PING TMH

[Stephen]

Hi Medway Handyman,

I was wondering if you might be willing to discuss your career as the TMH. The reason I ask is that I am thinking about a career change. I am thinking about setting up my own handyman business. rest assured its no where near Medway so no competition for you personally.

I am currently employed as an employee and I am paid £120 daily gross, with full holiday pay, full sick pay if needed and a pension scheme that the employer pays into as well as myself. I obviously do not need to worry about paying business costs out of that gross pay.

I have a number of thoughts that you might want to comment on.

I fully understand if you decline to answer some of my thoughts on the grounds of commercial confidentiality and so I won't push further on these points.

1. When you started, how did you build up your clientele? did you advertise, leaflet houses or did you manage to build up by word of mouth?

1. Public Liability insurance. is this cheap or expensive? do insurance comapnies require proof of your technical competence? my experience is self taught so I have no formal qualifications in tiling, plumbing, electrics etc but I am more than capable of undertaking the work.

2. I presumably would need to charge far more than 120 quid gross daily to cover van, tools, fuel, insurance, VAT, corporation tax, accountant's fees, and to earn enough to cover for 6 weeks holiday per year and say a couple of weeks sickness a year to be in the same financial position that I am currently in. I reckon that I would be looking at a charging rate of £250 daily to customers once all these costs are taken into account.

1. can you get away with working Office hours or do you find yourself working till 10pm at night or on saturdays and/or Sundays too?

2. Bad payers... do you take cash only, or do you also have a mobile phone based card machine to take payment? Or are you happy to accept cheques and chase them up if they bounce? What percentage of customers do you end up writing off due to non-payment?

1. Is your workload fairly constant throughout the year or do you find you have quiet periods of no work and hence no income or do you have periods where you have to turn work away?

2. Anything I have missed out with my thinking?

Regards

Stephen.

[Stephen]

P.S.

1. Competition.... Do you find yourself being undercut by other handymen/women and hence lose potential business to them?

[Stephen]

[Dave Liquorice]

Public Liabilty is if you drop a hammer on some ones head, it's not Professional Imdemnity that backs up the quality of your work.

So far so good.

You don't have to be VAT registered until your turnover exceeds something around £70,000/year.

Only of you set up a seperate legal entity, such as a Ltd company. You could be a sole trader but bear in mind if things go pear shaped creditors can come directly after you.

Might be worth having one do your tax return but day to day book keeping and reconcilaition is best done by you, it's a lot cheaper and it's not difficult.

6 weeks holiday! Feck me can I have your job.

Couple of weeks sick, good grief. Do I spot a sherking 9-5 wage slave? Good on you for wanting to get out of the fur lined rut but it ain't easy being self employed. Fail to turn up or be more than 10 mins late on a few jobs and the word will get around "unreliable".

As for sick take a look at Permenant Health Insurance, this coughs up if you can't work due to injury or sickness. The one I have with the Cirencester Friendly Society was very handy when I broke my ankle. It's also not "money down the drain" as you buy units that have value and you can cash them in when you don't need cover or pay outs. It's not a lot but better than nothing.

Wander over to TMH's web site I think his rates are there. I wouldn't pay a handy man £250/day unless that is the whole day, all 24 hours of it with only 3 hrs total for all breaks.

I do see a 9-5 M-F wage slave. 7 working hours a day for just 5 days/week isn't working in my book. Working is 6 days/week 12hrs at work plus travel each end of the work period.

See if there are any free "starting up in business" courses available from the local Chamber of Commerce, Business Link or WHY. The local job center might be a good place to try and find out what is out there. I did a 5 day course after being made redundant and going freelance. Probably the most useful 5 day course I have ever been on. It didn't go into great detail but covered all the basics well, the various structures, basic accounts, VAT, the legal requirements of these things etc etc.

[Bill Wright]

Do everything! Church magazines adverts are good. Adverts in shop windows, small ads in local papers. Latch onto a local charity that's doing something for the disabled or whatever, and once you know the local press will be interested go along and help. Apart from the publicity you will make yourself known to a circle of people. At local events (school sports days, church fayre, car boot, etc) go along and park your signwritten van prominently near the car park's pedestrian entrance. Become well known in the community. Put yourself about. Make sure everyone round about knows you as that nice friendly chap who does little jobs.

