The decision to stop accepting large deposits had a ripple effect on the finances of my business in many ways.
The most significant adjustment that resulted was that I was no longer comfortable purchasing paint for my client's projects. It was too risky. Customers frequently change their mind, delay their projects, do it themselves, hire someone else, stop returning phone calls, or are indecisive about colours and sheens.
So with no or minimal deposits, it freed me from purchasing paint. This is a big change for a painting business. Most painting companies include paint in their quotes. This way they have more control over the materials they use and it can make things more convenient for the client.
But does it have to be this way?...
On this rainy West Coast Sunday morning I'm thinking about how many contractors I have personally talked to over the years that have told me that they grew their business to sometimes 2 or 3 dozen people, only to hit a major crisis (health, family, bankruptcy, lawsuit, etc) and decide to scale back, way back, to just themselves and a helper.
Like a cool Sunday morning rain, running a small business is just more laid-back.
Small is low risk. Small is low stress. Small is manageable. Small is profitable. Small is freedom...
How do you know when it is time to make a change?
There is a theory that says people generally do not change until the pain of the status quo is greater than the pain of change.
“Change happens when the pain of staying the same is greater than the pain of change.”
- Tony Robins
That is why we hear people say things like: 'getting fired was the best thing that ever happened to me'. They likely hated their job, were to afraid to leave a stable paycheque, but since the decision was made for them they were then free to move in a direction of their choosing. We change. What made us happy and brought us satisfaction at 20, becomes different at 30, or 50.
So how do you know when it is the right time to make a move if you are unhappy about an aspect of your life? Do you have to wait for someone else to make the decision for you? Do you have to wait until you just can't take it anymore and you have a breakdown? When to initiate change is something I have struggled with over the years...
Having your own business requires a lot of different insurances. You likely have vehicle insurance for your service truck, WCB, and liability insurance in order to get work. Outside of those basic policies, you may also have tool insurance, home insurance, health insurance, accident insurance, critical illness insurance, or life insurance. But which one is the most important insurance to carry?...
With all the heartbreaking natural disasters striking Mexico and the Caribbean this month, it got me thinking about the importance of taking small steps to prepare for the worst.
Living in Western Canada, I appreciate how quickly natural disasters can strike. Whether it was the wild fires that almost trapped the residents of Fort McMurray, the floods that instantly struck High River, Okotoks and Calgary, or the 'Big One' that the Pacific Northwest is anticipating. Living near a fault line in a subduction zone makes emergency preparedness is constant a concern. Everyone should have a Go Bag ready of course.
But I wanted to share another simple hack that can save your life in an emergency...
Realized today as I was working on a ladder most of the day, and working under an old deck too, that painting has helped me overcome two of my biggest phobias.
I used to be really scared of spiders, but working on exteriors in the Okanagan Valley where the Black Widow, Brown Recluse and Wolf spiders thrive, eventually provided enough exposure therapy to dull the panic attacks. Look close enough in any yard and you are likely to find one. Best just not look, and keep on painting ‘cause you ain’t getting paid till that section behind the bushes is done. Oh, and don’t forget that area under the deck...dang...
As entrepreneurs we must be effective problem solvers. Problems come in all variations: financial, health, technical, scheduling, staffing, etc. One type of problem that we will eventually encounter is people problems.
People problems can be particularly difficult to handle if you have an aversion to confict. Many people would rather experience just about anything but having to confront someone about a problem. I know, I used to be one of those people, and I still have to fight that tendancy. And that is a benefit of the road we travel as business people...it exposes our weaknesses and provides opportunity to confront them one way or another before you can achieve success. Learning to deal with people problems is one of the biggest hurdles facing a start-up. We all want to be liked and we all hope to get along with others, but things can go pear-shaped pretty quickly when mixing money, deadlines, personalities and expectations.
So here are 4 things I have found that help to difuse potential hot spots...
"Oh, I don't really have a business, I just work for myself."
Is something often heard out in the field. It sounds like a simpler, more manageable way to work independently without all the hassle of running a business. Who wants the headache? Get work. Get paid. Repeat.
But getting stuck in that cycle is a problem...
You might be thinking about taxes at this time of year. And that maybe causing you some stress.
Or you may be feeling taxed by the stress of a busy painting season just ahead.
I've been thinking about work stress recently, particularly about the toxicity of stress and the toll it takes on our health, relationships and general job satisfaction. Stress is real. The effects of stress can be as simple as being more irritable to more complicated - like the inability to sleep properly, addictions, memory loss, a compromised immune system. Stress can even lead to heart attacks and death. My observation is that some of us don't consider stress enough when looking at jobs. For me, I need to be more intentional about limiting it's influence in my work life where possible.
