electrical business
- Thread starter sparky723
- Start date
- Status
resistance
Senior Member
- Location
- WA
I've been in business for some time now, and it's not easy for small businesses!!! May sound uncanny, but it's the truth!! 480 has hit the nail on the head for the most part, and I recommend you heed to the advice given!!
kwired
Electron manager
- Location
- NE Nebraska
I do work in population areas of less than half the size of the town you mentioned. I have to travel to a lot of my work - but it is usually less than an hour drive away. Big city guys can drive for just as long and actually not travel as far. I started business 12-13 years ago. There are good times and bad times. Health insurance is a big thing, especially if you don't have a spouse that has health insurance at their job that will cover you. Mine is high decuctable, no copays, no prescriptions - just to get an affordable premium, then they raise it every year until you look for another company and start over again.
When I first started I got a lot of work for anyone that wanted work done cheap. I don't know how cheap I was compared to my competitors, but have learned that this only gets you work for certain types of customers and I didn't care to work for most of them. I have at least doubled my labor rates from when I first started. I don't get too many complaints, and I don't get too many people that I don't care to work for anymore. I do get a lot of people that think I charge too much, but usually find out that they had a hard time with the other guy that they thought would be cheaper.
Being honest with customers is still the best. If you are higher than someone else tell them why. If they don't care you don't want to work for them anyway.
Advertising in rural areas is different than in the larger cities. I ran radio ads when I first started. People that I knew always said I heard your ad. When I received calls from people I did not know to do work, they always said they had a friend (that I also knew or worked for) that refered them to me. I don't know if I ever received a call because of my radio ads. Signs on your vehicle are probably the best advertising money you can spend.
I worked alone for several years and hired an apprentice about 2 years ago. This has good and bad also. Having a journeyman sounds like a better deal, but they want more money, which is fine, but you better have work for them to do or you will either spend a lot for them to clean up the shop or cut their hours and they will look for another job.
If I could do it all over again I may do some things differently but I would still do it. Small towns have a lot of other businesses just like you - they know what to do with their trade but they have no experience in owning a business. I would have done things different if starting today - just being able to read the comments on this site would have made that happen. I did not even own a computer until in business for 1.5 to 2 years, now it is used for a lot of things.
shepelec
Senior Member
- Location
- Palmer, MA
Don't forget to say good bye to,
Paid holidays
Paid vacation
Sick Time
A paycheck every week
Health insurance
Life insurance
Unemployment insurance
Don't get us all wrong, owning your own business can be great. I personally find it very rewarding, stressfull and sometimes depressing. Just make sure you are aware of what you are getting yourself into. Remember, if you don't do it, it won't get done.
Paid holidays
Paid vacation
Sick Time
A paycheck every week
Health insurance
Life insurance
Unemployment insurance
Don't get us all wrong, owning your own business can be great. I personally find it very rewarding, stressfull and sometimes depressing. Just make sure you are aware of what you are getting yourself into. Remember, if you don't do it, it won't get done.
stevenje
Senior Member
- Location
- Yachats Oregon
Sparky732,
I don't think that you are listening to all of the great information that is being presented to you by the membership. It doesn't matter where you live or how big your customer base is, every business should start out with a basic business plan which of course is modified and expanded as time goes on.
A business plan is the road map on how to get a business started and a guide for where you would like to take it in the future. It keeps evolving as your business grows. Take the advice that is given on this forum and do a little research on setting up a business plan. It isn't rocket science, it's just a plan.
You asked to list the population of the city we serve the most. My answer is I came from a metro area with a population of 3 million and moved to an area with a population of 3000. Big change in population, but the basic business plan is still the same.
Remember, an hour of planning is worth eight hours of work. That's why you need a business plan.
In short, 'Plan your work.... Work your plan'.
hurk27
Senior Member
- Location
- Portage, Indiana NEC: 2008
One word I can say that is one of the most important is discipline
over the years, I have seen some of the most successful business people were ex military, and one thing that used to get taught in the military was discipline! it goes a long way to sticking to what you need to do, and sticking to it. not taking the easy way out all the time.
