Starting a business

[bradyman1]

Do you think it is a terrible time? How would you go about getting your name out it in the times we are in?

[Buck Parrish]

What's your location?

[bradyman1]

Missouri near St. Louis

[Buck Parrish]

Their is a slump in new homes. But service work will always be needed.
In my opinion it is a good time. However me not knowing your situation. If you are working now with benifits, family, etc... That should be taken in to consideration.
You might want to start off with week end or evening small jobs. If their is a property management company in your area. You could ask them to call on you if needed.
All this energy savings (Green) wind, solar, etc.... This is making more work for electricians.
You should time your start up when the yellow page book comes out. Have a nice ad. Not over budget. Make sure you are in the book that most people use in your area.
Start with low over head.

[satcom]

The first step is check to see if there is a need for additional contractors in your area, many guys just assume they can start a business without checking for the need, a common mistake, that usually leads to a pile of debt and little or no income, when the economy is up and everyone is fully employed, you can start just about any business and have some sucess, but in this enviroment we have now, you really have to plan, and check the area you plan to operate in, who is in the business now, and what is their business like?

[brian john]

Do you have contacts now, that would use you?
What type of work.
What will the wife do when you go six weeks without a check.
Healt insurance.
Vehicle
Good credit.

[bradyman1]

Looking at mostly residential rehab/ service work, and light commercial (strip centers and the like).
We are a single income family. I have thought about the health insurance, vehicle, cell phone cost, I have a reserve that I can survive for several months on. I am planning on starting with a large job to kick start the business, to keep me busy for a month or 2, I would just need to build some customers rather quickly to keep moving in the right direction. I have excellect credit. I have already set up a company, have liability and workers comp., and a little cash in the business bank account. I just have not got that big job yet. I had a couple that were very promising but they fell thru. I have one contractor in particular that I will be working with, he is a small guy but does large money making projects. I have several other contacts I do not want to steal from my current employer but had considered asking them for a "letter of referral" to provide to potential customers stating that they had worked with me and was happy etc...

[480sparky]

What does your business plan tell you?

In other words, let's say you are George Bailey, from the movie It's a Wonderful Life. You want to start a business (call it Bailey Building and Loan), and you need operating capital. So you go down to the bank and talk to Henry F. Potter.

Now, Potter is a rich man, and he didn't get that way by being stupid. He's going to ask you all sorts of questions, and require certain things from you, such as your education, training, experience, credit history, and most importantly, he'll want to see a current balance sheet. In order for you to convince him your business plan is a profitable venture, you'll need to do your homework and have all this prepared in advance.

But before you go to the bank with all that information, what does it say to you?

If you don't know what balance sheets and business plans are, you'd better keep the horse in the barn until you learn how to saddle the horse first.

[jmsbrush]

The first step is check to see if there is a need for additional contractors in your area, many guys just assume they can start a business without checking for the need, a common mistake, that usually leads to a pile of debt and little or no income, when the economy is up and everyone is fully employed, you can start just about any business and have some sucess, but in this enviroment we have now, you really have to plan, and check the area you plan to operate in, who is in the business now, and what is their business like?
Satcom not to ask a dump question. How do you check to see if there is a need? What is the number where you say, " well there are to many EC's in this area".

[brantmacga]

you need money bradyman; lots of it too. I found also that most banks aren't too willing to loan money to a small upstart EC; and for good reason I guess. Would you loan the money to something like this? I really wish I'd educated myself more before starting a business; and I really wish I had found this website before starting a business. There's a lot of things I did early on that really hurt me and made it a struggle to stay afloat. Guys like satcom, emahler, brianjohn, (and others who's name escape me at the moment) have good business advice. search for anything they posted relating to business.

[peter d]

Guys like satcom, emahler, brianjohn, (and others who's name escape me at the moment) have good business advice. search for anything they posted relating to business.

How could you forget me? :roll: :D

[satcom]

Satcom not to ask a dump question. How do you check to see if there is a need? What is the number where you say, " well there are to many EC's in this area".

Start with the county you are in, and search the filing records, of the type business you are looking into, also the labor department tracks every type of business by type and location, you can usually get a pretty good pic of the general health of that industry in your area, there are also firms for a fee, that can predict how a business may fair, your best fastest check is with local contractor assn, and business groups. Tax records are another good indicator.

Quote "If you don't know what balance sheets and business plans are, you'd better keep the horse in the barn until you learn how to saddle the horse first." Really good advice, every year we have over half of the new EC's go belly up, and they are usually above avarage electricans, but have not mastered the business side.

