Tell me it's not so...Has our trade hit bottom with prices?????

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Seems like we have the same problems down here in Florida that EC's are having across the states. Depending on who you have been doing business with for the past however many years makes a big difference on how much work you currently have going. I saw many post about keeping your customers or GC's happy and you will still get a good shot at the job, but depending on who you are working with or for, that could be the farthest from the truth. Our company was built and practically funded by doing work for the Univ. of Florida, or CM's with contracts with the University. Our CM's have always loved our quality of work and finished products we have given them over the years, therefore always keeping us in mind when awarding the job even though we may not have been the low bidder. Now days though, the University is actually forcing them to only take sealed bids and using the lowest guy, therefore throwing quality, reputation, and everything else we have built leading up to this day out the window. Builders and owners are working with such tight budgets now days, they are trying to get the most for their money, which in turn, is forcing them to go with the lowest bidder, no matter the reputation you have spent years to build or the references of the guy who just beat you by 30%!


Recently I was speaking with a contractor who has performed State Education work in NY for decades. He stated that the procedures of bidding/bid acceptance has been modified, generally to allow non-qualified companies (with no record of work) to bid these packages. This has pretty much excluded this contractor (and similar, experienced contractors) from winning any bids. Some jobs have even been awarded to contractors that bid lower than cost. The State is initially saving money due to lower bids.
But we are now seeing some of these contracts going to default and the bond company taking them over...rarely a good thing.

...yes, times have changed. I just wonder how long the legitimate contractors are going to last. Since this is a protracted economic downturn, we are starting to see much dissatisfaction by these contractors.
 

480sparky

Senior Member
Location
Iowegia
Recently I was speaking with a contractor who has performed State Education work in NY for decades. He stated that the procedures of bidding/bid acceptance has been modified, generally to allow non-qualified companies (with no record of work) to bid these packages. This has pretty much excluded this contractor (and similar, experienced contractors) from winning any bids. Some jobs have even been awarded to contractors that bid lower than cost. The State is initially saving money due to lower bids.
But we are now seeing some of these contracts going to default and the bond company taking them over...rarely a good thing.

...yes, times have changed. I just wonder how long the legitimate contractors are going to last. Since this is a protracted economic downturn, we are starting to see much dissatisfaction by these contractors.


It's caused by Big Box stores spending $billions convincing every living human that the only thing that matters is the low price. Some call it Walmarting. Henry Ford was an early pioneer in the idea. He didn't just make cars. He owned railroads, coal plants, steel mills, rubber factories, petroleum companies, lumber mills, glass factories, ..... if it was a component that ultimately went into a Ford, or in any way was associated with a component, Henry wanted to control it. Not just have a passing interest in it.... he set out to dominate that aspect of the auto industry. All for the sole purpose of making cheap cars.
 
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__dan

Senior Member
stuff in this thread escapes me

489$ days would be fine if consistent
 

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Electric-Light

Senior Member
What I hear in your response is a person who unknowingly degrades the value of the talented people of this industry. Those who enter the industry as new.."noobs' business owners, have every right as a citizen to charge whatever they feel like. Yet this degrades the industry as a whole and does not necessarily benefit anyone in the long term. Yes we have a system that permits people who are uneducated/ignorant in business practice to become licensed, unfortunately I suspect it is also one of the pieces to the puzzle that has kept the installation portion of the industry at the level it is today.

So what are you suggesting? That the .gov control the pricing of goods and services?
 

__dan

Senior Member
:)

What exactly are we looking at?

That is one day of the NQ, the CME futures contract of the QQQQ, the Nasdaq 100 technology stock index.

Here is the first and last freebie on the subject that will save the time and money of coming by the information. The charting platform is Neoticker and .. use an electronic simulator to try it, don't go in with real money.

testing, pictures one at a time open in the post:
 

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kwired

Electron manager
Location
NE Nebraska
It's caused by Big Box stores spending $billions convincing every living human that the only thing that matters is the low price. Some call it Walmarting. Henry Ford was an early pioneer in the idea. He didn't just make cars. He owned railroads, coal plants, steel mills, rubber factories, petroleum companies, lumber mills, glass factories, ..... if it was a component that ultimately went into a Ford, or in any way was associated with a component, Henry wanted to control it. Not just have a passing interest in it.... he set out to dominate that aspect of the auto industry. All for the sole purpose of making cheap cars.

Look what happened to US automakers in recent years.

Competition is good. It weeds out the ones that are not serious enough.

Someday somebody else will likely put WalMart in its place. There have been other companies that were once large giants in their industry that are now gone or no longer the giant they once were.
 

480sparky

Senior Member
Location
Iowegia
Look what happened to US automakers in recent years.

Competition is good. It weeds out the ones that are not serious enough.

Someday somebody else will likely put WalMart in its place. There have been other companies that were once large giants in their industry that are now gone or no longer the giant they once were.


Competition is one thing. Completely taking the industry over is quite another. Henry Ford set out to control every single aspect of making cars, and if that caused the other car makers out of business..... well, good ol' Henry would end up with a monopoly by default. You can't make cars if you can't buy steel, glass, rubber, etc.

Not that WalMart is intentinally trying to create a monopoly, but they are creating an entire generation whose attitude is "low price is king". They couldn't care less about service, safety, licensing, permits, etc. Towards that end, I am increasingly finding folks who want work done sans permits. Not just a simple room remodel... entire houses, full kitchen guts & remods, 3-car detached garages, you name it. "No permit" means "I want the lowest price, and not obtaining a permit means I not only don't pay for a permit, my taxes won't go up either."
 

kwired

Electron manager
Location
NE Nebraska
Competition is one thing. Completely taking the industry over is quite another. Henry Ford set out to control every single aspect of making cars, and if that caused the other car makers out of business..... well, good ol' Henry would end up with a monopoly by default. You can't make cars if you can't buy steel, glass, rubber, etc.

