Starting a business

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bradyman1 said:
Thanks for the advice. I have been contemplating this for some time. I have my masters license and have all the paperwork done for the business (tax ID and that stuff). What do you think about asking the customers of my current empoyer for the letter of referal? Would you consider that stepping on toes? Also what would you suggest for bringing in the phone calls? I have been researching this and have found the following idea's:
Property management companies, Real estate offices, call landloards of vacant strip centers and request to be put on the bidders list for future tenants, join my chamber of commerce, network with all who will listen, hand out business cards at every opportunity, church newsletters, local small news papers, etc. (THANK YOU to all who have posted the above idea's on this post and past post). I will probably call past customers from my current company and try to revitalize my relation ship with them (most of these customers were lost by inefficiencies by others in our company). Does anybody have any other idea's?

Thanks
Jason
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Dont make the jump unless you have a steady cash cow. You will close up waiting for the phone to ring.
Take the dirty tough jobs nobody wants
 
The St Louis area is saturated with ECs now so you will be just another name in the book and with no state license almost anyone can be an EC in most areas.Everybody who has found themselves unemployed will be turning those side jobs into paydays so look for price shoppers in the small jobs.The problem with larger jobs is your time is eaten up on them you just can't drop everything and go do a service call or go bid your next job.Now we are heading into winter and slow work so starting a business will be a bigger gamble and you probably need to have a years income put back on top of your startup capital.
 
When I investigated going on my own about 2 years ago. I found out I would need atleast $40k cash, and I would join a Nextstar networking.
 
bradyman1 said:
Looking at mostly residential rehab/ service work, and light commercial (strip centers and the like).
We are a single income family. I have thought about the health insurance, vehicle, cell phone cost, I have a reserve that I can survive for several months on. I am planning on starting with a large job to kick start the business, to keep me busy for a month or 2, I would just need to build some customers rather quickly to keep moving in the right direction. I have excellect credit. I have already set up a company, have liability and workers comp., and a little cash in the business bank account. I just have not got that big job yet. I had a couple that were very promising but they fell thru. I have one contractor in particular that I will be working with, he is a small guy but does large money making projects. I have several other contacts I do not want to steal from my current employer but had considered asking them for a "letter of referral" to provide to potential customers stating that they had worked with me and was happy etc...
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Ah, to be young & foolish again. Every out-of-work electrician takes on residential service & light commercial. It's the type of work that REQUIRES phone book advertising. Check out the phone books of your proposed territories. You want to have a display ad & not be too far down the list. Call DEX & price the ads like half page if that doesn't put you on page 6 of ECs.

Let's say the ad is going to be $1k/mo. Imagine how you'll feel getting a bill for $1k every month-calls or no calls. It happens. Now check some old phone books if you have them. See who tried playing with a big ad & couldn't repeat it the following year. Companies experiment with $10k+ ads that don't work.

Think a big job with a big boy will jump start you? What will you do when you have $5k in installed materials & the big boy ignores your invoices for 60 days? What if the big boy drops you for a better price & you just lost 50% of your business?

Good Luck!
Dave
 
Sparky555 said:
Ah, to be young & foolish again. Every out-of-work electrician takes on residential service & light commercial. It's the type of work that REQUIRES phone book advertising. Check out the phone books of your proposed territories. You want to have a display ad & not be too far down the list. Call DEX & price the ads like half page if that doesn't put you on page 6 of ECs.

Let's say the ad is going to be $1k/mo. Imagine how you'll feel getting a bill for $1k every month-calls or no calls. It happens. Now check some old phone books if you have them. See who tried playing with a big ad & couldn't repeat it the following year. Companies experiment with $10k+ ads that don't work.

Think a big job with a big boy will jump start you? What will you do when you have $5k in installed materials & the big boy ignores your invoices for 60 days? What if the big boy drops you for a better price & you just lost 50% of your business?

Good Luck!
Dave
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The contractor I am speaking of in particular is a very good friend of mine, and I have worked with him (on my own) in the recent past and know he pays less thatn 30 days. I have worked with him with my current contractor for the past 10 1/2 years and I know he is a very loyal and quick pay contractor. I have quite a bit of faith that he will use me exclusively for all of his work, he has not bid shopped us in the past 10 1/2 years. He however does have slow times, and he is an older gentleman that will probably retire within the next few years. I was not planning on his work being my only jobs, just a good jump start for me until I can make a name for myself.

I appreciate all the feedback and you have all brought up very good and valid points. Everyone has got me really thinking. Does anyone have any advice about establishing a name for yourself, and getting your phone to ring? I think this is my main concern at this point.

