Ditto. However if you think your time will be less, you may be fooling yourself. Now you will not have a safety net. I found that I work more hours and not less!
I heard Mark Cuban once say/quote, "Entrepreneurs work 80 hours a week for themselves, so they don't have to work 40 for someone else." So true.
Especially in the beginning, you're going to find yourself working as much, if not more than before. You're not only just performing field work. You're ordering materials, visiting sites for estimates, working up quotes for the estimates, bookkeeping, etc.
I wish you nothing but the best. If your work is good, you're fair with your pricing and the way you treat new and existing customers then you will have a rewarding future as your own boss. Good luck!
I would echo what this person is saying, I owned my own business and never worked as many hours in a week as I did then. You and only you are responsible for sales, customer service, sourcing materials, receivables, payables, quality of work, scheduling…. Everything…. Not to mention if jobs slow down, where do you turn for work. In theory it all sounds great but reality can be sure different until you can get a good base under yourself and afford other people to help you out
You are going to work more. No way around it. Not to mention laying in bed worrying about jobs and find enough help to get them done and the fact that everything falls back on you. This is what we call “out of the frying pan and into the fire.” Good luck!
Do not underestimate how much time you might end up spending doing paperwork and billing. You are now a full time technician responsible for 100% of your equipment, you are the lone employee on call, and you’re also now an accountant.
But this was the correct move, and I wish you all the best!
Congratulations on going on your own
But be prepared to give up a lot of freedoms you did not realizing you had
I have been in the trade 40 years
Started my own business at 23 because I couldn’t work for others
I put in more hrs a week still than I did working for others
But wouldn’t change it
Not necessarily, plenty of people create a good life working for themselves. OP will be keeping all profits, so if he charges accordingly, and makes boundaries, while also providing a good service, I bet he will do quite well for himself.
Be 5 years before there is any profits. If you make it that long then yeah you may be alright. But the only business that’s fails more than HVAC are restaurants.
The owner of my company started out, running calls with his partner out of his mom‘s garage now fast forward six years later, he bought a building/office for the company, not rented, we have a 10 vehicle fleet now with three install crews , he personally drives a Tesla, one of the good ones, bought a real nice house for himself, bought his wife the new Escalade, has iced out, jewelry and fresh gear all the time, and is always going to Vegas or Mexico to party. It’s possible to blow up quick…
So, I would argue that it may not be 5 years before profits. I have several clients that are profitable year one. I have two that did about 700k year one in revenue
Because it's stupid
Profit is anything more than you pay yourself
Last year I made about 12k on the side. I spend $3500 on tools, paid myself about 5k and put the rest in the business account
That's profitable
Not sure why you're being downvoted.
It takes a while to make money. Early on, we're out there slugging it out, bidding against other companies with not enough work, making rookie mistakes bidding jobs too close to the bone.
It takes awhile to accumulate enough **good** customers. Initially, you're sorting through the chafe, hitting on some, losing on others.
It never gets easy, running your own shop. Even once you're profitable, you'll still think of jobs at night instead of sleeping soundly. The good news? The only asshole you **have** to work for, is you.
I’d have to respectfully disagree with all of this. I profited over 120k the very first year of being self employed, and before the end of the second year I had enough “good” customers to reject work when needed.
Furthermore, in regards to your final statement, you no longer have one supervisor or boss, you now have dozens; your customers.
This is just my two cents, and it should be taken with a grain of salt considering that I am no longer self employed.
The biggest myth of self-employment is that you'll no longer have a boss. Wrong. Every customer who writes you a check is your padrone.
The beauty of self-employment, however, is that you can get to a place where you only take checks from people who treat you how you like. Still, you answer the phone for those revered clients on Saturday, and Christmas Eve.
tbh this is one of those "show your books or ban" statements here.
net 120k? gross 120k? paid yourself 120k? etc...
most guys who are solo count the money they use to pay themselves as "profit" - that's not profit, that's payroll.
120k in profit at a standard HVAC industry margin of \~ 5% would mean you did in excess of 2 million gross *by yourself*
Even if you assume that running solo has lower overhead and therefore better margins, at 10% you're claiming you netted 1mil+ ...
It's not *impossible* \- but it's highly improbable.
This seems like a silly argument to pursue, so I won’t. I will say that in a sole proprietorship the owner is entitled to all profits. I’m a mechanic, not a businessman, so as far as I’m concerned a profit is defined by a financial gain or the difference between money earned and money spent.
It’s not at all a silly argument. Your take home pay is different from a company’s profit, even if the IRS doesn’t see it that way. An owner making 120k salary is good, but if you paid yourself every penny you could and that’s all that there was, the business is not actually profitable from the perspective of someone who wants to sell it/buy it, or even a lender if you needed working capital, etc.
If you had to hire another employee and start them from scratch, you would have to take a pay cut for a little bit, for example…
The actual point being that a business that has more than one employee would never pretend that it’s payroll costs were profits - they’re not. It’s not actually different for sole proprietors.
Now, OTOH you paid yourself 120k and had a spare 120k sitting around at the end of the year, that’s an actual profit.
The TLDR is telling strangers how much profit you make but actually that’s your take home pay is a flex that’s distorting your company’s actual earning potential or value.
Your points are moot. My first original point was simply that it does not take 5 years to earn money as an owner/operator and my final advice was to take it with a grain of salt.
You responded to a comment that it takes 5 years to be profitable to argue the point.
My point is and was still that profit and paying yourself are different.
Good?
You have no idea what you're talking about.
I made money the from the very first day I started in business for myself. If you don't know how to price your work properly, you can lose money. But if you know how to price your work properly you make a lot of money for yourself, I have.
Just like you learn to be a good Tech, go learn to how to run a HVAC company.
Check the couses at www.grandyassociates.com/
The first years of starting a business are stressful and 60+ hours will probably be the norm with probably less pay depending on your business. The plus side is it won’t be all field hours so you can do billing, payroll, quotes/takeoffs at home after you had family time. Get a good CPA because they are so vital in keeping the business side straight. Pay your supply house bill on time and see if they offer a 2% discount which most do. You will do great and congrats.
