Jumping in with both feet...

[HeavyMetalMech]

Hello everyone! Since this is the "General Industry Questions" section, I am hoping I can be VERY general...

I have very little experience in the industry, but I decided to start a service company {yikes}...

Any advice for a complete n00b?

 

[funwithfuel]

I think that's a bit too general. Service? PM service, on site? Welding service? Specialty service, ie electrionics diagnosis, regen and engine related, what? What service are you planning to provide?

 

[HeavyMetalMech]

Well.... my background isn't in heavy equipment, but my partner has decades of experience as an onsite mechanic... We are still figuring out our strategy, (Literally formed the official company today).

So far we have one service truck (In the pic) that we bought and will get to Tx this weekend. Looking into a lube truck and should have one by next week. He's been on one of those bad boys since he started, but this is the first time he will be in one of his own!

He's got the experience on the ground both in moving metal and electronic diags.

Our main focus is going to be to keep machines moving so clients stay productive.

I know I'm still kind of all over the place, but like it's too late too look back now!

Here's a couple of specific questions I'd love some guidance on:
1.) What's a good place to look for good mechanics either with experience, or who want to get into the field (for a lube truck, or for onsite work)
2.) Where can I find good deals on used welders

I'm so glad I found this site! I've been doing a lot of reading and it's great to see so much good information from professionals! Thanks again for any help!

 

[Birken Vogt]

What is your experience? If your partner is a mechanic then get him out making money as much as possible ASAP. I presume (hope) you are the business savvy type. Keep your books current and don't let slow pay customers slide away on you.

 

[funwithfuel]

Start here, https://www.heavyequipmentforums.com/threads/loss-of-talent.69681/
I think yer in fer a rough ride.

 

[funwithfuel]

I'm sorry, I don't want to discourage, but man?! You look for input and advice afterwards? I don't know if yer ballsy or ill prepared or just that confident in your one wrench.
Have you looked at your small business insurance, workmans comp, federal requirements... How about specific training for certain sites. A lot of customers subscribe to this insurance rating thing, where if your risk is too high, you don't work for them. What about customers who want 90 and 120 days to pay? That's most of your municipalities there. Is the business in your wifes name for women and minority owned business preference? What about tool insurance on that rig? What's she weigh in at. Over 26k? How about log books for the DOT?
I would start with your tech. Does he know anyone worth their weight to bring in? Are you going union? Have you considered it. In my area , no one works heavy equipment without union. Maybe theres a crafts guild or something of that nature you could tap for help. I would not entertain the idea of an apprentice, who would train him? A go fer, maybe or mechanics helper, but no apprentice.
Again, not bustin balls, or discouraging. I think you guys are brave "AF" for stepping in. Im just asking if you weighed it out against the benefits.

 

[HeavyMetalMech]

What is your experience? If your partner is a mechanic then get him out making money as much as possible ASAP. I presume (hope) you are the business savvy type. Keep your books current and don't let slow pay customers slide away on you.

That's the plan! My background is in Operations/Logistics, so I'm working on the back end stuff... He is still technically employed which will give me a few weeks to get everything in order on my end before we move any wrenches...

Is this industry known for slow paying clients? As in, not paying when the invoices come due?

 

[HeavyMetalMech]

Start here, https://www.heavyequipmentforums.com/threads/loss-of-talent.69681/
I think yer in fer a rough ride.

Awesome, will def check this out...

Also, That's what she said!

 

[HeavyMetalMech]

I'm sorry, I don't want to discourage, but man?! You look for input and advice afterwards? I don't know if yer ballsy or ill prepared or just that confident in your one wrench.
Have you looked at your small business insurance, workmans comp, federal requirements... How about specific training for certain sites. A lot of customers subscribe to this insurance rating thing, where if your risk is too high, you don't work for them. What about customers who want 90 and 120 days to pay? That's most of your municipalities there. Is the business in your wifes name for women and minority owned business preference? What about tool insurance on that rig? What's she weigh in at. Over 26k? How about log books for the DOT?
I would start with your tech. Does he know anyone worth their weight to bring in? Are you going union? Have you considered it. In my area , no one works heavy equipment without union. Maybe theres a crafts guild or something of that nature you could tap for help. I would not entertain the idea of an apprentice, who would train him? A go fer, maybe or mechanics helper, but no apprentice.
Again, not bustin balls, or discouraging. I think you guys are brave "AF" for stepping in. Im just asking if you weighed it out against the benefits.

