Author Topic: Working for yourself advice.  (Read 433 times)

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Online Wilksey

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Working for yourself advice.
« on: Yesterday at 11:33:09 am »
Hi, I have a friend, yeah yeah I know the cliche, but I really do on this occasion!

My friend has worked in the electronics industry for the best part of 20 years here in the UK, he is a product designer and has only ever worked in a small lab environment so not exposed to customers or anything that might be considered social.
The company he works for has undergone a buy out and they are removing the need of product design and going fully off the shelf (because that always works so well!) so his job is goneski and is being made redundant.

He is in his late 40's and wants to explore doing his own thing, he has enough savings and is getting a pretty sweet payout that he can live over a year without any kind of financial input (lucky sod!), he has asked me if I have any suggestions on certain things and I did ask him to think about viability of starting a company whilst the chip shortage is in place but he ensures me he has thought about it and is happy to proceed.

Anyway, some of the questions he has asked I have no clue as I am not in that position or have ever done it before, so i'll post them here and see if anyone has any advice if you don't mind.
1. How do you find out what products are in demand if you don't have a contact within a particular company?
2. How do you get clients or find clients if you have no contact with the company, is it too niche to just advertise?
3. How to know what to charge? (for this I said cost *2.5 but is that still a good guide?)
4. Dealing B2B is it best to form a LTD company to protect the director. (I thought yes but good to clarify).
5. What insurances do I need (I said liability but are there any others?)
6. Any other advice? (I'll throw this one to the room too!).

Thanks in advance for all of your replies, I think it is quite overwhelming going from paid 9-5 to working for yourself, but I guess everyone has to start somewhere and he seems quite determined to try it which I admire.
 

Offline pardo-bsso

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Re: Working for yourself advice.
« Reply #1 on: Yesterday at 12:20:40 pm »
Be prepared to a lot of anxiety, responsibility, lack of proper rest and sleep and work 24/7.
And don't take employees unless you really need them and have about ~4 months of salary buffer in case things go sour.
 
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Online nctnico

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Re: Working for yourself advice.
« Reply #2 on: Yesterday at 12:42:23 pm »
If you want to have any succes then you'll need to be able to do firmware development as well. Also don't compete on price and try not to get projects on a blanque check. I always give customers a ballpark estimation of hours which I try to adhere to. Customers work with budgets so you can't confront them with financial surprises they didn't budget for.

Product liability is something you have to limit in the terms & conditions / contract. You can't get any insurance for this. Some insurance policies claim they do but if you read the small print, they actually don't and you are sinking money into a black hole. What does make sense is to have an accident liability insurance. So if you knock a Ming vase over, it is covered by insurance.
« Last Edit: Yesterday at 12:44:50 pm by nctnico »
There are small lies, big lies and then there is what is on the screen of your oscilloscope.
 

Offline AndyC_772

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Re: Working for yourself advice.
« Reply #3 on: Yesterday at 04:10:34 pm »
I've been working for myself for about the last 10 years, under very similar circumstances. A few tips...

- Know, confidently, what you're going to work on and who your first customers will be BEFORE becoming reliant on contract work.

- See above, it bears repeating.

- ...multiple times.

- Find a good accountant, ask them about the tax and liabiity positions of going self-employed vs Ltd company. Grill them on IR35, make sure you know what the tests are for "disguised employment" and ensure your contracts are drafted accordingly.

- Also find a good solicitor specialising in company law and intellectual property. Ask them to explain the law surrounding IP ownership as it applies to your kind of business, and get them to draft (or at least, check and revise) your contract T&C's. It's expensive, but worth it 100 times over if it means the difference between collecting royalties on your IP vs losing it entirely.

- Don't ever believe someone who tells you what's in a contract; always read it in full for yourself. I've lost count of the number of times I've been told a contract says one thing, only to discover it's nothing of the sort.

- As the 'little guy' you can expect that some companies will try to assert themselves and screw you over. Respond robustly. "No" can be a valid, correct, and occasionally therapeutic response.

- You should have a web site, for the benefit of people who hear about you by other means who want to check you out. Don't expect that it'll attract new customers independently, though.

- A good customer is worth bending over backwards to support. So is a bad one, unless they don't pay their bills, in which case they're not a customer at all.

- There will be gaps between contracts. Accept these unplanned holidays. Embrace them. Don't spend the time staring at an empty schematic and feeling uneasy about being unemployed. (This is *hard*!)

Offline voltsandjolts

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Re: Working for yourself advice.
« Reply #4 on: Yesterday at 05:36:12 pm »
If you want to have any succes then you'll need to be able to do firmware development as well.
Yup. Everything has firmware these days. Be prepared for some customers to dictate Microchip or ST or Freescale etc.

Customers work with budgets so you can't confront them with financial surprises they didn't budget for.
Yup, which makes it important to highlight any technical risks you foresee at an early stage. Presenting these risks in the correct way doesn't put a customer off but actually makes you look more competent  ;)
 

Online Ed.Kloonk

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Re: Working for yourself advice.
« Reply #5 on: Yesterday at 07:05:31 pm »
It's hard to offer advice on this predicament since much of what I found prolly won't apply to anyone else and my journey began when the world was very different. Though my door is always open if anyone wants tough love, in private.

