deciding, self employed or Employee? your opinion please

[litleboy]

I'm currently working for an AEC company, (95% of the work is engineering) because business is slow I had my income cut last year. I'm ruining out of savings so I asked my Employer the chance to try to get some architectural services jobs by my self, and I will share % with the company.

 

Long story short. He cant let me do that, but he offer me his office to set up my own company ( I don't need to pay rent, Internet utilities etc.) and also he promises to send me some work I was doing for the company, for a fixed price.

 

I have 3 kids my wife can't work, so I'm the only source of income.

My saving will run out in 4 to 7 months if I keep working for him, or 2-4 months if I don't get enough work by my self.

 

I know it is a very personal decision, but I just need to hear some advise, opinions or even just emotional support

Edited February 19, 2010 by litleboy

[Arnold Sher]

Hi Steve,

 

I know that it is the toughest decision that one can make as it is not just about you and that there is a family involved but here is the thing.. My father always said to me: " those that do not take risks do not drink moet & chandon". The point really that i am trying to make is do you want to grind it out and make just enough to survive or do you want to give to your family what they deserve? If you never take any risks how will you know what you are capable of? I am talking from a personal experience as about 7 yeas ago i a fortune of meeting an absolute crook, who called himself a boss, who took a liberty of swindling a fair amount of money out of a company that i was managing. To cut a story short we all landed on the street and it was either trying to find a job or starting something of my own. I chose the latter.. It was the hardest thing i've done with a lot of all nighters and crazy deadlines. I took everything on i could get my hands on. I was scared i was going to run out of jobs so i would anything that paid. I loved it!!! It was wild days with stupid decisions but it tested me and made me who i am today. To this day i believe that with hard work and being prepared to put it all on the line is what separates boys from the men. There are leaders and there are followers. There is nothing wrong with either the questions lies which one are you.. I hope that helps and i wish you all the best..

[litleboy]

I really appreciate your comments, and totally agree. There is so much stuff involved on taking the decision but it is something that I want to do soon or later, I guess if I don't take the risk now, the later will never come.

 

How are you guys doing on your business? do you fill that is starting to pick up?

[Jeff Mottle]

Hey Steve,

 

I can really relate to your story. After being let go last summer I decided to make a go of CGA full time. Not that working from 5pm to 2am was not full time already, but you get the idea. My son was born only 2 months before I got the news of being let go and my wife was on maternity leave, so not really ideal timing. I did/do have savings to help subsidize things as things grow, but I would totally recommend going out on your own. It's scary and stressful as hell, there is no getting around that, but it's also the most rewarding and fulfilling thing I've done. BTW, I'm also working a lot more hours. Yeah, there were 2 more hours I could squeeze out of my 18 hour day LOL.

 

Do be warned. I don't know what kind of hours you work now, but I don't know many business owners who do not work crazy hours. It will likely cut into your family time for the foreseeable future, but if you have the backing and support of your wife and kids, I would absolutely go for it.

 

Good Luck!!

[litleboy]

Thanks for your words and time to answer. 5 Years ago, in my previous job I was working 6am to 10 pm, Saturdays half time and some (a lot) Sundays, not to mention some full nights. Its is hard now to not dedicate a weekend to my family, but in hard times hard measures.

 

a few years a go someone told me that by age 40 I should have a well established business by my self because it will be hard, almost impossible to be hired a that age.. I saw that tendency and wanted to have mine started by 30. So all this is coming together now. In fact in 2007 it was happening selling Artistic Iron products, but construction industry fell along with the sales.

 

I'm not new at running a business, but I always had a backup, now it's all or nothing.

[jkletzien]

While I think going your own way isn't a bad idea, if you have a family, a job and a consistent paycheck, I would not leave that job and jump into a business venture. Most startups lose money in their first couple years and startup costs are primarily salaries, and living expenses until the work starts coming in and being profitable -and I don't know if you've looked at procuring health insurance independently, but you should before you get too convinced you'll be able to hold onto more dollars doing it all on your own.

 

Plain and simple, it is a rock fight out there right now.

 

Try and get some freelance/moonlighting work first, see what the landscape and your connections are gonna produce, because if you leave of your own volition 1. you won't be able to collect unemployment, and 2. If it is a disaster and you want to get another job you'll be negotiating in a market with 50% unemployment for architects.

