I want to learn more about contracting

[~Shado~]

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.

Only thing with that is...what if Bob has been the one handling all of Mr. Smiths work for all those years? What does this say about ABC electric then?

 

[Mr. Bill]

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.

A no-compete clause in an employee contract could legally be written to prevent this situation. Just to stop an employee from stealing customers for a specific period of time. 2 years seems to be common. It just cannot be written so vaugely as to prevent him from doing any and all business for any period of time.

Just think of it like the scared straight education programs. Show the employees interested how tight the numbers are and how scarey the contracts are it should prevent some from starting out on their own. When the economy is good more people start small businesses. I wouldn't be too worried right now.

If you ever see the word "defend" in the contract language NO NOT SIGN. It's been a popular thing lately for the lawyers of building owners to put into the contracts. They present it to the architect, engineer, and contractors hoping any or all will sign. That word "defend" means if the owner is sued for any reason during the project then you are paying their legal defense. Including lawyer fees and settlements. Even if you're not involved in the lawsuit you are contractually obligated to "defend" them.

 

[ITO]

If you refuse to sign any contract with the word "defend" in it in Texas, you wont get any contracts. Even the AIA has the word "defend" in it.

It's just a necessary evil here.

 

[macmikeman]

In my early years of contracting I used to sign AIA contracts, and similar ones with liquidated damages and such. I quit doing that. Either sign my contract or we don't do any work for you. (at least thats how its been anyway, we"ll see how it goes in 2009, that might have to change in this economy).

 

[Ken9876]

I'd never try to steal a former employers accounts, I feel it is completly wrong and shows a lack of respect. The way I figure it is if he put up with me while I was learning I should return the respect he showed me. As far as showing others things I've seen it written would you rather train someone and have them leave, or not train someone and have them stay.

 

[bjp_ne_elec]

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

ITO - Those two things you mention go along way.

Some contractors go as far as profit sharing. That is a great way to incentivize, especially for your key personnel.

Going in to business usually means a better paycheck - but with a bigger paycheck goes bigger headaches. There are great JWs out there that will always be content with working for someone - and if they are taken care of, they'll stick with a "good" EC who's a good businessman as well as a good manager.

 

[ITO]

Profit sharing was a disaster for me, and I have yet to see a model that would work.

 

[Greg Swartz]

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

I don't think anyone understood that.

It is a very good read. I have it on .pdf

Tried to get my wife to read it too...

Very interesting ideas on running a business, but even more so, is a mindest that people have vs. need to have.

 

[Greg Swartz]

... There are great JWs out there that will always be content with working for someone - and if they are taken care of, they'll stick with a "good" EC who's a good businessman as well as a good manager.

Finding them is tough. But when you do, hang on to them.
My latest hire is (as in ITOs situation) an EC who is going belly up. He is a great electrician, has tremendous amounts of experience, and teaches at the local IEC.
He just was not a business man.
I pay him well, give him a company van, and soon, a company credit card. And I praise him when he does well. And I explain to him what I want done differently when he does not do as I would have desired.

When I get a couple more service electricians, he will become my service manager. I have already shown him a potential future with the company...

And I hear him all the time saying thing like "this is the reason you are still in business, and we are not..." (and there are quite a few things)

 

[quogueelectric]

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.

I am quiting you tommorow does anyone know that I am your cow????

 

[cadpoint]

Very interesting ideas on running a business, but even more so, is a mindest that people have vs. need to have.

My Bride most have read the Book, she'll remind me all the time of wants and needs!

What does she win ?

Contracting is knowing a little about a lot things, that only add up to a finished product, how one get's to the end is the real deal or should I say ordeal!

 

[jrannis]

In my early years of contracting I used to sign AIA contracts, and similar ones with liquidated damages and such. I quit doing that. Either sign my contract or we don't do any work for you. (at least thats how its been anyway, we"ll see how it goes in 2009, that might have to change in this economy).

I returned a contract to a GC with so many crossed out lines it was almost funny. He said that no one had ever done that before. After a long silence, he initialed every line.
I guess we both knew that if he didnt want to pay me, I wouldnt get paid.
And if I ran off with his money and didnt complete the job, I wouldn't complete the job.
Interesting side note is that I was the first contractor to have a material lein placed on a customer of his. He got very emotional about that one.
Paid me up the same day.:smile:

 

[petersonra]

The best employees are not those who want to strike out on their own anyway.

 

[Kdog76]

The best employees are not those who want to strike out on their own anyway.

If you listen to my former employer, he would agree. But I have solace knowing it's not what I WANTED to do, but seeing as how the opportunity came my way and with my former employers blessing, as he was going out of business, it's something I felt compelled do to. That's what $100,000+ owed to the IRS will do to you (when I worked for him). None of it was my doing, although I tried to undue some of the damage that he had done for the previous 3 years before I signed on (i.e. not paying in to workman's comp and unemployment, not paying matching S.S., etc.)
No stepping on toes, no stealing accounts. More of a ' transition'. Heck, my old boss did and still does refers customers to me. I would have never struck out on my own otherwise.

Either I went out on my own, or I could stand in line looking for a job like a lot of other people.
I decided to go to work. That was 2 years ago.

 

[cadpoint]

The best employees are not those who want to strike out on their own anyway.

Oh, I don't know, some are just qualifiable good mechanic of the trade!

One can't beat down someone that steps up to the plate, or as others have said, put them in the corrrect position! OK, JMO ...:roll:

 

[dduffee260]

The best electricians can be the worst businessmen. The electrical part was the easy thing to learn because you were paid while you learned. When you start a business the only way to learn lessons is by the loss of money. New contractors mostly do not know ther actual costs of running a business. I think the one most common mistake by new EC's is that they think just because they get a $50,000 job they have $35,000 to spend. Meaning the materials are like $15,000 and they think the other $35,000 is profit. They don't take into account all the other overhead costs. Truth is with ours if you make 10% profit then you did well on that project. I say get to know how to get your vendors to compete with each other, shop around for equipment, materials, insurance and mostly make sure you are getting your money's worth out of the employees. Best of luck !!

 

[stevenj76]

Thanks for all the feedback.

Thanks for all the feedback.

Employees are employees, end of story. They are hourly, and in the end they are going to do what's best for them. Well, they should always do what's best for themselves, and if staying employed by you is mutually beneficial, its a win-win situation. If an employee wants to go into contracting, best of luck to them, electrical contracting is the second highest rate of failure among business startups, behind restaurants.

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

Anybody learn the answer to this while working at a larger contractor?

By a potential associate I mean somebody who is on salary and commission or bonus, you know, an office guy.