After seven successful years in the business world, I have made the decision to wind down my operations. An exciting job opportunity came my way, and I chose to seize it. The insights shared previously resonate with my experiences. One aspect I struggled with the most was accounting. Even though I engaged a reliable accountant (who I was fortunate to find), I still found myself managing about 90% of the accounting tasks. Unfortunately, I never discovered a suitable alternative for this workload. Running a business is quite costly—it demands comprehensive insurance coverage, including commercial and professional liability.
One of the aspects I valued most was the freedom that entrepreneurship provided me. However, dealing with non-paying customers proved to be a challenge. In my seven years, I only faced a loss of $750 due to a client going bankrupt, but slow payers were a persistent issue. I have consistently paid my bills punctually, which inadvertently turned me into a financial lifeline for my clients, including billion-dollar corporations and numerous smaller businesses. To address the problem of delayed payments, I began informing my customers that those who consistently pay late would lose their priority status. This strategy did help expedite payments, though not for every client.
- 08-04-2025
- Highland Controls
Thank you all for your valuable insights! I've received some fantastic advice here that far exceeded my expectations. Regarding insurance, could anyone recommend where I can obtain coverage? Additionally, concerning slow payment issues, I was contemplating incorporating the costs of all necessary components into the initial 30% of my pricing. Is this unrealistic thinking? I understand the importance of managing my bills within the designated timeframe. It seems I've significantly underestimated the financial and accounting aspects, an area where I'm currently lacking knowledge. I plan to dedicate time to educate myself on these topics. For now, I intend to begin crafting machines in my spare time until I generate enough cash flow to fully commit to my venture.
QuickBooks is an essential tool for managing your accounting needs. However, it's important to remember that there are numerous regulatory filings you must complete as well. For instance, I handle sales tax reporting, even in instances where there are no taxable sales. Additionally, you may need to obtain a vendor's license to operate legally. In Ohio, take note of the Commercial Activity Tax requirements as well.
I've been seeking a part-time business manager or a similar service to streamline operations, but my search has been fruitless so far. When it comes to my projects, I typically require a 35% deposit upfront, which often helps cover the cost of materials. Unfortunately, I often find myself in a situation where I invoice clients for the 35% upfront, order the necessary parts, receive them, and pay for them—all while still waiting for that initial payment.
Currently, I'm facing this challenge again and may have to inform my panel installer to pause work. I anticipate a call from the customer shortly to inquire about the installation timeline. While this situation isn’t always as dire as it sounds, it's crucial to be prepared for such delays. Some customers are punctual and pay their invoices immediately upon receipt, while others adhere closely to payment terms, and some invoices, regrettably, go missing.
I currently have one client who is 90 days overdue on a relatively minor invoice, despite having settled several earlier invoices without issues. It's a reminder that managing cash flow and customer payments requires diligent planning and communication.
- 10-04-2025
- Highland Controls
There is a significant contrast between receiving a traditional monthly salary and taking the initiative to pay yourself. The challenge arises when you become overly preoccupied with financial details and bookkeeping; this can lead to hesitation and prevent you from making the leap. While you may have received valuable guidance, at times, you must take a leap of faith and just go for it. If you have a solid workload lined up for the upcoming months, that’s a sufficient reason to make a decisive move. Keep in mind that many businesses and freelancers do not have the advantage of a continuous stream of work or projects. As I reflect on my situation, I currently have three jobs on my plate, all of which will conclude within the next two weeks—after that, I have no commitments. Are you prepared to adapt your lifestyle to embrace such uncertainty?
- 11-04-2025
- Ronnie Sullivan
Valuable insights shared here! As a self-employed individual, I intentionally avoid mechanical and electrical projects. These types of builds can demand significant working capital while waiting for invoiced payments to come through. In my local area, numerous shops are eager to collaborate and form partnerships. Even when focusing solely on the "soft" aspects of my business, I’ve found it essential to maintain around $30,000 in reserves to handle the unpredictability of payment schedules.