You can't do much in the way of electrics without qualifications. Part P and all that. Public Liability is just for if you hurt someone. It isn't expensive. You want to think about personal accident insurance as well.

People have the view that handymen are cheap. You will earn far more if you specialise in something. Before I retired I charged £400 per day plus travel, or more, much more, for some types of work. You won't be registered for VAT for a long while. But you have to pass on the VAT on materials. Do your own daily book keeping, but use a pro for the tax return. All you need do is keep a careful and accurate record of every penny the business spends and every penny it takes. You shouldn't pay any tax for the first few years as you will be offsetting the cost of tools, materials, vehicle, computer, stationery, adverts, etc. Don't claim a portion of your domestic costs against tax. Dangerous!

Keep a record of your hours so you know you aren't fooling yourself. But be flexible. If someone's desperate for help at 3am on the morning of Christmas Day quote a price and get the job.

A lot of people don't have a cheque book these days. Just don't ever let anyone owe you a lot of money. Don't do jobs where that will happen. Not worth it. Remember, it's the nice ones who turn nasty.

It will always fluctuate. When it's slow keep your nerve, and catch up on your own jobs, van repairs, wife and kid maintenance, etc.

Bill

[John Rumm]

I am sure Dave will be along shortly, but in the mean time...

The key to success here is going to be your "pipeline" i.e. keeping the job book full for a week or two in advance. That means constant input on the promotion and marketing aspects of the business as well as actually carrying out the primary work. Needless to say with time and reputation this gets easier.

Depends on the type of work you undertake... you would need to talk to some brokers / insurers to get an idea. As long as you avoid things like groundwork and underpinning you ought not ring too many alarm bells for the insurers.

Again it depends on what services you are doing for the client. Minor electrical works for a member of the public are unlikely to need proof of competence (but make sure you really *are* actually competent), whereas for a company they are likely to be more picky. If you wanted to take on electrical work that is part P notifiable then you would need some formal qualifications and membership of a trade body - even if its only completing a basic domestic installers course. However companies will frequently be prepared to pay for jobs that individuals may not - like changing light bulbs. Minor plumbing jobs are likely to be fine, but note that some do involve building regs compliance these days (e.g. changing a hot water cylinder). Obviously commercial gas work is out if you are not gas safe registered.

Its not compulsory to register for VAT until your turnover hits the registration threshold (currently £79K). If you perceive that individuals rather than other VAT registered companies are likely to be your main clients then its to your advantage not to register until you have to, since it keeps your prices 20% lower. Note that some also try to limit their turnover by allowing the clients to supply materials. (personally I am not convinced this is necessarily good practice since it complicates the responsibilities and liabilities, and also removes a profit stream from your business)

CT only kicks in for incorporated businesses, and is paid on profits after expenses and salaries etc have been paid.

Find a good accountant who is prepared to show you what you need to do to keep your own day to day accounts - its not black magic and much cheaper if you can do the basics yourself.

IIUC, TMH structures his prices to make carrying out lots of small jobs economic. Many traders don't do this and hence tend to shy away from small jobs, since they incur a level of unwanted overhead. You would need to come up with a similar scheme if that is your anticipated kind of job.

If you are working for yourself you need to be flexible. You are trying to make life for the client convenient - and that may mean making life for you inconvenient! So especially in the early days you will have to be prepared to work antisocial hours at least some of the time.

I can see that being able to take card payments would be pretty useful in this day and age, not only for the convenience of the customer, but also as a way of reducing your exposure to bad debts etc.

Again, pipeline. You want to be turning some work away (i.e. either the jobs you really don't want, or more likely, the customers who give you a bad feeling), but also not have great empty spells. You can adjust pricing to achieve this to an extent.

One observation I have made looking at many business startups is that they often fail because they owner does not do enough of the stuff that he/she does not like doing. In specialist activities, that tends to be the non "core" activities of sales and marketing and general administration. You need to find ways to get good at those activities, and where possible find ways to subcontract some of them. e.g. getting onto lettings agents lists of trusted handymen can be a valuable way of getting someone else doing some of the marketing and promotion effort for you.