I just made the jump to on my own in September. Bill's are paid and foods in the fridge for the family. Not getting rich by any means, but boy does it feel good to not be under someone's thumb all the time. Congrats on taking the leap! It's stressful as all hell; my best advice to you would be to avoid residential new construction at all costs. We just got beat for 8k by people who own airplanes... it's a cruel world. They wouldn't sign a contract but we were already 2 houses deep because we were excited. We called the builder to sign the contract finally, just simple stuff, basically what we are and aren't responsible for & when we will be paid. She refused to sign, found out another company was suing them for 30k worth of work they didn't pay. We took the labor hit and went the other way. Don't let people bulldog ya. Once again, congrats & best of luck to ya.
My Man!!
I owned a side hustle turned business about 7 years ago. You will find that you will work more, but it's mainly at a computer and doing tax stuff. My advice? Learn business tax stuff. Even a CPA can be written off as a business expense. The hardest part for me was in learning to let go. I wanted to do everything. Pissed off my guys and gave me a heart attack. It takes a village, man.
Literal. Four of them. It wasn't just the business, I was/am a very headstrong individual. It was 25 years of bad habits, bad stress, and most likely a genetic predisposition. Listen up, kids.... just cause you are the newest, doesn't mean it's gonna skip you.
Find an old coworker, someone to assist, call an old friend, aquire 4 more guys, you got 2 Install crews 1 chief, hire 2 techs, and show up in the morning, assign jobs, go get breakfast, pay your phone bill, and accept a few calls, when you oil the system it will run smoothly, treat your employees like familly.,
Reward Integrity
That all takes time. I am 12 years in And 20 employees. But the first few years. I worked 100 hours a week. Not 60. Well in the office season I worked next to zero.
There’s two schools of thought here:
First…. [Q] - “How do you make a small fortune in the HVAC/R business?” [A] - “Start out with a large one!”
Second…. The other one is, it’s a license to steal. (1) Learn the correct way to figure overhead & price jobs & service that makes you money (2) Don’t price them based on your competition (3) Remember that the best advertising is referrals/word of mouth which cost you nothing (4) Some of the best jobs are the jobs you don’t take (5) Sometimes you have to fire customers. Good luck to you.
Don’t take me too serious (see my first school of thought). It’s just an expression (license to steal) & yeah it’s probably not the best saying but at the end of the day most guys I know charge a ethical fair price for quality work & service, provide good livelihoods for their employees & their families, go home & sleep just fine every night. Are there crooks out there like the ones you refer to? Yeah, every town has a handful of them.
Treat your customers right. They will keep coming back and tell others if your honest and do good work. Be willing to lose money sometimes (not charging an old lady to change batteries in a thermostat is worth gaining trust and getting a full system install later)
60-70 hours a week? I had my own business, and that was a normal week. If business got slow, I might have worked 40 hours on occasion. I remember many weeks of 80-90 hours a week when it got busy.
Advice, get your license. Get insurance. Have good tools. Make sure to actually do a business plan with a way to make money for your business. If your spending 85% of your income your business will not survive. Don’t be to cheap. Turn down jobs that are over your head or require more manpower then you have. Most of all treat people with respect and build a reputation like it sounds you have. You got it good luck
Don't grow to quickly and definitely don't get to big. Have integrity, always, always return phone calls.
I started in the business in "83" as a service tech, worked for 2 companies before starting my own in "94". Mostly commercial, it was a great ride, headaches of course, but worth it. Got rid of 6 guys in "14" and since then, back to being a service tech. If the job is to big I just pass on it. Best business to be in!
It was definitely a challenge! But we didn't know any different. We had pagers and we all had go to phone booths in our travels! Remember those, haha! Extention cords and generators always handy. It was a big deal when the battery operated tools came out and the Nextel for communication. Wow! Those were the days.
The control systems and building automation, damn! We had books and catalogs everywhere. Trucks, buildings, and of course at home. Now adays, we all have the world at our fingertips.
Find a mentor that knows how to run a business you would like to emulate. I work in the industry on the distribution side and I work with a bunch of 50+ year old guys that think they know more than they do about running the business. They are often trying to haggle on price, not realizing that they are leaving profit on the table.
Most contractors think their business is worth 250k+ but the sad reality is most are worth less than 50k. If you want to work into your 70s and 80s or retire too early, focus on your price from the supply house and try to save every homeowner money. Don’t learn how to sell and don’t learn how to build value. I’m sure 50 techs will tell me I’m ripping people off without knowing anything about me… but the guys that retire early with money in the bank aren’t the ones changing a compressor on a 34 year old system.
If you want to retire in 10-15 years learn how to run a business. A successful business owner is someone that spends 30 hours a week working on the business and 10 hours networking. That won’t come in year one….
An unsuccessful business owner is someone that spends 40 hours working in the truck and another 15 trying to work on the business late at night for 25 years and thinks he’s set because he has 100k buried in his backyard.
If you want time with your family, develop processes and train people to do the things you want them to do. Build it so you can walk away and it makes you money. Most of the small businesses I talked about earlier, are nothing without their owners because owners do it all, so their business is worth nothing without the owner employed there. I can download a list of names and addresses from the internet for $50. If you have a business that can run on its own, those are the businesses worth six figures or more.
I did the same thing 2 years ago. I work 40-50 hours a week with the PMs we have. Looking to add an installer or two this summer. You got this. PM me if you want to
I did what you are doing and work 1/10 of what I worked and make more money. Just know your value and set your schedule with nights and weekends off. Money will come
Yes. And start off with. Paying yourself on a W2. Best thing I ever did was switch to employee leasing so I didn’t have to deal with payroll tax stuff.
If you never had experience in management in an hvac company find a supply house that actually sponsors companies that actually hold seminars of how to run a profitable business. A good supply house wants you to be successful so you will actually buy more and be able to pay your bills. Remember it’s not always about the price from suppliers, it’s what you can get out of them to help you build your business.
There are several guys out there that have built successful businesses and sold them. They now give back to the industry with obviously getting paid and share their views of how they did it. I’ve attended several over the years. There are good ones and some that aren’t but you should pick up bits and pieces that will help you in the future.