 

I agree that doing it on your own is invigorating, and the best time is at the beginning when you are really struggling, working ungodly hours, and finding your bearings, but it ain't all cake especially now and if you have people depending on you, better to wade in more gingerly.

 

Sorry to rain on the parade

[litleboy]

you're right jkletzien and thats why I ended writing here, because I needed more voices. the thing it's that my income right now is so low that in 2009 I was 16% above the us gov poverty level and this year so far I'm 2% under. I cant pay my mortgage, cant pay medical insurance. so far I'm in good shape everywhere else.

 

The freelance on the side was the request I had to my employer, but we live in a small town and he felt he could have problems with his clients..(my competition) so I wasn't able to do that. I don't agree with him 100% but I can't do anything about it.

 

I'm going to take a full month to organize and do some research and market study, call a few friends in the business. run numbers projections and anything that can help me take a better decision. ( I will also play powerball once a week)

[alexg]

The offer of having a free rent to set up your company is good. I suggest you take it. When you starting up, any offer of help is better than spending more out of pocket. And staying within your old office precinct has an advantage, keeping your ex boss close, his projects will spill over to you when required.

 

If you can stand up with your own company flag, then do it.

It takes lots of guts to start up, but hey, fortune favors the brave.

Just go all out at the first opportunity to shine, satisfied clients are going to be repeat clients, they are your future income.

 

The downside is, of course, lots of stress in the beginning.

Have jobs or no jobs, it WILL be stressful. You will need to learn to juggle between family and work since you have almost no fixed working hours now, it can be 24x7 for weeks, but sometimes you will be also free for days. You'll get stressed at your relaxed time because you have no work, you'll also get stressed while busy and overworked and guilty feeling that you have no time for your family will kick in. Not to worry, most of us experience the same.

[andyH]

Its a hard decision theres no doubt, but a couple of things to think about, how come your boss is offering office space and work? and how come your wages have been cut? Sounds like if your boss is not just willing to let you go, but is helping you to go that maybe he feels his business may not be benefiting from your employment, so ask yourself why that is? Is it because there isnt enough work for him to be able to fully justify a decent salary for you? if thats the case, your small town may not have enough business for your existing company, so now may not be the time to start up on your own.

 

Its a brave thing to head off on your own, particularly with a family to feed and shelter, and although fortune does favour the brave, it doesnt favour the stupid... so my advice is before breaking away from your income, even if it is too low to pay all of your bills, you should run through a business case, and do a good amount of groundwork and honest answers to ensure that your not comitting financial suicide... thing is a business case will not ensure success, but it should give you an idea if your business has a chance... you may even approach your local bank and present the case to them for financing, even if you dont plan on financing, the bank will be very critical of your business case, and would be a good yardstick.

 

In your shoes, I would most likely hunt for some freelance work and keep it to myself. Perhaps look for work in nearby towns, you probably have a good portfolio, so set up a web site, and start making some calls... your boss doesnt need to know, and to be honest, if he isnt paying you a decent wage what does he expect? he wouldnt mind if you were flipping burgers in your spare time, right?

 

I dont get why he wouldnt let you moonlight, but he would offer you free office space to set up in competition with him... something aint right there.

 

Business case before you commit... good luck!!

[litleboy]

andyH, thks for your words.. you touch some good points.

 

My situations it's a little bit more complex than I can explain, but I'll try.

 

Its true there is not enough jobs in this town, but there is also very little competition, just a handful of architects and designers, my boss company is AEC but only when there is an Architectural designer in staff and is like 5% of architectural, otherwise is 100% engineering. So I wont be fighting for the same jobs with him, in fact I will send the work I get to him. on the other hand there are no companies in town that offer some of the services I'm going to offer. So even architects and designers will be potential clients.

 

Like you mention, I'm not rushing in to this, I'm preparing the website, brochures, business letters, list of companies to visit and mail them, ruining numbers, budgets, and contacting a few possible clients. Cant do more than a few, because that's one of the things he didn't wanted. I don't agree with him and I think there is a little bit of ego on his decision about not letting me work on the side while working for him, but cant argue that. And is almost impossible to go around visiting people without him knowing.

