The company I’ve been working at for 7 years is relocating to the other side of the country. Friday, the CEO just announced to all of us here that we can take a “voluntary separation package” if we don’t want to relocate.
For me this means: 7 months pay. 7 months continued 401K, life insurance and pension. And, best of all, 24 months (yes, 2 years) of continued medical coverage for me and the family! WOW!!
I’m thinking this is a great opportunity to try and turn my hobby into a business since I’ll be getting paid for at least 7 months and have insurance for 24.
Thoughts, concerns, experiences anyone??
molten
Replies
molten,
Read the fine print in your insurance policy. Mainly to find out if it offers you 24 hour coverage and while you are self employed ? Not all policies are user friendly to self employed folks. Un employed is different then self employed . Of course you will need to find out if your skills are in demand in your area and where your shop will be and what your overhead will be to break even. You may need a business license and some state contractors license along with the proper insurance package. The start up costs can be surprising . Also it is sometimes advised to have a savings surplus of maybe 1 years living expenses , in case you are not an instant success.
good luck dusty
Molten, THAT'S FANTASTIC! What a great opening to make a change. That first two years is the toughest for any new business, and here ya go -- you have "start-up financing." No pearls of wisdom from me, just congratulations.
forestgirl -- you can take the girl out of the forest, but you can't take the forest out of the girl ;-)
Another proud member of the "I Rocked With ToolDoc Club" .... :>)
Go for it! If you don't try, you will regret it 20 years from now. If it doesn't work out, at least you tried.
Two things spring to mind:
1. Financially, it seems that you have a good opportunity. I rented my first commercial space on the heels of a very lucrative project in which I made 10 months of rent in two weeks. (I didn't sleep much during that project.) That gave me a good boost after working for 10 years in a home shop.
2. Be very sure that this is something that you want to do. Woodworking (or any activity for that matter) as a hobby is far different than as a profession. I have no regrets making the choice that now faces you, but (for me) woodworking is no longer the escape from life that it was as a non-professional.
7 months? Wow. that's tempting. You could try like he double hockey sticks for 6 and still have a month to reconsider if things don't pan out the way you want. I got 1 month free when I started doing remodels. Started slow and worrysome (man, especially that first cold winter) but things are going hog wild now. When you get to January and you're booked through summer, quit worrying.
"If you pick up a starving dog and make him prosperous, he will not bite you. This is the principal difference between a dog and a man." - Mark Twain
My question concerning the medical coverage would be who pays for the coverage after 7 months? Is the employer planning on paying for your coverage for the entire 24 months? Or is he telling you that you will be eligible for coverage for 24 months?
Big difference in that coverage continues under "C.O.B.R.A." for up to eighteen months following separation from service. Almost always (in my experience) at the expense of the employee... And always at a higher rate.
Just something to clarify on your end!
RR
Wow, thanks for the great supportive comments guys. And the cautious ones also. I'll know all of the specifics next week, but it seems a plan that's hard to turn down, especially knowing if I don't take it I could get suddenly laid off any day.
EDIT: meant this one for ALL
Edited 3/27/2004 6:49 pm ET by molten
The memo from the head man reads:
"The employee's medical premium (COBRA coverage) will be paid by the company for a period of 24 months from the date of termination."
It's my understanding from guys that were laid off last year that COBRA is exactly the same as the PPO we already use. Those guys that got laid off last year are going to be pi55ed when they hear about this...some of them pay $800/month for COBRA!
Good for you! That really is HUGE in that he will pay that for you!
I wish you wisdom in your decision.
RR
Molton,
This could be just the opportunity your looking for, however, be careful. your emotions will go on a rollar coaster ride regardless. Not having a paycheck every week is a difficult adjustment for the psyche. It's a good idea to sit down and make up a financial plan...a monthly budget...detailing the minimun amount necessary to pay your bills and feed your family. With that budget in hand, identify possible alternative sources of changing that cash flow...part time work, reducing expenses, etc. I'm sure your wife would like to stay put...but she'll be the most nervous during the transition. The more you plan the easier and more comfortable you'll be with your decison.
