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Posts tagged with: small business expenses

Lessons Learned from Owning a Small Business


Happy Thanksgiving to you U.S. readers!!!! I hope you have a wonderful holiday filled with happiness and warmth! In full disclosure, I wrote this post on Monday but I wanted to schedule it ahead of time so I could give you a little light reading over the long holiday weekend. I’ll be spending the day with my family. I hope you all have a great day and a safe holiday weekend!

I’ve got some good news to share in relation to my husband’s business!

He’s now up to three crews! Woohoo!!!

If you’re new or don’t know what I’m talking about then let me back up…

My husband is a small business owner. His company does wood flooring and since I’ve started blogging he went from having one crew (him and a helper) up to having two crews (his + another), back down to one crew (his) and now he’s back up to three (his + 2 others).

I want to knock on wood while I’m saying this but so far it’s been going really well with the extra crews!

I haven’t talked a lot about husband’s business since I’ve been blogging, but I want to brag on it (and husband) a minute here and provide some insight into his work situation.

Husband has been in wood flooring forever. He started when he was 18 and had done it on-and-off for years. When we moved to Florida (for my Master’s program) he decided to do it full time and went to work for other people. He worked 2 years on really high-end homes (he did Celine Deon’s floors on Jupiter island and the majority of his work was on multi-million dollar properties). He learned more in those 2 years than most would in 15.

When we moved to Arizona (for my Doctoral program) he worked for someone else for the first couple years and had bad experiences – work was irregular, low paying, and unreliable. He then decided to start his own business.

Owning our own business was pretty costly the first year or so.

Not only are there the mandatory expenses (business licensing, contractor licensing, and start-up costs associated with equipment, etc.), but there are also the expenses that you have to chock up to “learning lessons.” We had a LOT of those that first year. Husband tried to bring on a bunch of crews at once and it was a nightmare. He ended up eating multiple botched jobs completed by employees and didn’t have great control of the situation. We bled money and husband dropped his crews and just had one crew (him and a helper) for a long time.

When he added a second crew he did so cautiously. He leaned on some of his management background (while on-and-off with flooring he also did retail management for a few years), and did a much better job controlling the situation. He learned some valuable lessons from his previous experiences (both in terms of leadership/management but also in terms of business finances) and he was able to apply them this time around.

He did have to let his second crew go, but then he was able to bring back a second crew, plus add a third crew! Plus, he’s expanded his horizon a bit. Husband only does wood/laminate floors but his second crew does both wood and tile work. And his third crew does carpet installation. Husband’s licensed for all floor types so now he’s expanded his company’s repertoire and, as a result, enjoyed increased business in recent weeks.

I’m still cautiously optimistic about the whole thing, but proud of my hubs for the way it’s worked out. I’ve mentioned how husband may try to expand his business in Spring but its just sort of worked out to happen sooner. Hubs wanted to go back to two crews so his second crew was planned, but his third crew just kind of “happened” to him. He’d done a wood install that included carpet tear-out and when husband went to the local carpet recycling place to drop off the old carpet, he made a business contact who put him in contact with his now third crew. Funny how things work out!

So hubs’ business is looking like it’s on the ups and with any luck (*fingers crossed*) we can continue to draw an income even when we go out of town for Christmas!

Small Business Owner Bad thing = No breaks from work!

Small Business Owner Good thing = Paychecks keep coming!

That’s the hope, anyway!

Any small business owners out there? Any good books you might recommend or tips you have from learning the hard way how to build your business?

Income Nail-Biter


Well, it’s happening. Remember how my first few months blogging I kept saying how unusually high our income was? Those first few months we were making in the $8,000-$10,000 range (crazy high! Highest months of income in our lives!), when our average had previously been closer to only about $5500.

Although I knew we wouldn’t be making that much forever (husband is in flooring and the flooring business is cyclical – busier during summer months and slower during winter months), I was not expecting the slow down to start until November.

