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how long do you hang on
4

how long do you hang on

how long do you hang on

(OP)
I have talked to multiple firms/friend in my area that have either gone out of buisness or are about to go out of buisness due to this economy. My buisness has taken a HARD hit as well. its down to just me now.  This all begs the question: Once its down to just you how long do you hang on before you start looking for work as an employee?   That is assuming there are actually jobs out there.

I would be curious to hear some thoughts on this especially from those of you who have been through a downturn like this before.

Thanks,

RE: how long do you hang on

If you are able to cover all your business and personal expenses without killing yourself in the process, why not continue to operate. You will be much better positioned (than the ones who folded) to pick up new business when/if the economy picks up again.

cheers

RE: how long do you hang on

I started looking a month ago.

Mike McCann
MMC Engineering

RE: how long do you hang on

As the joint owner of a small company I find we are asking the same questions as you AlpineEngineer. We were actually having a very good year last year up until December when two of our biggest customers went into administration, effectively losing 25% of our annual turnover overnight. These were basically solid companies taken down by bigger companies going into administration.

As with most owners we have invested huge amounts of personal money and time in the company and are very reluctant to let it go. Currently we have cut our charge out rate to just/ nearly cover expenses and a very modest salary and targeted Europe, which is helped by the pound being so weak, but there is no way we could employ someone on a reasonable salary and make any money on this.

I really have no idea if this is the right way to go, we have also thought about putting the company into hibernation and trying to find jobs doing anything just to see us through.

I have been working since the 70's and never known it this bad, admittedly it has been worse in certain sectors or regional areas but not across the whole spectrum.

I am sure many different companies will come up with different ideas as to how to survive and I guess the ones that make it through will be the ones that got it right, but I am sad to say I am far from certain we will be one of them. This really is unchartered territory for us.
 

RE: how long do you hang on

If you can survive as an entity, employee of another company or otherwise, when the smoke clears, you will still have a network to begin with to start again.  You may not have the same employees, but, with your prior reputation, restarting will be easier.  Your network is your best asset.

Hybernation is not a bad alternative here.

Mike McCann
MMC Engineering

RE: how long do you hang on

Ditto to all..consulting business is very bad here in Pa.
If you are in your 50's and you have a pension from a former employer and if wife has a job with medical benefits, then it is easier to hang on.
If not, it makes it harder and if you have been doing OK for sometime there, is a relucatance to hang up and get a real job (as my mother would say...)
Me,I am lookig for part time work!
Jim
 

RE: how long do you hang on

(OP)
Yeah, I'm the sole provider for a wife and 2 kids so I can't hang on for to long.  It is a bummer that I have invested so much into this business, I do like the hibernation idea. I have been trying to land a contract job locally so that I can go back on my own if and when the time comes.  The tough thing for me is that 80% of my work is tied to single family construction and I don't anticipate it getting better for quite awhile.  I am trying to re-gear and go after other work but it is a tough time to break into new clients/work.   

RE: how long do you hang on

Can you do both?  Keep the company alive, at least on paper, while you work?

Work where?  Jobs are dying off everywhere.

In times like this, there are many displaced workers that end up entering into self-employment.  At least you are already established and ahead of the upstarts.

RE: how long do you hang on

Alpine

I'm so sorry to hear that you are having difficulties.  A slight change in fortune could certainly put my firm in the same boat as yours as well, so it is indeed a scary time for many of us.

If we hadn't received an NTP for a major project last month, i was ready to mothball the office (still have 1.5 years of lease to pay) and start work for a transportation engineering company (bridge engineer) with the capacity to snag some of the upcoming US stimulus.  Already had to layoff both our engineers in the last 3 months, so it's now down to just me and my wife (accountant).

If I can impart any useful advice, it is this...don't hang on for the sake of hanging on and throw your money (and retirement) down a rat hole.  Do what you need to do to protect your family's finances, even if means some personal pain.  This is no ordinary recession.  With numerous core economic industries teetering on the edge of insolvency, there is the real possibility that a full blown depression could be around the corner.  

