electrical business

[elvis_931]

You forgot, a wife with a six figure income.

Amen! All of the "successful GC or EC I know have wives with great paying jobs. Makes it too easy for them, and allows them to be cut-throats.

 

[sparky723]

Here's a story I like to tell in this situation:

-------------------------

Years ago, Joe Sixpack got a job as a helper for Fly-By-Night Electric. He started out working with a journeyman wiring houses for Cut Corners Construction. Joe turned out to be a pretty good electrician, learning fast and working hard. As the years went by, Joe got pretty good at wiring houses. Soon, he was running the jobs himself, and had his own helper.
Then recently, Joe got to thinking. "Fly-By-Night charges Cut Corners ten grand to wire a house. I know I get paid about $1500, and my helper gets $1000. I know the material costs around $2500.......... so that means the boss is making five grand just sitting at the office endorsing checks!"
So Joe decides to strike out on his own. "Man, this'll be great! I'll charge just $7000 to wire the houses, and with only $2500 in material, I'll pocket $4500 for each house I do....... Jeez, that's more than three times what I was making for 'the man'!"
So Joe hangs out his shingle. . He doesn't have any health insurance, thinking he'll get that later when things really get started. Suddenly, he realizes he needs to be licensed. So he takes the test, and spends more money for the test and license. He also doesn't understand that driving his own truck costs money, both in gas, repairs, insurance, etc
All fired up, he gets his first job for Cut Corners. Right from the start, Cut Corners wants a current liability insurance certificate. So Joe forks out $3000 for insurance. A few weeks later, he gets a letter from the state saying he's not a registered contractor. So another $600 is spent. Oh, yea, the city says they need $1250 for a permit.
A few days into the first job, Cut Corners says they need temporary power. Joe didn't figure the cost of a temp pole into the job, but he builds one and gets it hooked up. Joe finds out he needs more than a 3/8" drill and 4-foot stepladder. So he goes out and buys more cords and a couple ladders. Every time Joe needs material or another tool, he'd drive down to Home Depot and whip out the plastic. Pretty soon, he realizes he's a couple days behind schedule. Why? He's working alone, and doesn't have his old helper with him.
So Joe starts working 12-hours days, and a couple Saturdays as well. He skips his daughter's dance recital, and misses his son's Little league game. He comes home dirty, tired and grouchy, which cause his family to stay away from him.
By the time the house is roughed in, his credit card is maxed out and Joe needs to borrow money from his parents. "Just until I get this job done, then I'll be rolling in dough" he tells them. He borrows even more money just to buy the material he needs to trim the house. By this time, he has alienated his family and taken his credit rating down below 400.
And the sad truth is, by the time job is done, he's been paid only $7000 and has spent $14000 just to 'be in business'. So he tells Cut Corners the next job will be $8500, thinking he can 'make it up' on the future work. But even that 'extra' $1500 'from the next job' won't cover his $7000 shortfall. Besides, Cut Corners won't hire him again because Joe caused them to get behind on their schedule. And to add insult to injury, they found someone else to do the job for less.
Dejected, Joe goes home, only to find a letter from the IRS saying they want $3250 for the income tax Joe owes from that job. The state also wants $675 for sales tax. All the 'profit' Joe thought he was going to make went to pay his bills, leaving nothing to pay his parents back with.

And who did Cut Corners hire to wire their next house? Joe's old helper from Fly-By-Night!

you make that up?
so are you joe or his old helper?

 

[Davebones]

Work for a Aerospace company now . Got my Masters license back in 96 . I liked doing industrial and decided I didn't want the headaches of contracting so I just keep it inactive . Have run work in Nuclear and Coal plants, Paper Mills , Waste to Energy , Phosphate plants ,etc.. I work mostly inside in the AC now . Work ot pretty much when I want to .I can make up to $80,000 depending upon the ot .I get 3 weeks vacation ,soon to be 4 . Get 56 hrs of personal time and 11 holidays ( 401 ,6% matching ) ( cash balance ).Hardest part of my job is getting here .10 yrs have had 1 call out . I sometimes wish I had started contracting but I don't miss the hassel that comes with it . Some of the contractors I deal with would like to get something like this now as they are tired of chasing the work . Sometimes working for someone else is not that bad if you can find a good place .

 

[ptonsparky]

Starting a business is a no brainer or at least it was 30 years ago. Keeping one going that is profitable is the hitch. (Maybe 10 of those 30) Pay attention to what these guys are saying. You asked, listen up.

 

[480sparky]

you make that up?
so are you joe or his old helper?

