat those unforseens.  I also felt bad asking a client for 2k extra for something when they were giving me 200k.


2008 should of been a good year for me.  But I had 200k worth of work back out 4th quarter.  4th quarter is where all the money is made.  By then all my overhead is paid up except for labor/fuel.  That hurt me the most.


Lets not even start talking about employees.


This is basically my story.

My family built a house when I was in grade school, when I needed work to pay for college construction paid better than anything else I could find, and I got on with a general contractor who built custom homes and got to do a lot of cool stuff, and he needed someone with my skills so I advanced very quickly and when he retired he helped me get my business started as a sort of severence.

There's alot of people who've worked in the construction industry because we just had a huge RE boom, if I were starting a business today I'd do something else for sure.

I made most of my money flipping/renovating /building on spec., there's probably still an opportunity there in getting foreclosures ready for retail sale. I've still got my eyes open waiting for my local market to ripen even so I'm really tired of the manual labor side of things...

What made me start this friend is I got  a job offer.  A friend of mine owns a big company in a completely unrelated field.  He is loosing his top sales guy and expressed interest in me coming to work for him.  I am good friends with the guy, hes 50 and I talk to him more then my own dad.  It could be a great opportunity for me.  His top sales guy currently makes 150k.  Sales is really my strong point.

I worked at a gas station after high school, then went on to be a mechanic.
I always wanted to try carpentry, so , I found myself without a job at 23. A buddy worked as a carpenter and offered me a job as a laborer. I took it at $4.85 per hour in 1983. Bounced around as a carpenter for the next 17 years and then said, fuck this. Got my contractors license back in 2000, and never looked back.
People are starving for someone just to treat them fairly. I saw this when I was a mechanic and now as a contractor. Its the same with clients and sub contractors.
Most of my clients and sub contractors are more like friends and extended families.
I have no patience for people that want to play games or "Lets make a deal".
Sorry for being long winded.

I have 8 years under my belt with a machine shop. I decided to take a real job last year though. Still run my shop part time. Glad I have for a safety net.

I just turned 40 last and started my first biz. Completely different from what i was doing. I was in the environmental field. Senior Field Technician. Ran sampling projects from gas station spills to 70 year old creosote sites in 4 states. New company vehicle every 3 years, matching 401k, 100% health, 3 week paid vacation a year and good pay for just a high school education. Gave it up to open a pizza place Not rolling in the "dough" yet but im up an average of 30% from last year, and home every night  Like stated before, if you can make it through this time, you will be much stronger "if" America pulls out of this crap. I have had several restaurants within eyesite of me close the doors already but we are still going strong(through the grace of God). Keep your name good by giving your customers what they pay for and you will have those customers for life. Good luck to ya(and all of us) and God bless

This will be my first year farming. Not enough land to support myself, but its a little extra money. I'd like to pick up more acres eventually.

(My sigline is in reference to the farm. As kepl308 put it...the ????? stands for a lot of work)

I bet you are spending too much money on new tools and toys as a write-off and underestimating your work.  You are in the exact sam position I was about 7 years ago.  I realized I did not need all the newest tools to do a good job and make the customer happy.  It also hit me that every hour counts and long lunches and short days kill money making potential.

True for me as well.  On an unknown project, I usually take my best guess and double it.

Well... I don't feel I should give the company name out over the internet... but I will give a description.
We created a dairy blend... Cheaper than milk, tastes similar to (many say better than) milk, and is more nutritious than milk, and can be stored for years in a powder form before mixing in hot or cold water, and doesn't settle out. Less lactose, fewer allergens.
Everything was going great... the company was buying a jet or two... thinks were going really well.
The dairy lobby felt threatened by the product... seeing as it had so many advantages over milk.
They sued, sued, sued, sued, sued... never really proved anything... but the company was crippled with legal expenses.
We sell a further refined variant of the product to foreign countries, and some prisons.... no where near as big as we once were.
We went from nothing, to the top, then to the bottom in 20 years.





 

Left a dead end construction laborer job and took the helm of the family business in June 2005.  It was a nitch market auto salvage yard specializing in pick up truck parts and mail order/delivery up the east coast.

It was a struggle at first.  Very little money.  One big meal a day and lots of bread and water.  12 - 18 hour days.  Photo finish on the monthly bills most of the time.  But I took it from a failing business to stopping the blood flow by Dec 2005.

I dumped every spare dime back into fresh inventory in 2006 and saw nice growth, almost 1.5 sales a day that year compared to under 0.5 a day that last half of 2005.

2007 was looking good and my little business seemed destined for big things.  I averaged 1.8 sales per day in 2007 which was enough to keep fresh inventory coming in while covering expenses.  I was not getting rich but the business was growing and I was having fun.  I was looking forward to 2008!

2008 started out with 2.3 sales per day by June!  Awesome.  July = 16 sales.  August - 12 sales.  September = 6 sales.  October = 4 sales...

I find myself far behind the power curve.

You have a piece of equipment paid for?  Free and clear?  You are doing better than a lot of us out here.  Hang in there.

Lots really depends on your business and how tied to economic cycles it has been.

I've been doing my deal over 12 years now, and with Obama-level taxes on the horizon, will likely close up shop and take a lower paying position in the 9 to 5 world.