Like not going out and spending the money as fast as you get it in, build that bank up first before you start spending, I call it a buffer, as it takes out the hills and Vally's in this roller coaster ride were on. put off buying that new car or van till you get that bank up there.
How do you get discipline?
Practice, practice, practice.
you do this by stopping and thinking things through, sort of not getting the cart before the horse, doing what needs to be done before doing what you want to do.
And when you can do that, things will start to come easier, things will fall into place, and before you know it, you will have a company that seems to run its' self, because others around you will see your determination, and fall into place or get the boot.
Always keep an open mind, and seek advice but always seek the truth of the advice your are given.
good luck as I know I'm going to need it also, but it seems everyday gets a little brighter, just not at the end of the tunnel yet.
over the years, I have seen some of the most successful business people were ex military, and one thing that used to get taught in the military was discipline! it goes a long way to sticking to what you need to do, and sticking to it. not taking the easy way out all the time.
Like not going out and spending the money as fast as you get it in, build that bank up first before you start spending, I call it a buffer, as it takes out the hills and Vally's in this roller coaster ride were on. put off buying that new car or van till you get that bank up there.
How do you get discipline?
Practice, practice, practice.
you do this by stopping and thinking things through, sort of not getting the cart before the horse, doing what needs to be done before doing what you want to do.
And when you can do that, things will start to come easier, things will fall into place, and before you know it, you will have a company that seems to run its' self, because others around you will see your determination, and fall into place or get the boot.
Always keep an open mind, and seek advice but always seek the truth of the advice your are given.
good luck as I know I'm going to need it also, but it seems everyday gets a little brighter, just not at the end of the tunnel yet.
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Don't forget to say good bye to,
Paid holidays
Paid vacation
Sick Time
A paycheck every week
Health insurance
Life insurance
Unemployment insurance
If you don't include these items, you will be one of the guys that thinks he has no overhead, or operating expenses, all of these items have to be included from day one, if you can't provide these, you are not in business, you are a day labor worker.
mtfallsmikey
Senior Member
Well, I'm a 3rd gen. plumber, and an electrically-related individual, and what you and others have posted relates to any business, not just electrical....there are just as many shysters, jacklegs, and ripoff artists in plumbing, roofing, drywall, HVAC as electrical.
readydave8
re member
- Location
- Clarkesville, Georgia
- Occupation
- electrician
I've seen more new businesses fail than I've seen suceed. I started out thinking I could work cheaper, set my own hours, etc, etc. The only thing that kept me going the first 10 years was that I was too stubborn to admit that my business was not doing well.
In 1988 I grossed $250,000, after expenses got $17,000 (total--no benfits paid by the business, only perk was I used work truck for personal trips. And personal trips turned out to mostly be driving to work).
Nobody had mentioned a business plan to me when I started out, or either I wasn't listening. I'm happy with the way things turned out, but it probably was more difficult than it had to be.
In 1988 I grossed $250,000, after expenses got $17,000 (total--no benfits paid by the business, only perk was I used work truck for personal trips. And personal trips turned out to mostly be driving to work).
Nobody had mentioned a business plan to me when I started out, or either I wasn't listening. I'm happy with the way things turned out, but it probably was more difficult than it had to be.
sparky723
Senior Member
- Location
- Haskell,Tx
GUNNING
Senior Member
- Location
- Gainesville, Florida
Great customer! Lots of work!!
Great customer! Lots of work!!
I didn't know I was loosing money the first two years I was in business. My wife told me to get a copy of Quickbooks. I found out I had been working for one contractor for a year and he hadn't paid me, at all!! He had all kinds of work. Kept me busy all the time. Its the little things that trip you up. At the time I thought I had a great system. Work cheap ($25 an hour) and keep busy. I had people calling me up at 2 in the morning yelling at me why hadn't I done this or that?? The higher the rate the less those calls came in. I discovered people equate cost with quality and respect. I have one electrician friend when asked how much he charges says "a dollar a minute". Now that keeps them from helping. I also discovered the cost/demand curve. You can charge twice as much for something and work half as much. In other words you can adjust your demand by charging more for your services. There are a lot of variables but for me it generally works.
