21 replies to this topic

[kennygray81]

as title really, thinking of starting doing subby work, what kind of insurances do i need, what are rough costs of these? anything other advice you guys can offer about that side of things would be great!
In the process of sorting a van etc, as i have a good few contracts offered to me by an old company that i used to work for

Thanks in advance

[DirectFS]

kennygray81, on Apr 21 2009, 10:41 AM, said:

as title really, thinking of starting doing subby work, what kind of insurances do i need, what are rough costs of these? anything other advice you guys can offer about that side of things would be great!
In the process of sorting a van etc, as i have a good few contracts offered to me by an old company that i used to work for

Thanks in advance

Okay, advices number 1, 2, 3, and let's see how many more we get to:

1) Insurance costs may, or may not, depend on how much experience you have. Insurance cover depends on how many of you there are planned to be - is it you, solo, or you and a lad, another guy, or what? Format of your business?

2) You'll need, as a minimum, public liability - probably for £2M to start with, depending on the work you're doing. You'll need van insurance, you'll need tools insurance. You'll want to think about efficacy cover, personal injury and sickness, empployers liability (if using lads, or more than one of you), and those are probably just the basics.

3) Cost varies from place to place, person to person. But you should probably budget around 500 - 1000 per annum plus your van insurance.

4) Open a business current account AND a deposit account. If you have your tax registration, then you can invoice gross, BUT - put 25% of it straight into your deposit account and DO NOT TOUCH IT - this is your tax money - you will probably get a bonus from it at the end of the year, but these guys can do you more ways than a Christmas Turkey....don't chance it.

5) As per the above - tell the tax man what you're doing, and make arrangements to pay your NI by direct debit or standing order.

6) Have a business plan of sorts - set goals and stick to them. Do you just want to subcontract work for ever more, or is this part of a bigger plan to establish a business in your own right, with your own customers?

7) Be professional at all times, no matter how well you think you're getting on with the guy giving you the work! Make sure you receive written work orders from the company (and purchase orders), comply with all paperwork requests from them - those are the biggest single reasons subbies don't get paid. Get a proper email address - don't use a Hotmail one, and make sure your mobile phone account has plenty of minutes on it each month (don't use PAYG). Also, make sure you answer your phone, have a professional voice mail on it, and return calls!

8) Start storing all manufacturer tech support numbers in your phone - they are your new best friends, because the only response you'll get from the company giving you the work is "you're the engineer - fix it".

9) Forget the notion that being a subby is easy - it isn't. If you want repeat work, and recommendations, be prepared to work twice or more harder than you did as a paid engineer - you need to envelop a mentality of taking the work when it is there - but also of being clear about your holiday time - let your companies know as far in advance as you can that you'll be on holiday at specfic times. Make sure you do not leave work unfinished when going on holiday.

10) Learn about running a business - because that's essentially what you'll be doing.

There's 10 quick pointers - but with a bit more info on what you want to do, you can probably get some more specific answers....happy to help if I can.

Bill.

[Chorlton]

can't really add much to a quality reply like that!

Don't under value yourself or your services.
£15-20 per hour is NOT enough to chanrge regardless how much work or how local.
You can't work 8hrs every day, you'll have lost days, admin time, holidays, sickness, weekends, bank hols and remember you've got 3 things to pay for at all times - YOU - THE BUSINESS & PROFIT !

[steven sneddon]

Hi Kenny

Make sure your payment terms are made quite clear as a subby you do not want to go more than 30 days between payments(make sure your invoicing is spot on). Ideally if you know the company well they might be willing for you to invoice fortnightly to start you off.

As Bill and Chris have already stated do not sell yourself short, do what is right for your self as it is you that will have to live with your decision.

I could probably write a book on what not to do as in my time as a subby I have made every mistake possible.

Best of luck

[DirectFS]

Chorlton, on Apr 21 2009, 01:49 PM, said:

can't really add much to a quality reply like that!

Oh. Blush!

Quote

Don't under value yourself or your services.
£15-20 per hour is NOT enough to chanrge regardless how much work or how local.
You can't work 8hrs every day, you'll have lost days, admin time, holidays, sickness, weekends, bank hols and remember you've got 3 things to pay for at all times - YOU - THE BUSINESS & PROFIT !

This is absolutely correct. A major reason businesses fail is becasue they simply do not cover their costs. The reason most of them don't cover their costs is because they have no idea how much it is costing them to "do" business. This was discussed recently in another thread, and is worth looking at. Essentially, know how much it costs you to do what you do, add your profit margin to that, and arrive at an hourly rate that makes you money.

An average rule of thumb is that as Chris says, after lost days and admin time, etc., you can have as few as 220 working days, or 1760 normal working hours in any year.....it's a good point to base your costs on anyway.

Bill.

steven sneddon, on Apr 21 2009, 03:31 PM, said:

Hi Kenny

Make sure your payment terms are made quite clear as a subby you do not want to go more than 30 days between payments(make sure your invoicing is spot on). Ideally if you know the company well they might be willing for you to invoice fortnightly to start you off.

