I want to learn more about contracting

[stevenj76]

There is so much priceless advice on this forum for guys who are working on the low end of the food chain!

The problem I have seen is, and it has happened to my father too, any person working for you who has ability and talent is a liability once they know how the business works. Non-compete clauses and the like typically wash out and when a new professional becomes capable, they more often than not strike out on their own, becoming your competition and siphon off some of your business and employees.

Ask any potential associate who wants to join your business, and they will tell you they want to help you build your business. What you cannot know is they truly intend to stay for three years, learn enough about the business to be successful on their own, while building relationships, stay in your geographical area for good, and in a worst case scenario paint you out as a bad guy.

How would you know a potential is genuine? Or even this, have you learned to keep all people stupid?

 

[BryanMD]

... What you cannot know is they truly intend to stay for three years, learn enough about the business to be successful on their own... Or even this, have you learned to keep all people stupid?

A little bit of knowledge is a dangerous thing.

Anyone bright enough to *really* learn what is needed to operate, and more importantly to be successful at it, won't need you to learn it from.

 

[480sparky]

There's no way to keep someone from going out on their own. My experience with no-compete clauses is that they really don't hold up well in the courts. I've never had one challenged, so I'm just speaking from anectodal experience.

It's part of the free-market system, and you just need to learn to live with it. You can only take solave in the fact that if your best mechanic hangs out his own shingle, the odds are against him from the git-go.

 

[satcom]

There is so much priceless advice on this forum for guys who are working on the low end of the food chain!

The problem I have seen is, and it has happened to my father too, any person working for you who has ability and talent is a liability once they know how the business works. Non-compete clauses and the like typically wash out and when a new professional becomes capable, they more often than not strike out on their own, becoming your competition and siphon off some of your business and employees.

Ask any potential associate who wants to join your business, and they will tell you they want to help you build your business. What you cannot know is they truly intend to stay for three years, learn enough about the business to be successful on their own, while building relationships, stay in your geographical area for good, and in a worst case scenario paint you out as a bad guy.

How would you know a potential is genuine? Or even this, have you learned to keep all people stupid?

It appears you have a great bit of learning ahead of you, and this site has plenty of information, you just have to sort out the facts, from the fiction, from any information, you want employees that help build your business, and you want them to be the best they can be at everything they do, as far as employees leaving to go on their own, that will depend on how you run your business, in todays market, the employers with employees that have a vested intrest in staying will not bolt and try to go it on their own, things like good benifits, profit sharing, and stockholders/owners that are progressive in growing a business.

Any contractor that does not treat their employees well, and expects them to help build a business, without making them vested in the business, In my opinion needs to go back to school, and invest in managment studies, or you will run thru employees like ditry wash, and you can't complain if they leave.

 

[ceb58]

There's no way to keep someone from going out on their own. My experience with no-compete clauses is that they really don't hold up well in the courts. I've never had one challenged, so I'm just speaking from anectodal experience.

It's part of the free-market system, and you just need to learn to live with it. You can only take solave in the fact that if your best mechanic hangs out his own shingle, the odds are against him from the git-go.

Very true.
A no-compete clause is worthless in my state, it is a right-to-work state.
There are smart, well qualified people working for someone else every day. They have their reasons for not wanting to start their own business. They dont want the headache of starting and running the business, they are not wanting to sacrifice their personal time and the list goes on. You can hire and try to keep dumb employees but that is what you are going to get. Which will add to your own problems. I would rather take a chance on hiring and training qualified smart people that can do the job with out screwing every thing up than some one who needs some one looking over their shoulder.

 

[220/221]

You can't worry about it. People are free to do as they choose.

Some people don't want to work for themselves, some feel the need to.

The trade off for the steady job and education you are providing is the fact that they are doing the physical work and you are making money. It's a win/win situation.

 

[charlietuna]

To hold someone back from education that is working for you only hurts your business. I always encouraged my men to learn additional education concerning their trade. At one time i purchased three computer systems and estimating programs thinking they would get interested in estimating. One guy had been seriously injured working for another contractor(fell from a ladder and damaged his hip), but none of them really took the interest to learn. It was an expensive mistake on my part. And i always offered to pay for their training in certain trade related classes. I had one man leave to go into the electrical business and he returned a year later. One other guy moved to California and opened up a Deli ?? Knew nothing about the Deli business--and had no relatives there----- has three stores last i heard !!! I always was wide open to explaining anything about my business to my men--maybe thats why they stayed with me-didn't want the headaches !!

 

[satcom]

I always was wide open to explaining anything about my business to my men--maybe thats why they stayed with me-didn't want the headaches !!

Yup, once they see the cost of doing business, and understand that only a small amount of the income is your, they tend to think about any moves.

 

[ITO]

Two of my best foreman are ex-contractors who both swear they will never do that again.

I find that good pay and praise helps keep good people too.

Another good thing to show somebody who thinks they want to be a contractor is a commercial contract. It usually scares them straight.

 

[ITO]

Here, I ask them would you sign something like this?

This is an actual excerpt from a contract I was asked to sign.

Article 19- Indemnity for injury and property damage.

