starting a company

[helen18]

Hey :bye: I have a question I'm starting my own company and I want to work with commercial and residential and I still dont have
my master but I know you can pay for lease a master license, Thats the thing.. I dont know how it work that because the person that have the master license that I know
does not have an idea too, and I dont want to ask to somebody else cuz I dont want to much scandal
Could someone give me an idea or tell me prices and the way that it work?

thanks :angel:

 

[jeff48356]

Hey :bye: I have a question I'm starting my own company and I want to work with commercial and residential and I still dont have
my master but I know you can pay for lease a master license, Thats the thing.. I dont know how it work that because the person that have the master license that I know
does not have an idea too, and I dont want to ask to somebody else cuz I dont want to much scandal
Could someone give me an idea or tell me prices and the way that it work?

thanks :angel:

Without having a master license, you would need to employ full-time a guy who has one. This means you'd have to pay his wages, workman's comp, taxes, and many other expenses. As the contractor, you would receive only a small fraction of the actual gross revenue that customers would pay you when you contract work to be done. If I were you, I would wait until I'm qualified to sit for the master exam, study for it, take it, then start your own one-man operation. You will get to keep a LOT more of the money you take in from customers that way.

 

[Coppersmith]

Without having a master license, you would need to employ full-time a guy who has one. This means you'd have to pay his wages, workman's comp, taxes, and many other expenses.

I agree with this.

As the contractor, you would receive only a small fraction of the actual gross revenue that customers would pay you when you contract work to be done.

I don't agree with this.

How much money you make is directly related to your expenses. If you are paying the guy with the license the same amount you would pay a journeyman, then you will make exactly the same amount as if you had the license and hired a journeyman to work for you, which is exactly what you want to do to grow.

This is not far fetched. A lot of guys with master's licenses but no company of their own don't want the responsibility of running a company or don't have the capital to start one. A lot of them would be perfectly happy to just have a steady job that pays j-man wages or perhaps a bit more.

However, it may be better for you to partner with this guy. A partnership is more of a commitment for him which is good for you since you'll be in trouble if he quits and leave you with no license. You don't have to split the profits 50-50. The actual split is more related to what each of you bring to the company. If you are supplying everything except the license, an uneven split like 20-80 might make more sense. Also, you don't have to split the profits, you can pay him a salary and keep the rest. But keep in mind that profit sharing takes the pressure off you to make payroll.

If you do partner I highly advise you to consult an attorney who specializes in partnership agreements. Do not enter a partnership without an agreement.

You should definitely be working on getting your master's license as quickly as possible to avoid the above quitting situation.

 

[Gary11734]

Hey :bye: I have a question I'm starting my own company and I want to work with commercial and residential and I still dont have
my master but I know you can pay for lease a master license, Thats the thing.. I dont know how it work that because the person that have the master license that I know
does not have an idea too, and I dont want to ask to somebody else cuz I dont want to much scandal
Could someone give me an idea or tell me prices and the way that it work?

thanks :angel:

If some general offers you to do a hundred fast food restaurants with no bid, but negotiate the price, then you add in the cost of the Master. Cost of doing business.

Now, if you start with no work and paying a master up front, your competition that has his/her Master will have a competitive advantage over you.

 

[Coppersmith]

Now, if you start with no work and paying a master up front, your competition that has his/her Master will have a competitive advantage over you.

Your competitor only has an advantage if your price is higher. Price the job the same as your competitor and s/he has no advantage.

Are your costs higher? No, actually, your costs are lower than a one-man-band competing against you because you and the license holder are each going to be doing a job which means you are bringing in payments from two jobs, not just one job. And your overhead costs are lower because you are splitting them over two workers.

When you're competing against another company with two employees your costs should be about the same.

Larger companies can price lower than you because their costs are lower. They can divide their overhead cost over more workers.

Now that I've said all that for the purpose of making the economic argument, forget about competing on price. That's a losing strategy. You want to charge as much as possible. You will get fewer clients, but the ones you do get will be much more valuable to you. To find out how much you should be charging, check out books by Ellen Rohr especially "How much should I charge".

 

[Gary11734]

Your competitor only has an advantage if your price is higher. Price the job the same as your competitor and s/he has no advantage.

Are your costs higher? No, actually, your costs are lower than a one-man-band competing against you because you and the license holder are each going to be doing a job which means you are bringing in payments from two jobs, not just one job. And your overhead costs are lower because you are splitting them over two workers.