That said, a couple of things stand out WRT the particular questions.

1. How do you find out what products are in demand...?
   You should always know this regardless of your jump status.
      Jot down on paper where you think the thing of interest to you will go. Date your journals. Review them often.
     
2. How do you get clients or find clients if you have no contact with the company, is it too niche to just advertise?
  Whilst advertising has it's place, the reality for small fish is you'll only hear from time wasters and sales folk if you put yourself out there. The key is word of mouth. Kicking that off really depends on the character of the individual and they're approach.

3. How to know what to charge? (for this I said cost *2.5 but is that still a good guide?)
   Again, depends on the proprietor. Are you building a company or a client base? A general rule, I think, still applies is with products it's hard to be competitive. What local customers are craving is local, good service.

4. Dealing B2B is it best to form a LTD company to protect the director. (I thought yes but good to clarify).
   Depends on the situation. Who knows?

5. What insurances do I need (I said liability but are there any others?)
  Best advice I can give you is look not at the insurance so much as look at what you could claim if you need to. Insurance companies don't like paying out. The claim has to be worth the effort and not just being valid.

6. Any other advice? (I'll throw this one to the room too!).
   Be prepared to adjust your approach per customer. Learn the rule about 20% of your customer base supplies 80% of your income.

Quote
He is in his late 40's and wants to explore doing his own thing, he has enough savings and is getting a pretty sweet payout that he can live over a year without any kind of financial input (lucky sod!)

Don't let these guys fool ya. They too often piss opportunity up the wall. Just watch. Soon as the payout comes. New car. Renovated bathroom/kitchen. But 9/10 times they will squander and exhaust nearly all the money then complain that the system is against them. (it is, don't get me wrong).

Quote
Thanks in advance for all of your replies, I think it is quite overwhelming going from paid 9-5 to working for yourself, but I guess everyone has to start somewhere and he seems quite determined to try it which I admire.

You cannot understand the distractions that will hit you when you make the change. I hope for his sake that he has a wife who will hone his energy not help him spend his windfall. By all means, encourage him where possible. Just don't fall into the trap of offering him strategy advice because he could very likely blame you.

HTH
 

Offline Bud

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Re: Working for yourself advice.
« Reply #6 on: Yesterday at 09:23:39 pm »
Do not forget banks will treat you differently if you are self-employed. Specifically, difficult to get a mortgage.
Facebook-free life and Rigol-free shack.
 

Offline coppice

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Re: Working for yourself advice.
« Reply #7 on: Yesterday at 09:40:21 pm »
Two of the hardest things in engineering are finding good suppliers and finding good customers. Its hard enough when you are in a substantial sized company. On your own its really tough. Most people who do well starting a business for themselves have spent years cultivating a pool of good contacts before they begin.
 

Online nctnico

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Re: Working for yourself advice.
« Reply #8 on: Today at 12:05:40 am »
Two of the hardest things in engineering are finding good suppliers and finding good customers. Its hard enough when you are in a substantial sized company. On your own its really tough. Most people who do well starting a business for themselves have spent years cultivating a pool of good contacts before they begin.
It is good to start off with having customers but with the help of internet new customers can be found or just contact you to do work for them.
There are small lies, big lies and then there is what is on the screen of your oscilloscope.
 

Online Wilksey

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Re: Working for yourself advice.
« Reply #9 on: Today at 01:39:27 am »
Thanks for all of your replies so far, very helpful, he is divorced no kids and has his own house which is paid off already and drives a 1999 Toyota Corolla, his savings without redundancy pay which he recently told me whilst chatting over his current predicament and ideas, would hire a decent software developer for at least 3 years let's put it that way, his current job role consists of designing automation products, he can write C for 8051 chips and the latest thing he has been working on involves a Raspberry Pi and Python.

I introduced him to the world of GSM years ago and ESP devices a few years ago when they became popular so I think he wants to pursue some product ideas he had around that.

That is a bit of background on him, not sure if that helps or not.
One question I have, bearing in mind I work in a completely different industry (highways), if he had a product or a kind of product idea - i.e. keeping up his automation products (PLC alternatives, "smart" relay controls etc whatever that entails) how would he find companies to work with based on his interests?  I would guess it's not as easy as going to your local HVAC supplier and asking if they want to buy your "smart" relay?  He doesn't have a "pool of contacts" as he has been squirreled away in a lab environment.

I told him it will be a hard slog, he doesn't mind it taking a while as he doesn't live lavishly and his redundancy alone will pay his bills he reckons for at least 2 years without dipping into his savings.  I think he will do it anyway I would like to help him with all of your kind advice, I have told him I take no responsibility to the success of his new venture should he decide to proceed, but I also told him that I would be willing to do a bit of side work for him if needed such as firmware and working with other micros as I primarily work with ST, PIC and AVR where as he worked solely with 8051 until the company switched to x86 SBCs now Raspberry Pi's.
 

Online nctnico

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Re: Working for yourself advice.
« Reply #10 on: Today at 02:11:21 am »
IMHO selling your own products is very hard. You need to be a salesperson as well. Many people won't see the benefit of a product at first and need convincing through advertising, doing demos, being present on exhibitions, etc.
There are small lies, big lies and then there is what is on the screen of your oscilloscope.
 


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