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RustyCas

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Reply with quote  #1 
I'm putting this here so it gets the most reads.  When I left a good job with the electric utility to start my own business 24 years ago, I didn't really know what I was getting into.  I knew I had to have "liability insurance" but didn't know what that meant, exactly.  I found a $1M general liability policy for around $1,000 a year and increased my limits on my vehicle to $1M and that's really all I ever had to carry until just recently.

A couple of years ago, one of my large industrial customers told me I'd have to join ISNetworld, an organization that serves as a "clearing house" of sorts for insurance certificates, safety programs, etc.  The idea is if you join this organization (actually just a for-profit company) and meet all their requirements, then you will be able to work for literally 1000's of subscriber companies without having to meet each individual company's requirements.  But it looked like a nightmare in the making, so I elected not to do it (after spending $800 to join) and let that customer go.

ISNetworld came up again recently, at a major industrial customer where I had always flown "under the radar" since I've been there continuously for  15 years.  I was able to convince them that I was in fact a "consultant" as opposed to a "contractor", so they waived the ISN requirement, but then said I'd have to have "professional liability" insurance (which I'd never carried), which I now have (at a cost of $6000 a year), but which was a real pain to get set up exactly the way my customer wanted it (endorsements, notices of cancellation, etc.)

I ran across a young guy on LinkedIn recently who has "gone out on his own" who is, unfortunately, clueless about all this.  It doesn't seem like it needs to be so hard, but in this age of regulation, lawyers, "standards", and certifications, it's obscenely complicated.

My point is, if you have a good job with a decent company that you are mostly satisfied with, think long and hard about leaving to start your own business.  You will likely not make substantially more money, and maybe not even enough to survive, unless you "go big" and hire a lot of folks to actually do all the work.  There's a good chance that - even if you work alone - you will spend much more time on soul-crushing administrative tasks than you do now.  You won't have to put up with a clueless boss, and you'll have somewhat more control over your schedule, but you will have far more headaches than you do now.

If there are any of you "independents" who don't agree with my assessment, please let me know what you are doing to avoid all the red tape I've described, or who your customers are that just let you show up and work with a minimum of hassle. (I have a few, but not enough to make a good living off of).

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electricpete

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Reply with quote  #2 

I appreciate the advice Rusty.   I’ve been working for “the man” all my life and planned to work another 5 years or so.  But our company will “freeze” our pension benefits, which means there may be more incentive to look at other options even if they don’t match my current salary.  Your comments give some good perspective on the self-employed option. It doesn’t seem attractive especially spending all the time to learn the ropes and try to build a business... for just a few more years of working.

RustyCas

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Reply with quote  #3 
Pete, there are more smaller companies doing this kind of work now than there used to be, but they seem to be getting bought out at a rapid clip, because of what I mentioned above.  Working for one of them as a "subcontractor" is an option, but the larger a company becomes (and better able to navigate the paperwork jungle), the less likely they are to use subcontractors, so a bit of a catch-22.

I have one long time customer that has been bought out a number of times, and are now large enough that I am no longer "qualified" to do work for them.  I said fine, find someone else.  Their solution was for me to work as a subcontractor to a local firm that does a lot of their construction work - not a large company, but apparently qualified (enough).  So now I do the work (without a purchase order, as I've mostly always done), and send this contractor the invoice.  He marks it up 20% and gets a PO and then submits it.  When he gets paid, he pays me.  Have never met the guy.  We have nothing on paper.  I don't have a copy of his safety program. I don't see how he or I am really protected, but it seems like a standard arrangement for my customer.  Makes no sense.

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MarkL

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Reply with quote  #4 
I did entertain the Idea briefly a few years back to try and go on my own but circumstances changed and weighing up the options I decided to stay with my company. 
I now notice in the last 3 years a lot of Multinational clients, mainly the US-based medical device and pharma companies we deal with, are using these 'Documentation companies' and they have reams of red tape that I am glad I don't have to personally contend with, but its a bit annoying knowing these nameless companies are effectively charging us fees for the pleasure to do business with our clients. But I guess its the way it goes.

I had a Job for a Large Multinational 2 years back, as I wasn't on theyre vendor list we e3nded up going in on the job as a subcontractor to 'Joes the local Hardware guy' who is a vendor for them. Strange situation but hey we got the job done.


Vibe-Rater

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Reply with quote  #5 
Hi MarkL,

Large companies want as few vendors as possible on their vendors list.  Not sure why. I do semi regular work for an oil refinery and they needed me. Done within a few days. Once you're on you tend to stay on.  Lazy accountants / admin I think but not sure. rgds
OLi

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Reply with quote  #6 

Hear, hear. I do think it is the same here. I have client we worked for forever and he is now owned by a European corp so purchaser want a contract. If I had made some agreement I would be obliged to follow the one sided requirement that suddenly popped up to extend payment from 30 to 45 days and then they centralized admin somewhere so they pay by intl. banking not the local systems etc. So I ducked for that so far.

