Any advice for an electrical contracting newbie.

[Flux]

I was laid off here recently after I finished running two X-ray rooms at a hospital (one man band style) I wasn't tied in.
Before that at the previous company I ran 43 stories of slabs (many man band style) rain or shine even came down with
pneumonia before I was laid off for taking too much time off after death in the family. Bottom line
I am done waiting on the books for a job that I bust my hump at just to get laid off when times get slow
so they can keep their buds who do nothing but suck money out of projects making it harder on the producers:rant:.

So license and insurance in hand I go. I was just wondering if there are any newbie mistakes to avoid,
pearls of wisdom anyone can share, or pitfalls to look out for that kind of thing?
Thanks

 

[ptonsparky]

Don't slam any doors behind you.
Charge enough to make enough.
If you don't work you won't get paid
No job is complete until the paperwork is done.
Some jobs, you are better off not getting.
Lay off the alcohol and drugs.

 

[Dolfan]

Enjoy the ride, you will be fine. I started just as the economy took a dump and I'm still around.

 

[brian john]

Be fair, be honest, do right and when you get to the point where you have employees, treat them like you wanted to be treated when you were an employee.

 

[wolfman56]

Don't fall into the trap of thinking you have to charge low prices to get your foot in the door. All you would generate is cheap customers that will drop you as soon as you up your prices. You should get paid enough from every job that if you never saw the customer again its OK. With that in mind never let a customers explaining that there is much more to come, or that he'll get you in with all his contacts, that all you need to do is give him a great price on this job. Even if he did tell others, he'll be telling them to expect cheap prices.

Always try to get COD, but if you must wait for payment then demand enough upfront to cover at least your materials. Get a credit card that gives flyer miles. Buy all your materials and more with it. Use the miles for vacations. You can still open a cash account at the supply houses for good pricing.

If your like most start ups then you have more time then money. Many will disagree with me but I recommend you buy a book and software and learn to do your own website very well. You'll never regret it, because the lower you can keep your monthly obligations the better off you will be, for not having to sweat it those months income is low.

RW

 

[hurk27]

Biggest mistake I see new contractors doing is as soon as they get paid on a big job they race to buy expensive toys.

Work hard at building up a buffer in a bank for when times are slow, don't buy something unless you absolutely need it, rent tools and equipment until you can afford to maintain them.

Also try as hard as you can to make your customers happy as happy customers are returning customers.

Make you contracts clear and always have a disclaimer for added items after the bid has been accepted, put a disclaimer in it that says if you don't supply it you don't warranty it, if something fails that you didn't supply it will be a service charge to repair it or replace it.

I think mine says materials supplied by others are not covered under any warranty
Any thing extra above and beyond this bid with be charged on a time and material bases, something like that.

 

[Fulthrotl]

So license and insurance in hand I go. I was just wondering if there are any newbie mistakes to avoid,
pearls of wisdom anyone can share, or pitfalls to look out for that kind of thing?
Thanks

take a look at this:

http://www.barebonesbiz.com/

you can download her "weekend biz plan" and do it this weekend.

you really need to know what you need to charge an hour to
make a living.... not what shows on the bill, but what you
need to have come in the door for every billable hour.

it's a LOT more than you think it'll be. honest.

if you don't have a biz plan and a budget, and KNOW what
your expenses are, you'll end up toasted.

 

[peter d]

Contracting ain't all it's cracked up to be. You think the grass is greener on the other side, and when you get there you find out there's no grass at all sometimes. I'll leave it at that.

 

[BAHTAH]

Newbe

Newbe

Keep your overhead low, don't buy all new equipment but instead look for good used items when possible. We spend years learning how to be good electricians, then we go into business as contractors often knowing little or nothing about business. Get sound business advice from experience business resources. There are many retired business groups that offer free advice to those starting a new business, take advantage of the resource. If you have the choice of getting the job done with the purchase of a new tool or hring an employee, buy the tool. Remember contracting is not a hobby, stay on top of your accounts receivable, your not a bank for those you do work for. You will find out soon enough that being in business is 24hrs a day 7 days a week, even when your away on vacation but the satisfaction and rewards are worth the effort. Don't make the mistake of figuring out what your making per/hr.

 

[cowboyjwc]

Treat every customer like they're your only customer. Good enough is never good enough. Do it like you would want it done at your house. When you are on the job and getting paid, turn the cell phone off. When you're at my house you're working for me now, if you want to talk about another job, do it on your own time or theirs.