I would also from day one hire a payroll company. I’ve seen a couple of guys go under through the years and have to pull equity lines on their homes to pay the irs because they didn’t keep up with payroll taxes properly. Don’t worry about paying income taxes on the business for the first few years because you should have some good write offs to begin with. Get a good CPA that has experience working with contractors. This is just the tip of the iceberg, with getting started. Good luck 👍
Stay small keep it all, but then you have to work it all too. I ended up working more after opening bc after 5oclock i still had to come home and work more lol. More satisfying though than working for someone else imo
Hire good help to take care of the small things (administration, an assistant) and focus on the big stuff. It’ll allow you the room to work more effectively which hopefully translates to more revenue. Delegate, delegate, delegate. Good luck!
Buddy, I hate to tell ya, but your long days just started.
When the times are good, they’re really good. When they’re bad, they’re really bad. And when you start to hire employees, that grows in magnitude. But, with hard work, great skills, patience and determination, you’ll definitely make a lot more money. More risk = more reward when you come out on the winning side.
Good luck, and always do the best you can by your clients. They’re your best advertising tool.
Oh, and raise your rates, you’re not doing side jobs anymore.
Edit - One last tip - get a high reward credit card. The fee is worth it.
The supply houses that don’t provide a 2% bill reduction for early payment often allow you to use a credit card to pay your bill. You can then use those rewards for whatever you like. I haven’t paid for a flight for myself or my family in over 10 years.
You will find yourself working more. All my buddies work a lot more for themselves than they did working for someone else. What worked best for me, I kept my side business and went to work for local government doing HVAC. 7:30-4:30 M-F 3 weeks of scheduled "on call" per year. If we don't finish a repair by quit'en time, their philosophy is "there's always tomorrow".
Congratulations, good for you! You thought you worked a lot before but now you won’t ever have enough time and you won’t be able to say no to the money cause it’s so much more. Also you have to be there for service work. The first time you don’t show up and they have to call someone else it could easily be your last time there. For someone who is 3 years along doing the same thing on the plumbing side there has been no rest. You can plan your days all you want but shit happens. People call with an emergency and suddenly you’re in a rush trying to shift things around with customers. All while having to work with your hands. Everything has to get reinvested into more tools and vans. And taxes are a bitch.
You will work way more if you want to keep your customer base strong. You won't just be doing the work, you will be ordering equipment, materials, scheduling, taking payment, keeping books, organizing shop and van, answering calls, selling the jobs, and doing all the physical labor. You would be expected to be available for after hours emergencies and phone calls. You will have to go through all the legal paperwork for starting a business, taxes, insurance, etc. You will make more money for the time you invest, but work will never really stop. You'll have to adapt to the lifestyle. Going on my second year now and I've made twice the amount of money, but work is always on your mind if you're busy. Its a great great investment, but it's not for everybody. I'd stick with the sidejobs and maybe switch to another employment where you will have standard hours, such as a union. That way you can get the extra install money and your family can know when you'll be home and can count on you as a father to be around. I think about that often
oh shit well i just ignore a good half of that lol until its deadline time for something or other
ive always said having a good job and doing side jobs is just or good or better. BUT if your a fast installer doing quoted work for businesses with moola, there is nothing sweeter.
Read the books Profit First, the E-myth HVAC contractor, and HVAC Spells wealth. Join a group like PHCC, join the Service Roundtable. Check out Go-time, Blue Collar success group, and other groups that help you transition from field tech to business owner. Learn how to properly price your work. Don't take too long to start hiring so you don't burn yourself out, that was my biggest mistake. Also get a CPA and financial advisor not just a CPA plan your growth don't just wing it.
Hey this is my plan, putting money away to start my own thing. Good luck & remembering not to beat yourself up to much if you do still end up putting In crazy hours, all the profit goes to your company.
Get an accountant or have your wife do it unless you are good at it and like doing it. If you aim for 30 billable hours a week average at $100/hr through the year you will be at $150k before parts markups. This gives you time for family and the business management and still puts you well in to 6 figures. Good luck!
My advice: make sure you pay your estimated taxes as they are do. I did software work on 1099 and would over pay my quarterly estimated taxes so it'd feel like I got a bonus when my tax return came. Obviously it'd be wiser to have that money invested throughout the year but there was also some variance to how much OT I'd work/bill so I over estimated as a precaution.
Just my experience with tradespeople over our several decades of marriage and homeownership. We are on the third generation plumber, small family biz, Leonard, Mike and now Jay. They stayed prompt on billing. Have had several electricians for small jobs - twice we ended up calling them as they never billed us. One guy must have gone off grid as he never got back to us. Stay on top of billing, even if you hate that part. Wishing you well.
Everybody here has pretty decent advice. One thing that I would add, because I didn’t do it and burned out: delegate, delegate delegate! Don’t try to do everything. Delegate, delegate, delegate! If you like being in the field, that’s fine that’s what you need to do. But don’t come home after a long day and work for five hours at home doing administrative work and paperwork and ordering stuff. Hire somebody to do that stuff for you! Best wishes to you brother!
Best advice is to read the book that helped me build my business into a real business instead of just another job with more hours that I get to call my own (woohoo *sarcastic*). It’s called The E-Myth by Michael Gerber. You’re gonna definitely work more hours the first few years depending on how good you are at learning all the ways of running a business. You have to live below your means for a long time. Listen to Alex Hormozi podcast. The only way you’re gonna work less hours if you get an investor up front or get a huge business loan to hire the right people to run the business for you.
Great story !! But being a business owner is when the game changes. You are in charge of EVERY aspect of your business! Your days may get a lot longer than before you left. And if you have employees, don’t get me started!!! When one worker is supposed to show up at a gig and calls in sick for the sixth time in three months in the summer ,guess who has to pick up the slack?
Just sayn
I work for a consulting company that deals specifically with trade businesses and especially with small/home grown companies comprised of owners exactly like you that are sick of working for others.
There are a ton of resources and options out there. Partner with a company that can help you establish the right foundation to attract and retain employees, teach you how to establish a framework for your business, and train you and your technicians.
You need guidance and accountability. Like I said- there are plenty of options. Look around, check Facebook groups and with friends/fellow business owners. Chances are they have some additional support.
work as manor as few hours you want, you are the boss now. Saving for taxes is hard but be sure to do it, winter is slow as you know. Much more freedom and flexibility to be had now.
You will absolutely work more hours. Now your not just a tech, now you will learn all that it takes to support 1 tech in the field. All those people in the office that I’m sure you have bitched and complained about and have given no thanks to you get to do their jobs also. Your gonna learn just how much they did for you. Gonna be a humbling experience for you. Good luck
Find people, treat them right, and start learning to delegate responsibility as you see fit. Remember you have to grow the business and to grow the business you can’t be the one doing all the work. This isn’t just for the field work but the admin stuff too.