I wrote it, but I'm neither Joe or his old helper.

 

[Rewire]

Write a business plan. If you do not know how then you need to learn.many ECs business plan was simply go get jobs and make money.Well five years ago that would get you by but in todays market you will want a little more detail.Market reraserch is an important part of the plan, ask yourself is their a need for what you offer?How is it different from what other ECs offer.How will you set yourself apart? these are just a few to get you started.

 

[haskindm]

Sparky723,
You will find that most of your "backed up jobs" will dissapear one you are in business and have to pay taxes, insurance, workman's comp, inspection fees, etc. Many people love to get people to do "side work" thinking that they are saving money. They won't be interested in you doing the work once you are in business, even if you charge the same price. When I was in business, I couldn't find work to save my life. Once I closed my business, my "friends" came out of the woodwork wanting "side jobs" done! Needles to say I told them to take a flying leap!

 

[stevenje]

You're assuming that running a business takes very little time, effort and knowledge.

Even a 1-man shop cannot make it unless you work 8-10 hours a day, and that's when you're tools are moving. You are just an electrician during those hours. Outside of those hours, there's bookkeeping, taxes, invoicing, billing, accounts payable, advertising, training, licensing, CEUs, vehicle maintenance, filling out permit requests, bidding jobs, getting quotes, collecting unpaid bills, calling your lawyer & accountant & banker, calling customers back, checking deliveries, repairing tools, straightening out the truck, building & maintaining your website, 'selling' your services, and even taking out the trash.

If you're going to hire someone, it's a lot worse than getting married. You enter into a whole other realm of responsibilities........ workers comp., payroll taxes, benefits...................

sparky 723 Please read the above quote again. This is what is in store for you if you start up a 1-man shop. Been there. Done that. It can be all consuming and can wear you down in a hurry. It never stops. Over the years I have seen a few marriages bite the dust from the start up of construction businesses. That all being said, good luck with your new endeavor. Remember the old saying "Work smarter, no harder."

 

[growler]

Some of the contractors I deal with would like to get something like this now as they are tired of chasing the work . Sometimes working for someone else is not that bad if you can find a good place .

Working for someone ( the man ) is not that bad and can be much safer than going it alone.

There are people that have a different personality that really don't like working for the man.

The only way for a person to know (for sure) if they are willing to trade the security of a full time job for the insecurity and the the problems of running a business is to try it for awhile. Actually about 4 out of 5 will go back to work for the company and just doing electrical work if they get the chance.

 

[satcom]

Sparky723,
You will find that most of your "backed up jobs" will dissapear one you are in business and have to pay taxes, insurance, workman's comp, inspection fees, etc. Many people love to get people to do "side work" thinking that they are saving money. They won't be interested in you doing the work once you are in business, even if you charge the same price. When I was in business, I couldn't find work to save my life. Once I closed my business, my "friends" came out of the woodwork wanting "side jobs" done! Needles to say I told them to take a flying leap!

Oh yes, once those backed up customers, discover they are going to be paying someone that has overhead, and expenses, they are back looking for Mr side job, and Joe the Hack, the good paying customers, are looking for service and value, they are the accounts that take years to build.

 

[Rewire]

Oh yes, once those backed up customers, discover they are going to be paying someone that has overhead, and expenses, they are back looking for Mr side job, and Joe the Hack, the good paying customers, are looking for service and value, they are the accounts that take years to build.

Even if it is not so they always think the sidejobber is cheaper.

 

[satcom]

Even if it is not so they always think the sidejobber is cheaper.

You have a good point, we have a good number of side job guys that have good jobs, and benies, and charge two to three times what we charge, and the customers not only pay, they pay in cash, thinking they are getting a deal, even the handymen charge more then many of the EC's.

 

[growler]

we have a good number of side job guys that have good jobs, and benies, and charge two to three times what we charge, and the customers not only pay, they pay in cash, thinking they are getting a deal, even the handymen charge more then many of the EC's.

There is actually a demand for electricians willing to do illegal work and most of these are side jobbers and handymen.

I'm doing a kitchen in a basement and the homeowners would have prefered it to be done without a permit but they still wanted a licensed electrician. When the inspector shows up he knows the rest of the basement was remodeled without a permit and does not meet code. Now the fun starts.

Once they start useing side jobers and handymen they can pretty well be locked into that sort of thing or going back to correct the work that was done before. I think some people are afraid to hire a real electrician, afraid of what a mess they may find.

 

[satcom]

There is actually a demand for electricians willing to do illegal work and most of these are side jobbers and handymen.

