Business Worries and Sleep

Running your own business can make it hard to get a good night's sleep. Here's some advice on healthy habits that may help (personal and business both). April 9, 2008

Insomnia comes hand in hand with custom cabinetry... I used to get two hours of sleep per night designing, visualizing, and building things step by step in my head. I was truly 100% passionate about creating from my mind's eye. I would often toss and turn for hours and come to terms with the fact that I wasnít going to sleep, so I'd get dressed to solve a problem in the shop.

Now having gone on my own, I am facing the common problems of a start up cabinetry business. My insomnia is no longer due to my passion. Instead I am dealing with clients who fail to keep their own schedule in the DIY portions of their remodel, setting back other subs, which of course domino effects my schedule. With a contract which reads 50% down, 50% upon completion, my cash flow begins to suffer. Then the next client in line canít make up their mind for a month and a half what they want to do while my bills keep compiling. No calls, no e-mails, no sales. The indecisive client comes closer to finding the courage to take steps toward their new kitchen. I finally get to the point of handing them an agreement prior to a deposit and they want to wait another week while they have the agreement looked over. I am emotionally worn out and am experiencing severe difficulty in getting to sleep because of it.

I spent the last year in San Francisco and even went out to New York (Staten Island) for 6 months. I wanted to take opportunities as they came and they were great experiences, which gave me the confidence to take on business in my home town. This winter/holiday season has created a dry spell in business opportunities for me and I am often feeling like I am sucking wind. I have a NKBA designer who has given me a few jobs, and if it werenít for her, I would have gone under a long time ago. She understands passion and quality and it makes me feel good that I have her confidence. That at least keeps me keeping on.

I am confident that the dilly-dallying clientsí deposit will cover all of the materials and my overhead expenses including overdue bills and I will survive for a little bit longer. I am hoping the spring and summer will pick up as I round into my first year of local business. It is so very hard.

Please share some similar experiences and some motivation. I am going to go pick up some sleep aid pills. Until I get the deposit on this job I am out of work. It is an African mahogany kitchen with birds eye maple panels. All pull outs in lowers on Tandem Blumotions and crown. Or at least until another change is made, setting it back another week.

Forum Responses
(Cabinetmaking Forum)
From contributor X:
I wish I could say that as time goes on, it gets easier, but it doesn't, and I can't say that. In that passage of time, problems are constant. It's always something. Like the old saying, "You worry about how to earn money" versus, "Once you get money you worry about how to keep that money that you earned." Problems never end. All you can do is just plug along and do the best you can.

Since you have cabinetry as your main line of work, you might consider a secondary field of work to do also when things get slow to help pay the bills. Sit down and make a list of all the things that are made of wood that you might try making and selling. An example might be a walk in refrigerated cooler, or a swag lamp, or a ruler that has advertising on it. Whatever, it's something to keep the wolf away from the door. Who knows, maybe the secondary field is a gold mine for you. Expanding your thoughts outwards might solve your lack of sleep.

From contributor T:

You might want to consider changing your payment terms. For example, you already use 50% down, and this is great. I would suggest that you either do 40% on completion of the cabinet and before install, or get the full 50% and charge extra for storage and installation as needed.

From contributor V:
Welcome to the real world of professional woodworking. You have joined the ranks of many who have come and gone before you. You didn't say what you were doing, but we have found this time of the year is always slow for cabinets and usually better for furniture. Try different ways of marketing and the best thing I have found for indecisive clients is to ask them when they think they want their work done and then let them know they need to make a deposit in order to get on the schedule.

Also, as to the 50%, your wording above was "on completion." If you completed it, then they should pay, however I suspect you really meant installation. Change your agreements to 50-40-10. The 40 is due upon completion and regardless of delivery/installation. Then add on a storage clause. Ask your designer to refer you to some of her competitive friends or just ask her for other contacts like her that you can follow up on.

From contributor L:
For a first year independent cabinetmaker, your observations are very astute! Whether you make cabinets, build widgets, or sell insurance, your experiences are common to all self-employed businessmen (women).

Once you crossed over from employee to business owner, your whole mindset changed focus. You can no longer afford to just show up and milk your way through the day and still collect a check on Friday. Instead, your realization that unless you are productive at all times, you don't get paid is a very real concern. One that eventually gets to all of us. So, what are some solutions?

Well for starters, you need to set a personal schedule, one that you don't violate. Whatever quitting time you choose, stick to it. Your customers will wait, some more patiently than others.

Another solution that I see as a problem for all start-ups is the 50% down 50% on completion farce. What I mean is that if you are using that formula to collect your money, you will fail. It's inevitable. One rule that I have always followed is actually pretty simple. If I have a job that I figure will take 6 weeks to complete, I add two weeks and then look at how much money it will take for me to buy all of the materials, pay my labor and pay myself for those six weeks. With that number in hand, I sit down with my prospect and tell them that if they want my undivided attention on their project to the exclusion of all others, this is the amount of money that I will need as a down payment. We can certainly work out a draw schedule to accommodate both of us if the down payment is substantial. Otherwise, I tell them that I'm working multiple projects because after all, cash flow is king. By the way, I firmly believe that you will sleep better once you get a handle on your cash flow. Good luck and keep the faith.