BTW, my last company paid for move from IN to MA cost the company $70,000...hiring a new employee in a new area can cost a years sallary too...so while its a great deal...the company aint no dummy either
That happened with me but I had 22 years in and 3 kids in college. I took the transfer and lasted another 15 years. My 401K and the parachute at the end of my tenure made it all worthwhile. Not only did I get full retirement but also 2 years of severance. (our company was bought out and my entire department was terminated)
I came real close to not taking the transfer back then because I had a good moonlight job doing commercial cabinets. About 6 months before the transfer, the local economy (1987) went belly-up and the cabinet work dried up at about the time the relocation was announced.
All in all, I think I'm pretty lucky the way things turned out.
Something to think about, but if interest rates start rising after this election year, then constuction jobs and all related activities might see a down-turn.
PlaneWood by Mike_in_Katy (maker of fine sawdust!)PlaneWood
Taking the transfer is NOT an option. It's to Ogden, Utah...bunch of crazy people out there. My family would rather live in a trailer than move all the way across country.
We crazy people don't bite... We even shower once in awhile.
We're no more crazy than anyone else in the world, but I don't mind if you don't like Utah it's getting crowded here anyways.
Maybe if you'd bite more often it wouldn't get do darned crowded! HaHaYes,I made it. No,not hard. Yes, a long time.
Same thing I said about Houston 15 years ago.
A few months ago I spent a week up in Oklahoma and I don't recall one murder being mentioned on the local news. Takes the 1st 15 minutes of each nights news here to get through all the days homicides. But, apart from ducking a few stray rounds occasionally, tain't to bad here.
PlaneWood by Mike_in_Katy (maker of fine sawdust!)PlaneWood
It's been exactly one year since I left my job, also with a nice separation package. Before deciding to leave, I had decided that what I was doing was not going to see me through to where I wanted to be: self-employed and in a situation to give back to the community that has been very generous to me over the past 30+ years.
So I took the package and started graduate school in Counseling Psychology. Meanwhile we decided to remodel our kitchen with the inheritance left by my wife's mother, and to save money and have some fun I made the cabinets. Granted, I've been doing woodworking for many years (self-taught), but the ktichen was my biggest job to date.
The kitchen turned out well, and people who saw my work referred me to others in the process of remodeling kitchens. Where we live, the houses are 80-100 years old and the kitchens tend to be small. Standard cabinets don't service this market well and store-bought custom cabinets cost a fortune. I've also had the good fortune to spend a lot of time on sailboats, living aboard for one year on top of 20 years sailing my own and others' boats.
Kitchens on boats (we call 'em galleys) have to make the most of small space. So I took what I learned from being on many different boats over the years and incorporated that thinking into kitchen cabinet designs for small spaces...like we have in my town!
Today I landed my third commission for kitchen cabinets. This was not planned on, and in fact I intended to spend my limited stock portfolio on school. However, not stock has been sold so far, I'm half way through an M.S. degree, and bringing in enough money to upgrade my shop (just bought HVLP with a part of the first kitchen's proceeds) and pay the mortgage.
Here's where I am a very lucky man: when things were coming to a head at work, my wife said: "Quit the job and take whatever time you need to figure out what you want to do. I'll support you." She does have a good job, and my health insurance is through her company (whew!). And when I get excited about a new kitchen design she asks two questions: 1) will you have fun doing it, and 2) how's school?
We don't have children, so we don't have that cost (or benefit either, for that matter). And we don't have huge sums stashed away for "retirement" (whatever that is!). The plan is, enjoy the journey, because that is what life is all about. I'm on a great journey.
Anyway, Molten, take some time to develop your business plan. Make sure you charge what you're worth (that's a toughy, trust me!) and take only those clients and jobs that inspire you. Send the rest to Home Depot or Ikea. And if you're really, really fortunate, your family will be behind you. You should be OK with the health insurance from your firm, so long as there are no exceptions in your agreement with them (there shouldn't be any). And make sure you plan for coverage after the two years...COBRA may not be the most cost effective way to go.
Maybe we Knots folks should band together for group health insurance...but that's another thread.
Best wishes!
Thanks for sharing that, it was very inspiring.
