Info on Setting Up a small shop

[jeep534]

Setting up a one or two person shop
This started with the thread about setting Minimum fees for work... in a very recent post. a real good discussion was going on and It got me to thinking..... I have been collecting machines and tooling and have a pretty good start on things. I own what is behind my shop doors. I Have somewhere about 15 thousand invested over the last few years. my real question at this point is how to set up the business,paperwork, work flow, Billing an figuring "cost of services provided" (from an accounting class a long time ago) for a one person shop. I guess I am being nosy but here goes How do you single or two man shops handle the business part of things. I am pretty much of the mind that I will have to do this as a part time venture maybe for quite some time. but the structure of things (process) work flow tracking of parts orders bids. are you using programs.... printed forms from word..... what.

Thanks for listening........

[Central Texan]

I know the feeling, I'm just starting my third career. I talk to a few friends and a sister that is accountant. They sugested that I get Quickbook Pro to put all my business info into, it has inventory, invoice, billing, credit cards, check register and then you can past it to a CPA to do you Taxes. The QuickBook site has a 30 day trial and training course for it. To me for the one's that are out there it's the easiest one for the price. Good Luck!

[Geof]

"The business part of things"?????

I think there are two parts to this; Central Texan refers to one part which is the bookkeeping side, and I cannot comment on that....way back when I started computers didn't exist and these days somebody else handle all that stuff.

The other part "cost of services provided", I do have some comments on: Figure out a realistic value for this, taking into account costs that you would incur in the future when you are successful, have employees and are leasing an enormous building with numerous machines.

Pretend that you are already a successful, large company. You might be happy to get a rate of $30 per hour...but if you had an employee who merited this amount you have to take into account vacation time, coffee breaks, etc ., so when you are calculating the hourly rate for pricing jobs you do not use $30 you bump it up to maybe $45 to cover all the lost time.

Similarly, at the present moment you are not leasing business premises but in the future you might. Therefore your present pricing must include then cost of leasing the space you occupy. If you do not do this you will go bellyup when you have to lease premises. So your hourly rate for pricing has to include something to cover the cost of the space you need to do things.

And you mention $15,000 invested...All this machinery is going to wear out, so in your pricing you have to include an amortization amouint to build up a fund for machine replacement.

What I am getting at is that you do not set up your pricing, record keeping, job scheduling system, to suit what you are doing now....you set it up to suit what you will be doing in a few years time when you are successful beyond your wildest dreams.

If you do not plan for success you are planning for failure.