Great customer! Lots of work!!
I didn't know I was loosing money the first two years I was in business. My wife told me to get a copy of Quickbooks. I found out I had been working for one contractor for a year and he hadn't paid me, at all!! He had all kinds of work. Kept me busy all the time. Its the little things that trip you up. At the time I thought I had a great system. Work cheap ($25 an hour) and keep busy. I had people calling me up at 2 in the morning yelling at me why hadn't I done this or that?? The higher the rate the less those calls came in. I discovered people equate cost with quality and respect. I have one electrician friend when asked how much he charges says "a dollar a minute". Now that keeps them from helping. I also discovered the cost/demand curve. You can charge twice as much for something and work half as much. In other words you can adjust your demand by charging more for your services. There are a lot of variables but for me it generally works.
stevenje
Senior Member
- Location
- Yachats Oregon
hurk27
Senior Member
- Location
- Portage, Indiana NEC: 2008
Sparky here is a PDF report done by a independent source for Super Pages as to how most people who need a trade or item will search for this need, I received this by a sales man trying to convince me to invest in to an ad with them to get my name out there, it looks like the yellow pages is the highest percentage of where people will look. now in my experience I believe this is true as most people who don't have a regular electrician or just moved into an area will first look in the yellow pages, and it is a very good idea but with one draw back, it is a bill that keeps coming and has no cut off as once you are in there you will have to pay no matter what, until you can have it remove the next year, and its kind of done like a no collateral load.
with me and my cash flow problems just starting out, its hard for me to decide to get locked into this kind of agreement until I know what my cash flow will be, since I use my cell phone I have no listings anywhere for local people to find me even if they know I'm out there looking for work, so I think it will be a must to at least just get a simple listing with my company name maybe in bold, and $40.00 is not a lot to get locked into. but its scary as once it is published you are bound by the contract to pay no matter if you get work or not. and if work does pick up enough, then in the next year or two, getting a little bigger ad aimed at the type of work your wanting to do might be a good investment, but starting out and trying to keep the over head down, we can be presented with some tuff choices we have to make.
It is too large to upload so I'll copy the perntnit info:
As you can see the Yellow Pages phone book is the highest return.
with me and my cash flow problems just starting out, its hard for me to decide to get locked into this kind of agreement until I know what my cash flow will be, since I use my cell phone I have no listings anywhere for local people to find me even if they know I'm out there looking for work, so I think it will be a must to at least just get a simple listing with my company name maybe in bold, and $40.00 is not a lot to get locked into. but its scary as once it is published you are bound by the contract to pay no matter if you get work or not. and if work does pick up enough, then in the next year or two, getting a little bigger ad aimed at the type of work your wanting to do might be a good investment, but starting out and trying to keep the over head down, we can be presented with some tuff choices we have to make.
It is too large to upload so I'll copy the perntnit info:
As you can see the Yellow Pages phone book is the highest return.
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Rewire
Senior Member
- Location
- Lake of the Ozarks
Keep asking it's the best way to learn.We have been at this six years asking and getting answers and at the first of september we will open our first franchise. good luck and keep swinging for the fence.
readydave8
re member
- Location
- Clarkesville, Georgia
- Occupation
- electrician
me too ..........................
Split Bolt
Senior Member
- Location
- Northern Virginia
Hey Sparky723. Although it may seem like you are getting ganged-up on by everybody, you are really getting a great service by people who have been where you are right now! PLEASE, for your own benefit, absorb as much of this free advice as you can! It is not a cakewalk going out on your own, but it is not impossible either. When I first went out on my own in 1989, I was working for a company that did mostly retail stores in malls. Since I knew how to do this work very well and the stores usually provided their own lighting fixtures, I figured it would be a snap to bid on a few small ones to start, then work my way up to the larger ones. Boy did I get an education! When I turned-in my first bid on a small store, I got a call back from the GC asking me if I was serious. He told me what their budget for electrical was and it was lower than what I was going to have to pay for the materials alone! (years later, while talking to my former boss, he told me that he loses money on all of the bid jobs, but makes his money with inevitable change orders that occur during the job!) I then set my sights on residential, where the materials were something I could afford to wait to get paid on. I have settled on doing mostly service work. There is a steady cashflow and it's not very hard to keep myself busy.
