Starting a new start up

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lakecitieselectric

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Dallas, Texas
How many current owners had a REALLY good paying job with benefits decide to open their own company to just get away from current company politics? Was it worth taking the leap of faith? My wife continues to push me in this direction but we both have reserves because of my current income.
 
kansas city electrician

kansas city electrician

YEP!!! had a good job but wanted to be able to run things the right way. and concentrate on taking care of the customer

love it now that i work for myself
 
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There are probably many newer and small shops where the owner has no benifits and make less than a good paying job. Many say a business is not profitable for a few years. You have to be ready to take a journey involving lots of hours and little payback.

I believe many EC owners start as a great electrician. But lack the business background.
It can include taxes, permits, law, human resources, promoting, accounting, estimating, customer relations, training, workplace safety, fleet management, logistics, and operations.
The more you know of the business side of things the better you'll do.

Asking yourself tough questions and creating a plan is the 1st step.
Such as why would a customer choose to hire you.
What markets and services you provide.
How much demand is there.
Where you'll get enough work.
How much funds are needed.
How long can you go with little income.
 
There are, of course, exceptions but if you have a "REALLY good paying job", I would not leave and set up shop for the money.
Ive seen a few guys who already had their customer base set and did well off the bat but for most
the money comes later (if at all). More of the ones I see do it for other reasons than $$
 
Everything Active1 said is true. I would add the following:

You're going to need a lot of help from your wife. If your wife is not able to help, you're going to have to pay someone to help you. (And you can't afford to.) These things include: sending out invoices, bookkeeping, chasing slow payers, handling incoming phone calls, scheduling, running paychecks, talking to insurance agents, etc. Sure you could all this yourself, but you won't want to after a hard day of electrical work.

Also, before you hang the shingle, find yourself a mentor, preferably another EC owner who can (and is willing to) advise you. You are going to have tons of questions both with the business and electrical work you've never done before. Join networking groups to meet other business owners who can advice you on related but non-electrical topics like contracts, business insurance, health insurance property management, real estate, construction, vehicle maintenance, advertising, websites, signage, payroll, HR, etc.

As a union member, I was well paid when I worked and not paid at all when laid off. I averaged about three months of lay off a year. I got tired of being laid off unexpectedly and having to wait in line for a job so I decided to make my own job. Been almost three years now. Can't say I've had any regrets.
 
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I agree with what active1 and coppersmith have said.

I went a different direction with what I did. I had no interest in all the office work, crunching numbers or any of the office stuff mentioned above. I ended up finding a business entrepreneur who owned a HVAC contracting company already and wanted to start an electrical contractor. He wanted to own it solely and I was fine with that.

We worked out a deal where I would be compensated based on how the company was doing ultimately. He knows nothing about electrical and wants to keep it that way. Basically, he deals with the numbers and human resource stuff while I run the operations. He doesn't get involved in the day-to-day operations unless I need to involve him for some reason. We have meetings bi weekly to discuss various things, usually cash flow, future projections, budgets, etc.

There was still a lot of hours and small paychecks in the beginning just getting set up, but we are 5 years in and doing great. We now have a full time estimator, 4 office staff, 15 electricians and 8 trucks on the road.
 
thank you all for the insight

thank you all for the insight

MNSparky said:
I agree with what active1 and coppersmith have said. I went a different direction with what I did. I had no interest in all the office work, crunching numbers or any of the office stuff mentioned above. I ended up finding a business entrepreneur who owned a HVAC contracting company already and wanted to start an electrical contractor. He wanted to own it solely and I was fine with that. We worked out a deal where I would be compensated based on how the company was doing ultimately. He knows nothing about electrical and wants to keep it that way. Basically, he deals with the numbers and human resource stuff while I run the operations. He doesn't get involved in the day-to-day operations unless I need to involve him for some reason. We have meetings bi weekly to discuss various things, usually cash flow, future projections, budgets, etc. There was still a lot of hours and small paychecks in the beginning just getting set up, but we are 5 years in and doing great. We now have a full time estimator, 4 office staff, 15 electricians and 8 trucks on the road.
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thank you for the info, and I appreciate all the wonderful feedback
 
lakecitieselectric said:
How many current owners had a REALLY good paying job with benefits decide to open their own company to just get away from current company politics? Was it worth taking the leap of faith? My wife continues to push me in this direction but we both have reserves because of my current income.
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I have been an electrical contractor for 11 years now after leaving a well paying job. I would highly recommend studying your local marketplace. Electrical contracting is a highly competitive, highly volatile, risky business and comes down to supply and demand. If the area that you intend to serve is growing with lots of economic activity now and projected for the future there may be opportunity.

You may want to identify what area you want to focus on i.e. new construction, residential service, medical facility build-outs, public work, working directly for owners...and study those market conditions. If you have relationships with people in any market, that may help tremendously. In our local marketplace I find that the old saying of "It's who you know not what you know" to be very much true.
 
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