Becoming a license holder/ manager

[Rdcowart]

I am 31 years old I have passed the nc intermediate classification a year ago. I have just been offered a license holder position. I will be over day to day operations and I will have to work in the field every day as well. I will have two employees under me starting out. I will be working more in the office as the electrical department grows. Right now there will be two field offices that I will be working out of. I have never been in a this position before. What are some of the things I should be looking for in the offer letter. They have offered commission on all my sales no matter what trade and profit sharing on electrical only.

 

[oldsparky52]

Well 1st, congratulations.

The profit sharing can be "funny". Are you paid on profit before general overhead is applied or after? If after, you are vulnerable to inflated overhead being dumped on you.

 

[Rdcowart]

The Profit is after all overhead is paid. Do you know anything special I should ask for to protect myself.

 

[paulengr]

The Profit is after all overhead is paid. Do you know anything special I should ask for to protect myself.

You kind of can’t since “overhead” can be anything. Sounds like a pure commission job. Very hard to get you hands around it. You need examples or something. Otherwise how do you even know where to price a job? Do you do all the sales too? This sounds like the deal that the outfit out of Chesapeake does. Their name escapes me at the moment.

I do estimates all the time. They give me a labor rate and some guidelines on materials at 10-20% mark up, usually giving discounts on larger jobs and with long term clients. Sometimes the quotes are based more on how much the client will pay (high or low) too. I don’t know the margin on the labor rates. It’s hard to estimate margins for our company but I’m pretty sure my crew is definitely making money.



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[Rdcowart]

I should have mentioned that I do get a base salary plus the commission on all my sales I make. We will be doing 90 percent just service calls with the rest being bid work. We are going to be a flat rate pricing system. The first year is going to be putting a system in place trying to build with existing customers from the other two trades and knocking on a whole lot of doors.
I guess the main thing I’m looking for is what is the normal profit sharing percentage rate and what other perks usually come with being a license holder.

 

[oldsparky52]

I don't think there is a "normal" when it comes to this type of arrangement. The owners of the business want you to get as little as they can get away with and keep you happy, and you want as much as you can get without souring the deal. Kind of the American way .

IMO, since you cannot control general overhead, I would ask for my "profit sharing" to come before the application of "general overhead".

I think this is a great opportunity for you to learn how to be in business without taking the upfront risks. Learn all you can learn, and when the day comes that you decide to leave, you will have learned how to do the things that work and what things you should stay away from.

I sincerely wish you the best of luck with this.

 

[oldsparky52]

I would suggest you call the state board of electrical contractors and discuss how the state views your responsibilities and liabilities. I'm specifically thinking about the 2 field offices. I'm not sure what your field offices are, but I think the state has some requirements on this that you should be aware of.

 

[roger]

I'm specifically thinking about the 2 field offices. I'm not sure what your field offices are, but I think the state has some requirements on this that you should be aware of.

You are correct. 87-43.2 (a)(1)

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87-43.2. Issuance of license.
(1) At least one listed qualified individual shall be regularly employed by the applicant at each separate place of business to have the specific duty and authority to supervise and direct electrical contracting done by or in the name of the licensee;

All the laws are at this link ​

https://www.ncbeec.org/laws-rules/

Roger​

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[Rdcowart]

I just wanted to say thank you for all the information. Being a younger guy in the field I want to start getting the next generation into our trade. This opportunity is really going to help me do that. So thank you for all your help.