Profit

[laketime]

I am working on a 5, 10 and 15 yr business plan and I need some statistical data. What have been your average profits over the course of your business (percentage)? Annual company wide profit is good and I was also looking for average profits by type of work if you track it that way (i.e. commercial, high end residential, residential, mulit-family...etc.).

 

[iMuse97]

apparently nobody is trying to project 5, 10, & 15 years. Maybe the intervals should be 5, 10, & 15 days.

Seriously, you should project very conservatively, as you cannot accurately determine your mix of types of work, etc. anyway. Some companies always make their profits on one type of work they specialize in, such as multi-unit housing, while other contractors would get killed in that market.

And especially in this economy, "past performance cannot predict future results." Be very conservative; if you find yourself on track to meet those goals, then you can step it up a notch.

 

[Pierre C Belarge]

I saw the word "profit" and had to see what it meant. I am not sure this is a current term people are using anymore.

 

[kbsparky]

Many businesses these days are thinking "survival" instead of profit. They are operating at a loss. Minimizing loss is what they think is the key to survival.

The problem is competing with someone who is not profit motivated. This may or may not be possible in today's economic climate ...

 

[laketime]

I have only been in business since January (I know, perfect time to start a business) but wanted to find out a good cross section of opinion. I have a friend who has been an EC for 15 years and he has averaged 10% over those years.

 

[satcom]

I have only been in business since January (I know, perfect time to start a business) but wanted to find out a good cross section of opinion. I have a friend who has been an EC for 15 years and he has averaged 10% over those years.

Might be the worst time in history to go into certian areas of the electrical contracting business, and the best time to enter nich areas in the electrical market, some of these areas can earn profits well above the 10% level.

 

[laketime]

What areas are you referring to?

 

[satcom]

What areas are you referring to?

Areas, it took me a lifetime to learn, put your thinking cap on, a hint, someone that added AC service and installations to their business will have better profits because they also sell service contracts, and can make huge mark ups on equipment sales, this is also true of all the other nich markets in electrical, if your planning to make any real money contracting for new construction, learn to live on dog food, and peanut butter.

 

[laketime]

ok thanks :-?

 

[benaround]

laketime,

Take care of your customers, be there when you say you will be there, call them back when

they need to be called back, charge them what you need to charge them, and the profits

will take care of themself. You will be surprized how fast word travels, just by cleaning up

after yourself. Also, you can't make a million in a town worth 1000, get yourself established

where the money is. There is plenty of money in 'new construction', you don't have to sell

air conditioners to eat steak.

 

[satcom]

laketime,

Take care of your customers, be there when you say you will be there, call them back when

they need to be called back, charge them what you need to charge them, and the profits

will take care of themself. You will be surprized how fast word travels, just by cleaning up

after yourself. Also, you can't make a million in a town worth 1000, get yourself established

where the money is. There is plenty of money in 'new construction', you don't have to sell

air conditioners to eat steak.

The OP was looking at different areas of the business and wanted to understanf how these different areas produced profit, a great question, there are many areas in the electrical business that can produce great profit figures, new construction for the small contractor is not one of them at the present time, business runs in cycles, and there are areas of electrical that are not bumped by these cycles, AC being just one of them, Fire alarms is another area, solar and wind energy, and it goes on and on, for the last 20 years the new contruction business earned at best 4% and in many years way less, there are figures listed state by state, and they vary state to state and year to year.