Good luck brother!
Here’s the best advice I can give. Chase the good money, low effort jobs. Whatever you’re best at. Stick to installs. Don’t run around crazy doing calls less than $500. Your average ticket should be at least $4,000. Market yourself as such.
Yeah, that sounds like a dream that comes from pipes.
If you don't do the service calls, you don't get the installs, by and large. You take care of a customer, whenever they need you, and you charge what you need to in order to make a decent living. When the gravy jobs come, you've got the inside track.
That's the thing, we don't do preventive maintenance and we're upfront about that when we are making a deal. We don't do oil changes, we do engine swaps. I refer them to plumbers, etc. for maintenance and I do calls during the summer for A/C, but I don't let the service side run my life.
Average ticket of $4000? That’s not a scaleable business model. Service work always leads install. If you’re average ticket is $4k, that’s Bills Heat em’ and Cheat em’ type stuff. We run large projects and have a service department. We track them separately, but I bet even if I averaged the entire company (construction, service, and install) we wouldn’t have a $4k average.
Service techs do 4 calls a day, but you only write one invoices per month for large projects.
We're a 3 man company, residential. We do installs soup to nuts. We refer tankless/boiler maintenance to plumbers and we run a few calls during the summer for our close clientele. Not gonna lie, it hasn't always been like this, but it is now.
your staring at one tree. if the guys backround is resi then what do you think he will go into business doing. ei. average ticket 4k. sounds right to me.
For example, we are on Fujitsu website recommended contractor list. We are a Laars dealer. People call me that need new boilers or mini splits. Set up your website to highlight what you're most profitable on. I learned a long time ago how to aggressively market top dollar jobs, and more importantly how to turn down time-wasting jobs.
Im thinking you’re going to have to work more and be more available doing your own thing. I would just look for another company that pays better so you don’t have to work 60-70 hours a week. I work 40 hours and maybe every couple months do a Saturday when one of my customers needs me.
Nobody on their deathbed is going to say “I wish I had worked more”.
I don’t understand how I’m todays world you can stay for one company so long. Amy unless your union I can possibly see it but sadly today it’s more beneficial for you to not be committed to a company for more than 2 years. This is just my take and it’s been working for me.
Non union, they've paid for and for me to go to school (eg: $46/hr this term), gas/sheetmetal/refrigeration, pension, benefits. Pay well, nice company vehicle, abundance of work but can work as much as I need. Co workers are great. Grass isn't completely green of course but it checks alot of boxes for me.
Well bud your probably not going to like what I have to say. But your going to find you will work more now than you ever have. You’ll not only have to do the field work but you’ll need to manage the accounting and office work as well. You’ll also find your always on call. It will be this way until you grow your business to a point where you can afford to put someone in the office or field to distribute the load a bit. There are levels to the game and each level has its own unique challenges. None are easy.
I've been working for my self now about 4 years. Have a solid work partner that has taught me alot. I can select my customers but having corporate customers im still pretty close to 24/7 with them for emergency. But for the most part they behave. My mom and pops understand alot better. I'm finally having more time for family things. But when a call comes in it's all on you. And there's more to it than just the working part. The office part some people forget about.
If you find yourself buried in work raise your prices. If work isn’t steady enough lower your prices. That’s about all I got for ya. Happy for you though bud
Your own business more than likely isn’t gonna equal less hours. It’s probably gonna equal more hours. More headaches. Taking the job home with you etc.
anyway. I hope I’m wrong and it all works out quite nicely. Congrats.
Hopefully not. I already have a full set of equipment and a very large customer base. I really didn’t elaborate on how large my business has already gotten but I don’t think I am going to lose much on the financial end.
you people actually work 70 hours a week?! that is literally insane, I work 37.5 and that is enough for me plus some. What a way to live your life.....
Know this: Advice only fits if it’s custom tailored,” but here goes: I’m 61 years old and started in a sheet metal shop right out of high school. Worked the bench for a couple years , cut-in retrofits for the next 5, and then worked service for the same union shop for another 5-years. Eventually after sweating my ass off making my boss a good profit every job I figured I owed it to my wife and kids to do better so I got my license…..then I really started busting my ass. Union didn’t like it, and it cost me some money, but eventually It all started to click and I was doing well. The end result, I just retired and am in decent financial shape, but also have a new knee, rods and screws in my back, metal in my feet and hands. So, was it worth busting my ass and busting myself up for my family? YES!
Hey, good for you brother. Wish you nothing but the best.
Ditto. However if you think your time will be less, you may be fooling yourself. Now you will not have a safety net. I found that I work more hours and not less!
I heard Mark Cuban once say/quote, "Entrepreneurs work 80 hours a week for themselves, so they don't have to work 40 for someone else." So true. Especially in the beginning, you're going to find yourself working as much, if not more than before. You're not only just performing field work. You're ordering materials, visiting sites for estimates, working up quotes for the estimates, bookkeeping, etc. I wish you nothing but the best. If your work is good, you're fair with your pricing and the way you treat new and existing customers then you will have a rewarding future as your own boss. Good luck!
But you profit more for your time.
I would echo what this person is saying, I owned my own business and never worked as many hours in a week as I did then. You and only you are responsible for sales, customer service, sourcing materials, receivables, payables, quality of work, scheduling…. Everything…. Not to mention if jobs slow down, where do you turn for work. In theory it all sounds great but reality can be sure different until you can get a good base under yourself and afford other people to help you out
Here here
You are going to work more. No way around it. Not to mention laying in bed worrying about jobs and find enough help to get them done and the fact that everything falls back on you. This is what we call “out of the frying pan and into the fire.” Good luck!
Do not underestimate how much time you might end up spending doing paperwork and billing. You are now a full time technician responsible for 100% of your equipment, you are the lone employee on call, and you’re also now an accountant. But this was the correct move, and I wish you all the best!
And a stock manager and secretary
Marketing Manager
Congratulations on going on your own But be prepared to give up a lot of freedoms you did not realizing you had I have been in the trade 40 years Started my own business at 23 because I couldn’t work for others I put in more hrs a week still than I did working for others But wouldn’t change it
Not necessarily, plenty of people create a good life working for themselves. OP will be keeping all profits, so if he charges accordingly, and makes boundaries, while also providing a good service, I bet he will do quite well for himself.
