Need help with estimating large job

[erusek]

Hey guys
Need some help with this job I'm estimating. Currently I'm a one man shop been in business for a year doing mostly residential. I did a service for someone who is a manager at a new data center and wants me in he asked me to submit a price for a good size job coming up. I'm going to look at it tomorrow but was wondering if I'm in over my head. I'm not concerned with the estimating, man power or job itself. I'm more concerned with the insurance end and how this whole process works if I get the job.

Do I need to tell my insurance company about the increase in man power? and what will they charge because it will only be for 1 month for 5 guys
Do I need to get a payroll started? or can I pay cash
How does the contract process work when do I present it and etc
Is it common for contractors to hire people for cash without telling their insurance company?

I know this may sound nieve but I never saw this end of the business and I really need help getting this part down because the work part is not the problem and the estimating part is still shaky but will get there just don't know how to run the business part with contracts and insurance any help or advice on further knowledge is greatly appreciated.

 

[mcclary's electrical]

Hey guys
Need some help with this job I'm estimating. Currently I'm a one man shop been in business for a year doing mostly residential. I did a service for someone who is a manager at a new data center and wants me in he asked me to submit a price for a good size job coming up. I'm going to look at it tomorrow but was wondering if I'm in over my head. I'm not concerned with the estimating, man power or job itself. I'm more concerned with the insurance end and how this whole process works if I get the job.

Do I need to tell my insurance company about the increase in man power? and what will they charge because it will only be for 1 month for 5 guys
Do I need to get a payroll started? or can I pay cash
How does the contract process work when do I present it and etc
Is it common for contractors to hire people for cash without telling their insurance company?

I know this may sound nieve but I never saw this end of the business and I really need help getting this part down because the work part is not the problem and the estimating part is still shaky but will get there just don't know how to run the business part with contracts and insurance any help or advice on further knowledge is greatly appreciated.

If you're a one man shop, you probably don't have workmans comp,which you will need for most commercial work. If you don't insure the guys, your workmans comp/ and or GC/ will want the guys to have their own.

About paying them, I would stroke them a normal check for that month, don't worry about payrolling them for one month, just 1099 them when you are done.


Thridly, if the value of the building (at total loss) exceeds what you are insured for now, then yes, you need to let your liabilitycarrier know about it. You don't wanna wire million dollar homes being insured for $100,000

 

[satcom]

If you're a one man shop, you probably don't have workmans comp,which you will need for most commercial work. If you don't insure the guys, your workmans comp/ and or GC/ will want the guys to have their own.

About paying them, I would stroke them a normal check for that month, don't worry about payrolling them for one month, just 1099 them when you are done.


Thridly, if the value of the building (at total loss) exceeds what you are insured for now, then yes, you need to let your liabilitycarrier know about it. You don't wanna wire million dollar homes being insured for $100,000

A lot will depend on what state he is in, some states require everyone to be covered if they are a corporation, one man or ten, it does not matter, but who would be crazy enough to work with out comp coverages and who in their right minds would hire anyone with out it. Libality coverages and limits are another concern when your in business.
In my state it is illegal to 1099 employees working for electrical contractors.

Check your state laws.

 

[Article 90.1]

Time to sit down with a CPA, attorney and insurance people. They need to know what you are getting into so that you stay protected, legally, and financially. There are advantages and disadvantages of how you set up how to pay your employees, or subs. I don;t know the exact details, but as far as I understand it that as of Jan. 1, 2010 you can no longer contract without WC, and pay your subs (who the IRS will look at as employees) with a 1099 arrangement. Continue doing research, as I'm not clear about this last statement.

 

[ksmith846]

For a one month job you can rent a few guys from a labor company. For longer term hiring you can run their payroll through a staff leasing company and they will hold the Workers Comp Insurance for the men and you can still be exempt. You are still however responsible for the liabilty of having them perform the work under your supervision. You decide if it's worth the risk...maybe it is if your just getting going at this game.

 

[growler]

he asked me to submit a price for a good size job coming up. I'm going to look at it tomorrow but was wondering if I'm in over my head.

Yes, you are in over your head but that's how you learn to swim.


The first thing to do is look at the job and then study the plans to figure out how you are going to do the job. Do you really need five guys for a month or maybe just a couple of guys for the first two weeks and then seven guys for a few days and then back to two guys. Getting a bunch of guys just standing around with nothing to do is a quick way to go in the hole. Figure out how you are going to use your labor.

You don't just submit a price for a job like this, you will need to submit a proposal of how you expect things to go. This will include what you will do and what you will furnish and what you won't do and won't furnish. Scope of work and exclusions and also how and when you will be paid to include any draws or front money. If you can agree on the terms that's when a contract is submitted and signed to keep everything nice and legal and cover your butt.

Don't rush yourself, make sure you know what things are going to cost before giving a price.

 

[CopperTone]

I think you should walk before you run. Someone here once said this "you should have at least the amount of the contract in the bank as cash or you can't afford to do the job."
You would have to pay your workers comp upfront and you have to make payroll every week. Do you have enough money for that? you probably will have to pay a stock bill before you get paid as well. You need more money than you think to keep the ball rolling.

I have turned down jobs that I wanted to bid and do but it simply were too large for my current set up. sucks but its true.

 

[hardworkingstiff]

This is good for you. Spread your wings. Good advice has been given and I hope you follow it.

Work above board, which will include payroll (not a 1099), workers comp, unemployment insurance, SS contributions, etc. A temp service may be the way to go on this, but it will cost you some money. They will handle all that stuff and bill you. The good part about it is you don't get any unemployment claims go against you (keeps your future payments lower).

Make sure you understand the payment terms and that you can live with them.

Make sure you understand the contract when it comes time to sign it.

Good luck.

 

[dmagyar]

Don't underestimate how many problems you'll have to solve

Don't underestimate how many problems you'll have to solve

When going into an existing commercial space, make sure you either: include money for contingencies like legacy code issues or exclude them completely. On one TI I was working in a space where the earlier installation was very bad and poorly inspected, I ended up having to fixing everything that the new inspector caught from the floor with the ceiling openned up. It was alot of time and money. In the end I ended up eating alot of that cost because I didn't properly address legacy issues in my bid. Plus when through, the owner wasn't that impressed because of those issues and the extra time it took to pass the final while he was paying rent on a space he couldn't occupy.

P.S. Imho you'll need more men & money than you can account for in your bid. In a data center the problems are multiplied because of the nature of data centers needing to be "UP" all the time & short duration, etc.
Good Luck.

 

[jusme123]

This is good for you. Spread your wings. Good advice has been given and I hope you follow it.

Work above board, which will include payroll (not a 1099), workers comp, unemployment insurance, SS contributions, etc. A temp service may be the way to go on this, but it will cost you some money. They will handle all that stuff and bill you. The good part about it is you don't get any unemployment claims go against you (keeps your future payments lower).

Make sure you understand the payment terms and that you can live with them.

Make sure you understand the contract when it comes time to sign it.

Good luck.

good advice Lou!

 

[erusek]

Thanks everyone

Thanks everyone

Just wanted to say thanks for all the replies and help. I would be very lost many times over if it wasn't for this forum. It's great to have a place where someone can come to get knowledge from experienced electricians. Thanks again for all the unselfish help.

 

[wireguru]

expect to carry big insurance. a DC i was in required 5million general liability (not 1mil + umbrella, but 5mil in primary liability) plus a bunch of other difficult stuff. get a copy of their insurance requirements and give it to your insurance co.