When you're competing against another company with two employees your costs should be about the same.

Larger companies can price lower than you because their costs are lower. They can divide their overhead cost over more workers.

Now that I've said all that for the purpose of making the economic argument, forget about competing on price. That's a losing strategy. You want to charge as much as possible. You will get fewer clients, but the ones you do get will be much more valuable to you. To find out how much you should be charging, check out books by Ellen Rohr especially "How much should I charge".

I assume for this thread; for a given service change as an example, we are looking at the same costs, plus O and P. Given that, the guy that has to add the cost at the back end of the bid for the Master's costs, he will be higher. In this thread, the Master is an additional cost to the business. Same as hiring an accountant.

 

[fisherelectric]

Call a lawyer who specializes in small construction business in your state.

 

[Coppersmith]

I assume for this thread; for a given service change as an example, we are looking at the same costs, plus O and P. Given that, the guy that has to add the cost at the back end of the bid for the Master's costs, he will be higher. In this thread, the Master is an additional cost to the business. Same as hiring an account. Pure overhead.

Not based on my statements in post #3. The master is an employee of the company and a working journeyman. His/her salary may be higher than a hired journeyman but s/he is not pure overhead. S/he will work jobs and bring in profits. So two service changes will be occurring simultaneously with two invoices being issued and two payments being made.

 

[Gary11734]

Not based on my statements in post #3. The master is an employee of the company and a working journeyman. His/her salary may be higher than a hired journeyman but s/he is not pure overhead. S/he will work jobs and bring in profits. So two service changes will be occurring simultaneously with two invoices being issued and two payments being made.

I didnt read where the new Master was going to work as an employee. The guy is talking about leasing a Masters license, not working as a JW with a Master..

 

[Coppersmith]

I didnt read where the guy was going to work as an employee. The guy is talking about leasing a Masters license, not working as a JW with a Master..

Both Jeff and I advised against that. Depending upon the jurisdiction it may be illegal and in all jurisdictions it's ill advised.

 

[Gary11734]

Both Jeff and I advised against that. Depending upon the jurisdiction it may be illegal and in all jurisdictions it's ill advised.

I have never run up against the owner that has to be the Master. Maybe in some States, but I haven't seen it.

I would never do it without having the master, but no one does any self perform these days. They sub it all out. Look at the general; the guy does nothing these days but pushes paper. In the old days, he self-performed 40 to 60 percent of his work.

It's just the nature of the beast.

Masters license are a dime a dozen these days. Knowing how to run a business is where it all goes south. We are all pretty good electricians, but when we enter in that white-collar world, all heck can break loose.

Hopefully, after this thread, the guy will get his master license!

 

[romex jockey]

My area has a few rising monopoly companies.

What they do is approach smaller local companies for buyouts , i.e.- the 'master' hands over his biz and customer base ,gets a managers position ,w/ golden parachute retirement plan

Said monopolizer company now offers plumbling, heating, electrical, solar, AC, hvac.....you name it

The owners have zero credentials ,other than being registered with our sec of state as a bona fide biz.

And so it boils down to personal license liability IE~ who's name is on the permit.
Where some states allow any Joe blow to pull a permit , the issue may be moot.

~RJ~

 

[jmellc]

In our state of NC, you cannot "lease" a license as I understand it. You can hire a licensee and run the business under his license. He is listed with the licensing board as the qualifier. I think you can have more than 1 qualifier but not certain on that.

If MI allows a qualifier, you may do ok for awhile going that route. But if he leaves for a better job or gets killed in a wreck, you all of a sudden have no qualifier at all. You would probably have to finish permitted jobs under supervision or closer inspections and likely not be able to permit any new jobs.

I had an uncle years ago who was part owner of a large pharmacy but didn't have a pharmacist license. He always had to keep a licensee on staff to stay legal. He got in a bind several times when someone left and he had to scramble to get someone else in the door in a very short time.

Best to get your license first. Having another licensee on board is icing on the cake.

 

[Coppersmith]

Said monopolizer company now offers plumbling, heating, electrical, solar, AC, hvac.....you name it

Yes we have a lot of those here as well although I would not call them monopolies because, well, we have a lot of them!