[Lobster]

On 12 Mar 2014, Stephen grunted:

No doubt Dave will be along soon; but meanwhile I recall that when he was in the same position as you a few years ago he started a very similar thread which IIRC generated a lot of stuff which would be useful to you - I expect it would turn up at

[spuorgelgoog]

The book's due out soon, apparently.

Owain

[The Medway Handyman]

It won't be soon! This writing lark is harder than you think :-)

[RJH]

snip

While I'm aware that many do work those hours, nobody should have to. Unless it's an unfettered choice, where you're maybe feeding a vocation, it'd be modern day slavery, IMO.

[Nightjar]

On 13/03/2014 04:16, John Rumm wrote: ...

One often quoted figure is that one in three start up businesses will fail in their first three years. Less often quoted is the fact that the majority of these are financially sound when they close. A lot of people simply find they don't like working for themselves.

Colin Bignell

[The Medway Handyman]

No problem.

More later!

You won't get £250 a day. You can earn a decent mark up on materials though.

Overheads are relatively low however.

Mainly Mon/Fri now, odd Saturday. I rarely leave home before 8:30 or get home later than 6:00. Quotes etc take a few hours some evenings.

I've only had one bounced cheque ever. Bank transfer is very popular. Don't have a card machine yet, but will be getting one.

Fairly consistent. Jan/Feb are quiet, but I never have a day without enough work. Most of the time I'm rushed.

[The Medway Handyman]

Yes occasionally. I'm happy to do so. Plenty of busy fools around.

[The Medway Handyman]

Maybe a month.

[Andy Burns]

Anything involving use of a blow-lamp, might raise their "hot-working" eyebrows.

Personally I'd be wary of putting my PIN direct into an app on someone's smartphone, ISTR screwfix (and John Lewis?) sell various mobile-linked card payment terminals, could be worth a look, depending on whether they work just on a percentage, or a monthly fee plus a percentage.

[Adrian]

It's really not brain surgery. Keep on top of it.

I found the way that worked for me was to have a "sacred" in-tray that all invoices and statements went into, and a similarly "sacred" whiteboard that all time got marked on. And be _regular_ in entering stuff into your accounts software. Then let that do the hard work. And, for longer projects, don't be afraid to invoice periodically.

The minute you start just shoving stuff into a shoebox and ignoring it until the day before the VAT return is the minute you're going to start loathing the very concept.

[Nightjar]

...

You will find a lot of help about starting and running a business here:

Have you considered what other alternatives might be open to you? This site, and others like it, give a whole host of different businesses that are up for sale.

You might not actually want to buy one, but browsing through could give you an idea of something else you might like to do. Some might even allow you to work 9-5 and have six weeks' holiday a year, although the latter is improbable if you work for yourself until you get really successful and employ lots of people to make profits for you. However, buying an existing business, even quite a small one, should mean that you start off with an established customer base.

If you do decide to buy a business, look for a retirement sale. They are usually the most reliable. Especially avoid those described as having great development potential. If they had any, why hasn't the seller developed the business, to increase its value, before putting it on the market? There may be a good reason, but they are more usually businesses where somebody has had a dabble and didn't like it.

Another option would be a franchise. There are even handyman franchises about e.g.:

A franchise should give you a lot of support and a recognised brand name. OTOH some people find them restrictive and, of course, you have to pay for the franchise rights.

The advantages and disadvantages of a franchise are discussed here:

Colin Bignell

[dennis]

Keep your job, pay extra into the pension, retire early, then become a part time handyman if you still think you need a change.

Stop trying to wind up the handymen, they still have to go out and work for less than you are earning.

[dennis]

What? Is someone publishing the wiki?

[dennis]

There are some pretty nasty ways to get customers on the books to make a business look viable, only to have the customers evaporate as soon as its sold.

One of the milkmen around here came around offering half price for six weeks, just before he sold it to a mug that thought he had a good round.

Just be sure the customers are real and want repeat business.