Actually, Molten, I may have benefited the most from writing that...it's always good to stay aware of one's good fortunes and the wonderful people who contribute. So, I thank you!
Signed my papers today and April 23rd is my last day working in an office (hopefully forever). Some good things have fallen in place the last couple of weeks; FIL is giving me one of his out building on his property to use rent free...well, actually my rent will be fixing it up myself, but that's free to me. It's about 900 sq/ft and dirt floor with no insulation. He'll buy the materials to put a slab in it and insulate and do everything else to make it habitable. I'll provide the manpower. I'm think radiant heat since we're pouring concrete. In-floor dust collection and electrical of course. He'll also be paying to have electric, phone and natural gas ran to the building. I'll pay the monthly usage bills of course.
I also have 5 potential clients lined up waiting for me to come by and give estimates. 3 of these 5 are in very wealthy neighborhoods, and two of them promise work around the 30K range. Could be a great start to a great business.
Good for you, Molten! Whatever good fortune you are experiencing today is no doubt based on your actions in the past. Best of luck to you and when you have a chance return the kindness to to another deserving soul. Keeps the world turning, you know?
I'll watch this space to see how you're doing.
Molten - best wishes to you in your new endeavor. I'm attaching something I picked up over at Breaktime a while ago. It's inspiration for me to someday escape the desk job. I don't think you're going to be a builder but, I hope you get the picture.
I forgot to write down the author's name, but his words have stuck with me since I read them...
There is nothing that ever happens in an office that is as good as being the first one to the jobsite in the morning, sitting on the new lumber package that hasn't even had the bands broken yet, enjoying a cup of coffee as the sun comes up, the smell of fresh lumber in the damp cool morning air, the smell of all that new concrete that you are about to put a house on, the birds singing in the relative quiet that is about to be shattered by the orchestrated dogfight you call your framing crew . . .
Man, my worst day on a jobsite was better than my best day in an office.
Ditto on the inspiration. I'm close to 50 and have 22 years in here at UT in Memphis. My plan is to retire when I get my 30 years in - right now they have great retirees insurance (hope it's still there for me) and just see what I can do. I always tell people I could be happy bein' a greeter at the Wal-Mart but then again maybe I could get a job at the new Lowe's. I believe it was ToolDoc (okay it coulda been you Sarge!) who talked about sharing his woodworking knowledge when he was shopping at HD or Lowe's and overheard a customer ask questions of an uninformed floor staff member. I might not be much help right now but maybe in 8 years I'll be good at it!
You're so right - it's the journey - and we'd best not be rushin' through it to get to somewhere else!
Robin, Molly and Sadie"Well-behaved women rarely make history."from the Sweet Potato Queens' Book of Love
I'm trying my best to think slowly and methodically about this. There's no doubt I'll take the separation package, I just need to make sure I know what to do with it.
I'm still waiting for our information meeting. I'm going to do my best to fully understand COBRA...make sure I don't screw myself out of medical benefits if I go self employed of get another job.
Time for some honest thought here.
Are you able to generate the markets to sell your products? anoutherwords how good of a salesman are you? Everything I read about the subject tells me that one in 100 who tries it actually makes a living at it.
Second how are you on administration? there will be paperwork required in any business.. (you'll be surprised at the amount) while you can hire it done or farm it out, can you afford the cost of having it done outside?
Third.. what is your ambition level? Do you have the ambition to work when there isn't anyone to tell you to? What if there aren't any orders or jobs to do? Can you still work or go out and try to sell your work?
Surprisingly the later was the thing that got me when I went on my own.. Without a paying customer I tended to get discouraged and loaf.. I could spend a whole day cleaning stuff or organizing stuff.. I once spent a whole day doing nothing but sharpening drill bits...
Don't think that your desire to eran money will be enough motivation,, it's not always!!
All good questions frenchy, questions that I've been pondering for the last few years but am now thinking about much more seriously. I just learned today that it will take "weeks" for those of us that want this to be processed. Plus I'll have 3 months of pay so I should have enough time to figure out what route I'm going to take.
This forum post is now archived. Commenting has been disabled