Can you run an Electrical Contracting business without trucks?

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Fire Alarm

Fire Alarm

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I'm From California
I currently am a one truck outfit. I see owning and operating vehicles as a huge headache and wonder if it's possible to grow a business without a fleet of trucks?

Obviously service oriented shops must run a vehicle centric business, but could you run a business with no company owned trucks?

I do mostly new homes, some remodels and small commercial jobs. It's hard to imagine doing a remodel without a well stocked truck but new homes and commercial jobs can probably use gang boxes with ladders chained to them. I like the idea of guys showing up in their own vehicles and getting to work.

Do any of you demand that employees provide their own vehicles? Perhaps pay them an additional hour per day on those days they use their trucks to haul parts or tools?

I see trucks as a impediment to business growth and if there is a business model that does not include operating a fleet of trucks I'd love to hear about it. Perhaps one flat bed/steak bed truck with a lift gate to stock-destock jobs..

Thanks, I'm anxious to hear your thoughts.
 
I see guys working for the cable company, direct tv, and all kinds of other outfits using their own vehicles, I don't see why you couldn't do that with a fire alarm company.
 
Fire alarms currently make up a small portion of my business, I'm a general "all purpose" electrical contractor. I think a truck is a mobile "parts warehouse" and needed on small one-day type jobs, but if you only did work that took say, 5 days or more, you could do without the truck and just load the job. Just thinking out loud...

Oh, around here the cable installer types you mention are sub contractors and paid a fixed rate for each type of install, since the jobs are less than $500 they do not need contractors licenses to sub contract this work. (this is a California license requirement).
 
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Why would you not want extra trucks. Trucks are a great asset to a business as they are mobile billboards,a bonus to your top hands to drive ,tax benefits as all costs are offsets to income,and they give a professional appearance to a business.Most ECs give a truck to the top hands and to grow a business you need to hire and retain top hands if you are asking your guys to use their POV then they will think you are taking advantage and will soon go elsewere.
 
Sure you can.


Lots of companies do this. I read somewhere that a bunch of FedEx trucks were owned by the drivers.

You are obviously going to have to compensate them but it will be a fixed rate. I know that the cable company here pays more if you have your own bucket truck. I sold my original bucket truck to a cable employee.

As far as materials, that might pose some logistical chgallanges. For service work you would have to provide x amout of inventory and require them to keep it stocked and accounted for.
 
Rewire said:
Most ECs give a truck to the top hands and to grow a business you need to hire and retain top hands if you are asking your guys to use their POV then they will think you are taking advantage and will soon go elsewere.
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For the large ECs I have worked for the top dogs in construction are not given trucks, they are given truck allowances. Mileage is often paid to the others if far from home.
 
Fire Alarm said:
It's hard to imagine doing a remodel without a well stocked truck but new homes and commercial jobs can probably use gang boxes with ladders chained to them.
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I wonder what kind of gas mileage those gang boxes get these days. :grin:
 
Fire Alarm said:
Business expenses are not "tax benefits". If overhead expenses were so desirable, going bankrupt would provide the best tax benefit of all.

But you bring up several good points.
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The "benefit ' is the offset of income which could lower your tax bracket if you give an employee a cash allowance this money is subject to payrole taxes which you pay a portion of ,Unlesss you enjoy being in the 32% bracket then by all means eliminate all overhead.
 
After 15 years and a number of trucks, I can see the benefits to operating without them.

Your guys would certainly take better care of the truck if it belonged to them.
 
Rewire said:
The "benefit ' is the offset of income which could lower your tax bracket if you give an employee a cash allowance this money is subject to payrole taxes which you pay a portion of ,Unlesss you enjoy being in the 32% bracket then by all means eliminate all overhead.
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Talk to your CPA, if they drive the truck home it's considered a fringe and is subject to payroll tax.
 
It should be obvious by now, but the bottom line is that for service work, trucks, especially vans are essential.

For construction work they are not necessary at all. The only trucks that the larger construction EC's own are tractor trailers, stake bodies or large straight box trucks to move material and tools from job to job.
 
OK....for all the accountants out there.....


If the dollar amounts were equal, would there be a tax advantage to expense the truck costs by paying employees for their trucks as opposed to owning them and writing off the depreciation?
 
Fire Alarm said:
I currently am a one truck outfit. I see owning and operating vehicles as a huge headache and wonder if it's possible to grow a business without a fleet of trucks?

Obviously service oriented shops must run a vehicle centric business, but could you run a business with no company owned trucks?

I do mostly new homes, some remodels and small commercial jobs. It's hard to imagine doing a remodel without a well stocked truck but new homes and commercial jobs can probably use gang boxes with ladders chained to them. I like the idea of guys showing up in their own vehicles and getting to work.

Do any of you demand that employees provide their own vehicles? Perhaps pay them an additional hour per day on those days they use their trucks to haul parts or tools?

I see trucks as a impediment to business growth and if there is a business model that does not include operating a fleet of trucks I'd love to hear about it. Perhaps one flat bed/steak bed truck with a lift gate to stock-destock jobs..

Thanks, I'm anxious to hear your thoughts.
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I thought good looks and wealth were your strong points? You can afford another one;) Kidding.
One truck, and a one man show? Why not?
 
Fire Alarm said:
I've always thought that reducing ones overhead expenses was a sound business strategy. Perhaps I should have gone to college after all. :grin:
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Reducing your overhead, yes. Shifting your overhead onto your employees, no. It amazes me how in this day and age, some employees are required to supply power tools, trucks, even allow their boss's use of their personal cellphones.

Drive to the jobsite and start work there, fine. Drive to the shop and use the company's vehicle, fine. But requiring an employee to shuttle between jobs, and transport your tools or materials is, IMO, for an hour's pay to save YOU the cost of a van, the ultimate in ballsy-ness. Might as well just do sidework since they'd already be all setup for it.
 
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