Not that WalMart is intentinally trying to create a monopoly, but they are creating an entire generation whose attitude is "low price is king". They couldn't care less about service, safety, licensing, permits, etc. Towards that end, I am increasingly finding folks who want work done sans permits. Not just a simple room remodel... entire houses, full kitchen guts & remods, 3-car detached garages, you name it. "No permit" means "I want the lowest price, and not obtaining a permit means I not only don't pay for a permit, my taxes won't go up either."


And Ford along with GM and Chrysler did have more less a monopoly until some foreign cars came along with low enough prices to take away quite a chunk of sales starting in about the 1980's, and many are still big competetors today. Consumers in general would rather spend less on things and be able to afford more things then to spend a lot on one item and then have nothing else. Of course then along came companies offering credit - for anything.

Walmart will eventually go down, maybe not disappear, maybe even become part of something else. There is always the new guy and eventually someone is better.
 

realolman

Senior Member
I'm trying to understand your point of view but I'm having some difficulty. According to your calculations you are assuming that you would be doing 1 service upgrade per day, x a five day week x 52 weeks. If that's a reality in your area I want to move there and start a new business where I can assume that I can hire more people to do (5) additional service upgrades per week. What a gold mine that would be. I didn't know doing business like that was possible.:roll:
There are guys out there who are willing and thankful to make themselves $500.00 for the day. I know times are tough but if that is what the future of our trade holds in store I'll be retiring my tools and working for Home Depot sooner than I think.

500 X 5 X 52=130,000
 

satcom

Senior Member
I can do the math. You missed the whole point. When was the last time you did 1 service upgrade per day for five days per week for all 52 weeks in the year:?

Your wasting your time, there are people that think all the money you collect goes in you pocket and some small amount pays all your cost of doing business, they say, how many expenses can a one man shop have, so they have no idea that in most cases for every dollar you take in you don't get to keep 90 percent, you may be lucky if you can hold on to Seven percent, now the reverse may be true if your an illegal operator.
 

mtnelectrical

Senior Member
That would be a very nice income

That would be a very nice income

$500 a day is over $130,000 a year. If you cannot make overhead and a decent profit with that kind of number as a small business with just yourself and your equipment, you need to find cheaper coke to sniff, just to get by until things get better.

But most of one man shops don't bill 40 hours a week.
 

mtfallsmikey

Senior Member
$500/day, $130K/yr, minus...

Insurance (health + liability)
Taxes
Truck expense
Inventory
Paid vacation
Admin costs, non-billable time

Maybe $60K if you're lucky.
 

kwired

Electron manager
Location
NE Nebraska
But most of one man shops don't bill 40 hours a week.

Someone understands one man shops. occasionally you are lucky to bill 5 hours in 1 week. Hopefully you get at least 20 most of the time. Occasionally you may have around 40 but that usually means you are swamped with service or installs and have no time to do send out the bills or pay your own bills. That doesn't go very good for very long either.
 

realolman

Senior Member
I can do the math. You missed the whole point. When was the last time you did 1 service upgrade per day for five days per week for all 52 weeks in the year:?

I didn't write the OP. This is what he said:

There are guys out there who are willing and thankful to make themselves $500.00 for the day. I know times are tough but if that is what the future of our trade holds in store I'll be retiring my tools and working for Home Depot sooner than I think.
If he was talking about grossing 500 bucks a week that's what he should have written. Obviously $500 a day is what Peterson based the $130,000 upon. I don't see anything about daily service upgrades.

Someone posted $60,000 annually... for a one man operation, how much would be appropriate?

If a guy can do electrical work, carpentry work, and plumbing work, and each trade makes $1.00 an hour, how much should this guy make? If a secretary or bookkeeper makes $0.75 an hour and this same guy does that as well, how much should he make?
He's only doing one at a time.
 
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goldstar

Senior Member
Location
New Jersey
Occupation
Electrical Contractor
I didn't write the OP. This is what he said:

If he was talking about grossing 500 bucks a week that's what he should have written. Obviously $500 a day is what Peterson based the $130,000 upon. I don't see anything about daily service upgrades.
Sorry, I should have been more explicit. I went off on a tangent (away from the OP) and started talking about guys willing to make $500 gross profit on a service upgrade. The conversation then somehow deterioriated to "what's wrong with making $500/day x 5 days/week x 52 weeks for $130K" . Hope that clears up my position on this.
 

satcom

Senior Member
Sorry, I should have been more explicit. I went off on a tangent (away from the OP) and started talking about guys willing to make $500 gross profit on a service upgrade. The conversation then somehow deterioriated to "what's wrong with making $500/day x 5 days/week x 52 weeks for $130K" . Hope that clears up my position on this.
.

The OP asked how low is to low, and he is in New Jersey the way I look at it Jersey sticks it to every C Corp business which most small EC's are, with a min $500 tax even if you made zero for the year, so using that as a starting point I would say anything below zero would be to low
 

Benton

Senior Member
Location
Louisiana
I personally don't have the same overhead (in many cases that is just a fancy name for debt) as others. I believe that if you start small and build your way up honestly, work hard, and build a nice clientele then it will all work out for the best. I don't believe this in all cases, but sometimes the lower price can be the honest price. I think that we get to wrapped in the "quality" of work, when in reality, it is not quality that we are always after, it is a higher material cost which leads to a higher mark up and a greater excuse for a higher profit. It may not be that way in all cases, but it is there. So, in short, be a true business man and those who not will be found out.
 
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