Corp's are fooled to believe that having a supplier "is a cost" I can not see that, but that's me. We can't sell eq. to Volvo, it need to go thru a tool selling company, Scania is still ok but we need to send the invoice to Poland one way or another. I still claim that my customer need to maintain a email where I can send a pdf invoice, not logging in to umpteen portals and entering the numbers by typing them again......
We did some work earlier this year for a municipal heat plant and when it just was a visit to say that tripping a brand new machine several times in a row and never reaching full power is bad it would go thru selected middle man, eventually when we actually had to work they did add us as a supplier but it took several weeks so all work was done before I got a PO.
It was a building site still so there was a added layer of red tape for that to enter and fees and I charged them all of it.
We had a unvolontary 4+ year project for a Swedish 3 letter corp and a Japanese 3 letter corp and the end user a 5 letter Dutch corp as they did not present the great plan just fire rescue bit by bit "can you go to Milan to balance a motor?" not giving the info "by the way we are 3 months behind in schedule since we have fiddled our thumbs and throwing darts", "can you go to Japan to be our representative aka scapegoat?" at a umpteenth FAT, so in the final stage "can you go to Norway to make the Dutch 5 letter corp happy, do what we actually are contracted to do, be our representative and if needed be a scapegoat". PO did not say that much more than "field balancing" after 7 visits to Norway we ended up having the glorious 3 run balancing in 23 days spent time and 3 letter company refuse to pay and the Swiss project manager started to argue about the exchange rate on the ferry ticket to the site that was like 10 Norwegian Krona like a bean counter. So I complain to the 5 letter corp that they have lousy suppliers and that they have responsibility for their subcontractors and what do you think, they saw it as a low cost to be able to call us to get advice if they get in trouble, after a 23 days balancing.... (it was not us, it was access to the machine in the process I had done it before in 45 min) so we are or was, this is a couple of years ago (suppliers are quickly lost), but we were a supplier to a Dutch petro 5 letter corp one of the sisters...... for some time, I have that PO on the wall :-) So it is a djungle out there, take care.


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Alex

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Reply with quote  #7 
Very interesting topic! I also run my own business. My advice is to avoid subcontractor deals. Recently I had a case of a large online monitoring enquiry. The customer rather chose a company dealing with home air conditioning. The most funny part of it was when the same company (without a clue about diagnostics) called me if I would be prepared to realize the whole thing. Not to mention for a very limited price. NO THANK YOU. 
Fortunatelly I don't have many customers with a lot of paperwork besides diagnostics related. Here I found another issue more worrying and that is corruption. Older industrial diagnostic companies have a good corruption network at the best customer sites. There it is impossible to compete even with a half of the price. So I must always be better than the others to survive and deal with some complex situations where the others can't find a solution.
OLi

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Reply with quote  #8 
I have a corporate letter from the corp that own the plant in the previous text with the required agreement and sudden credit extension. Corp is from southern Europe and the text says basically spread over a full page "don't bribe our employees" I have put that on the wall also.... I put that in the same class as 3 letter bearing company's habit of throwing in a bag of predictive maintenance in the  package deal on large sums of bearing deals....
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RustyCas

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Reply with quote  #9 
In total I buy a lunch a couple of times a year. Once a year I bring in “breakfast” for a dozen guys at a shutdown I do regularly. No caps, no coffee mugs, no pens, no “freebies” of any kind. I just never started any of that. Can’t be accused of any impropriety.
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Alex

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Reply with quote  #10 
Rusty, that's all in a good manner. I was talking about 10% money under the table, sponsoring some weird clubs with the decision makers in charge etc...  [smile]
OLi

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Reply with quote  #11 
Yes I admit in all years I did buy one pack of coffe mugs and 1 pack caps and quite a few pens, maybe a couple of hundreds and some T-shirts, a hundred since primarily 1992......
Last T-shirt was so cheap and ugly with a quick Android green monster from a internet cheapo so it's mainly only me wearing them :-)

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RRS_Dave

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Reply with quote  #12 
ISN is the biggest pain in the butt I have to deal with.
I have to pay $800.00/year to be able to send all my stuff to them and have them tell me I have a comma out of place and they reject it.
I back charge the company that makes me belong to them with an invoice that says "ISN Membership fee". I add 30% to it just for the hassle I have to go through. Should be 100%.
My insurance lady takes care of the liability insurance with them for me, so she has to deal with all the proper placement of commas. I have to deal with them for all my safety plans, etc. What a joke and a drain on finances.
I agree with Rusty, there are many times I have wished the last "real" company I worked for hadn't closed up and forced me into a decision. I would rather have some retirement benefits of some kind, and would like to have had some type of health insurance other than O'care catastrophic.
But it is what it is. I've met some awful fine folks, learned a lot about a lot of different things and equipment (which I probably wouldn't have if I had stayed with one company), and I certainly am jealous of the folk who come home each night about the same time, and don't work weekends on reports, books, government documentation or something else. Driving 35-40k miles a year will put a hurtin on you too. Ah well, the time is getting closer. Just another year or two, then I swear I won't answer the phone, and I'll learn how to say no.

D
OLi

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Reply with quote  #13 
I had to pass those hoola hoops with a 3rd party Norwegian cert company, just to be pre qualified to make a bid on a turbine system at a nuke site that we supported since it was new in mid 1970's and by the way now was shut down last year so I lost my mcv sensor nuke reference... Anyway after stacking the papers, paying the fees the qualified purchaser at the nuke declared Linux obsolete, old, "not future proof" and for that reason rendered our offer out of the race despite having the same system running at 2 other nuke sites since 15+ years. So they went with a windows API system from Knoxville..... and was shut down.
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tomcd3

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Reply with quote  #14 
Quote:
Originally Posted by OLi
I have a corporate letter from the corp that own the plant in the previous text with the required agreement and sudden credit extension. Corp is from southern Europe and the text says basically spread over a full page "don't bribe our employees" I have put that on the wall also.... I put that in the same class as 3 letter bearing company's habit of throwing in a bag of predictive maintenance in the  package deal on large sums of bearing deals....
tomcd3

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Reply with quote  #15 
My apologies OLi.
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