Nickles and dimes mostly. My biggest one probably was I went a little heavy on inventory. I went based on about what I carried when I worked for Hobart. Come to find out that the market I serve now doesn't really require such an inventory. Example: Dishwasher parts. Dishwashers were a big part of my repair when I was at Hobart. Now that I mostly work in locally owned mom and pop c-stores, and smaller restaurants I simply don't have as many dishwasher calls. I now have a better gauge of what I actually use frequently, and have adjusted in inventory accordingly. With the diverse amount of work I do, I practically buy almost everything as I need it. Another big factor was automobile expenses. I have drove around some clunkers last year. I think I finally have a decent truck that will hopefully give me a few years of service, but it's far from new.
Originally Posted by air1
I spent $50 on a tamper bit set at grainger, a few months later I discovered one that would have done the job (the exact same kind I had at Hobart) for $15.
To be frank and blunt, when I started I was just so caught up in the "cool factor of owning a business", that I really didn't pay much attention to where the money was going. When the bank account started to get low I snapped out of that mode of thought really quick. Now every expense, not matter how small gets mulled over to the fullest before I write any checks. When it comes to insurance, I don't want any unnecessary bells and whistles, I just want the coverage I need at a minimum cost. In 2013 I resolved to treat my business more like a business, and less like a glorified hobby.
And now, I'm happy to report that the bank account is slowing inching back up.
On a different note, I stopped by the insurance office today, she is going to work up some quotes for me. I hope to hear back later on today or tomorrow.
$4,000 per year
That's unattainable right now, and simply out of the question. That cost more than my home owners (two houses), auto, general liability, health insurance, and dental combined! My max was two grand, and I'd cringe writing that check.
Why is it so much money? Driving a car is a hundred times more risky than me, myself working on a job site, and my auto insurance is $350 per year! (and has almost the same coverage limits)
Good lord. Doctors, lawyers and insurance companies. If any of them make it to heaven, I'd rather burn in hell.
I think my truck and contractors insurance is about $1,400. Can't get collision on my truck. To old. I do spend on tools and equipment, though I am slowing down in my old (er) age. At 1 time I did have work comp, but as I am all by myself so I don't want it anymore. I did have to file something with the state for one of my customers. This was also for his insurance co. Basically it said I was an independent contractor and responsable for myself. Usually do about $1,500 a year for this company. Just because I have been in business since 1972, doesn't mean I know anything. I am still learning. Still learning refrigeration too.
After thinking it over. I have decided that at this phase in the game it's just to expensive, and since I have no employees, I am only covering myself anyway. I can simply make an effort to be as safe as possible. Currently I do not do roof work, and generally speaking I have always played it safe at the job site. I called my health insurance and they said that if I'm hurt on the job it's not covered.
To date not a single customer has asked for it, and with the cost of this coverage, this may be why Virginia doesn't require it for the first three employees. As this would give a business owner a chance to really get his business off the ground before saddling up with such a high premium.
I don't sub contract for any other contractor so that won't be an issue.
Realistically, if something drastic were to happen, I could just about make a payment to the hospital directly for the $400 per month this coverage would cost me and cut out the middle man all together. Couple that with my track record of employment safety, and I'm not going to sweat it.
My liability coverage is $440 per year and I can live with that. My auto is about $350 and it's rated for business coverage. Liability only but it has comprehensive added.
The agent did they could write a policy where as I would basically have a piece of paper saying I have a policy, but the policy doesn't cover anything. He said some contractors have taken those out because they were sub contracting for another contractor. He said this "policy" was about $700 a year.
I'm not going to spend $700 for a piece of paper that realistically means I'm still uninsured for all intents and purposes.
Just going to keep things they way it is. I'm making money now, and as the old saying goes: "If it ain't broke, don't fix it"
Are you sure about this? They are probably assuming you are working for someone else and you're covered by WC. Did you explain that you are self employed with no WC. Is it specifically excluded in your policy?
Originally Posted by moon_shadow
"The bitterness of poor quality remains long after the sweetness of low price is forgotten". --Benjamin Franklin
"Don't argue with an idiot, they will drag you down to their level and beat you with experience". --Mark Twain
Good questions. I must admit, I was in a hurry when they finally came to the line so I didn't get into a lot of detail. But it's 230 AM now and I pulled the policy book they sent me and here is exactly what it said:
Originally Posted by air1
We do not cover services or supplies if they are available under workers' compensation for work related injuries or diseases, when the employer must provide benefits by Federal, state, or local law, or when that person has been paid by the employer. This exclusion applies even if you waive your right to payment under these laws and regulations or fail to comply with your employer's procedures to receive the benefits. It also applies whether or not the covered person reaches a settlement with his or her employer or the employer's insurer or self insurance association because of the injury or the disease.
That's kind of a grey area to me. If we read this line: when the employer must provide benefits by Federal, state, or local law, or when that person has been paid by the employer it suggest that since I, as self employed am not required to provide benefits by any government level, and there is not employer to pay me... hummm.. I really don't know.
AS I said been from 1972 with no comp. You can never have an employee though. Should you have an employe and he gets a hang nail you might just as well hand hin the keys to the house, the business and everythink else you owm.
Just my thoughts though.
Originally Posted by moon_shadow
If you do not pay yourself a salary, you are doing something wrong
One insurance agent I called about this told me something I never realized... that is if you are a sole proprietor, you are not considered your own employee, thus you do not necessarily needs workers comp, however, if you are one of those who form an LLC, or any other type of corporation, then you are considered an employee of the LLC or corporation, and would need workers comp, even if you are the only employee of the LLC or corporation.
And don't worry, not to sound greedy or anything, but the sole purpose of this business of mine is to provide for myself and my family, not be a "jobs creator", so I don't have any plans to have any employees at any time. The only person who helps once in a while is my wife. This is intended to be a very simply structured, low key business, low overhead business. An old pick up truck with a magnet on the door and a home office squirreled away in the corner of my basement, we even use the same line for phone and fax.
Thankfully the bank has dibs on the house before anyone else! And if it ever got to that point, I'd just hang it up, file bankruptcy, start over and find a factory job somewhere! LOL
Originally Posted by lytning
Wow lytning that is a hell of a truck.
It's not if your doing it right it's whether your doing the right thing that is important.
As the owner (even of an LLC) you should be able to get a w/c exemption certificate. My company accepts those from small subs that do not have employees, even if they are not a sole prop.
I would definitely consider incorporating. Sole Prop is a terrible way to operate a business.
You'll pay more in taxes as a Sole Pro than the WC will cost