I choose to operate on a cash accounting basis, steering clear of accrual accounting that could require preemptive tax payments on ongoing projects. It's crucial to remember quarterly tax obligations; tax season can be particularly challenging if you've had a prosperous year, as you’ll need to pay first-quarter taxes alongside any taxes owed from the previous year on income that surpassed your prior estimates.
As a sole proprietor without partners or employees, I can take advantage of a solo 401(k), which allows for annual contributions nearing $50,000. This retirement account also provides the flexibility to borrow funds for business initiatives. Don’t hesitate to consult a qualified accountant; investing a few hundred dollars in professional advice can potentially save you thousands down the line. Best of luck in your entrepreneurial journey!
I encourage you to take the plunge, but it’s important to prepare and consider a few key factors. First, it's essential to have a financial cushion to help you navigate periods without income or unexpected expenses; the amount you save is up to you. Next, where will you obtain health insurance, and how much will it cost? For reference, my premium is $1,500 per month. Be aware that the IRS, both state and federal, may conduct audits, so hiring a reliable accountant is a wise investment. They can help you understand what expenses you can deduct and ensure you’re prepared for future audits. Additionally, remember not to sever any professional ties, as you might need to reconnect in the future. If you choose to hire employees, be prepared for the administrative burden that comes with the necessary paperwork.
- 11-04-2025
- geniusintraining
Navigating software expenses can be a significant challenge, particularly if you're utilizing automation and business management tools. These costs can present a formidable obstacle, especially since passing these expenses on to customers isn’t an option. The investment in meters and essential equipment can quickly add up.
I briefly ran my own business, which was enough time for me to realize that I lacked the necessary expertise and tools to successfully manage a company. Ultimately, I was relieved when I secured a stable, long-term job. I have a strong desire to work independently, but my passion lies in machinery, not in handling accounting and administrative tasks.
Finding clients is another hurdle; establishing connections with those in need of your services can be daunting. During my early entrepreneurial journey, I resorted to wiring a few houses to keep the financial flow going while waiting for industrial opportunities, which were quite scarce.
Interestingly, now that I have a steady job, I receive numerous external job offers that I often have to decline. It's ironic, considering how desperately I sought work during my self-employment phase. The fear of making a mistake that could lead to significant production losses and financial repercussions further adds to the apprehension of owning a business.
For now, self-employment remains just a dream for me, as the stress of ensuring financial stability and meeting obligations feels overwhelming. It's certainly not the right path for everyone. However, I wish you the best of luck on your entrepreneurial journey, and I hope you find success in your endeavors!
Looking for insurance? Discover where to find the best coverage options. For more information, click here: [Get Insured Now](http://www.plctalk.net/qanda/showthread.php?t=113695&highlight=insurance).
Thank you all for your valuable insights! The advice shared so far has been incredibly helpful, and I'm grateful I reached out here for guidance.
Be prepared to invest significantly more hours into your small business than you might expect! Managing all the various aspects of running a small company is incredibly time-intensive. Personally, I find that around 40% of my time is dedicated to essential tasks such as accounting, managing taxes, providing customer quotes, preparing contracts, and overseeing inventory, among others. On a different note, I want to highlight the importance of understanding business insurance. I've encountered last-minute challenges when clients unexpectedly added insurance requirements to a contract that far exceeded my current coverage. This often resulted in having to cancel the contract due to the prohibitive costs or unavailability of additional insurance. Such situations are particularly prevalent with larger corporations and are especially relevant in sectors involving medical applications. Just my two cents!
**Tips for Purchasing Parts for Your Business**
At Highland Controls, we typically require a 35% deposit upfront for most jobs, which ideally covers the cost of parts. However, I've encountered challenges where I invoice clients for this amount, place orders for the necessary components, receive the parts, and pay for them—all while still waiting for the initial 35% payment. I'm currently facing this situation and considering halting production with my panel specialist until I hear back from the customer about the installation date.
I understand this struggle with parts costs all too well; I faced similar obstacles but eventually developed effective strategies to manage them. It's important to recognize that profit margins on parts can be minimal. Clients have direct access to component pricing and may scrutinize every charge.