 

I do think he will mind if I was flipping burgers in my spare.. as stupid it sounds I really do.

 

Now, wen I say company I mean 4 people, the owner (Structural), one Civil, the administrative assistant and me (AE Designer) ... so I'm betting that he will provide at least 50% of the income that I have now, because right now I'm doing 80% of the company work, because he is doing only the special structures and taking care of clients, the civil only does civil and some inspections. He just doesn't have the time to do it. but thats is a guessing, a well founded one, and thats why last year hi didn't let me go, as he told me he invested on me and used a lot of personal saving to keep his office open, his first reaction when I asked about the side jobs was "how much do you need", but next day he make me the offer because he cant spend more savings.

 

About other business, they are not doing so well and there are a few that closed and people moved out of town. So now that I'm starting to see a little bit of movement there are less competitors and I have seen them getting a little bit more work as time pass by.

 

I'm 90% decided to go by my self but there is a 10% that stills makes me stay.

 

I cant thank you enough guys for your comments. Believe or not you are giving me more resources to take a decision.

[andyH]

Ahh ok, so that makes a bit more sense. I hope your solo venture works well for you, I am beginning to plan my own and anticipate 6-8 months I will start up on my own also... but thats another story.

 

I still say before you commit go and create a formal business plan and take it to your bank for comment, they wont invest in a three legged horse, so its a good way of counting your legs

 

Good luck, and keep us all posted of your progress, I will be watching closely as I am still not 100% decided if I have the balls to run alone, particularly as I cant yet produce the kind of arch viz that I know I must in order to succeed .. so maybe that makes me dafter than most ...

[litleboy]

The bank comments its just what I told my brother a few weeks a go. if you can plan something that convince a bank, investor or alike. then it has better chances. its not a 100% sure thing, but it's a good scale.

[hockley91]

Steve,

 

I can relate to your situation also. I was let go from my job in April 2009. I had already been doing side 3D work.

 

The first thing I did was apply for unemployment and then I called "every" person that I knew from the architectural profession to see if then needed any help with anything!

 

Thank goodness I had been on great terms with those people and I was able to find freelancing work for 3-4 months. It was up and down those months. Some months I made more than others.

 

My wife had skin cancer during this time and our medical insurance was stopped and my former employer couldn't even make the Cobra payments so it was all gone. My wife needed plastic surgery also so it was a rough summer.

 

During that time I wanted to start my own business, but things kind of slowed down by late July and I started sending out resumes. I found employment and some of it was luck, but it was mainly the people that I knew that helped me out.

 

I think during this time, if you can find employment with a company then that is something you should look into. It's probably not the best time in this industry of building and construction to be starting your own company. It all depends on your situation of course and these are just my thoughts.

 

On the bright side of it all looking back, that was the best summer I had with my 3 kiddos. I had all day and night with them. Yes, I was feelancing, but I was making my own hours. I had not spent that much day to day interaction with them since the day they were born. That is something that I will always remember and appreciate. I was also able to help around the house with my wife and her situation. She is cancer free and the plastic surgeon did an amazing job on her nose and you can't even tell she had "major" surgery there.

 

I do believe things happen for a reason though.

[easy3dsource]

Seeing that I had to face a similar decision myself, I figured I might as well chime in. I recently made the jump into self employment. Making this decision was far easier for me than I think it would be for you, however, as I'm a bit younger and don't have a family or a mortgage.

 

One thing that I feel is going to be imperative to ensuring your success on your own is having an established network in your area. If you don't already have a database of clients that are familiar with you and your work, it's going to be really difficult to acquire new projects. Do your best to plan for this accordingly. When I was at the crossroads you are at now, a friend of mine suggested that I save enough money to hold me over for a year, assuming I made no money. It may be a bit excessive, but it's definitely an emergency fund that keeps me from stressing too much during slow periods.

 

Also, I'm under the assumption that you're going to be doing this alone, as I currently am, so here's another thing to keep in mind: you're going to have to be a one man army, and handle all marketing, proposals, creative direction, execution, and delivery. Developing a solid workflow is really crucial, and is something that I haven't quite perfected. My problem is that I'm more of a creative type, so once I land a project I get absorbed in it, and spend no time pursuing other projects or networking. Once the project is completed, I find myself back at square one, and have to scramble to find more work. This workflow proved to be a roller-coaster of stress, and I'm working to correct it as we speak (fyi, my work extends beyond easy3dsource... I have another company through which I do archviz and creative multimedia).