We are just painters after all, not surgeons, so why all the stress? Is it necessary? What factors lead to some projects being more stressful than others?
Governments tax behaviours that they deem unhealthy for individuals or society, to reduce consumption/exposure and raise money to finance the side effects. So...why not tax stress in your life, particularly in your business? Add a surcharge to jobs that involve more stress, put a premium on that stress to discourage and reduce the amount of stress and raise money to deal with the consequences of stress (vacation, massage, therapy, date nights, exercise, healthy food, etc...).
With that in mind I created a Project Stress Analyzer and Tax Calculator. I fill it out as part of the process for every project I quote in 2017. In fact, I print a bunch of these sheets and use the back side to make my notes during the site visit. If a project has an average (or lower) anticipated amount of stress there is no premium tacked on. But for every degree of stress above average I add 2% to the quote, to a maximum of a 100% stress premium...
So about 8 years ago my brother-in-law and I requested a meeting with my business mentor. He kindly granted us a 20 minute meeting so we could run our latest idea by him. In our enthusiasm we never expected to receive the advice he gave us that day.
My brother-in-law Andre and I get along amazingly well. We both paint for a living. We have very different but complementary strengths and skills. We both recognized that painting is better with 2 people, and we had a lot of fun whenever we worked together. So it seemed logical that maybe we should consider a corporate merger and blend our businesses into one.
Let me give you the short version of Mr. Mentor's advice...
Living life, truly living - not just surviving or existing, involves risk. One of the biggest risks is failure. It can be be so scary that it keeps us stuck. So if you are thinking of quiting your job to start your own business, or are thinking of taking a sabatical from your business to pursue an adventure or project, or are thinking of simplfying your life and cutting back on work in order to free up time and resources to pursue something more meaningful, there is likely an element of fear trying to hold you back. You will find the following article relevant...
A couple of months ago I had a cancellation. As happens from time to time. You just roll with it - because really there is nothing you can do about it, and sometimes it takes the pressure off of an over-booked schedule.
The problem is that it is very easy for a prospect to cancel a job when they haven't made a financial commitment. Unfortunately, as the contractor, you don't have the same flex going the other way. Imagine cancelling at the last minute on a customer - the bad rep you would develop, how you could totally mess up their entire project schedule and that of the other trades, etc...
Some people think that self employment is very risky, and that it takes special powers to be able to run a small business.
Others think that working for yourself involves driving a new truck, writing off your lunches, golf every Thursday, and working when you feel like it.
The truth is somewhere in the middle...
After over a decade of dealing with a variety of customers and situations, I've learned the hard way to recognize 'red flags' that potentially pose a risk to my business and peace of mind. The best protection I have found is to avoid working for certain prospects and projects. The 3 main red flags that I pick up on are:
1. Unreasonable expectations. A year a half ago I received a phone call that perfectly illustrates this red flag. In the middle of peak season a lady called and asked if we are available to paint the interior of her house in short order. She needed it done in two weeks. But there was a catch - she was on a very tight budget. Normally I like to look at every job, but I didn't think there was any way we could squeeze it in and the low margin was not an incentive to even try. Out of curiously I asked what the size of the house was. She replied 5000 square feet. That was pretty much the end of the conversation. For our small and busy business there was no way we could even think of taking this on. Going any further would have been a complete waste of both of our time.
When I started my business I had a very keen desire to help everyone and try to take on every job. This was not modest and it exposed me to quite a bit of stress and risk. As a rule of thumb a job consists of three factors - quality, scheduling and cost. I can usually accommodate 2 out of 3 (as long as one factor is quality). If someone expects all three, or makes other unreasonable demands, it's time to reset expectations or walk away...
There has been much written lately about risk. Specifically about how we as humans tend to be inaccurate in assessing risk. We generally over estimate the potential risks in any given outcome, using it to rationalize inaction. Our default seems to be the status quo, safe, inertia. It's easier to avoid critiquing our estimation of risk, avoid planning for worst case scenarios, and avoid acting bravely, boldly.
But we can over-ride the fear of risk by using logic...
Who gets to decide whether a worker will act as an employee or as a sub-contractor? It should be a key concern to independent contractors.
Some workers prefer the stability of a steady pay cheque and the ease of having taxes, EI and CPP deducted and remitted on their behalf at source. Other workers prefer the flexibility and tax write-off potential of sub-contracting.
My preference was strongly towards having subs.It offered me motivated workers, flexibility in scheduling, simpler books and less pressure. It kept labour as a cost of sales, not overhead.
So who should decide....workers or employers?
Turns out, neither...