To alleviate this issue, I charge additional fees for building and assembling enclosures that comply with NFPA and NEC standards. Every quote I issue includes a detailed Bill of Materials (BOM), which outlines all necessary items such as wiring and other consumables required for the project and where they can be purchased. Building a strong network of distributors and suppliers has proven invaluable in this context.
According to our contract, clients are entirely responsible for sourcing and shipping these components to my facility. This strategy has been a game changer; once clients commit to acquiring the parts, the project's success becomes much more secure.
Define your payment terms clearly and take the time to understand the client responsible for the invoices. Whether you're dealing with Net 30 to Net 90 payment options, collecting outstanding payments can be incredibly challenging. I have experienced firsthand the frustration of waiting over a year to receive payment from a large Michigan-based company, and I often found myself needing to accept partial payments. Making those calls to request payment is something I dread—I’ve been managing this for over 11 years, and the stress of chasing after money still weighs heavily on me.
- 11-04-2025
- geniusintraining
According to BITS N BYTES, maximizing profit from parts can be challenging because customers often have equal access to pricing information and may scrutinize every charge related to each component. It's important to remember that, like us, other companies rely on providing specific services and also need to generate profits. For instance, when I present a partially filled PLC enclosure alongside a room filled with PLC cabinets that have available space, and then you provide a quote for two additional junction boxes needed to connect a fiber cable between these areas, I will thoroughly investigate every detail, as I dislike feeling taken advantage of.
This emphasis on transparency is vital in the industry, and understanding the costs and services involved is crucial for both sides to ensure a fair and profitable working relationship.
One important reason to avoid using the title "Engineer" is that certain states, such as Arizona, mandate evidence of a relevant degree before you can legally refer to yourself as an "Engineer." I learned this the hard way with a previous employer when my business card listed me as a "Field Service Engineer." However, it raises the question: where can one even obtain a degree in "Field Service Engineering"? To protect your professional reputation and ensure compliance with state regulations, it's crucial to understand the qualifications needed for engineering titles.
You don't need a formal degree to pursue a career as an engineer! An engineer is defined as someone who applies scientific principles to solve problems and create innovative solutions. If you possess the skills and capabilities of an engineer, then you are indeed an engineer! For more information on what it means to be an engineer, check out this [definition of engineer](https://www.google.com/search?q=engineer&rlz=1C1EODB_enUS564US564&oq=engineer&aqs=chrome..69i57j69i65l2.3544j0j8&sourceid=chrome&ie=UTF-8). Embrace your talents and step into the engineering world, regardless of traditional education pathways!
I acknowledge my mistake! I want to sincerely apologize for my earlier statement in #21. I spoke without fully understanding the topic. In Arizona, a degree is indeed required to use the title "engineer," and it's likely that similar regulations exist in other regions around the world. This approach doesn’t seem logical to me. Who would you prefer to handle your project: a professional with 40 years of hands-on experience or a recent graduate with only 4 years of training yet labeled as an engineer?
User damica1 expressed a change of heart, stating, "I must correct myself!" They acknowledged their previous mistake in statement #21, admitting they spoke without fully understanding the topic. In Arizona, a degree is indeed a requirement to use the title "engineer." It's reasonable to assume that other regions around the world share similar regulations. This raises a critical question: who would you prefer to handle important engineering tasks—someone with 40 years of hands-on experience or a recent graduate with just four years of formal training yet is labeled an engineer? This dilemma highlights a key issue: should we prioritize practical experience over formal qualifications? Notably, several countries, such as Singapore, follow regulations akin to those in Arizona.
NetNathan expressed his concern, saying: "I'm facing a dilemma between hands-on experience and formal qualifications. Which holds more value—real-world skills or a diploma? Take Singapore, for instance; it mirrors the situation in Arizona. In my previous position at a major manufacturing firm, the criteria for being recognized as an engineer were quite stringent: one needed to possess a Professional Engineering (PE) license. Without that PE stamp, you couldn’t claim the title of engineer."
