starting on shoestring budget

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bolthead

Member
Hey Guys and Gals,
I am going to start working for myself and I am looking to you all for your advice. I am employed now and do not intend to quit my job until I cannot afford to continue working for them, if that make sense. I have 15 years of experience and 15 years of collected material that was going to be discarded. I kept it, and organized it and now I have a 12 x 15 storage room that rivals alot of the supply houses I've been to! I have a truck and enclosed trailer that are both in good shape and I own them free and clear. My worry is that I have only worked for large contractors and I have not been involved in the everyday buisness. I tell people that "electrical, i know. contracting and company...not so much." Any advice on gathering clients and so forth would be great. I am not asking for anyone to write a buisness plan or anything like that, just a line or two along the idea of "make sure you do this" or "never let yourself get like this". I have used this forum for a few years and I respect the opinions of everyone. So BRING IT ON!!!!
 
LEO2854

LEO2854

Esteemed Member
Location
Ma
bolthead said:
Hey Guys and Gals,
I am going to start working for myself and I am looking to you all for your advice. I am employed now and do not intend to quit my job until I cannot afford to continue working for them, if that make sense. I have 15 years of experience and 15 years of collected material that was going to be discarded. I kept it, and organized it and now I have a 12 x 15 storage room that rivals alot of the supply houses I've been to! I have a truck and enclosed trailer that are both in good shape and I own them free and clear. My worry is that I have only worked for large contractors and I have not been involved in the everyday buisness. I tell people that "electrical, i know. contracting and company...not so much." Any advice on gathering clients and so forth would be great. I am not asking for anyone to write a buisness plan or anything like that, just a line or two along the idea of "make sure you do this" or "never let yourself get like this". I have used this forum for a few years and I respect the opinions of everyone. So BRING IT ON!!!!
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You can post an ad on craigs list "skilled trade services" in your area

Service upgrades
recesed lights
additions Ect Ect.

Just make sure you follow your state licence rules for advertising
In my state you must display your license number in all ads.

put your phone number in your ad .do not post hourly rates just look at the jobs an esimate your time and stock and just give a grand total price.:)
 
C

CopperTone

Senior Member
Location
MetroWest, MA
the more I learn - the more I realize I don't know anything.

1. don't over spend - buy only what you need.
2. make sure you get paid for the work you do.
3. make sure you are charging enough for your services to support your business.
4. don't spend every cent you make - leave as much in the bank for future as you can afford to.
5. stay organized - use Quickbooks
6. make sure you have a good tax accountant
7. work harder than you used to when you worked for someone else.
8. stay on top of the paperwork daily - it can swallow you up in only a couple of weeks.
9. always pay your bills and helpers or apprentices on time.
10. do great work and take care of your customers and they will give you most of your work through referrals.
11. put lettering on your van - free advertising - some of the best advertising actually.
12. open accounts at local supply houses - always pay your bills - always get paid for the work you do. (I stress these 2 points again)

I think I could type this list all night.

Good Luck
 
ceb58

ceb58

Senior Member
Location
Raeford, NC
Tiger Electrical said:
These days there are fewer projects and more electricians and contractors looking for projects, so it's the perfect time to start your own business.
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fireryan said:
According to that wouldnt it be considered a bad time to start a buisness:-?
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I would say that was a sarcastic statement.

Invest in a attorney to draw up a contract for you to use on all jobs. As Judge Joe Brown says " If it ain't in writing, It dont mean nothing"

Invest into an accountant. They can help keep up with what is what. Around this time of year mine will tell me if I need to buy tools and/or equipment or spend money on advertising. I would rather buy a tool that I might use once or twice or new shirts with name and logo on them than give that money to the gov.
 
flyboy

flyboy

Member
Location
Planet Earth
bolthead said:
Hey Guys and Gals,
I am going to start working for myself and I am looking to you all for your advice. I am employed now and do not intend to quit my job until I cannot afford to continue working for them, if that make sense. I have 15 years of experience and 15 years of collected material that was going to be discarded. I kept it, and organized it and now I have a 12 x 15 storage room that rivals alot of the supply houses I've been to! I have a truck and enclosed trailer that are both in good shape and I own them free and clear. My worry is that I have only worked for large contractors and I have not been involved in the everyday buisness. I tell people that "electrical, i know. contracting and company...not so much." Any advice on gathering clients and so forth would be great. I am not asking for anyone to write a buisness plan or anything like that, just a line or two along the idea of "make sure you do this" or "never let yourself get like this". I have used this forum for a few years and I respect the opinions of everyone. So BRING IT ON!!!!
Click to expand...