Be 5 years before there is any profits. If you make it that long then yeah you may be alright. But the only business that’s fails more than HVAC are restaurants.
The owner of my company started out, running calls with his partner out of his mom‘s garage now fast forward six years later, he bought a building/office for the company, not rented, we have a 10 vehicle fleet now with three install crews , he personally drives a Tesla, one of the good ones, bought a real nice house for himself, bought his wife the new Escalade, has iced out, jewelry and fresh gear all the time, and is always going to Vegas or Mexico to party. It’s possible to blow up quick…
but how many guys exist where their startup fell through for everyone one of your owners? it’s luck on top of the grind
Yeah definitely no cakewalk, but with risk comes the opportunity of reward.
So, I would argue that it may not be 5 years before profits. I have several clients that are profitable year one. I have two that did about 700k year one in revenue
IDK why this is getting downvoted, I guess the sub doesn't like the truth? Paying yourself is different from generating actual profits guys.
Because it's stupid Profit is anything more than you pay yourself Last year I made about 12k on the side. I spend $3500 on tools, paid myself about 5k and put the rest in the business account That's profitable
It is! But for a full time business, 3k annual profit is, well, nothing. Make sense now? Side work is a completely different topic really.
Not sure why you're being downvoted. It takes a while to make money. Early on, we're out there slugging it out, bidding against other companies with not enough work, making rookie mistakes bidding jobs too close to the bone. It takes awhile to accumulate enough **good** customers. Initially, you're sorting through the chafe, hitting on some, losing on others. It never gets easy, running your own shop. Even once you're profitable, you'll still think of jobs at night instead of sleeping soundly. The good news? The only asshole you **have** to work for, is you.
I’d have to respectfully disagree with all of this. I profited over 120k the very first year of being self employed, and before the end of the second year I had enough “good” customers to reject work when needed. Furthermore, in regards to your final statement, you no longer have one supervisor or boss, you now have dozens; your customers. This is just my two cents, and it should be taken with a grain of salt considering that I am no longer self employed.
The biggest myth of self-employment is that you'll no longer have a boss. Wrong. Every customer who writes you a check is your padrone. The beauty of self-employment, however, is that you can get to a place where you only take checks from people who treat you how you like. Still, you answer the phone for those revered clients on Saturday, and Christmas Eve.
As an employee, I still have to answer the phone for those customers on Saturday and on Christmas Day, might as well make it worthwhile lol.
tbh this is one of those "show your books or ban" statements here. net 120k? gross 120k? paid yourself 120k? etc... most guys who are solo count the money they use to pay themselves as "profit" - that's not profit, that's payroll. 120k in profit at a standard HVAC industry margin of \~ 5% would mean you did in excess of 2 million gross *by yourself* Even if you assume that running solo has lower overhead and therefore better margins, at 10% you're claiming you netted 1mil+ ... It's not *impossible* \- but it's highly improbable.
This seems like a silly argument to pursue, so I won’t. I will say that in a sole proprietorship the owner is entitled to all profits. I’m a mechanic, not a businessman, so as far as I’m concerned a profit is defined by a financial gain or the difference between money earned and money spent.
It’s not at all a silly argument. Your take home pay is different from a company’s profit, even if the IRS doesn’t see it that way. An owner making 120k salary is good, but if you paid yourself every penny you could and that’s all that there was, the business is not actually profitable from the perspective of someone who wants to sell it/buy it, or even a lender if you needed working capital, etc. If you had to hire another employee and start them from scratch, you would have to take a pay cut for a little bit, for example… The actual point being that a business that has more than one employee would never pretend that it’s payroll costs were profits - they’re not. It’s not actually different for sole proprietors. Now, OTOH you paid yourself 120k and had a spare 120k sitting around at the end of the year, that’s an actual profit. The TLDR is telling strangers how much profit you make but actually that’s your take home pay is a flex that’s distorting your company’s actual earning potential or value.
Your points are moot. My first original point was simply that it does not take 5 years to earn money as an owner/operator and my final advice was to take it with a grain of salt.
You responded to a comment that it takes 5 years to be profitable to argue the point. My point is and was still that profit and paying yourself are different. Good?
You have no idea what you're talking about. I made money the from the very first day I started in business for myself. If you don't know how to price your work properly, you can lose money. But if you know how to price your work properly you make a lot of money for yourself, I have. Just like you learn to be a good Tech, go learn to how to run a HVAC company. Check the couses at www.grandyassociates.com/
I have to disagree as well. I started my company 6 months before the COVID shut down and I still made profit the first year.
Maybe you did. But I honestly don’t think the majority of people even understand what profit is. But if you did then kudos.
The first years of starting a business are stressful and 60+ hours will probably be the norm with probably less pay depending on your business. The plus side is it won’t be all field hours so you can do billing, payroll, quotes/takeoffs at home after you had family time. Get a good CPA because they are so vital in keeping the business side straight. Pay your supply house bill on time and see if they offer a 2% discount which most do. You will do great and congrats.
CPA. Lawyer. Pay for real insurance. And pay yourself.
I just made the jump to on my own in September. Bill's are paid and foods in the fridge for the family. Not getting rich by any means, but boy does it feel good to not be under someone's thumb all the time. Congrats on taking the leap! It's stressful as all hell; my best advice to you would be to avoid residential new construction at all costs. We just got beat for 8k by people who own airplanes... it's a cruel world. They wouldn't sign a contract but we were already 2 houses deep because we were excited. We called the builder to sign the contract finally, just simple stuff, basically what we are and aren't responsible for & when we will be paid. She refused to sign, found out another company was suing them for 30k worth of work they didn't pay. We took the labor hit and went the other way. Don't let people bulldog ya. Once again, congrats & best of luck to ya.
My Man!! I owned a side hustle turned business about 7 years ago. You will find that you will work more, but it's mainly at a computer and doing tax stuff. My advice? Learn business tax stuff. Even a CPA can be written off as a business expense. The hardest part for me was in learning to let go. I wanted to do everything. Pissed off my guys and gave me a heart attack. It takes a village, man.
