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Just started a small business and absolutely hate it! Tale of caution..

Discussion in 'Starting your journey' started by secretagent, Aug 10, 2017.

  1. secretagent

    secretagent Member

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    Hi,

    I haven't been to these forms for years, I'm glad they still exist and that the small business community is thriving!

    I don't want to go into details, but I recently started a small business, and two months in, I can honestly say I hate it. The return is poor, and I constantly worry about the reliability of the sub-contractors that I use. You get little support when you start a business (but I bet they would all come out of the woodwork if it became the #1 in it's category in years to come). Each transaction is worth $500-600, and I only get a 30% commission from that, so it is all stress, and little return.

    I have a 25% conversation rate from enquiry to sale, and the clients are few and far between as it is a slightly niche industry.

    Luckily i bootstrapped it to start it. Website looks good, i built it myself (was quite surprised by this!), but you know, the stress far outweighs the rewards. Sub-contractors want more and more money, and I constantly live with the stress that they will get a better deal on a booking, and cancel on me at last minute (not realistic to pay them portion of deposit, as they could abscond anyway).

    Sometimes you just have to admit you've made a mistake.
    Last edited: Aug 10, 2017
    Steve T likes this.
  2. bb1

    bb1 Renowned Member

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    2 months it hardly long enough to make a judgement of the success or otherwise of a business, it can often take much longer to build up a good clientele and understanding of all the running's of it.

    How are you travelling against your business plan you did prior to startup? Have you discussed your concerns or problems with trusted advisers?
    Alan Maddick likes this.
  3. Paul - FS Concierge

    Paul - FS Concierge Administrator Staff Member

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    @bb1 has made some very good points.

    The absolute gold in owning a service business does not come until you have been around long enough that more than 2 thirds of your new business comes from repeat customers and referrals.

    When you grow larger, you will also have more available sub-contractors so there will be less stress there too - a friend is fond of saying that with less than 7 subbies, they run the business and with more than 7 subbies, you run the business.

    I appreciate that everything is stressful now but it may not feel that way if you stick with it for the long term.

    Cheers
    arrowwise likes this.
  4. Precise Tax Solutions

    Precise Tax Solutions Active Member

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    Does your business involve something you're passionate about?

    Are you putting 100% into it?

    Agree that 2 months isn't long enough to know whether it will work or not, but it would help if you're actually working with something you enjoy/love.

    I know that this can't always be the case though!

    Cheers
  5. secretagent

    secretagent Member

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    Thank you for your responses everyone, and constructive ones at that.

    I think the problem is that i'm not 100% passionate about it. I was, but i am studying as well. I can see myself setting up another business down the track, and one that i am very passionate about, so these are all lessons for me.

    Paul: i love what your friend says about sub-contractors! The subbys will most likely poach the customers by handing out their business cards while on the job. There is nothing i can do about this now, except if it continues to grow, get them to sign a disclaimer saying they won't do this if they accept work through me.

    bb1: I didn't really make a solid business plan with definate actions timelined next to dates, but i can see that this is essential.

    Thank you once again for your insights, i will continue to think about them. Very valuable insights.
    Last edited: Aug 12, 2017
  6. Dave - FS Concierge

    Dave - FS Concierge Administrator Staff Member

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    @secretagent thank you so much for sharing your experience with us. You know the views around here are very pro-small business and we rarely get the opposite point of view.

    Your post highlights something I've been thinking about too - that along with independence, going into business often brings a drastic change in the nature of work we're doing. It's often for the worse but it takes something (possibly knowing yourself) to see this and talk about it.

    Thanks again and keep us posted whatever happens. :)

    Dave
  7. Burgo

    Burgo Renowned Member

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    When I started my business over 30 years ago my wife was working part time and we had two toddlers.
    I actually started with no customers and it was a few weeks before any money came in.
    It took two to three years before we started to see a reasonable return then I started hiring subbies. Strange but the more subbies I took on the more more the business started to expand to the point of 10 subbies working 16 hour day seven days a week.
    It actually became too much chasing new business, supervising the subbies and working as hard as they did.
    So you need a balance.
    If the subbies are doing all the work what are you doing chasing new business, if this is so then you need to think differently so instead of you chasing the business the customers are coming to you.
    This then comes back to Marketing , how are you attracting your customer
    gtenvy likes this.
  8. Professor

    Professor Member

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    I am not sure what type of business you have established, but if you are relying on sub-contractors to do all the work for you then you are probably on a road to misery.
    I had a business with sub-contractors but found that they were ripping me off, so I stopped using them and did the installations myself Iwood heaters and air conditioners). I am not trained to do this work, but were able to observe what my sub-contractors were doing, so picked up many tips.
    My wife ran the showroom whilst I was installing, and I did the quotes in the evenings. This resulted in a decline is sales, but profits increased (not having to pay sub-contractors) i.e. less work and more profits is far better that high sales and more heartache.
    Sounds like you need a mentor to help you through the development phase.
    Regards
    John
    ([email protected])

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