I apply a markup on parts that exceeds their actual cost. Customers have the option to purchase the parts themselves, but I won’t provide a detailed list for this purpose. If they prefer that I order and manage the parts on their behalf, there will be a fee for my services. Should any of these components fail, I am responsible for covering the replacement costs, which justifies the markup. I've sourced a reliable online wholesaler that offers significant discounts, allowing me to keep more profits.
- 11-04-2025
- Ronnie Sullivan
User damica1 emphasizes that obtaining a degree is not a prerequisite to becoming an ENGINEER. In the English-speaking world, this notion seems absurd, as the term "engineer" can apply to various professions, from plumbers to individuals holding advanced degrees in engineering. However, in many parts of the globe, the title of "engineer" is strictly regulated, akin to that of a medical doctor. Consider this analogy: would it be logical to refer to a pharmacy assistant as a doctor simply because they work in a related field, despite lacking the formal education and credentials that define a physician?
Cardosocea raises an interesting point: Should we consider a pharmacy assistant a doctor simply because they work in the same field? After all, doctors typically undergo extensive university training to earn their titles. If a pharmacy assistant is involved in patient care and even prescribing medications, what title would be appropriate for her role?
- 11-04-2025
- Handcraftedsince87
Handcraftedsince87 commented: "If she is treating patients and prescribing medications, what title would you assign to her?" Click to reveal more... Barefoot doctor! Jokes aside, this highlights an important point: certain states in the U.S. take professional titles very seriously, similar to how they regulate occupations such as plumbers, electricians, and hairdressers. This emphasis is primarily about managing business risks rather than indicating competence. For instance, in my state, chiropractors must be licensed. Imagine that—it's akin to earning a certification for being a witch doctor!
Handcraftedsince87 remarked, "If she is involved in patient care and making prescriptions, what title would be appropriate for her?" To elaborate, a pharmacy assistant who retrieves medications from the shelves based on a prescription from a licensed physician is not actually providing patient treatment; she is merely fulfilling the duties at the pharmacy counter.
A pharmacy assistant who retrieves medications from the shelf based on a physician's prescription is not providing medical care; rather, they are simply managing a retail counter. It's important to recognize the distinction. While the assistant may not be responsible for writing prescriptions, it's relevant to highlight that a lack of formal engineering credentials does not preclude one from carrying out significant engineering tasks. For instance, I do not hold an engineering degree, yet I am fully accountable for comprehensive system design and integration. My responsibilities encompass a wide range of tasks, including creating wiring diagrams, constructing panels, programming PLCs, HMIs, motion control systems, vision systems, and robotics, as well as machining components and assembling the entire system. Once assembled, I also handle commissioning, debugging, installation, and providing ongoing support. No licensed engineer has developed this system for me; I take on that role independently. Although my title is engineering technician, I believe that the work I undertake aligns closely with engineering responsibilities, even without incurring student debt for formal education. Just my two cents...
Another crucial aspect to consider is determining your pricing strategy and how much you intend to charge clients. Are you familiar with the prevailing rates in your local market?
A pharmacy assistant who retrieves medication from shelves in accordance with a physician's prescription is not actually providing treatment; rather, they are merely working at a service counter. While I understand your perspective, my main argument is different. I never claimed that another doctor should handle the tasks. I align with Harryting's viewpoint that the focus should be on risk management instead of mere qualifications. It’s clear that certain environments and individuals place greater importance on credentials than others, which is likely a necessary approach. However, possessing a degree and investing a significant amount of money does not inherently equate to true competence.
- 11-04-2025
- Handcraftedsince87
Handcraftedsince87 expressed: "I concur with Harryting that the focus should be on effective risk management rather than just competence. It's evident that different cultures and organizations assign varying levels of importance to formal qualifications. This diversity in perspective can be beneficial. However, possessing a degree and having invested a significant amount of money does not inherently equate to being skilled or competent.
Moreover, university education condenses knowledge into practical applications (at reputable institutions) supplemented by substantial theoretical frameworks. There is no reason why an individual, driven by ambition or guided by their profession, cannot attain a comparable level of expertise as someone with a formal degree. That said, the learning curve may be steeper and heavily reliant on experience and available opportunities.
