An honest look at family finances
9 Feb
Ok, so I gave you guys a little tease the other day by hinting that I was working on something that was hopefully going to be really cool.
Well… My husband and I started a business. That’s my news. We have our own business. Pretty cool, huh? It feels weird to say it out loud.
We will provide staffing for telecommunications companies. Come again? A simplified scenario would be Company A hiring Company B to install/ maintain the phones in their building. If Company B needs technicians they can call us and we will send them some guys.
My husband has been in the industry for a very long time. He knows what’s going on and has a lot of contacts. We are basically hiring technicians who have been laid off and then when the work picks up Company B will need temps. That’s where we come in, with some very skilled and experienced techs who would never have been laid off if the economy wasn’t so bad.
Of course the risk is that the work doesn’t pick up. The economy is a double edged sword for us right now. While it’s giving us an opportunity to start this company, it’s also our biggest threat. So far, we have one company that has signed us up as a vendor; I’m excited about that cause it’s a pretty big contract and they could possibly have a ton of work for us. It’s a contract we could never get if the economy was going well. But at the end of the day if there isn’t work, there isn’t work. Nothing anyone can do about it. The biggest contract in the world does us no good if there isn’t work to do.
Another risk is that the guys we’ve hired find jobs before we have work. Clearly a possibility and I wish them the best. I don’t expect anyone to stop looking for a job or to turn down a sure thing when we have explained to everyone that we won’t have steady work for a while, maybe ever. But the hope is that we are on the leading edge of work. So in theory, we should have work for them before other companies start hiring. That’s the plan anyways. If they find jobs then we lose our edge against our competitors. We should always be able to get techs, they just won’t be the high quality guys we have right now.
Our annual operating costs are about $3,500. Which is basically nothing in the world of business, I know. We should know way before a whole year goes by if this is going to work out. So pretty much we have about $2,000 on the line. But I’m willing to bet $2,000 that the work will start again. And if it does… hold on boy! We will be making some cash money! We only have to have our techs work about 200 hours a year to break even. If we can’t do that then we severely underestimated the need for our services.
Two thousand dollars isn’t an exorbitant amount of money. I will hate myself if we lose it but I think the risk reward factor is in my favor here. We could potentially make a lot of money. Besides the start up costs are coming from money we have saved. I hate to say it like that cause you know how important I think emergency funds are, but it’s not like I’m skipping a mortgage payment to start this. We don’t NEED to make money right away. If it takes a few months, our company will survive.
Also, it’s a hedge against my husband getting laid off. At least he would have the hope of work. He would be in the same boat as our other techs are in now. The possibility of work is better than no work at all.
So yeah… that’s what’s been keeping me busy for the past few days. I’m worn out! I’ll probably have some posts coming up about what I learned during this whole process.
pic by: Gaetan Lee
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9 Responses for "Starting a business"
Good luck with the new venture, for the low start up costs the experience alone will be worth the money. I wish I had a business idea that was cheap to get off the ground, start up costs are always a huge hurdle.
What is the $3,500? Accountant and payroll?
Miss M: Thanks!
Dogatemyfinances: Actually the $3,500 is mostly insurance. At this point I’m not planning on using an Accountant, but I’ll see how I feel about that when the time comes. I could easily change my mind. And we don’t have payroll unless we have work. The payment for the work will more than cover what ever we have for salaries. We will get paid by the hour and we will pay our techs by the hour.
The 200 hours a year I mentioned would cover the $3,500 I have in fixed costs plus the payroll that the work generated. Am I explaining that properly?
Just stumbled upon your site - GREAT STUFF! Congrats on the business venture. It sounds really exciting (and hopefully profitable!). I’ve added you to my RSS feeds so I can see how it goes!!!
GOOD LUCK!!
Wonderful idea! and not much cost to keep it up too - i’m impressed
Hope you start out with a bang!!!
Wow, that is awesome!! Congrats!
Congratulations! I am so excited for you! Good Luck and Cheers! I hope to join you soon.
Did your husband lose his job? Did that precipitate this?
[...] & her husband from Wide Open Wallet started a business. Congratulations on taking the plunge into [...]
congrats! is this a service that is only local? if not, hopefully you can expand quickly through your online connections too!
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