No point killing myself just to watch the fruits of my labors flow to welfare leeches (both individual and corporate)





ETA: If I were in construction, I would look at selling the entire operation to a minority / woman based firm - you can bet that they will get first shot at all the stimulus package money, talk em into getting a loan, buy you out, then walk away. Be VERY careful about doing sub-work for these outfits. Many have little experience and fvck things up on a colossal scale (usually when they meddle in crap they don't understand)

I am not spending the money on tools and toys.  I drive the same pick up with roll down windows that I started the business with.  I don't even have fancy tires/rims or any of that other crap contractors put on their truck.

I will admit to wasting money on bad advertising to the tune of around 25k last year.


The main thing is the time issue.  My work is top notch and is clearly in the top 5 in my area.  It justs takes longer to do top quality work and its hard to charge for it when you are still getting established.  If I stick with this I am most likely going to go to all sub contractors.  Then I should be able to estimate with confidence that I know exactly what the job will cost me to produce.

I have two right now, working on starting the 3rd.  Between the first two i pay my bills, but not much more than that now.  The third would be a very small 1 person gig that can hopefully make me some cash on the side to supplement income until things turn around.  

OP, I was your age when I launched my first startup with two partners. It was a dotcom company and we launched near the top of the internet bubble. We were a bootstrap startup, meaning we had no venture capital, and we only made it two years before the company came crashing down. That failure gave me a lot of experience, though, and I don't have a single regret.

I went from the dotcom to a software startup serving the semiconductor industry. That company went through every phase of funding - bootstrap, angel investors, seed funding and then Rounds A & B totaling many millions of dollars with a major venture capital firm. The VC's (venture capitalists, not the guys in black pajamas) put our CEO and founder in the CTO role and installed a new CEO who immediately proceeded to make several epic fail business decisions and ran that company straight into the ground.

I am 35 now and completing the acquisition of my equity position in the company I am with now. This one is a small company that has been around more than 20 years and this is where I will be until I sell out or retire (or both).

My point in telling you all of this is that serial entrepreneurship is absolutely, positively the most rewarding thing you can do even when you're getting your ass handed to you. If you're making capital expenditures of $40,000 at the age of 23, I can tell you one thing with absolute certainty - you are so far ahead of your peers that the future has nothing but good things in store for you. You're going to have difficult times and you will find yourself in negative positions along the way that are completely beyond your control. Persevere. The other option - placing your future in someone else's hands - isn't for people like you. So don't let the down times interfere with your focus on the longterm. You're going to do just fine!

it took me 2 years to really get my snow removal/sanding business off the ground the first 2 winters was just building a good route and clients of commercial lots and residential driveways reinvesting money earned back into the business is a must so you can have dependable equipment, preventive maintenance is a must it's less costly to prevent breakdowns then to fix them not to mention down time
owning all your equipment outright is a plus no monthly payments makes it easier when work is slow I own all my equipment outright so my overhead is very low insurance, fuel, and maintenance
your on the right track don't get discouraged people are not spending much money right now but the economy will eventually get better,.. let the other guys close shop hang tough pick and poke to survive and eventually when the times get better you'll reap the benefits as you'll be one of the few in your field and you'll have more work then you can shake a stick at I've seen this time and time again

I've worked for myself for many years. Some ventures panned out better than others.



The average life expectancy of a new start-up is 3 years. If you make it longer than that, odds are you'll do fine.



The current economic situation is a wild card, but other than the credit shortage for bridge-loans it's not as doom and gloom as the media and Fearless Leader make it out to be.



Keep your powder dry and you'll do fine!

Thought it looked cool/fun.  Dove in head first without a clue of how to do it.  Shot from the hip 90% of the time.

You have some great replys so far. Only thing i can say is stay with it. Concentrate on building a great reputation and the rest will follow. I found in the auto repair business you can price yourself with the big guys and just need to comunicate with your customers and provide exceptional and honest service. Also, one more thing, I burned myself alot before I learned to be very careful what I assume.

Lots of good advice in this thread.

I am going to try to attempt to post some pics of my work.



errrr why am I getting red x?  I just started a photobucket account so I could post pics.

This bears repeating.
Communication is just as important with your clients/subs as it is with your SO.
99.9% of all problems are a lack of communication on someones part.
(I made up the 99.9 part but you get the idea)

Well, the OP could be me.
On our 6th year, but really only the 2nd full time.

People have made a lot of money off my business, but it isn't me.
Tractor dealers, truck dealers, tire stores, etc, etc, etc AND THE GODDAMN BLOODSUCKING GOVERNMENT

Actually after some huge issues early last year we were going great guns.
Until October 15th when the government scared the shit out of everyone.

Phone simply stopped ringing, and of course it didn't snow (we do snow removal in winter)
Even with ZERO work after Oct 15th, we were still up 50% from 2007

But this winter has been fucking brutal.  

So, of course, what else to do but go all in?
We bought a truck (#401k, guess where we got the money?) to expand another side of the business.

Going to be tough, but if we can hang on, and just have one or two monster months and get ahead, we'll make it.
I hope.

I don't sleep much anymore.

I've been on my own as mechanic for a couple years now.   After 18 years of working at dealerships and making them a lot of money its nice to be on my own.   The last few years of working at the dealership I was aiming toward starting my own shop.   I started buying the tools I'd need and started building a clientele on the side.  It finally  came to a head one day and I quit and haven't looked back yet.   If it weren't for this deployment I would have had to hire someone to work with me.   It sounds like I'll be able to start right back once I get home too.

If you've survived this long, chances are that you'll be OK. Some types of businesses take longer than others to get going. Competition, local population density, median age and income, etc. all play roles. If you enjoy what you're doing, I say stick it out.

I've run my own business for over 7 years. For me it was good from day one, but it certainly has its challenges, doesn't it?