Self employed and finding my groove?

[Knappers]

I've been at this for a while now and am not finding myself to be as settled as I think I should.

When I first took the leap into 'selfemploydom' I thought I was going to TAKE OVER THE WORLD (as many probably do).
But 6 years on and I find myself like a Swan floating about while frantically thrashing around under the surface.

My other half recently expressed an interest in coming on-board, to do all the things I want to and don't have time for, but after several months I'm still trying to understand what she's doing other than taking early (semi) retirement

I'm doing gas, heating and plumbing work, no bathrooms, mostly maintenance, boiler swaps, servicing etc.

My issue at the moment is with the boiler replacements as I've been doing one every week and I'm really not enjoying myself (poor me).
I tend to get most jobs I quote and worry that I'm pricing too keenly although small increases tend to swing things hugely the other way. I'm having to compromise on workmanship and it's always a rush to get finished.
Anyone got any advice on trying to sell a quality job to 'loyal' customers who seem happy to 'cheat' with some random nobody just to save £100-£200?

Maybe I just need to do more quotes and play more of a numbers game, so that not only are the customers happy but I am too?

 

[Ric2013]

What I've noticed is that often it's the least needy people who aren't afraid to ask for freebies, or just try to get them by not discussing money. I have never had a new kitchen, nor have either of my parents, but I have never seen my mother try to get work done for free (except from BT, but then that's a big corporation). Do I really want to do favours for people who have more wealth than they need, or would I rather charge them and give the money to the local food bank if I feel I'm raking it in too fast?

Feeling sorry for people aside, it is very difficult to know whether freebies really get you extra work or not. I do have a customer (a very nice retired lady) who once said as I was mumbling about prices as I was writing the invoice (I was literally 5 minutes over an hour and decided to round it down) that I should make sure I was charging enough and should round up if I needed to. I said not to worry, that it was enough. She gave me some soup to take home and helped me load my van. To be fair, she is very frugal (she is a Quaker, after all) and all the work I've done for her has been maintenance work, but she appears to be frugal at her own expence, and not at the expence of others, for which she has my respect - but she doesn't ask for freebies.

You may find (and this is someone else's idea, so I can't claim credit) that you are getting referrals from customers who expect freebies and a certain price range, which may explain why you lose work if you up your prices. Possibly, though, if you do good work at a higher price (even if you still throw in freebies, they would be on top of a higher basic wage), you'll be referred to people as expensive but good - which may suit you better?

 

[Ric2013]

What I did was to concentrate on a smaller radius from my home and that paid off well so less travelling between jobs too - that said there are parts of my patch where I won’t work!

That was my plan - before life got in the way and I had to go abroad: advertise hard in my local area and reduce my callout in that area to reflect the reduced travel. An element of of greenwash(*) and it fits it with my environmental beliefs (and strong dislike of traffic jams). Town traffic in Colchester has got to the point that parking the van at home and making use of cycle routes to get to the merchant saves a lot of time.

*The reason I say there is some greenwash is that the main environmental impact of plumbing is probably in the manufacture of goods or the use of the goods once installed and it is generally the customer who chooses what they want fitted and how they use it.

 

[PETE 123]

Instead of doing work free say to custard as your a good customer i will come round asap and only charge you min charge.

 

[WC1]

My prices used to be cheaper, I found I often got cheap customers who didnt really want to pay for anything and were more likely to try it on.
Imo spend more on generating enquiries and you'll have a better selection of customers to choose from.

 

[Knappers]

Some good advice here thanks.
I will keep doing little free/cheap bits occasionally, I don't respond favourably to customers asking for freebies but I think offering to do a 15min favour after taking £600 on a new boiler is good for buisness in the longrun (and it makes me feel good!). I'm not going to avoid customers expecting a bit extra sometimes but will look at increasing my rates, maybe £70/£50/£350 (77/55/385 if I tip into VAT reg).
And stop reducing quotes when jobs goes well (another problem I have)
After years running around the country I over compensated when I went self employed and now rarely travel more than 5 miles between jobs.

I have liability and indemnity insurance.

Hopefully my other half will eventually get up to speed and can do the extra admin stuff, I've got a few great ideas on how to improve my customers experience and would be nice to see some of them implemented.

Anyway, I've got the weekend off for a change, need to sort the van out so I can fit the KTM in for an enduro day at Houghton Conquest on Sunday
(Expecting a very tired and grumpy Monday morning!)

 

[Gasmk1]

To save going into vat make your other half self employed and let her bill for the small jobs,

 

[Murdoch]

To save going into vat make your other half self employed and let her bill for the small jobs,

Isn't that fraud?

 

[Gasmk1]

Why it becomes two companies one for larger jobs one for smaller

 

[Knappers]

It's a bit iffy.
Want to look into supplying parts for larger jobs as an agent, basically customer buying parts but I pass cost through buisness and include on invoice without including in turnover.

 

[Ric2013]

Why it becomes two companies one for larger jobs one for smaller

I see your point. And there may be a way of splitting the liability, quite legally. May be worth discussing with an accountant. I'm not normally a fan of this sort of thing, but we all know VAT is a regressive tax.

But if he's doing the work and she invoices the customer is he A her employee, B subcontracting to her, or C working cash in hand? So it could probably be seen as an attempt to avoid paying income tax and VAT that are legally due.

 

[Knappers]

Linked businesses between partners definitely won't hold up in court and would be found to be tax evasion.

 

[Murdoch]

It's a bit iffy.
Want to look into supplying parts for larger jobs as an agent, basically customer buying parts but I pass cost through business and include on invoice without including in turnover.

that sounds dodgy too!

 

[Chuck]

Isn't that fraud?

A relatively recent regulation called 'IR35' has pretty much killed off such schemes for income tax and national insurance avoidance:

Important facts for contractors - off-payroll working rules (IR35)

www.gov.uk

Not sure about whether splitting into two companies in order to stay below the VAT threshold works but I think it's unlikely.

 

[EvilDrPorkChop]

IMO everyone who turns over more than £20k should be VAT registered. It should be a level playing field for everyone.

And trying to avoid being VAT registered, tbh it'll just cause you more headaches in the long run and you'll always be hitting that ceiling.

Customers don't want hassle, they want you to supply and fit and bill in one go.

 

[Murdoch]

IMO everyone who turns over more than £20k should be VAT registered. It should be a level playing field for everyone.

wow - that would drive tax evasion up massively

I think that the VAT threshold should be higher for 1 man bands and higher again if the person has an apprentice

Being a spark its very easy for me to keep well below the VAT threshold - but guys fitting boilers are in a different ballpark all together - that said I can across a start up GSR a couple of years ago with an employee and he was doing lots of work and his USP was he wasn't VAT reg yet! Not sure that was going to end well