To paraphrase a common colloquialism, when juggling what life throws at you, there are rubber balls and glass balls.  Careers are rubber balls that bounce back when dropped.   Your family are the glass balls.  

I always chose to put family first, no matter what it took.  In earlier lean years, I even chose to accept an assignment (as a former employee) halfway across the US during the last slowdown and live apart from my family for 6 months in order to get back on our feet.  The company I worked for tried to force me to move the family out there, but it just wasn't right for them at the time, so I declined and they forced an ultimatum.  Since our finances were stable again, I opened this office back home.  (I hate ultimatums)

I hope you find work to keep your company alive, but if not, don't beat yourself up.  Do what need to be done.

Best wishes for your success.



 

RE: how long do you hang on

I'm a sole proprietor and I've decided that, as long as I can pay my bills I'm going to hang in there.  My backlog has shrunk to almost nothing but the work is trickling in.  I have one more expense I could cut, which is my office rent in town.

However, that's just me - my spouse is a City employee so we do have a steady income from that.

It may be time for you to take a hard look at what work could potentially materialize for you over the next couple of years, and make up your mind based on that.

I think hibernating is a good option; you might even want to pursue further education during this recesssion.

Another option would be to look for another small firm/sole proprietor whose work complements yours, and go after contracts as a partnership.  I'm working on an SOQ for some airport work with that method.

Good luck!

RE: how long do you hang on

Many of us in the same shoes... Laeving your business is big step back in my opinion. If you can just survive staying where you are, it is success in overal terms...

RE: how long do you hang on

I have found that keeping a diverse clientele has helped a lot. Diverse in the sense that they are associated with different segments of the economy. I have been a three to five person operation since 1991. I remember the Carter years and it's not that bad yet. Inflation was 18%, the prime was at 21% and unemployment was over 10%. Bad news. There are always segments of our industry that are active. The people I have seen suffering the most are those who have gotten comfortable with one or two areas of practice and have taken a major hit. Remember what we are trained to do: solve problems. You may need to retrain yourself and change your business model. Find a problem to solve.
Also if you want to get paid you absolutely must follow up on the invoice within two weeks. Even my best paying clients need a reminder these days. Good luck to all.

Greg Robinson

RE: how long do you hang on

1) Why would you want to be an employee? Secure (maybe?) position, teamwork and commraderie? technical support?

2) Why would your rather be self employed? Security (can't get laid off) independence?  

Make a list of the attributes and compare. One of the most satisfying aspects of being self employed is the access it allows to satisfy customers. I have personally spent too many years being told by various corporate culture what I was not allowed to do. I would have a very difficult time going back to arbitrary rules. I realize now that I had poor employers but that left me with great motivation to keep my own business.  

RE: how long do you hang on

Alpine, the key to suvival nowadays is to diversify your income. I think the days of operating one business and working one job are coming to an end... at least if you want to maintain the same lifestyle.

Consider what you are good at and form other low-cost startup businesses (not necessarily engineering-related). You could keep your current business going while you develop other sources of income. Networ, network, network! The more people you meet, the more opportunities you will get. Try to keep as many balls in the air as you can.

RE: how long do you hang on

The flip side of that is you do not concentrate on what you do best.

Sure I could start a business walking dogs, start a sandwich round, or the like, all for a very minimal set up cost, but there are loads of people out there already doing that and to the best of my knowledge they are struggling as well.

If you cannot make a living doing what you know best and have done for many years, why would it be any easier doing something you know little about?
 

RE: how long do you hang on

For those looking for a job, have you actually found anyone hiring?  If so, have you approached them about sub-contracting with you?  This could be a win-win.   Helps you stay in business, and is probably cheaper for them.

We do this all the time, and are currently doing this.   We are fortunate that we do alot of public private partnership work, where we actually fund the project, and them lease back the building to the owner, usually for a hospital or municipality( jail, WWTP, etc).  The program actually is well received, especially in these times when the need for the project is there but no money.   We steal actually going strong.  Probably one of the few out there, but it is due to this program.   Good luck to all!       