Some other things that I want to bring-up are supply house credit and employees. Can you afford to pay your supplier on 30 day terms while the GCs are paying you on 45 to 90 day terms? Don't think that, because you are a good electrician and worker, everyone you hire will be the same way. They won't! When I have hired electricians and helpers over the years in order to "take on more work," I definitely ended up working more...going around fixing their screw-ups for free and doing PR work to keep my clients happy! I thought I could work my butt off to build the business, then get some other people to do the work while I ran the office. The problem with that is you are selling yourself to the client with your good work so well that they don't want your electrician, they want only you!
Many people told me about business plans and all the other stuff, but it went in one ear and out the other! TAKE THE BUSINESS COURSE AT NIGHT AT YOUR LOCAL COMMUNITY COLLEGE!!! "I'm tired of making money for the man, so I'm going to make it for myself" is NOT a business plan. As far as advertising, I'm not a fan of phone books. People don't use them that much anymore, and the ones that do call the first companies listed. (AAAAAAL'S ELECTRIC SERVICE) Be creative. I did the door-to-door fliers during slow days with some success and got recent home sales records from the county and sent "Welcome" letters to the new buyers.
Above all, go for it! But read what all of these people are telling you. They only want to make sure they will read your future success stories!
Good Luck!
Some other things that I want to bring-up are supply house credit and employees. Can you afford to pay your supplier on 30 day terms while the GCs are paying you on 45 to 90 day terms? Don't think that, because you are a good electrician and worker, everyone you hire will be the same way. They won't! When I have hired electricians and helpers over the years in order to "take on more work," I definitely ended up working more...going around fixing their screw-ups for free and doing PR work to keep my clients happy! I thought I could work my butt off to build the business, then get some other people to do the work while I ran the office. The problem with that is you are selling yourself to the client with your good work so well that they don't want your electrician, they want only you!
Many people told me about business plans and all the other stuff, but it went in one ear and out the other! TAKE THE BUSINESS COURSE AT NIGHT AT YOUR LOCAL COMMUNITY COLLEGE!!! "I'm tired of making money for the man, so I'm going to make it for myself" is NOT a business plan. As far as advertising, I'm not a fan of phone books. People don't use them that much anymore, and the ones that do call the first companies listed. (AAAAAAL'S ELECTRIC SERVICE) Be creative. I did the door-to-door fliers during slow days with some success and got recent home sales records from the county and sent "Welcome" letters to the new buyers.
Above all, go for it! But read what all of these people are telling you. They only want to make sure they will read your future success stories!
Good Luck!
brian john
Senior Member
- Location
- Leesburg, VA
You need to get the proper licenses in your area.
You need to get some market research done.
You need to get a business plan laid out.
You need to get a balance sheet.
You need to get any bonding required.
You need to get general liability insurance, usually $1mil. minimum.
You need to get a working advertising campaign.
You need to get at least one years' worth of money saved up to live on.
You need to get customers.
THEN you can get going.
Talk to a lawyer, a banker and accountant about your game plan and get their input.
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Split Bolt
Senior Member
- Location
- Northern Virginia
Oh, one more thing: Don't burn any bridges! I left that company that I mentioned (that did stores in malls) on good terms. My first winter alone, things came to a grinding halt. Since I had maintained my friendship with my ex-boss, I went to talk to him. He told me he had a large store coming-up and would let me wire it for him as an employee as long as I promised not to leave until it was done. I agreed and did my stuff in the evenings and on weekends through the winter! I have a lot of friends who are ECs and we try to help each other out during both the super busy and super slow times!
hardworkingstiff
Senior Member
- Location
- Wilmington, NC
Very well said Split Bolt!
- Status