It's also essential to note that when arrogance is set aside, engineers often have a faster learning trajectory than those without formal education. This advantage can stem from foundational knowledge acquired during university training, as well as the conditioning that comes from that educational experience.
In specialized fields, practical experience alone may prove insufficient; a solid understanding of the underlying theory or regulations often becomes essential. For instance, would you want a bricklayer to design a bridge that must support thousands of people at once, if you’re not keen on the doctor analogy?
Personally, I believe that hands-on experience is often undervalued in today’s job market. However, it's crucial to recognize that experience alone cannot be the sole determining factor in hiring decisions. I have worked in an industry where hiring was predominantly based on experience, which led to a troubling mix of inept candidates who were selected merely for their "experience.""
This rephrased text enhances clarity, incorporates commonly searched terms related to education, risk management, and employability, while preserving the original message.
After taking a moment to revisit my previous post, which I hurriedly typed while seated on the floor amidst some stress, I’d like to clarify that I wasn’t referencing anyone specific or any individual document. This forum has been an invaluable resource for my professional growth, and I truly appreciate everyone who dedicates their time to contribute. For me, it doesn't matter what title they assign me, as long as my compensation aligns with that of an "engineer."
My main concern is that I would hate for a high school student, interested in pursuing a career in this field, to think that obtaining an expensive university degree is the only viable path. Many students are genuinely passionate about building and repairing things, and I recall being told that attending university was the only ticket to success. However, "the times are changing," and the landscape of education and career advancement is evolving—I’m uncertain how long this pay-to-learn model will remain in place.
On the topic of building bridges, I can relate to the analogy when it comes to union shops. While I agree it's critical to ensure quality in our infrastructure, that doesn’t necessarily translate into constraining smaller, agile firms.
To add some relevant insights to this discussion, the small systems integration company where I worked operated tirelessly, often seven days a week. The owner possessed exceptional skills but struggled with securing contracts and managing multiple projects, all while contending with a less-than-dedicated office assistant. Despite his best efforts to find reliable help, such talent is scarce in our area.
Moreover, I spent considerable time troubleshooting automation challenges across various industries, and the software costs to operate diverse machines were outrageously high. It's impressive that he managed to keep afloat, especially since our hourly rate was about $50 less than that of a local plumbing service. Many of his repeat clients were longtime acquaintances, and he was reluctant to raise his prices for fear of offending them.
In conclusion, the path to success in our field is diverse, and aspiring professionals should explore all their options without feeling constrained to traditional routes.
- 11-04-2025
- Handcraftedsince87
I highly recommend finding a reliable insurance broker to simplify your coverage options. Choosing a knowledgeable expert can save you money and provide peace of mind, especially if unexpected situations arise in the future. Trust me, I speak from experience!
At BITS N BYTES, we encountered a similar challenge with the rising costs of components, but we have since developed effective strategies to tackle this issue. It's essential to recognize that profit margins on parts can be slim, as customers often have access to the same pricing information and may question every charge for individual components. However, I do charge for the fabrication and assembly of enclosures that comply with NFPA and NEC standards. Each estimate I provide includes a comprehensive Bill of Materials, detailing wires and other necessary supplies for the project, along with recommended suppliers. [Building a network of reliable distributors and suppliers is vital for this process.]
Under our contract, the responsibility for purchasing and shipping these components falls entirely on the customer. This method has proven to be incredibly beneficial. Once customers commit to acquiring the parts, the project is essentially secured.
On another note, I must emphasize that it's crucial to keep information about your business and suppliers confidential! This is what makes your business unique. I manage to secure a decent profit on parts by conducting thorough research and avoiding retail suppliers. If a customer inquires about my sourcing, I simply ask, "Could you please provide a copy of your customer list?" Their responses can be quite amusing, and it typically prevents further questions.
It's also important to establish clear payment terms. Consider implementing a runtime counter within your program that lasts for three months or set your own time frame. After this period, if payment isn’t received, the machine stops, and things can get complicated, but at that point, you have the leverage. Remember: no payment, no machine—it's straightforward!