RE: how long do you hang on

I'm a small firm as well, and it has gotten very difficult to find new projects.  The architects I work for all have very little, if anything, on their boards right now.

I feel as though cutting fees or hourly rates is the wrong way to go.  All that does is drag down the entire profession.  If you cant make a profit, why do it?  Additionally, I was told by an engineering firm owner many years ago "I'd rather be hungry than hungry and tired".  Your first reaction may be to lash out at that comment (mine was), but when you're sitting behind your desk, working your tail off, when you know in the back of your mind you're not even making time.....that statement means alot more to you.

I think small firms need to hang on to the bitter end.  Closing the business and trying to find a job is likely not the answer, as there are no jobs and no security, as we're all in the same mess.  I know myself, that I absolutely must diversify.  I'd gotten comfortable with my work type, my clients, my income, etc. and had not worked or expanded my thinking in awhile.  I've got work to do and I'm going to do it.

We need to suck it up and think.  We need to minimize the negative we choose to accept (watching the news) and focus on changing our businesses for the current conditions.  I agree with the guy above....we need to find problems to solve.  We need to think and work to position our businesses into something that does pay.

RE: how long do you hang on

I started my firm in November 2008 with a partner and we've hung on for 7 lean months already, while building up enough cash to hang on for 6 more.  It hasn't been pretty, but just surviving in this economy is a victory.

I cannot and will not go back to work for someone else.  Despite all of the stress and worrying, working for someone else is less secure and more headaches.  Despite over a decade of experience and a great reputation, I was laid off (which is when I went out on my own in November).  Where's the security in that?

RE: how long do you hang on


runninreb:

I didn't know that I had already been reincarnated!

Mike McCann
MMC Engineering

RE: how long do you hang on

Quote (runninreb):

Despite over a decade of experience and a great reputation, I was laid off (which is when I went out on my own in November).  Where's the security in that?
Same here... tough to feel loyalty to a company that wastes money during good times by employing people who sleep at their desk every day, then scrimp and save in bad times by laying off people like me.

Dan - Owner
http://www.Hi-TecDesigns.com

RE: how long do you hang on

Same here, there is no going back for me no matter how hard it is. It's really about controlling your own destiny as job security is a myth. There was a time when I'm still working as an employee that I dreaded my monday mornings. I get all depressed and anxious at the same time every sunday evening thinking about the week ahead. Now on sunday nights, I get a smile on my face and look forward to the week ahead even when the prospect is not good. I just have this eternal optimism in me that keeps me in a positive mood. I don't stress about the things that I cannot control. I guess I'm also lucky that I haven't been idled since I started my own practice. Though it's considerably slow right now, I'm still consistently managing to find my next project after I'm done with one. I started last Dec 07 with 2 employees right off the bat and added 3 more as the work load increased. I'm down with 1 right now but still surviving.
Just a piece of advice to those looking to go back and be an employee again. If you happen to receive a job offer, just make sure you don't sign away your client list once you join a company. Protect yourself if the employment would not work out or if the economy improves and you decide to try working on your own again.          

RE: how long do you hang on

Good point RacingAZ.
A buddy of mine has been on his own most of his 35 years in business as a one man operation. About a year and a half ago, when he found himself struggling to stay afloat, he took on a job with a company in the same sector. He kept his client list to himself and was let go after 6 months. A few months later the same situation came up and again he took the job, and again he only lasted a few months. His employer wanted his customers, and when he wouldn't give it him, out he goes.
I also have a small business and there is no way that I can see myself working for someone else. As tough as things are, I can't help but feel that I'm better off working for myself. Mind you, if the fridge is empty, I'll serve burgers with a smile if I have to.

RE: how long do you hang on

Quote:

Mind you, if the fridge is empty, I'll serve burgers with a smile if I have to.

I hear ya. I've been in business for 9 years now as a sole proprietor.  I can't see going back to work for someone else, either - I think I'd go back to waiting tables first.  We've also got a pond full of fish here and plenty of room for a garden.  winky smile

RacingAZ, I also think that is excellent advice regarding your client list.

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