 

So I guess my suggestion would be to do your best to have a backup fund, and never forget to fulfill all your roles within your "company." If what you're saying is correct (that your funds will dry up in 4 months anyhow), it looks like the decision is making itself.

[litleboy]

hockley91 I'm glad your wife is fine now, and there's nothing worts in life than adding a illness to any situation, not to mention on a already difficult one.

 

easy3dsource I will go en look for a few book I read. they could be mainly garbage, but you can extract a couple of good advices. (and you make me remember that I need to plan on that)one of them was to establish a daily schedule. like first hour in the mooring, make CALLS.. one day of the week, take it off work to find more Jobs. let the answer machine work in critical hours (established ones) do administration only at the time you set. etc.. there is more, but I'll give you the book name.. and one audiobook..

[Tommy L]

Time to ask yourself some big questions and be brutally honest with the answers.

 

1: Are you brilliant at 3d?

2: Can you demonstrate those skills? (portfoilo and website)

3: Do you have balls?

4: Do you have an uncanny knack for business?

5: Do lots of people know you, like you and know your work and like your work (aka network)?

 

If you cant answer yes to at least four of those five questions, keep your job, bite the bullet and start working 20 hrs a day until the answers are yes, then quit your job.

[litleboy]

Excellent Tommy nice and simple list. Just need to change #1 for: Are you brilliant at what you do? (workwise)

 

I'm sure I have 4.5 of those.

[litleboy]

Just updating, I'm ruining numbers, so far the minimum I can/need to charge per hour is 25 dlls, (8 hours a day 5 days a week), Including my income, overheads and taxes to break even.

[Jeff Mottle]

Just updating, I'm ruining numbers, so far the minimum I can/need to charge per hour is 25 dlls, (8 hours a day 5 days a week), Including my income, overheads and taxes to break even.

 

Finally! Someone who knows you figure out the hourly rate by working backwards like this. I hate those "how much should I charge" questions.

 

BTW, you should probably calculate your hourly based on some downtime. Maybe base it on 50-60% billable hours. At least until you are swamped with work.

[litleboy]

thks Jeff. I thought about it, but I also was thinking "what if a work extra hours" that will drop my rate, as the lower billable hours will rise it.. but I needed to now mi normal point of balance. I now I will have to charge more for unexpected expenses and downtime, but also, I need to work more hours if I under price a job.

 

I don't want to do make the mistake of spending more time or relax on a project because I don't have anything else waiting.

[Jeff Mottle]

Certainly there are the market conditions to consider, but if you are only going to be 60% capacity most of the time, you would have to charge more just to meet your break even point. I don't think it would be safe to bill a rate that considers you need to be busy 100% of the time. It's just not realistic I don't think.

[litleboy]

You are 100% right.

[Matt Sugden]

My advice is don't be self employed unless you have either balls of steel or massive amounts of funding. If all you know is being employed self employment is not for the faint hearted. You have to have a different attitude to working for someone. If you don't get it done there isn't any one else to take the blame or do it for you, the buck stops with you.

 

Even after five years of going it alone I get tempted by the prospect of security and a full time position, last week I was working from 8 in the morning to 2 in the morning and I have a 7 week old daughter. But once you've tasted self employment I think it is very hard to go back. Basically it comes down to one thing, do you have what it takes to make it work?

[litleboy]

I had a business before, the problem was that we were 5 partners (all with different goals and ideas) and in the top of that we made the mistake of putting too much attention to one client and when that client broke we broke too.

 

I've always been business oriented. I'm not afraid about ruining a business, I been doing that for all my employers, even doing contracts, budgets, payrolls. almost like an owner, so that is not new to me. I wish I had the option of having funds. And I do know the feeling of some times wishing to be employed with no other responsibility than arrive on time and flip burgers. (nothing wrong about doing that work, I mean the stress level is nothing to compare).

 

But now, been employed it's just taking me down the drain faster and faster. I can't find an other work, even if I find one nothing ensures me that a new company wont fire me in 2 months.

 

I think I have some advantages now. but what you say is valid, I'm still working on my decision.