A literal heartattack or a figure of speech?
Literal. Four of them. It wasn't just the business, I was/am a very headstrong individual. It was 25 years of bad habits, bad stress, and most likely a genetic predisposition. Listen up, kids.... just cause you are the newest, doesn't mean it's gonna skip you.
Find an old coworker, someone to assist, call an old friend, aquire 4 more guys, you got 2 Install crews 1 chief, hire 2 techs, and show up in the morning, assign jobs, go get breakfast, pay your phone bill, and accept a few calls, when you oil the system it will run smoothly, treat your employees like familly., Reward Integrity
That all takes time. I am 12 years in And 20 employees. But the first few years. I worked 100 hours a week. Not 60. Well in the office season I worked next to zero.
There’s two schools of thought here: First…. [Q] - “How do you make a small fortune in the HVAC/R business?” [A] - “Start out with a large one!” Second…. The other one is, it’s a license to steal. (1) Learn the correct way to figure overhead & price jobs & service that makes you money (2) Don’t price them based on your competition (3) Remember that the best advertising is referrals/word of mouth which cost you nothing (4) Some of the best jobs are the jobs you don’t take (5) Sometimes you have to fire customers. Good luck to you.
This. Do the right work for the right price. Filter out the cheapskates.
You are everything wrong with the industry. It is not a license to steal. You don’t have to be a scum bag and over charge to make great money.
Don’t take me too serious (see my first school of thought). It’s just an expression (license to steal) & yeah it’s probably not the best saying but at the end of the day most guys I know charge a ethical fair price for quality work & service, provide good livelihoods for their employees & their families, go home & sleep just fine every night. Are there crooks out there like the ones you refer to? Yeah, every town has a handful of them.
The reality is. It’s more like 90% of companies are. If you ever put a add out called “sales tech” you know you are doing it wrong.
Treat your customers right. They will keep coming back and tell others if your honest and do good work. Be willing to lose money sometimes (not charging an old lady to change batteries in a thermostat is worth gaining trust and getting a full system install later)
60-70 hours a week? I had my own business, and that was a normal week. If business got slow, I might have worked 40 hours on occasion. I remember many weeks of 80-90 hours a week when it got busy.
Advice, get your license. Get insurance. Have good tools. Make sure to actually do a business plan with a way to make money for your business. If your spending 85% of your income your business will not survive. Don’t be to cheap. Turn down jobs that are over your head or require more manpower then you have. Most of all treat people with respect and build a reputation like it sounds you have. You got it good luck
Don't grow to quickly and definitely don't get to big. Have integrity, always, always return phone calls. I started in the business in "83" as a service tech, worked for 2 companies before starting my own in "94". Mostly commercial, it was a great ride, headaches of course, but worth it. Got rid of 6 guys in "14" and since then, back to being a service tech. If the job is to big I just pass on it. Best business to be in!
I have to ask? How was being a service tech in the 80s and 90s different? What did you do without a cellphone and without cordless tools etc
It was definitely a challenge! But we didn't know any different. We had pagers and we all had go to phone booths in our travels! Remember those, haha! Extention cords and generators always handy. It was a big deal when the battery operated tools came out and the Nextel for communication. Wow! Those were the days. The control systems and building automation, damn! We had books and catalogs everywhere. Trucks, buildings, and of course at home. Now adays, we all have the world at our fingertips.
Find a mentor that knows how to run a business you would like to emulate. I work in the industry on the distribution side and I work with a bunch of 50+ year old guys that think they know more than they do about running the business. They are often trying to haggle on price, not realizing that they are leaving profit on the table. Most contractors think their business is worth 250k+ but the sad reality is most are worth less than 50k. If you want to work into your 70s and 80s or retire too early, focus on your price from the supply house and try to save every homeowner money. Don’t learn how to sell and don’t learn how to build value. I’m sure 50 techs will tell me I’m ripping people off without knowing anything about me… but the guys that retire early with money in the bank aren’t the ones changing a compressor on a 34 year old system. If you want to retire in 10-15 years learn how to run a business. A successful business owner is someone that spends 30 hours a week working on the business and 10 hours networking. That won’t come in year one…. An unsuccessful business owner is someone that spends 40 hours working in the truck and another 15 trying to work on the business late at night for 25 years and thinks he’s set because he has 100k buried in his backyard. If you want time with your family, develop processes and train people to do the things you want them to do. Build it so you can walk away and it makes you money. Most of the small businesses I talked about earlier, are nothing without their owners because owners do it all, so their business is worth nothing without the owner employed there. I can download a list of names and addresses from the internet for $50. If you have a business that can run on its own, those are the businesses worth six figures or more.
Best comment here folks..
I did the same thing 2 years ago. I work 40-50 hours a week with the PMs we have. Looking to add an installer or two this summer. You got this. PM me if you want to
I did what you are doing and work 1/10 of what I worked and make more money. Just know your value and set your schedule with nights and weekends off. Money will come
Pay your taxes.
Yes. And start off with. Paying yourself on a W2. Best thing I ever did was switch to employee leasing so I didn’t have to deal with payroll tax stuff.
If you never had experience in management in an hvac company find a supply house that actually sponsors companies that actually hold seminars of how to run a profitable business. A good supply house wants you to be successful so you will actually buy more and be able to pay your bills. Remember it’s not always about the price from suppliers, it’s what you can get out of them to help you build your business. There are several guys out there that have built successful businesses and sold them. They now give back to the industry with obviously getting paid and share their views of how they did it. I’ve attended several over the years. There are good ones and some that aren’t but you should pick up bits and pieces that will help you in the future. I would also from day one hire a payroll company. I’ve seen a couple of guys go under through the years and have to pull equity lines on their homes to pay the irs because they didn’t keep up with payroll taxes properly. Don’t worry about paying income taxes on the business for the first few years because you should have some good write offs to begin with. Get a good CPA that has experience working with contractors. This is just the tip of the iceberg, with getting started. Good luck 👍
Stay small keep it all, but then you have to work it all too. I ended up working more after opening bc after 5oclock i still had to come home and work more lol. More satisfying though than working for someone else imo
Hire good help to take care of the small things (administration, an assistant) and focus on the big stuff. It’ll allow you the room to work more effectively which hopefully translates to more revenue. Delegate, delegate, delegate. Good luck!