As Bill and Chris have already stated do not sell yourself short, do what is right for your self as it is you that will have to live with your decision.

I could probably write a book on what not to do as in my time as a subby I have made every mistake possible.

Best of luck

As could we all!

Another very valid point - every day your customer has your money, you don't. That might sound obvious, but in reality it means that you have to fund your business, because your customer isn't - or put another way, every day your customer holds on to your money, it becomes worth less to you.

Make sure you have a rigid cash collection programme in place, and stick to it. Try, as Steve says, to go for as short a credit period as possible, and try similarly, to ge tthe maximum terms you can from any supplier you use.

Bill.

[kennygray81]

guys your help has been great, im at the very bottom of the ladder as to starting myself, but i suppose its the best place to strart!!

this forum is an excellent source of info for me and everyone is v helpful indeed!!

Thanks again!!

kenny

[steven sneddon]

kennygray81, on Apr 21 2009, 09:13 PM, said:

guys your help has been great, im at the very bottom of the ladder as to starting myself, but i suppose its the best place to strart!!

this forum is an excellent source of info for me and everyone is v helpful indeed!!

Thanks again!!

kenny

Kenny when you get to 15 posts and you wish to apply for trade, I will vouch for you.
It's ok I won't tell who you work for lol .

[SUBS]

DirectFS, on Apr 21 2009, 05:58 PM, said:

Oh. Blush!



This is absolutely correct. A major reason businesses fail is becasue they simply do not cover their costs. The reason most of them don't cover their costs is because they have no idea how much it is costing them to "do" business. This was discussed recently in another thread, and is worth looking at. Essentially, know how much it costs you to do what you do, add your profit margin to that, and arrive at an hourly rate that makes you money.

An average rule of thumb is that as Chris says, after lost days and admin time, etc., you can have as few as 220 working days, or 1760 normal working hours in any year.....it's a good point to base your costs on anyway.

Bill.




As could we all!

Another very valid point - every day your customer has your money, you don't. That might sound obvious, but in reality it means that you have to fund your business, because your customer isn't - or put another way, every day your customer holds on to your money, it becomes worth less to you.

Make sure you have a rigid cash collection programme in place, and stick to it. Try, as Steve says, to go for as short a credit period as possible, and try similarly, to ge tthe maximum terms you can from any supplier you use.

Bill.

You have to make sure you dont finance someone elses projects. If your not careful, there are people that will get the kit on acount, get the labour ie, you, on account, then pay up when they get paid, or at some time after that.

Of course if they dont get paid at all..........

[Chorlton]

steven sneddon, on Apr 21 2009, 09:29 PM, said:

Kenny when you get to 15 posts and you wish to apply for trade, I will vouch for you.
It's ok I won't tell who you work for lol .

As Steven says, see Link below & you can see another 1/2 of the forum that's trade only and even more helpful (some say anyway)!

C.

[DirectFS]

steven sneddon, on Apr 21 2009, 09:29 PM, said:

Kenny when you get to 15 posts and you wish to apply for trade, I will vouch for you.
It's ok I won't tell who you work for lol .

You make that sound like it's a three letter acronym company Steven.....lol



Bill.

SUBS, on Apr 21 2009, 09:30 PM, said:

You have to make sure you dont finance someone elses projects. If your not careful, there are people that will get the kit on acount, get the labour ie, you, on account, then pay up when they get paid, or at some time after that.

Of course if they dont get paid at all..........

Subs - another very good point.

Your credit accounts should be for your use - for things you supply as part of your price, or as agreed - often these days, a subby will be asked to provide their own fixings, and even some fittings in cases I have known - make sure you charge these back to your client at market rate plus - you're entitled to recover the cost of buying that kit too - i.e. travel, postage, admin. Again, make sure your hourly labour rate includes for all that, and any possible interest or late payment charges you might get hit by - it all adds up.

Bill.

[Chorlton]

Ignore all previous advice, I didn't realise you were based in Scotalnd.

Start off working for small local companies for £60 a day and offer 90-days credit.....you do fire right?



C.

[Rulland]

Chorlton, on Apr 21 2009, 10:22 PM, said:

Ignore all previous advice, I didn't realise you were based in Scotalnd.

Start off working for small local companies for £60 a day and offer 90-days credit.....you do fire right?



C.

As much as £60 a day C? lol

[Chorlton]

Ooops meant to say week, lol

[Rulland]

Oxo, on Apr 21 2009, 10:58 PM, said:

Budget tomorrow, bet we all get shafted ...........................AGAIN

Thats put a dampener on it- Oxo

[Rulland]

I do-just hope the Chancellor does !

[Chorlton]

never trust a man who's eyebrows meet in the middle or are a different colour than his hair

[Rulland]

Chorlton, on Apr 21 2009, 11:36 PM, said:

never trust a man who's eyebrows meet in the middle or are a different colour than his hair

Or who purports to be a politician!!!!