From contributor A:
Stay away from sleeping pills. They are a very short term solution at best, and a huge dependency potential. I am well versed in the sleep issues. Two specific dietary issues will cause you to have very restless sleep. B-vitamins and Magnesium. Before you try the Ambien... Take 1 B-100 with breakfast and 1 with dinner. Find a health food store and purchase a Magensium supplement that is Magnesium Citrate or Aspartate (not oxide) in capsules. Do not consume any dairy products 1 hour before bed. Take 400mg of the magnesium about 30-45 minutes before you plan on sleeping. Try reading some book in bed (not work related). No TV or computer in that last hour before bed (it is very stimulating).

From contributor N:
After being in business 27 years I can sure relate to your worry/sleep problem. I believe the reason why government is so big is that people need that safe, easy job with a steady paycheck and benefits. We, on the other hand, work for our money.

Here's what helps me and maybe others. Once your business takes off, save a rather large sum of money and put it in your business money market account, your business reserve fund. Don't touch it, but borrow from it if needed if a good customer is dragging their feet on final payments or you need something important for your business. Then borrow some money from yourself (to maintain your peace of mind). Then pay it back as soon as you can. I know some say why not set up some type of loan from the bank. That would only get you in more debt and interest, therefore more sleepless nights. These problems never go away, as it's human nature that is driving what your good customers are doing, and that is never going to change. Save what you can to build up your reserve. It works better than Ambien. Everyone is different.

From contributor J:
The bad news is it can get worse before it gets better. My 7 month old son doesn't care to sleep more than 3 or 4 hours. Since both mommy and daddy work, we share the load at night. I've always had a tough time sleeping anyway, so now by the time I drift off, someone else is waking up! After a few weeks of this, you're basically living in a fog and that makes for a bad work environment. I can't even begin to tell you how many stupid mistakes I made on my last job... Ugggghhhh!!!

As said before, sleeping pills aren't the best solution. My doctor gave me a box and so on Saturday nights I'll take one and get about 6 hours of sleep. But it's not as good as a normal night's sleep and makes me groggy the next day.

I would also suggest changing your payment plan. This is just my opinion, but I think that's a terrible way to have your payments set up. You're just asking to get burned for a lot of money. I know guys do a variety of different payment schedules so you'll have to do what's right for you. For my work I get 40% down payment to schedule the job and order materials. Once the cabinets are built and ready for finish, I get the next 30%. The final 30% is collected upon installation. This keeps the money coming in a little more regularly and prevents you from having such a huge balance due at the end of the job.

From contributor R:
I posted a similar thread last month, and have since changed my contract to 50% up front, 35% when cabinets are ready for delivery, and 15% upon completion of installation.

From contributor F:
Most sleeping pills can only help you initiate the sleeping process and will not keep you asleep all night long. The ones that do will most likely leave you feeling groggy or hung over in the morning.

From contributor P:
I went through this recently myself.
- As someone else said, try to keep some money in reserve (easier said than done).
- Keep overhead low. Don't buy new tools. Shop around for materials.

- Take the small jobs you might not normally want. Take jobs that aren't strictly cabinetmaking - trim, repairs, etc.
- Always have 2 jobs going at once. Switch to the other one if there's a delay.
- Do whatever is in your power to expedite the delays. Tell clients that you will have to put their job aside if they can't make a decision. Ask for progress payments, even if it's not in your contract. The worst that can happen is they say no.
- Use downtime to make samples, catch up on your bookkeeping, clean your shop. That way when the work starts up, you can hit the ground running.

From the original questioner:
Thank you for all of your feedback and time. I was able to sleep in this morning and I am headed off to go for a run out in the trails with the redwoods. The dietary/supplement advice was great! I think I will give it a try, though I always sleep well when all is well. Itís a very tough cycle on the body and mind.

I gathered a lot of advice to modify my payment terms. I actually thought it would be fine to do small jobs with those terms being as though it was a bathroom vanity. Regardless, $1,200.00 is a good sum of money to be put off for an entire month. I will never do 50-50 again. It truly was a learning experience.

I offered these terms in my agreement for this kitchen:
- 50% up front to cover initial costs.
- 30% upon completion of fabrication to a functional state.
- 20% after finish and installation.

Thanks again for taking the time for the very valuable advice. Itís just a very difficult time.

From contributor D:
Lots of good ideas out there. My only simple caution is try not to collect too much of the money because it tends to go to other things. It's different if you're using it for survival, but beware of progressing ahead of the job. There is nothing worse than getting to the end of it, being broke and knowing there is very little money coming. Lose your will to work. I make a comprehensive payment schedule for all our jobs, and believe it or not, include "force Majeure" as well. Maybe also try and change your clientele a little. You're much better off building 4 kitchens for 25K than 10 for 10. Also, not a bad idea to try and schedule delivery and install every few days if that's your only job, and you need the money. I've been in that situation before and it gets people thinking a little more about you and your products. As for the no sleep... Ha! You're in business for yourself! We all experience it, and not to urge you to reconsider: some people aren't cut out for dealing with the serious highs and lows that result from being an entrepreneur.

From contributor O:
For the payment schedule I use 50%, 20%, 20%, 10%. 50% down, 20% after the building portion is halfway completed, send pictures using email or have them stop by, 20% before delivery and 10% after the majority of the install is complete. I started with a 33% x3 system and found that 1/3 at the end is way too much leverage for the client to have. I might even change it so I have only 5% left after install. Get your money. You will sleep better. Any changes in the project are made through change orders and they are paid immediately, before the change occurs.