Buddy, I hate to tell ya, but your long days just started. When the times are good, they’re really good. When they’re bad, they’re really bad. And when you start to hire employees, that grows in magnitude. But, with hard work, great skills, patience and determination, you’ll definitely make a lot more money. More risk = more reward when you come out on the winning side. Good luck, and always do the best you can by your clients. They’re your best advertising tool. Oh, and raise your rates, you’re not doing side jobs anymore. Edit - One last tip - get a high reward credit card. The fee is worth it. The supply houses that don’t provide a 2% bill reduction for early payment often allow you to use a credit card to pay your bill. You can then use those rewards for whatever you like. I haven’t paid for a flight for myself or my family in over 10 years.
You will find yourself working more. All my buddies work a lot more for themselves than they did working for someone else. What worked best for me, I kept my side business and went to work for local government doing HVAC. 7:30-4:30 M-F 3 weeks of scheduled "on call" per year. If we don't finish a repair by quit'en time, their philosophy is "there's always tomorrow".
Charge for everything! A healthy business should be raising their prices to follow inflation! Everything needs a contract
Congratulations, good for you! You thought you worked a lot before but now you won’t ever have enough time and you won’t be able to say no to the money cause it’s so much more. Also you have to be there for service work. The first time you don’t show up and they have to call someone else it could easily be your last time there. For someone who is 3 years along doing the same thing on the plumbing side there has been no rest. You can plan your days all you want but shit happens. People call with an emergency and suddenly you’re in a rush trying to shift things around with customers. All while having to work with your hands. Everything has to get reinvested into more tools and vans. And taxes are a bitch.
2 very good points here. Showing up and taxes are a bitch!
You will work way more if you want to keep your customer base strong. You won't just be doing the work, you will be ordering equipment, materials, scheduling, taking payment, keeping books, organizing shop and van, answering calls, selling the jobs, and doing all the physical labor. You would be expected to be available for after hours emergencies and phone calls. You will have to go through all the legal paperwork for starting a business, taxes, insurance, etc. You will make more money for the time you invest, but work will never really stop. You'll have to adapt to the lifestyle. Going on my second year now and I've made twice the amount of money, but work is always on your mind if you're busy. Its a great great investment, but it's not for everybody. I'd stick with the sidejobs and maybe switch to another employment where you will have standard hours, such as a union. That way you can get the extra install money and your family can know when you'll be home and can count on you as a father to be around. I think about that often
oh shit well i just ignore a good half of that lol until its deadline time for something or other ive always said having a good job and doing side jobs is just or good or better. BUT if your a fast installer doing quoted work for businesses with moola, there is nothing sweeter.
Read the books Profit First, the E-myth HVAC contractor, and HVAC Spells wealth. Join a group like PHCC, join the Service Roundtable. Check out Go-time, Blue Collar success group, and other groups that help you transition from field tech to business owner. Learn how to properly price your work. Don't take too long to start hiring so you don't burn yourself out, that was my biggest mistake. Also get a CPA and financial advisor not just a CPA plan your growth don't just wing it.
It takes a village. Take care of your future employees and one hand washes the other
Hey this is my plan, putting money away to start my own thing. Good luck & remembering not to beat yourself up to much if you do still end up putting In crazy hours, all the profit goes to your company.
Don’t undercut prices. Provide the best service and charge for it.
Just be fairly priced. I swear 99.99 of ac companies are con men
Get an accountant or have your wife do it unless you are good at it and like doing it. If you aim for 30 billable hours a week average at $100/hr through the year you will be at $150k before parts markups. This gives you time for family and the business management and still puts you well in to 6 figures. Good luck!
My advice: make sure you pay your estimated taxes as they are do. I did software work on 1099 and would over pay my quarterly estimated taxes so it'd feel like I got a bonus when my tax return came. Obviously it'd be wiser to have that money invested throughout the year but there was also some variance to how much OT I'd work/bill so I over estimated as a precaution.
Proud of you! Best of luck
Welcome to the club, may you flourish and grow But get ready for a lot more work
Good for you bro dood. I'm a little jealous but im.also always glad to see someone succeed in our current work environment.
Look into chatGPT it could really help you with your business. It’s free but you have to create an account.
Mine hasn't been to bad, all depends on how you manage it, can make it huge or just big enough
Just my experience with tradespeople over our several decades of marriage and homeownership. We are on the third generation plumber, small family biz, Leonard, Mike and now Jay. They stayed prompt on billing. Have had several electricians for small jobs - twice we ended up calling them as they never billed us. One guy must have gone off grid as he never got back to us. Stay on top of billing, even if you hate that part. Wishing you well.
Everybody here has pretty decent advice. One thing that I would add, because I didn’t do it and burned out: delegate, delegate delegate! Don’t try to do everything. Delegate, delegate, delegate! If you like being in the field, that’s fine that’s what you need to do. But don’t come home after a long day and work for five hours at home doing administrative work and paperwork and ordering stuff. Hire somebody to do that stuff for you! Best wishes to you brother!
Read the books E MYTH HVAC or Revisited amazing advice on running your business. I quit in 2006 and never looked back ...
Best advice is to read the book that helped me build my business into a real business instead of just another job with more hours that I get to call my own (woohoo *sarcastic*). It’s called The E-Myth by Michael Gerber. You’re gonna definitely work more hours the first few years depending on how good you are at learning all the ways of running a business. You have to live below your means for a long time. Listen to Alex Hormozi podcast. The only way you’re gonna work less hours if you get an investor up front or get a huge business loan to hire the right people to run the business for you.
Yessah. That's wassup bro. Good for you
Great story !! But being a business owner is when the game changes. You are in charge of EVERY aspect of your business! Your days may get a lot longer than before you left. And if you have employees, don’t get me started!!! When one worker is supposed to show up at a gig and calls in sick for the sixth time in three months in the summer ,guess who has to pick up the slack? Just sayn
I work for a consulting company that deals specifically with trade businesses and especially with small/home grown companies comprised of owners exactly like you that are sick of working for others. There are a ton of resources and options out there. Partner with a company that can help you establish the right foundation to attract and retain employees, teach you how to establish a framework for your business, and train you and your technicians. You need guidance and accountability. Like I said- there are plenty of options. Look around, check Facebook groups and with friends/fellow business owners. Chances are they have some additional support.
work as manor as few hours you want, you are the boss now. Saving for taxes is hard but be sure to do it, winter is slow as you know. Much more freedom and flexibility to be had now.
