- Location
- Chapel Hill, NC
- Occupation
- Retired Electrical Contractor
Most all of my jobs were T&M. Even with that they usually wanted a guestimate. Since it was T&M I just kept track of my time and materials to see if I was close with my bid.
Do you know if you made money on a job, or just guess?
- Thread starter advancedquail
- Start date
I was in your shoes not too long ago. I have been at it six years now. I now have a small team of five, including myself, admin. assistant, two electricians, and one 4th year. Hoping to add a helper and another electrician this year. Four Fleet vehicles. This past year was our first year doing over a million in total revenue, respectable net and gross margins. I know I am one of the little guys out here, but I am very proud of that accomplishment.
The thing that helped me out the most early on was learning to price my work for a 50% gross profit margin and job costing every job on the back end to see how we did. Check out "The Contractor Fight" on YouTube. He has great videos on this stuff and more. These guys are right, there are more things you will need to track in order to make sound business decisions based off real data, but I think the best thing you can do out the gate is ensuring you are getting a 50% GPM on most projects. Which means if it costs you $1 to provide a service to a customer then you charge them $2. We have several GC's who give us consistent work, so I cut them break and drop the GPM down to 40%. Here is a link for a pre-built spreadsheet I use for job estimating and job costing. https://thecontractorfight.com/jobcosting/ You should be able to copy and paste it. It has been a great tool for me.
I get you do not have much overhead now, but hopefully you will soon, so price your work accordingly. The spreadsheet has labor burden built in already, keep it there. If you want a team, want to offer them 401k w/match, company paid short/long term disability, health insurance, etc..you need to price your work like you have all that going on now or you will never get there.
I recommend one of your first hires to be an admin. assistant. Pay them well, they will increase your total revenue/margins in very short order. Mine has been with me for 5 years now and was one of the best things I did early on to drive revenue/increase margins. I believe I took that advise from a member on this forum.
IMO a good CRM is invaluable. Especially as you build your team. I use Jobber and have little complaints. Other than as mentioned above the cost increases, but they do continue to add value.
Lastly, there are plenty of electricians out there for people to call, at least where I am located (SE WI), but what is lacking are EC's returning customer's calls in a timely fashion, bedside manner/professionalism, and good/clear communication. I have found these things go a long way. Good luck to you!
Books:
E-Myth for Contractors
Profit First for Contractors
The thing that helped me out the most early on was learning to price my work for a 50% gross profit margin and job costing every job on the back end to see how we did. Check out "The Contractor Fight" on YouTube. He has great videos on this stuff and more. These guys are right, there are more things you will need to track in order to make sound business decisions based off real data, but I think the best thing you can do out the gate is ensuring you are getting a 50% GPM on most projects. Which means if it costs you $1 to provide a service to a customer then you charge them $2. We have several GC's who give us consistent work, so I cut them break and drop the GPM down to 40%. Here is a link for a pre-built spreadsheet I use for job estimating and job costing. https://thecontractorfight.com/jobcosting/ You should be able to copy and paste it. It has been a great tool for me.
I get you do not have much overhead now, but hopefully you will soon, so price your work accordingly. The spreadsheet has labor burden built in already, keep it there. If you want a team, want to offer them 401k w/match, company paid short/long term disability, health insurance, etc..you need to price your work like you have all that going on now or you will never get there.
I recommend one of your first hires to be an admin. assistant. Pay them well, they will increase your total revenue/margins in very short order. Mine has been with me for 5 years now and was one of the best things I did early on to drive revenue/increase margins. I believe I took that advise from a member on this forum.
IMO a good CRM is invaluable. Especially as you build your team. I use Jobber and have little complaints. Other than as mentioned above the cost increases, but they do continue to add value.
Lastly, there are plenty of electricians out there for people to call, at least where I am located (SE WI), but what is lacking are EC's returning customer's calls in a timely fashion, bedside manner/professionalism, and good/clear communication. I have found these things go a long way. Good luck to you!
Books:
E-Myth for Contractors
Profit First for Contractors