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Thread: How much does it cost just to keep the doors open?

  1. #1
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    How much does it cost just to keep the doors open?

    Just curious what it costs to have an active and insured business open?

    This is bound to vary from place to place, that's OK.

    I am not talking vehicles, overhead, etc. Just the license and insurance to be able to go out and do a job?

    Are we talking hundreds$ a year or thousands$ a year?

    thanks

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    Quote Originally Posted by JoeNorm View Post
    Just curious what it costs to have an active and insured business open?

    This is bound to vary from place to place, that's OK.

    I am not talking vehicles, overhead, etc. Just the license and insurance to be able to go out and do a job?

    Are we talking hundreds$ a year or thousands$ a year?

    thanks
    I suspect it varies widely from place to place. here in Illinois depending on just what it is you want to do you may need several different business licenses. I think you are required to have $1 million liability insurance to be a contractor. But, you can be a business without being a contractor.
    Bob

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    Well first thing is insurance. I pay about 18k a year for insurance, but I’ve got about a million dollars of equipment, either trucks or inland marine. A one man show with a service van is probably going to pat about 1K for business insurance and about the same for insurance on the vehicle.

    then you’ve got business licenses. Figure 500 per year or so,

    bonding for your your contractors license will be a couple hundred dollars.

    i have three licenses that require continuing education classes. 500-2500 per year.

    so one to two thousand a month minimum, with out doing any work, or taking any draw, or any advertising.

    i figure I’ve got to gross 20-30k a month to keep the lights on and pay the bills. And I dint have any loan payments to make. Everything is paid for. A friend of mine has loan payments of over 20k a month for equipment. I think his overhead is going to sink him.

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    You can search data out there on the interwebs for specialty contractors, like electrical contractors, in addition to gross revenue and region and find this out the average percentage for overhead.
    ETA - sorry I re-read your post and this doesn't answer your question

  5. #5
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    I think my business insurance runs about $1,000 per month including WC.
    Tom
    TBLO

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    Quote Originally Posted by ptonsparky View Post
    I think my business insurance runs about $1,000 per month including WC.
    A friend of mine has a tree cutting business. His $1 million liability policy is less than $500 a year. The liability insurance on his bucket truck is almost $2000 a year. I think he told me his business license was $30 or maybe $60 every 3 years.
    Bob

  7. #7
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    Just looked P&L Prev Yr Comparison. Ins is $1420/month
    Tom
    TBLO

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    I am Probably on the low end. Insurance, $1k /yr, bond, $150 yr, three electrical licenses, around $600 (not counting continuing education cost and time), state LLC filings/renewing maybe $200 yr. So around 2k per year. Of course that doesn't include vehicle (I have combo work/personal), or tools.
    Ethan Brush - East West Electric. NY, WA. MA

    "You can't generalize"

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    2nd that, being in the 'back 9'of my career ,having dumbed down to ONE dummy.....~RJ~

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    Quote Originally Posted by JoeNorm View Post
    I am not talking vehicles, overhead, etc. Just the license and insurance to be able to go out and do a job?
    Others above have mentioned the licensing, insurance, continuing ed costs, and tools. I know you said your not interested in vehicle or overhead costs, but I don't see how you can do work without those costs.

    A vehicle is absolutely required. You're not planning on walking to these jobs pushing a wheelbarrow full of tools and materials are you? Even if you use your personal vehicle, there will be additional operating costs such as gas, oil, tires, and wear and tear that will cause maintenance. This assumes your personal vehicle is big enough for ladders and 10 foot sticks of pipe. Planning on using a trailer for those? Trailers aren't free either. Even if you already own one you are wearing it out using it. And pulling a trailer increases wear and tear on your car and costs extra gas. If you really are planning on pushing a wheelbarrow, keep in mind--wheelbarrows cost money.

    How are you going to avoid overhead? If you buy some material, will you or your bookkeeper enter the data into Quickbooks? That's overhead. Doesn't matter if you or your wife are doing it. No overhead work should be done for free. You must pay yourself or the person doing it. You wouldn't let an employer make you work for free. Why do it to yourself? Looking at jobs? Overhead. Estimating and bidding? Overhead. Opening a bank account, paying bills, hiring, firing, payroll? Overhead. Taking service vehicle to repair shop, writing up advertisements, tax filings, trips to update business license, working with a web designer, buying office supplies; the list is endless.
    Last edited by Coppersmith; 01-10-19 at 05:25 PM.

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