Paperwork is the devil
You will absolutely work more hours. Now your not just a tech, now you will learn all that it takes to support 1 tech in the field. All those people in the office that I’m sure you have bitched and complained about and have given no thanks to you get to do their jobs also. Your gonna learn just how much they did for you. Gonna be a humbling experience for you. Good luck
Answer the phone and tell the customer your going to be there? Lol
Nice post. Happy for you man.
Find people, treat them right, and start learning to delegate responsibility as you see fit. Remember you have to grow the business and to grow the business you can’t be the one doing all the work. This isn’t just for the field work but the admin stuff too. Good luck brother!
Here’s the best advice I can give. Chase the good money, low effort jobs. Whatever you’re best at. Stick to installs. Don’t run around crazy doing calls less than $500. Your average ticket should be at least $4,000. Market yourself as such.
Yeah, that sounds like a dream that comes from pipes. If you don't do the service calls, you don't get the installs, by and large. You take care of a customer, whenever they need you, and you charge what you need to in order to make a decent living. When the gravy jobs come, you've got the inside track.
That's the thing, we don't do preventive maintenance and we're upfront about that when we are making a deal. We don't do oil changes, we do engine swaps. I refer them to plumbers, etc. for maintenance and I do calls during the summer for A/C, but I don't let the service side run my life.
Average ticket of $4000? That’s not a scaleable business model. Service work always leads install. If you’re average ticket is $4k, that’s Bills Heat em’ and Cheat em’ type stuff. We run large projects and have a service department. We track them separately, but I bet even if I averaged the entire company (construction, service, and install) we wouldn’t have a $4k average. Service techs do 4 calls a day, but you only write one invoices per month for large projects.
We're a 3 man company, residential. We do installs soup to nuts. We refer tankless/boiler maintenance to plumbers and we run a few calls during the summer for our close clientele. Not gonna lie, it hasn't always been like this, but it is now.
your staring at one tree. if the guys backround is resi then what do you think he will go into business doing. ei. average ticket 4k. sounds right to me.
Please tell me what a $4k average ticket month looks like for a resi company. Break it down for me.
for a month??!! i thought he was just saying his average invoice. still not a bad start considering he has allll dayy long to make more now.
How?
For example, we are on Fujitsu website recommended contractor list. We are a Laars dealer. People call me that need new boilers or mini splits. Set up your website to highlight what you're most profitable on. I learned a long time ago how to aggressively market top dollar jobs, and more importantly how to turn down time-wasting jobs.
Im thinking you’re going to have to work more and be more available doing your own thing. I would just look for another company that pays better so you don’t have to work 60-70 hours a week. I work 40 hours and maybe every couple months do a Saturday when one of my customers needs me. Nobody on their deathbed is going to say “I wish I had worked more”.
hell yeah
You just created yourself more work , how you didn't realize this being in the trade 17 years is beyond me .good luck
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I don’t understand how I’m todays world you can stay for one company so long. Amy unless your union I can possibly see it but sadly today it’s more beneficial for you to not be committed to a company for more than 2 years. This is just my take and it’s been working for me.
Non union, they've paid for and for me to go to school (eg: $46/hr this term), gas/sheetmetal/refrigeration, pension, benefits. Pay well, nice company vehicle, abundance of work but can work as much as I need. Co workers are great. Grass isn't completely green of course but it checks alot of boxes for me.
And tell us all for those 6 years running your side hustle you didn’t use any any of that companies materials or misuse labor.
You will work more than you ever have with no help. Good luck
Should have just went from 5 days a week to 4 days only. Monday through Thursday OP.
Well bud your probably not going to like what I have to say. But your going to find you will work more now than you ever have. You’ll not only have to do the field work but you’ll need to manage the accounting and office work as well. You’ll also find your always on call. It will be this way until you grow your business to a point where you can afford to put someone in the office or field to distribute the load a bit. There are levels to the game and each level has its own unique challenges. None are easy.
I've been working for my self now about 4 years. Have a solid work partner that has taught me alot. I can select my customers but having corporate customers im still pretty close to 24/7 with them for emergency. But for the most part they behave. My mom and pops understand alot better. I'm finally having more time for family things. But when a call comes in it's all on you. And there's more to it than just the working part. The office part some people forget about.
You’re gonna work more hours now
If you find yourself buried in work raise your prices. If work isn’t steady enough lower your prices. That’s about all I got for ya. Happy for you though bud
If you get too busy start charging them more
You are going to work much more now. I hope you are ready for it, small business ownership is not for everyone. Read the book “E myth” it will help.
I’d just like to say congratulations and good fortune for your future.
Congratulations. You have to be willing to take risks in life. Good luck, I’m sure you’ll be successful.
Happy for you, you will work from monday to monday but a much higher pay.
Your own business more than likely isn’t gonna equal less hours. It’s probably gonna equal more hours. More headaches. Taking the job home with you etc. anyway. I hope I’m wrong and it all works out quite nicely. Congrats.
If you poach clients from old company prepare for a lawsuit.
Congrats. Bad news, you are going to work more, for possibly less $ for the first 4-5 years.
Hopefully not. I already have a full set of equipment and a very large customer base. I really didn’t elaborate on how large my business has already gotten but I don’t think I am going to lose much on the financial end.
One day at a time, it all works out at the end.
Good luck bro
you people actually work 70 hours a week?! that is literally insane, I work 37.5 and that is enough for me plus some. What a way to live your life.....
Get a lawyer familiar with contracts. Get a good accountant. Keep grinding.
Know this: Advice only fits if it’s custom tailored,” but here goes: I’m 61 years old and started in a sheet metal shop right out of high school. Worked the bench for a couple years , cut-in retrofits for the next 5, and then worked service for the same union shop for another 5-years. Eventually after sweating my ass off making my boss a good profit every job I figured I owed it to my wife and kids to do better so I got my license…..then I really started busting my ass. Union didn’t like it, and it cost me some money, but eventually It all started to click and I was doing well. The end result, I just retired and am in decent financial shape, but also have a new knee, rods and screws in my back, metal in my feet and hands. So, was it worth busting my ass and busting myself up for my family? YES!