Through a surprise turn of events, our income was quite a bit lower in August. This is the “fun” part of owning a small business. Four things happened that negatively influenced our income:

  1. Some of husband’s jobs were canceled or pushed back.
  2. Husband had a few large business expenses for flooring equipment that needed to be replaced.
  3. Husband had to do a warranty repair that cost him in materials and labor (for his time and to pay his employees for their time), but didn’t result in any income since warranty work is free for customers**this was the most painful in terms of monetary value.
  4. I didn’t get paid from my teaching job (due to regular schedule of payment). **this is where the majority of my income is from, so this was a big hit, too.

September would be so much better, we both believed. Husband has a HUGE job this month that pays out quite nicely. In addition to that, he has been busy with all types of regular-sized jobs, too. He’s back to working non-stop, though we’ve come to an agreement that he will always take Sundays off (thus, working 6 days a week maximum). So surely this month would be a jackpot in terms of our income, right? RIGHT???

Well, I’m a little nervous. Thankfully, I got paid from both of my jobs this month. However, husband is certainly the primary earner so huge income fluctuations are generally due to his income (or lack thereof). And, as it turns out, husband has run into some problems this month, too:

  1. For his super-huge job, he’s had to purchase a higher amount of insurance (this doesn’t affect our monthly budget since it comes out of his business account, but it does factor into the amount of money he’s able to give me for “income” during the month).
  2. He’s had to purchase separate auto insurance. His car used to be on our family policy and was categorized as a business vehicle. But this big job requires that he have a separate commercial auto policy due to the expensive materials he will be transporting (required coverage of a million dollars in property damages!!!) This will actually positively impact my monthly auto insurance budget because his car has been removed from our family policy. But, again, it’s an expense he pays for, which means less money coming to me in the form of income. ***Note, I actually think I prefer for his auto to be separate. I think it will make taxes easier to have it as a separate policy, though it makes us lose our multi-car discount. Anyone deal with similar issues? Think its better to keep these separate? After this big job is complete, he has the option to move his car back to our family policy if he wants. Any thoughts or suggestions of which idea is better from a business/tax perspective (keeping separate or re-combining)?
  3. Husband does not get paid until jobs are 100% complete. This month he has been KILLED on jobs that are unable to be completed. This happens from time-to-time. A customer may not order enough materials or, more commonly, there aren’t enough transitions or the transitions are the wrong color. Husband can work for two weeks straight and be 99% of the way through, but if he’s short even a single transition or t molding, then he can’t collect payment. And often, these pieces take weeks or even months to be delivered from the big distributors (and this often causes a headache because the dye packs are different even though it’s the same basic color, so then even more need to be ordered and it’s a whole cluster). ***THIS is what is hurting us this month. Husband has 3 separate jobs that are 99% complete, but he is unable to collect final payment because he’s waiting on little pieces to come in so he can install them, complete the jobs, get work orders signed, and collect payment.

It’s a bit of a nail-biter this month. Even though hubs has been working diligently almost daily, he’s made very little money this month…..even less than last month (gulp!!) We do have my pay that helps to off-set things a bit. And there’s still a few more days in the month (and supposedly transitions should be here soon). We’re holding our breath and crossing our fingers, hoping these pieces come in so he can complete these jobs and receive payment. Husband was looking at his various jobs last night and calculated that he has close to $10,000 sitting in nearly-completed projects. Of course, the full $10,000 isn’t income because some of it goes to recoup his business expenses, pay labor, etc. But a significant chunk of the money would be coming straight to me as income. And, instead, it’s hanging out in space making us nervous as crap.

Cross your fingers for us! Oh, the joys of being a small business owner.

Side note: it’s times like these that I am so glad we have a decent sized emergency fund and live on last month’s income so that if these payments don’t come through until October, at least we won’t be completely broke. We still have money and will NOT be in danger of having to pay for groceries and gasoline on credit (as we have done in pre-blogging days). Thankful for that!