To the fullest extent permitted by law, subcontractor agrees to defend, hold harmless and unconditionally indemnify contractor and owner, their officers, directors, shareholders, employees, agents, contractor?s surety and all parties whom contractor is required to indemnify pursuant to the term of the contract documents, against and for all liability cost expenses, claims, liens, citations, penalties, fines, at attorney?s fees, losses, and damages which contractor may at any time suffer or sustain or become liable for by reason of any accidents, damage or injuries either to the persons or property, including loss of the use or property, or both, of subcontractor or contractor, or the workmen of either party, or of any other parties, in any matter, or failure or defects in materials or goods supplied by or on behalf of subcontractor, including, but not limited to, any negligent act or omission or claim involving strict liability or negligence per se of contractor or anyone directly or indirectly employed by the subcontractor or anyone for whose acts subcontractor may be liable.

Not withstanding the foregoing, to the fullest extent permitted by law, subcontractor agrees to defend, hold harmless and unconditionally indemnify contractor and owner, their officers, directors, shareholders, employees, agents, contractor?s surety and all parties whom contractor is required to indemnify pursuant to the term of the contract documents, against and for all liability cost expenses, claims, liens, citations, penalties, fines, at attorney?s fees, losses, and damages which contractor may at any time suffer or sustain or become liable for by reason of any bodily injury to, or sickness, disease or death of, any agent, employee, or representative of subcontractor or any of its subcontractors, in any matter arising out of or resulting from subcontractor?s performance or failure to perform hereunder, including, but not limited to, any negligent act or omission or claim involved strict liability or negligence per se of contractor or owner, their officers, directors, shareholders, employees, agents, contractor?s surety and all parties whom contractor is required to indemnify pursuant to the term of the contract document.

 

[satcom]

Here, I ask them would you sign something like this?

This is an actual excerpt from a contract I was asked to sign.

Guys that entered a business without thinking, will sign anything, they usually don't have any long term contracts, are hungry for any work, and if it means signing something, that they don't understand, they will, and then kick and scream, like a baby, when everything goes wrong.

The OP wants to learn more, that is a good sign.

 

[stevenj76]

The OP wants to learn more, that is a good sign.

YIKES!

Thanks all for the good information!

My backup plan has been to go back to school to get my degree in Project Mgmt, you know, join the student NECA chapter.

But that backup was only in case I got injured and couldn't do physical work anymore.

Would getting a four year degree be worth the trouble? I mean, would it help pave the way in the real world?? How much do you guys hit the books? Has it helped other contractors you know in real life?

 

[peter d]

Two of my best foreman are ex-contractors who both swear they will never do that again.

That statement, in and of itself, doesn't prove anything. They may be outstanding electricians who can run a crew, but were bad businessmen. Great electricians don't always make great businessmen. In fact, over time the most successful contractors I've worked for have been run by business men who should be nowhere near a set of linesmens, but they sure knew how to run a business.

 

[mdshunk]

I want to learn more about contracting

Yeah, me too!

 

[peter d]

You can't worry about it. People are free to do as they choose.

That's the bottom line. Furthermore, I think someone who goes out on his own and taking some of his bosses business with the "use me because I'm way cheaper" is only doing himself a disservice in the long run. Low price is a bad way to sell yourself.

 

[mdshunk]

That's the bottom line. Furthermore, I think someone who goes out on his own and taking some of his bosses business with the "use me because I'm way cheaper" is only doing himself a disservice in the long run. Low price is a bad way to sell yourself.

The better way to steal the boss's customers (if there is such a thing) is to tell the customer, "Look, the boss has been sending me here to do your work for years. You've been happy with MY work. I'm going out on my own, and I'd love to keep doing your work. When I leave XYZ Electric, I'm not sure who they're going to try to stick you with. Here's my cell number...".

I really can't believe I just explained that.

 

[peter d]

I really can't believe I just explained that.

Uh...ok. You explain lots of other stuff, why not that?

At any rate, that is one tactic. I would not do it myself because I do not want any of my bosses customers.

 

[Kdog76]

Tell you what guys, I worked under an EC for a number of years. Later on I got my masters license. Later on after that for a LONG list of reasons (mainly because my old boss should NEVER have went into business) we went under. On EXCELLENT terms with my former employer, I decided to give 'er a go about two years ago. Got my former employers blessing to take over our existing accounts. One in a million shot. Two things helped: #1) our customers already knew me #2) I knew which customers I DIDN'T want.
Reason #2 is why I am still in business.

 

[sfav8r]

The better way to steal the boss's customers (if there is such a thing) is to tell the customer, "Look, the boss has been sending me here to do your work for years. You've been happy with MY work. I'm going out on my own, and I'd love to keep doing your work. When I leave XYZ Electric, I'm not sure who they're going to try to stick you with. Here's my cell number...".

I really can't believe I just explained that.

Then again, the boss can send out his own letter...

Dear Mr. Smith,

As you know ABC electric has done your work for years. We are known for our extensive background checks and absolute concern about your safety. Please not that Bob is no longer with the company and his replacement will be by soon to introduce himself.

Hey, I didn't say it was nice.

 

[brother]

ever hear of 'rich dad poor dad' ?? about running a business??