I'm doing a kitchen in a basement and the homeowners would have prefered it to be done without a permit but they still wanted a licensed electrician. When the inspector shows up he knows the rest of the basement was remodeled without a permit and does not meet code. Now the fun starts.

Once they start useing side jobers and handymen they can pretty well be locked into that sort of thing or going back to correct the work that was done before. I think some people are afraid to hire a real electrician, afraid of what a mess they may find.

What we noticed here, is an increase in calls for bringing jobs up to code, ever since the increase in home inspections, for home sales the home buyers will not consider closing on a home until everything that fails is repaired, we had many homes where they had wiring behind the walls, and the owners were not able to find someone dumb enough to sign off the work, and they had to bring in dumpsters and gut the basement jobs.

 

[rgiraldo]

Things to do

Things to do

Ok first You need to have a plan and the right info and software.

Plan: Go to the SBA, Score office. They have alot of information to help you in the business.

http://www.electrician-electricalcontractor.com/ecbs.html This is a good book I recommend it.

There are other books on amazon or look in this site.
http://nspg-software.com/store/index.php?main_page=products_all&disp_order=1&page=2
Look at the bottom two books. They are good.

For software:

Intuit Quickbooks - Contractor Pre..Accounting.

Vtiger: CMS program that will help you with marketing sales and other things. Oh it's free Opensource.

If your doing service then think of doing flat rate. Try this site. Its pretty cheap to own but I think it works. I will be getting it today to try it out.
http://www.electriciansmart.com/pricing-guide.htm or http://www.electrician-electricalcontractor.com/flatrate.html

And if you need a simple but working estimating software try www.electrimate.com, it works good.

You can find IndCom Estimate. Its free but its hard to use, or I find it difficult to use.

 

[readydave8]

All that being said, it's still true that you can suceed. But probably not if you go into it half-heartedly. The business plan and such are not just for those that don't want to be millionaires, to suceed doesn't only mean to make big bucks, it also means to not go bankrupt.

Many of the guys I've known that failed when they started their own business, weren't realistic about what it would take just to survive. And all of them thought they'd be able to set their own hours!

It takes a lot just to make the wages and benefits that you would be getting working for someone else.

 

[sparky723]

Well, the benefits at my current employer BITE!
They recently took our medical plan from 100,000 to 8,000.
I am the only family member on my insurance and the ONLY thing I really use it for is RX.
My med. co-pay now is $15mth, I talked to my pharmacist and my med. would be $30/mth.
$15 is worth leaving that place.
I could set my own hours. Whatever it takes to get the job(s) done.
Everyone is talking 'Business Plan'. What IS a business plan? I am not going to take classes for it. I will, however, talk to people who know.
I may read books,articles,listen to cds/dvds,etc...but I want to know what the meat and taters is of a business plan. I know that people in town will use me. They are tired of the other guy. I can't believe people wouldnt use me AFTER I opened shop, even at the same price. That makes no sense.
Of all the people who have commented, will you please list the population of the city you serve the most? I just think the very small town mind set is way different from the bigger cities. I lived in Dallas for 21 years and worked at the southwests' largest EC in America for 6+ of those years. After being there for so long and being in this small town for almost 10 years, Ican see a major difference in how businesses are ran, and not just limited to the electrical business.
I have no problem establishing a business plan, I just want to know how to establish a good one for a small area.
S723

 

[480sparky]

..............I could set my own hours..............

.................

Sorry, couldn't resist that. :grin:

...............Everyone is talking 'Business Plan'. What IS a business plan?........

Business Plan.

............... I am not going to take classes for it..........

Too bad.

............... I know that people in town will use me. They are tired of the other guy. I can't believe people wouldnt use me AFTER I opened shop, even at the same price. That makes no sense.............

Again, how do you know this? You need to learn that people will tell you all sorts of things, most of which means diddly-squat. What matters is when they fill out the check.

...............Of all the people who have commented, will you please list the population of the city you serve the most? I just think the very small town mind set is way different from the bigger cities. I lived in Dallas for 21 years and worked at the southwests' largest EC in America for 6+ of those years. After being there for so long and being in this small town for almost 10 years, Ican see a major difference in how businesses are ran, and not just limited to the electrical business.

This is what your market research will find out for you.

 

[kwired]

I wrote it, but I'm neither Joe or his old helper.

He is the owner of Fly-By-Night

 

[hurk27]

He is the owner of Fly-By-Night

I was going to post that last nite but chickened out:grin: