Hobby Or Is It A Business I Can Afford To Trust


The Grumpy Grease Monkey mechanical engineer.
Staff member
I found this posted elsewhere but it may help others with similar questions here
I'll try and keep this short. So for the last 10 years my fabrication work has strictly been a side gig, but in the last 3 years, ive gotten enough work where ive slowly transitioned out of my former full-time job, and am turning the side gig full-time. Ive been renovating a shop space for the last 2 years, and its almost time to make the big move. So, for you guys that have small shops/businesses, do you have any words of wisdom for someone in my shoes? I know that theres potential for me to get spread thin doing both the work aspect and business-running aspect of a new shop, so is an accountant something I should spring for right off the bat? Is there any steadfast policies that have worked for you? Any recommendations for shop insurance and how you let customers interact with your shop space? Should I pay myself a salary right from day one? Any words of wisdom or "I wish I had" 's are greatly appreciated.

for a business to run you need consistent cash flow you can depend on,:D
not a hobby that provides you with a bit of extra cash to spend:rolleyes:
no one can predict the future, but you can push the odds of success in your favor.

you must keep your business cash flow and expenses totally separate from personal expenses
obviously you need to consistently pay your daily operational expenses
and ,
replace tools and consumables, like welding rods shield gases,
and purchase materials before you can draw a salary,
be aware there will always be good and not so good weeks ,
your consistent financial draw should be based on the worst weeks.
you can,t base a draw on the occasional good week returns

having done something similar in the past Id suggest you simply have, or start a second savings account,
you can use it to transfer lets say $600 every week into , every week, as the theoretical pay check,

don,t spend the cash, unless you're forced too.

think of it as a financial safety cushion, your building from the business.

think seriously about incorporating, to limit your financial risk

and if you find you don,t need to touch that money after lets say 3 months

start pulling lets say $700 a week into that account every week for 3 more months,

keep upgrading the theoretical pay check amount by $100 a week, over stepped increases of $100 more a week, every three months

at some point you'll find you can,t do that regularly,

once youve done that you will really know what you should be pulling out of the business. and personally,
Id drop the amount I was putting in that savings account, as a potential weekly draw,
back a couple hundred dollars a week and keep building that financial cushion

and if its a hobby you won,t be able to consistently put cash away,
if you can,t consistently put cash away , its a hobby that supplies side cash flow,
not a business your growing to depend on.
obviously youll need to pay your daily expenses to stay functional as a shop, and
if you can,t consistently every week,
put away that theoretical paycheck ,
over and above the operational expenses its not a business

you need to keep an accurate account of cash flow

that requires
good accounting software



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a bit more good info someone posted

Here is some general random tips to keep in mind in no particular order:

Pay your quarterly estimated taxes on time.
Figure out how to use Quickbooks or some other quality accounting software.
Don't talk shit on your competition.
Get decent general liability insurance that includes some form of product liability incase you fuck something up.
Have a lawyer that is worth a shit draw up your articles of incorporation and business arrangement.
Start with 4-6 months of livable salary in the bank before you open.
Don't ever bullshit a customer.
Don't borrow any money if at all possible. Keep banking money at your square job until you are ready.
Work very hard.
Make SURE the CPA you have isn't a moron.
Take the high road at all times no matter what.
Answer the goddamn phone when it rings.
Give your customers what they need on time at a fair price. (that one sounds easy, but most can't do it.)
Don't take any wooden nickels.
Open a bank account in the company name that is for company business ONLY.
Remember that holidays don't apply to you.
Pay your quarterly estimated taxes on time. (so important, it is on here twice.)

That is everything I can think of at the moment.
Put it into a Trust so you do not lose everything if you are sued.

Home should be in a separate trust.
I had a good lawyer draw up a document I had everybody sign that said I was not responsible for anything except cashing their check. Wish I still had a copy!
btw try hard to rarely if ever work on " family or friends cars"
as it will almost always eventually cause far more hard feelings,
cost you more wasted time and result in less cash
recovered for time spent than its worth.
that group will expect you to
and anything that happens to the car forever more is now

you replaced the front brakes....the air conditioner stopped working 90 days later....your fault

you did an oil change...... the tires are wearing funny.. your fault

you replaced the headlight that didn,t work.....the radio quit working.. yeah your fault

you re-packed a wheel bearing.... the windshield wipers stopped working.... yeah you knew it was your fault

and theres always some family member, who says...
oh BTW I have an uncle lives three states and 900 miles away...
could you run over and pick up that truck ,
fix it and get it back in perfect shape by next week?
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