Probably all of the above... You're definitely not discouraging, and I appreciate your thoughts!

Like I mentioned before, I have no experience in this industry so I don't know what to fear.. (which I count as a positive)

I'm learning a lot about the biz, and I know I have so much more to learn... The payroll/compliance/insurance stuff I'm pretty well versed in, but I'm sure I'm gonna find some industry specific stuff there too...

To answer a couple of your questions, we are going to keep our vehicles under 26k gvwr for the time being to avoid the DOT stuff... It takes a little more work to find the rigs, but for the time being I think it's our best way to go. We are definitely starting with my partner's contacts, especially for the lube truck.. The PM side of things should be pretty busy from the jump...

We are lucky enough to be minorities ourselves, so that doesn't hurt! You're absolutely right about the apprentice, btw... My partner said the EXACT same thing almost word for word! =)

Thank you for all your input again, ... Like I said, I don't know if brave or stupid is what we are, but there's no looking back now! I do appreciate your perspective, especially when I know I don't know enough to fear!

 

[AzIron]

hats off to you for jumping in feet first

its better to have 5 happy customers than 10 that are mad

its going to be quite the challenge for one guy in the field to make enough billable to keep both of you going even in the short term and grow your buissness

keep in mind if your buying the parts and things your fronting that money until the customer pays that can get ugly really fast if not kept on top of

above all take time to maintain your trucks always seems the only truck that always kept running enough to get by and never fixed is the mechanics truck your job is to come to the rescue not be rescued believe me you dont want to be that guy.

good luck and strap in your in for a ride

 

[Tenwheeler]

I did some work for a man that had been a shop manager for the family dealership. They were selling G's, WC's, WD's, D17's and such. He told me " A good man with a good helper can do the work of three men. When you need more done than they can accomplice you will hire more people. Then you will find yourself paying five men to do the work of three."
Somewhere around the bottom of that number of employees requires workmans comp.
Straight hourly employees can require a straw boss like the Henry Ford model. Straight commission mechanics, come backs are free, tend to be untidy. Hourly plus commission can be a good blend.
If you extend credit to most anyone that comes along you will have the busiest shop around. It only takes one default to cost you all of your profit for a whole month.
Unless you are specializing do not get into major component overhauls. Exchange them and let someone else warranty them.
A good CPA is a must and set aside money for your payments.
Just some start up opinions. Good Luck!

 

[Birken Vogt]

Is this industry known for slow paying clients? As in, not paying when the invoices come due?

I think any industry is known for slow/non payers.

Get yourself a Square credit card setup immediately and take credit cards. That way you can get your money immediately and the card companies can fight it out with the debtor if there is a problem.

If I was you I would work C.O.D. exclusively and only venture into extending credit very slowly after a couple years, and with well referenced clients.

Even municipalities and the federal government have credit cards these days, just ask for them.

 

[Welder Dave]

I don't think there's anything wrong with expecting to be paid promptly at the completion of the job. Sometimes there are exceptions but the customer needs to tell you in advance. Payment comes from head office in another city so takes a few days might be an example of why a payment wasn't immediate. Having customers pay for parts on a large job is OK too. If you want partial payment up front for labor and possibly progress payments, you need to be bonded. Not that honest businesses would be a problem but you can't just take money up front because then there isn't much incentive to return to the job. This is an all too common scam with people doing home renovations. Being bonded also gives you credibility. One thing my dad told me was to never feel guilty about asking to be paid for work you did. Some customers aren't happy no matter what you charged and try to weasel out of paying the full amount. Be leery of a customer who wants a huge amount of work done and acts like money is no object. I had a couple of these and then they tried to haggle on the amount at the end.

 

[thepumpguysc]

Speaking of "slow" payments.. I did a couple of pumps for a guy who owns & runs another fuel shop..
The pumps were alittle above his knowledge..
I did the pumps, sent them back on my dime & NEVER got paid.. this was in OCTOBER!!!
I'd call him once a month to "check-in",, I just KNEW I'd get my money one way or another seeing we both did the same thing.. I could just recoup it from parts or tools or something..??
I found out yesterday> HE DIED..!!! & I have no recourse.. The only # I had for him was his business phone.
I had met his wife a time or 2 & she knows who I am but that's it..
I DID leave a condolence msg on the business phone voice mail & offered my services to help close-out the business, cuz I KNOW there were customer jobs in there..
Just sayin> don't let the money get TO FAR behind.. cuz you never know whats gonna happen.
& I'm out $1000.00..