[rlane00]

Satcom not to ask a dump question. How do you check to see if there is a need? What is the number where you say, " well there are to many EC's in this area".

Check the local help wanted ads. If there are lots of ads for electricians then it's a good sign of strong demand (and weak supply)... a good time to get into business. If there are not very many ads then the opposite is true. This is a quick and easy way to check current supply and demand - but obviously limited information.

If you are a little more adventurous you could also investigate historical employee data (provided by local government website probably) to see the trend in electrician employment. If it is going up (more electricians employed than in past) then you are on the "good" side of the supply/demand curve.

[Mule]

Have your wife call several contractors (incogneto) ask about some 20hr job that she needs done. Find out how long until each contractor can get to it. That will tell you how much average backlog is out there.

Or if you have some contractor friends that you trust, just ask them. When I started a few months ago, most everyone in town was a month out, so I knew right away, I could get some of that work.

I know its sneaky, but its effective for your purpose

[cadpoint]

Check the local help wanted ads. If there are lots of ads for electricians then it's a good sign of strong demand (and weak supply)... a good time to get into business. If there are not very many ads then the opposite is true. This is a quick and easy way to check current supply and demand - but obviously limited information.
You could also watch Drafting or CAD postions as well, in the same vain as the statement made above. 1st hired for the work, first fired cause no work ... LOL, I know ...

Since your in a larger metro area, I would have to believe your better off then being from out yonder!

You could easy make 20 hours a week and send the others pouring into your own aspects of Business 101, Networking, PR, advertising, workshops, speed reading, ETC. Etc, etc ... It will not be 2 hats, ball cap to hard hat, it will be many hats, and many sizes that you will come to learn.

Many great statements have been made, I just want to add to pay yourself and cover your taxes.

Good Luck !

[bradyman1]

Thanks for the advice. I have been contemplating this for some time. I have my masters license and have all the paperwork done for the business (tax ID and that stuff). What do you think about asking the customers of my current empoyer for the letter of referal? Would you consider that stepping on toes? Also what would you suggest for bringing in the phone calls? I have been researching this and have found the following idea's:
Property management companies, Real estate offices, call landloards of vacant strip centers and request to be put on the bidders list for future tenants, join my chamber of commerce, network with all who will listen, hand out business cards at every opportunity, church newsletters, local small news papers, etc. (THANK YOU to all who have posted the above idea's on this post and past post). I will probably call past customers from my current company and try to revitalize my relation ship with them (most of these customers were lost by inefficiencies by others in our company). Does anybody have any other idea's?

Thanks
Jason

[brantmacga]

What do you think about asking the customers of my current empoyer for the letter of referal? Would you consider that stepping on toes?

I did that w/ some of my previous employer's longtime customers, but cleared it with the boss before doing so.

[emahler]

How could you forget me? :roll: :D

dude, you're wife is calling:D

[peter d]

dude, you're wife is calling:D

Ouch. ;)

.

[brantmacga]

dude, you're wife is calling:D

ha!


listen to peter too. sometimes. ;)

[jrannis]

Thanks for the advice. I have been contemplating this for some time. I have my masters license and have all the paperwork done for the business (tax ID and that stuff). What do you think about asking the customers of my current empoyer for the letter of referal? Would you consider that stepping on toes? Also what would you suggest for bringing in the phone calls? I have been researching this and have found the following idea's:
Property management companies, Real estate offices, call landloards of vacant strip centers and request to be put on the bidders list for future tenants, join my chamber of commerce, network with all who will listen, hand out business cards at every opportunity, church newsletters, local small news papers, etc. (THANK YOU to all who have posted the above idea's on this post and past post). I will probably call past customers from my current company and try to revitalize my relation ship with them (most of these customers were lost by inefficiencies by others in our company). Does anybody have any other idea's?

Thanks
Jason

Dont make the jump unless you have a steady cash cow. You will close up waiting for the phone to ring.
Take the dirty tough jobs nobody wants

[emahler]

ha!


listen to peter too. sometimes. ;)

yep....anytime he quotes one of the names listed, you can listen to him:D

[peter d]

listen to peter too. sometimes. ;)


If I were you I wouldn't listen to me at all. :D

[peter d]

yep....anytime he quotes one of the names listed, you can listen to him:D

Except "emahler." ;)

[emahler]

Except "emahler." ;)

no argument here...

[quogueelectric]

Dont make the jump unless you have a steady cash cow.
Take the dirty tough jobs nobody wants
Did someone mention me??

[Rewire]

The St Louis area is saturated with ECs now so you will be just another name in the book and with no state license almost anyone can be an EC in most areas.Everybody who has found themselves unemployed will be turning those side jobs into paydays so look for price shoppers in the small jobs.The problem with larger jobs is your time is eaten up on them you just can't drop everything and go do a service call or go bid your next job.Now we are heading into winter and slow work so starting a business will be a bigger gamble and you probably need to have a years income put back on top of your startup capital.

[khixxx]

When I investigated going on my own about 2 years ago. I found out I would need atleast $40k cash, and I would join a Nextstar networking.

[Sparky555]

Looking at mostly residential rehab/ service work, and light commercial (strip centers and the like).
We are a single income family. I have thought about the health insurance, vehicle, cell phone cost, I have a reserve that I can survive for several months on. I am planning on starting with a large job to kick start the business, to keep me busy for a month or 2, I would just need to build some customers rather quickly to keep moving in the right direction. I have excellect credit. I have already set up a company, have liability and workers comp., and a little cash in the business bank account. I just have not got that big job yet. I had a couple that were very promising but they fell thru. I have one contractor in particular that I will be working with, he is a small guy but does large money making projects. I have several other contacts I do not want to steal from my current employer but had considered asking them for a "letter of referral" to provide to potential customers stating that they had worked with me and was happy etc...

Ah, to be young & foolish again. Every out-of-work electrician takes on residential service & light commercial. It's the type of work that REQUIRES phone book advertising. Check out the phone books of your proposed territories. You want to have a display ad & not be too far down the list. Call DEX & price the ads like half page if that doesn't put you on page 6 of ECs.

Let's say the ad is going to be $1k/mo. Imagine how you'll feel getting a bill for $1k every month-calls or no calls. It happens. Now check some old phone books if you have them. See who tried playing with a big ad & couldn't repeat it the following year. Companies experiment with $10k+ ads that don't work.

Think a big job with a big boy will jump start you? What will you do when you have $5k in installed materials & the big boy ignores your invoices for 60 days? What if the big boy drops you for a better price & you just lost 50% of your business?

Good Luck!
Dave

[bradyman1]

Ah, to be young & foolish again. Every out-of-work electrician takes on residential service & light commercial. It's the type of work that REQUIRES phone book advertising. Check out the phone books of your proposed territories. You want to have a display ad & not be too far down the list. Call DEX & price the ads like half page if that doesn't put you on page 6 of ECs.

Let's say the ad is going to be $1k/mo. Imagine how you'll feel getting a bill for $1k every month-calls or no calls. It happens. Now check some old phone books if you have them. See who tried playing with a big ad & couldn't repeat it the following year. Companies experiment with $10k+ ads that don't work.

Think a big job with a big boy will jump start you? What will you do when you have $5k in installed materials & the big boy ignores your invoices for 60 days? What if the big boy drops you for a better price & you just lost 50% of your business?

Good Luck!
Dave

The contractor I am speaking of in particular is a very good friend of mine, and I have worked with him (on my own) in the recent past and know he pays less thatn 30 days. I have worked with him with my current contractor for the past 10 1/2 years and I know he is a very loyal and quick pay contractor. I have quite a bit of faith that he will use me exclusively for all of his work, he has not bid shopped us in the past 10 1/2 years. He however does have slow times, and he is an older gentleman that will probably retire within the next few years. I was not planning on his work being my only jobs, just a good jump start for me until I can make a name for myself.

I appreciate all the feedback and you have all brought up very good and valid points. Everyone has got me really thinking. Does anyone have any advice about establishing a name for yourself, and getting your phone to ring? I think this is my main concern at this point.

I am concerned about taking on projects that are large at first because I have seen the slow pay on these project 60-90-even 120 days. That is a long time for a 1-4 man shop to wait for payment. That is the main reason I am wanting to focus on the smaller commercial, residential, and service work. I do understand that you will often have to wait 30 (minimum) to 90 days for payment on these projects but a smaller project means less out to be waiting on, and if for some reason you run into legal issue's with the project you are not waiting for 6 months worth of payroll and overhead.

Again thank you for all of your help. And I look forward to any more advice that you can offer.

Bradyman1

[khixxx]

Does anyone have any advice about establishing a name for yourself, and getting your phone to ring? I think this is my main concern at this point. Bradyman1

Try to locate an EC that went out of business and try to get his phone number if you can.

[Sparky555]

The contractor I am speaking of in particular is a very good friend of mine, and I have worked with him (on my own) in the recent past and know he pays less thatn 30 days. I have worked with him with my current contractor for the past 10 1/2 years and I know he is a very loyal and quick pay contractor. I have quite a bit of faith that he will use me exclusively for all of his work, he has not bid shopped us in the past 10 1/2 years. He however does have slow times, and he is an older gentleman that will probably retire within the next few years. I was not planning on his work being my only jobs, just a good jump start for me until I can make a name for myself.

Bradyman1

I'm sure I'm over thinking this for you, but I've read some posts that start with..."I have a GC friend who isn't paying". My test on friends is do you have dinner at each others homes & do your children play together? Also if the one guy is so faithful why won't he stay with the current EC and give you that business?

On the plus side you look like you have more business than I started with, but my wife's work was my safety net in the early years. I just met a husband/wife handyman business & it looks like they're going down the drain after 4 years. Business mistakes or a bad economy can be unforgiving.

You need marketing to make your phone ring & you need money in the bank when it doesn't. One of the most memorable marketing stories I've ever heard was about a guy with a phenomenal business and super business skills. He placed $1M magazine ad that got one phone call. He had targeted the wrong audience.

Dave

[brian john]

Try to locate an EC that went out of business and try to get his phone number if you can.

Yeah nothing better that a failures handle.

[bradyman1]

I'm sure I'm over thinking this for you, but I've read some posts that start with..."I have a GC friend who isn't paying". My test on friends is do you have dinner at each others homes & do your children play together? Also if the one guy is so faithful why won't he stay with the current EC and give you that business?

On the plus side you look like you have more business than I started with, but my wife's work was my safety net in the early years. I just met a husband/wife handyman business & it looks like they're going down the drain after 4 years. Business mistakes or a bad economy can be unforgiving.

You need marketing to make your phone ring & you need money in the bank when it doesn't. One of the most memorable marketing stories I've ever heard was about a guy with a phenomenal business and super business skills. He placed $1M magazine ad that got one phone call. He had targeted the wrong audience.

Dave

He is a customer of the contractor that I currently work for. He is still with this contractor because of me (his words not mine) and I have been talking to him for several years about making the move. He has been urging me to do it for some time. He is more like a for lack of better words "mentor" for me. He wants to help me build my business and get me started on the right foot. Now I realize business is business but we have a long standing good relationship and I have never had him stiff me on a job. I handle any issue's he has now and deal with the job issue's on a one to one basis with him. He is basically my customer now, just through my current employer.

[khixxx]

Yeah nothing better that a failures handle.

lol true, I guess you either get prospects or death threats.

[haskindm]

He is a customer of the contractor that I currently work for. He is still with this contractor because of me (his words not mine) and I have been talking to him for several years about making the move. He has been urging me to do it for some time. He is more like a for lack of better words "mentor" for me. He wants to help me build my business and get me started on the right foot. Now I realize business is business but we have a long standing good relationship and I have never had him stiff me on a job. I handle any issue's he has now and deal with the job issue's on a one to one basis with him. He is basically my customer now, just through my current employer.

Yes this "loyal customer" is encouraging an employee of the contractor that he is loyal to to go into business for himself, promising to give him the business that he presently give his boss. Why? He is looking for you to do the work cheaper. Then he may encourage one of your employees to go on his own promising him "your business". I would not trust this guy as far as I could throw him! Your "friend" is conning you into stiffing your boss and sticking your neck out for his own gain. If you go into business and want to do business with him, that is up to you, but if you count on him to sustain your business, YOU WILL LOSE. Sure as the Sun comes up tomorrow. If you are convinced you can make it with or without his business, go for it. Otherwise, stay where you are and tell him to go con somebody else.

[jimmyglen]

Hi
I am in St. Louis so I might send you a P.M

I work for a "name" contractor and I worked in outside sales for a supply house for 18 years. I have seen little guys get big and big guys get bigger - or wiped out. and so on and so on

There is no one majic secret. Getting your name out there takes TIME and money. Mostly TIME. The guys you will compete against in the book have 20 years or more head start.

This doesnt mean it cant be done - do you have your STL city and county?

Jim

[bradyman1]

Yes I do but they are tied up with my current employer until I make the move.

[jimmyglen]

check your mail