Starting a Business in Israel
Hebrew: הקמת עסק בישראל
I am a plumber and had been working in my field for about 10 years before I came to Israel. I studied, did my apprenticeship and got my plumbing license. I always wanted to be self-employed. I came to Israel when I was thirty and for the first year I was here, I worked for a large construction company, learning about local materials and standards.
I didn't want to work on a building site forever. I needed to move on. I had nothing in common with any of my co-workers and felt like an outsider. I had gained valuable experience though, learning the local building codes etc. There is a very basic and short course for plumbers in Israel, hardly comparable to the 3 year course I did and the things I had learned.
Plumbers in Israel have a bad reputation. I desperately wanted to prove that I was different.
I had almost zero capital and I had to make it work with what I had. I had all these great marketing ideas and I was anxious to put them into practice. My wife and I had no children so we felt that it was relatively safe to start a business. So with almost nothing except enthusiasm, I registered and opened my business.
I remember my first plumbing job. I caught a bus to Hadera to do a repair at a friend's restaurant. I was very excited when I wrote our my first invoice for 50 shekels. I did a few small jobs for Anglos in our area and with the proceeds, I bought a small motorbike. I would travel around on my Vespa with a limited amount of tools in a plastic crate. It took a long time before my business got going. There were some days when I had work and other days, I had none.
I soon learned that there were no other English speaking plumbers in my area and therefore I could offer a unique service to the local Anglo community. In those early days the majority of my clients were English speakers. I realized that I could not make a living from the small Anglo community alone and I had to improve my Hebrew in order to grow my business. Fortunately, today, my Hebrew is much improved. I wasn't afraid to make mistakes and was grateful when native Hebrew speakers corrected me. Now I can look back and laugh at some of those.
I had no business plan and the only market research I did was to count the number of plumbers in my local Yellow Pages - about 300. From this I came to the conclusion that plumbing was lucrative and there would surely be enough room for me too. I was highly qualified plumber after all. I had extensive experience in household and commercial plumbing. I had been the chief plumber in a 50 storey office complex and shopping center. I kept telling myself that I was the best in my area, if not in all Israel, and that if I did an honest job, customers would just start flooding in.
My marketing efforts were disastrous. Every idea I had, everything that is common practice abroad and everything I had learned back home, did not work here. My clients were not interested in my newsletters, special offers and other incentive schemes.
I did not realize that every transaction in Israel is negotiable. I quoted a price and expected the client to agree to it. I had no idea that clients would dare to ask for a discount or tell me how much they thought the job was worth.
I assumed that debt collecting in Israel was orderly and dignified. I was sure that I would send a statement out at the end of the month, and the client would mail me a check without delay. How wrong I was. A lot of my customers are not home when I do a repair. They leave me the key. So on the one hand they trust me implicitly, but on the other hand it means that have to spend some of my work day going back to get paid.
Over the years I took out a few small loans from the bank to buy new and better tools. One day my beloved Vespa packed up completely. I took out the engine and parked the motorbike in the garden so that the kids in our building could play with it. I took a 2000 shekel loan and bought a fifth-hand truck. Before my immigrant rights expired, I bought a new truck and have been driving it ever since. It has served me well. Even though my truck is the most important tool in my business, it is not fully tax deductible. For this reason it pays me to keep my old truck going for as long as possible.
It took a few years until I was doing a reasonable turnover. It did not worry me. I was doing what I wanted to do. I had to take on a worker but had no idea how much this would really cost me; pension fund, severance pay, national insurance, bonuses, holiday gifts etc. There were times when I considered taking in a partner. I am happy that I did not.
I tried to do my own books but I really had no idea what I was doing. I did not understand the tax system or any of the tax saving opportunities here. When I realized that I needed the services of an accountant and lawyer, I went to English speaking ones. It felt safe. Years later, I changed over to native Israelis though.
I keep my expenses to an absolute minimum. I have a small, inexpensive storeroom and try not to travel around unnecessarily. I invest money in new state-of-the-art tools that will save me labor or widen the services I can offer. I now negotiate the price of materials and ask for discounts from suppliers.
There are times when I put in a 60 hour work week and there are times when I am fortunate enough to go home in the afternoon for a couple of hours. I definitely work harder in my own business than I would have in a regular job. Would I do it all again? I am not sure. It has been tough at times.
As I get older, I realize that I physically won't be able to maintain the demands my business makes on me. I have no idea what I will do then.
My advice to new immigrants or anyone thinking about starting up; work for someone for a few years. Ask lots of questions. Learn the Israeli way before you make your decision. It could be a very expensive one to which there is no return.
With thanks to Tony's Plumbing - Tel: 0522-660144