I think that all the other guys have given you great advice. About the tools, if you need it for one job, rent it, if you need it more often then think about buying it. Ask some of these guys how many of them have tools that they hardly ever use. Or as I did get to be friends with some of the other EC's you can exchange work and tools sometimes.

 

[electricblue]

take a look at this:

http://www.barebonesbiz.com/

you can download her "weekend biz plan" and do it this weekend.

you really need to know what you need to charge an hour to
make a living.... not what shows on the bill, but what you
need to have come in the door for every billable hour.

it's a LOT more than you think it'll be. honest.

if you don't have a biz plan and a budget, and KNOW what
your expenses are, you'll end up toasted.

X2. All great advise here.

 

[zbang]

But wait! There's more!

Keep scrupulously accurate books; unless you really like doing them, hire someone for a couple of hours a week to manage that side of things.
Don't forget about paying the taxes. If you can, use a separate bank account for the sales tax you collect.
Don't forget about things like "paid vacation", build that cost into prices.
Have a lawyer available in case you need a contract reviewed or need help collecting.
Read up on mechanic's liens in your area, you may need to file one.
Nolo Press books are good, well worth the price. There's also a lot of good stuff on their web site.www.nolo.com.
Don't be idle, if you're not working, you should be selling or studying.
Consider finding a niche and filling it. How many people in your are really know, say, dental offices? Is there enough work to emphasize them? You also mentioned doing xray rooms, can that be a marketing tool?

Read a couple of years back in this forum .

 

[Flux]

Thanks to all who posted I am just sitting down at the computer now I have been dealing with a service upgrade and a new panel all day.
I have done little residential and there has been a learning curve for instance installing a service mast requires knowing how to install flashing
who would have thunk I would have to shorten my and knock my brains out to become a part time roofer kidding if there are any roofers out there:angel:.

Ptonsparky it’s hard not to slam the door at times as the saying goes your never know when you might need to go back through it or cross it.
Dang you mean I can’t get wasted at work anymore that’s a deal breaker I quit drinking a while back yeah I am a quitter.

Dolfan thanks I will try

Brian john I think most of us that are in electrics are honest it’s an honest living I mean there are a lot easier ways to make a living out there.
I hope as an owner I can be as fair as when I ran a crew I spoke my mind and didn't have favorites and they respected that.

Got to go I will finish the replies later thanks all

 

[dduffee260]

Remember the first few years you will actually be working for very little or free building up stock and equipment. After you get by for a few years learn to be a businessman and make knowing electrical work secondary.

Also remember to ALWAYS get material quotes from several suppliers. Watch out for the insurance industry. On all your projects keep detailed time for job costing so you will always know where you are at.

The biggest mistake contractors make is not knowing thier true overhead costs. Get these down so when you are bidding a job you will absolutely not lose money.

Stay calm and remember if you are good at what you do. You will get more work than you can handle. Good luck !!

 

[readydave8]

One problem I had when starting out had to do with handling money. I had to learn that if I got a check for $100, only $8 of it was mine. In the beginning I would spend $200 of that $100.

 

[GUNNING]

Plumber

Plumber

Become a plumber,

when the water is running no cost is too high.

 

[storeytime]

There are already a bunch of very good answers here. I'll try to throw out a few.

The best help I got was from joining an electrical contractor association. I went to the meetings, got to know them and I was amazed at how much
they wanted to help me succeed even though we were all competitors. I have had my butt saved many times by listening to their advice and horror
stories. The best advice I ever got was from a contractor friend who said, "Don't try to get too big too soon." Of course, I didn't heed his advice and
have paid for it many times over.

Number one thing I would tell you is don't use tax money to operate on, thinking that you'll catch that up on the next check from the next job. Deduct it as you collect it. If you don't you will be in tax trouble. Try to do this as debt free as you can. Get down payments every single time you can. I don't know if this fits you or not, but I was having so much early success that I played the big shot contractor. The other big boys weren't asking for down
payments so I didn't either. The difference was that they could afford to do that. I couldn't. You need to operate on the customer's money every time
you can.

Last thing someone else already said - Learn early on that you don't want every job. Learn to recognize the ones that you don't want. Don't base your price on trying to beat the lowballler guy who's going around undercutting you and everyone else. Price your work based on what it takes to keep the place open and make a profit.

Good luck to you!