I am concerned about taking on projects that are large at first because I have seen the slow pay on these project 60-90-even 120 days. That is a long time for a 1-4 man shop to wait for payment. That is the main reason I am wanting to focus on the smaller commercial, residential, and service work. I do understand that you will often have to wait 30 (minimum) to 90 days for payment on these projects but a smaller project means less out to be waiting on, and if for some reason you run into legal issue's with the project you are not waiting for 6 months worth of payroll and overhead.

Again thank you for all of your help. And I look forward to any more advice that you can offer.

Bradyman1
 
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bradyman1 said:
Does anyone have any advice about establishing a name for yourself, and getting your phone to ring? I think this is my main concern at this point. Bradyman1
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Try to locate an EC that went out of business and try to get his phone number if you can.
 
bradyman1 said:
The contractor I am speaking of in particular is a very good friend of mine, and I have worked with him (on my own) in the recent past and know he pays less thatn 30 days. I have worked with him with my current contractor for the past 10 1/2 years and I know he is a very loyal and quick pay contractor. I have quite a bit of faith that he will use me exclusively for all of his work, he has not bid shopped us in the past 10 1/2 years. He however does have slow times, and he is an older gentleman that will probably retire within the next few years. I was not planning on his work being my only jobs, just a good jump start for me until I can make a name for myself.

Bradyman1
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I'm sure I'm over thinking this for you, but I've read some posts that start with..."I have a GC friend who isn't paying". My test on friends is do you have dinner at each others homes & do your children play together? Also if the one guy is so faithful why won't he stay with the current EC and give you that business?

On the plus side you look like you have more business than I started with, but my wife's work was my safety net in the early years. I just met a husband/wife handyman business & it looks like they're going down the drain after 4 years. Business mistakes or a bad economy can be unforgiving.

You need marketing to make your phone ring & you need money in the bank when it doesn't. One of the most memorable marketing stories I've ever heard was about a guy with a phenomenal business and super business skills. He placed $1M magazine ad that got one phone call. He had targeted the wrong audience.

Dave
 
Sparky555 said:
I'm sure I'm over thinking this for you, but I've read some posts that start with..."I have a GC friend who isn't paying". My test on friends is do you have dinner at each others homes & do your children play together? Also if the one guy is so faithful why won't he stay with the current EC and give you that business?

On the plus side you look like you have more business than I started with, but my wife's work was my safety net in the early years. I just met a husband/wife handyman business & it looks like they're going down the drain after 4 years. Business mistakes or a bad economy can be unforgiving.

You need marketing to make your phone ring & you need money in the bank when it doesn't. One of the most memorable marketing stories I've ever heard was about a guy with a phenomenal business and super business skills. He placed $1M magazine ad that got one phone call. He had targeted the wrong audience.

Dave
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He is a customer of the contractor that I currently work for. He is still with this contractor because of me (his words not mine) and I have been talking to him for several years about making the move. He has been urging me to do it for some time. He is more like a for lack of better words "mentor" for me. He wants to help me build my business and get me started on the right foot. Now I realize business is business but we have a long standing good relationship and I have never had him stiff me on a job. I handle any issue's he has now and deal with the job issue's on a one to one basis with him. He is basically my customer now, just through my current employer.
 
bradyman1 said:
He is a customer of the contractor that I currently work for. He is still with this contractor because of me (his words not mine) and I have been talking to him for several years about making the move. He has been urging me to do it for some time. He is more like a for lack of better words "mentor" for me. He wants to help me build my business and get me started on the right foot. Now I realize business is business but we have a long standing good relationship and I have never had him stiff me on a job. I handle any issue's he has now and deal with the job issue's on a one to one basis with him. He is basically my customer now, just through my current employer.
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Yes this "loyal customer" is encouraging an employee of the contractor that he is loyal to to go into business for himself, promising to give him the business that he presently give his boss. Why? He is looking for you to do the work cheaper. Then he may encourage one of your employees to go on his own promising him "your business". I would not trust this guy as far as I could throw him! Your "friend" is conning you into stiffing your boss and sticking your neck out for his own gain. If you go into business and want to do business with him, that is up to you, but if you count on him to sustain your business, YOU WILL LOSE. Sure as the Sun comes up tomorrow. If you are convinced you can make it with or without his business, go for it. Otherwise, stay where you are and tell him to go con somebody else.
 
Hi
I am in St. Louis so I might send you a P.M

I work for a "name" contractor and I worked in outside sales for a supply house for 18 years. I have seen little guys get big and big guys get bigger - or wiped out. and so on and so on

There is no one majic secret. Getting your name out there takes TIME and money. Mostly TIME. The guys you will compete against in the book have 20 years or more head start.

This doesnt mean it cant be done - do you have your STL city and county?

Jim
 
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