 

[Junkyard]

Speaking of "slow" payments.. I did a couple of pumps for a guy who owns & runs another fuel shop..
The pumps were alittle above his knowledge..
I did the pumps, sent them back on my dime & NEVER got paid.. this was in OCTOBER!!!
I'd call him once a month to "check-in",, I just KNEW I'd get my money one way or another seeing we both did the same thing.. I could just recoup it from parts or tools or something..??
I found out yesterday> HE DIED..!!! & I have no recourse.. The only # I had for him was his business phone.
I had met his wife a time or 2 & she knows who I am but that's it..
I DID leave a condolence msg on the business phone voice mail & offered my services to help close-out the business, cuz I KNOW there were customer jobs in there..
Just sayin> don't let the money get TO FAR behind.. cuz you never know whats gonna happen.
& I'm out $1000.00..

That reminds me of the Tom T Hall song ballad of forty dollars......I hope he rests in peace but the trouble is the fella owes me forty bucks.

As to the OP, strap in it's going to be interesting. Having had several business and/or being a part of others I'll say this. NO EXTENSION OF CREDIT TO ANYONE for quite a while. I wouldn't buy more than a couple hundred in parts with my own $ for anybody. They've most likely got charge accounts etc so let them buy parts for their machines. If they don't have a way to pay for their own parts or make excuses about getting them for you guess what....you'll hear the same ones when you ask for your $!

Avoid debt and anything with monthly fees. That crap adds up fast. Run lean and bare bones as long as you can. When getting a call from a new client ask them questions to determine how big they are. Such as, who do I contact for accounts payable? Their answer will tell you a lot. If they say uhh what's that? Not good. If they say it's Jane Doe and she's at the corporate office in NY that's not good either. Ask about their payment terms. There's a lot you learn to ask up front that tell you who's going to be a good customer and who you should avoid.

Credit cards are great, just pad your bills to pay the processing fees. I would get in the habit of saying, all payments are due at the time services are rendered unless other arrangements have been made. If somebody won't pay at the time you're done, odds are they won't in 30 days and you don't need to work for free. There's always a guy looking for a new company that'll give him some rope so he can get something done for nothing.....

 

[DARO]

Common theam here? The cash is the life blood of the biz. Dont let it get out of hand. Most all the other stuff will sort it self out.

 

[DMiller]

I used to have a pile of rubber checks from my attempt at home office mechanic work. Lost/wrote off just at $6k over the course of a year in the early 80's. Was really bad times then with tight money. Adjusted my mechanisms where the customer would pay labor to me but buy their own parts I deemed necessity and I would install. Ended up with a few customer machines apart they could not afford to fix at THEIR locations, ate some lost labor but in the end was not so bad as the first three years.

I got old, mechanic work is pretty tough on the physique, labor is a really tight market right now but may expand IF the millennial turds open their eyes and opportunity avenues.

 

[thepumpguysc]

That's what I'v been doing lately.. no credit.. didn't used to be like that..
FOR YEARS, I would do a pump AND send it back WITHOUT A DIME PAID.. not anymore.
I'll bet 80% of the people on this site that got their pumps done by me did so w/ no money paid upfront..
The "funny thing is".. the only people that screwed me, were the people in my home State.. doesn't speak highly for the people of South Carolina.. or I need to pick my customers better.. Lol

 

[DARO]

Payment before the work starts for 100 Percent of estimated parts is not uncommon. Typically when i do that i give a invoice as a estimate of parts. And list them all. And make it claer it is a estimate. Some times you dont change all the parts in the estimate. U give that money back. No one complains when the bill is lower then was estimated. Most of my customers are in construction or logging. If you extend credit u will get bit.

 

[HeavyMetalMech]

A couple more questions! I'm hope it's ok to be asking about all this on the same post...

Do y'all independent guys charge a % above retail when you furnish parts? What's typical?
Do y'all charge mileage, drive time, both, or neither for field work? What's typical?
Any recommendations as far as billable hourly rates?

Thanks again y'all!