It makes perfect sense. You have a plumbing business that running well. If you add A/C and heating, you can utilize your existing overhead staff and office space. Just hire a mechanical master license holder, some mechanical techs, and equip a few trucks. Your costs are lower than a new startup and you tap into a whole new line of business. Then add the other trades as well. All that's left to do is change your company name from "ABCXYZ Plumbing" to "ABCXYZ Services".

 

[Coppersmith]

In our state of NC, you cannot "lease" a license as I understand it. You can hire a licensee and run the business under his license. He is listed with the licensing board as the qualifier. I think you can have more than 1 qualifier but not certain on that.

Florida allows a license holder to qualify up to four businesses. You can't just sell these businesses your license number. You must actually supervise the work being performed. Supervising is kind of a loose definition however. It would be perfectly valid (as far as I know) to review images of the completed work, or stop by for a few minutes and inspect it. The master would not need to be responsible for hiring, or scheduling work/employees.

It should be noted that a service truck business owned by a master requires the master to supervise all work but rarely does the master visit a job and check the tech's work. The supervision usually consists of sending the tech to the job and collecting the check from him/her when s/he returns to the shop.

 

[kwired]

Your competitor only has an advantage if your price is higher. Price the job the same as your competitor and s/he has no advantage.

Are your costs higher? No, actually, your costs are lower than a one-man-band competing against you because you and the license holder are each going to be doing a job which means you are bringing in payments from two jobs, not just one job. And your overhead costs are lower because you are splitting them over two workers.

When you're competing against another company with two employees your costs should be about the same.

Larger companies can price lower than you because their costs are lower. They can divide their overhead cost over more workers.

Now that I've said all that for the purpose of making the economic argument, forget about competing on price. That's a losing strategy. You want to charge as much as possible. You will get fewer clients, but the ones you do get will be much more valuable to you. To find out how much you should be charging, check out books by Ellen Rohr especially "How much should I charge".

One man vs two man organization won't necessarily have double/half overhead costs of the other. Each has their individual situations and own set of overhead costs to go with those situations. Some things may be similar but not everything is always the same.

An organization that only does single family residential work may not have all the equipment that someone that does commercial/industrial work has - even if they have same number of workers. Insurance on same two companies can be very different also.

 

[cdslotz]

The guy is talking about leasing a Masters license

not in Texas

 

[iceworm]

... but I know you can pay for lease a master license, Thats the thing.. ... I dont want to ask to somebody else cuz I dont want to much scandal ...

It has been 25 years, so I can't help much with current rates, but I suspect the law has not changed much.

At the time I'm working as an engineer and my Electrical Administrator license (probably similar to a masters license) is unassigned. A company asked if I was interested in renting my license to them. So my name goes on the permits and I sign saying the work meets code. But they don't want me to be part of the work. They do what they want and I stay out of it. Illegal - but not uncommon.

That doesn't work for me. I'm reviewing any job with my name on it. And I'm getting paid for my time as well as the license. If they can't convince me the job meets code, I'm not signing.

And that was the end of the conversation.

The point:
Following the rest of the posts, you really want to have a good relationship with your hired masters license..

 

[kwired]

The guy is talking about leasing a Masters license

not in Texas

Most places that is illegal. May be legal to hire or partner with a "qualifying license holder", but as mentioned earlier should that relationship dissolve for whatever reason, you are left with no license, good idea to use this (if allowed) only as a temporary thing and get your own license ASAP.

 

[lakecitieselectric]

Fix Quote

Fix Quote

Hey :bye: I have a question I'm starting my own company and I want to work with commercial and residential and I still dont have
my master but I know you can pay for lease a master license, Thats the thing.. I dont know how it work that because the person that have the master license that I know
does not have an idea too, and I dont want to ask to somebody else cuz I dont want to much scandal
Could someone give me an idea or tell me prices and the way that it work?

thanks :angel:

Sec. 1305.159. Electrical Contractor.

• (a) An applicant for a license as an electrical contractor must:
  • (1) be licensed under this chapter as a master electrician or employ a person licensed under this chapter as a master electrician;
  • (2) establish proof of financial responsibility in the manner prescribed by the executive director; and
  • (3) maintain workers' compensation coverage for the contractor's employees through an insurance company authorized to engage in the business of insurance in this state or through self-insurance, or elect not to obtain workers' compensation coverage, as provided by Subchapter A, Chapter 406, Labor Code.
• (b) A person who holds a master electrician license issued or recognized under this chapter may only be assigned to a single electrical contractor, unless the master electrician owns more than 50 percent of the electrical contracting business.