Statistics from the Small Business Administration say that more than 50 percent of small businesses fail in the first year, and 95 percent fail within the first five years.

So.............

Make sure you have a business plan? The business plan will force you to understand just how much you need to know and plan for to be successful (ignore those who say you don't need one)

Make sure you know your numbers, i.e., breakeven and desired profit. You must know your costs of doing business. You must know your billable efficiency and calculate your selling prices based on billable efficiency and breakeven (ignore those who tell you there are other ways of knowing your numbers)

Never base your prices on what your competitors are charging. You don't have to.

Make sure you pay yourself a respectable salary and include it as an expense. (Ignore those who suggest you can't in your first year of business).

Don't make your wife a slave doing your books, pay her a salary.

Make sure you know how to read an income statement & balance sheet.

Make sure you understand and know how to control cash flow.

Make sure you collect your money COD (ignore everyone who says you can't collect COD)

Pay cash for everything, always pay your suppliers better than agreed and get them to pay 2% for cash.

Don't hire anyone unless you can give them full time work, the best wages and benefits and career path they and their family can be proud of.

Don't ever take business advice from people who can't produce a P&L proving their profitability.

Don't ever believe anyone who says you can't make money in this business.

Don't ever believe anyone who tells you there is no work out there because there are more electricians than jobs.

Don't ever extend credit to a customer. Always get at least half down as a deposit and collect your balance immediately on completion. Do not believe anyone who tells you this can't be done.

Don't think for one minute your going to succeed in business without learning new skills associated with business systems, budgets, management processes, leadership and time management.

Be acutely aware that you don't know, what you don't know and seek to out find out just how much, you don't know.

You may just come to the conclusion it's better to work for someone else.
 
Sam Moore

Sam Moore

Member
Location
SC
Make sure you go into this whole heartedly and want it more than anything, if you dont, it'll never work...it's alot more work than working for someone, but it's more rewarding
 
JacksonburgFarmer

JacksonburgFarmer

Senior Member
Location
Butler County Ohio
Sounds to me like you are off on the right foot. I know some guys who didnt have that much when they started.....didnt last very long though either.

CASH IS KING!!!!!!

Reputation is key.

spend less than you make.

Get a line of credit, but use it right.....it is not a pile of money that will not have to be paid back.....ask my first employer about that.....
 
B

bolthead

Member
Great feedback everyone. I will take all of these things into consideration. Keep it coming. I have a couple of rules, I dont take diet advice from fat people and I dont take financial advice from broke folks, that is why I am turning to the people that on this site. You guys are the voice of experience, knowledge and, I assume, success. I am on my way to do a job this morning...painting a sign! I added lights to the sign last week and now he wants it painted! Cowboy, he drew a picture on the back of a big enough check!
 
B

bolthead

Member
JacksonburgFarmer said:
Sounds to me like you are off on the right foot. I know some guys who didnt have that much when they started.....didnt last very long though either.

CASH IS KING!!!!!!
Indeed Cash is King. Dave Ramsey is showing up everywhere!!! I avoid credit whenever possible, but I do have a small line at a local house.
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renosteinke

renosteinke

Senior Member
Location
NE Arkansas
One thing you simply MUST realize is that your 'preparation' only started with your electrical qualifications.

Here are some other 'educational' opportunities you need to address, and right now - when business is slow and you have another income - is the best time to address them. These are essential for the small electrical contractor:

1) Bookkeeping - especially investment and training in Quickbooks. You need this in order to pay your taxes, calculate prices, and watch your money;

2) The OSHA 30 hr. course;

3) EPA asbestos certification;

4) EPA lead certification;

5) EPA refrigerant licenses, and training in working on HVAC and refrigeration equipment, is a major 'plus;' and,

6) BICSI certification for low-voltage work.

Then there is the 'legal' side of things. There are a variety of excellent - if expensive- books from IICLE on topics like construction law, workmans' comp., etc. While focused on Illinois case law, they are excellent primers for at least 49 of the 50 states. Google "IICLE." Read them, and at least you'll know what questions to ask!

Another thing you want to get real familiar with is Google Sketch-up, Chief Architect, or some other form of CAD. This will be needed for documenting your jobs. The various seminars are very worthwhile.

Some business expenses are simply required; others are best to 'volunteer' for. For example, your state may require an additional license for work on mobile homes. Workmans' comp is a big 'plus,' even if you're not required to have it (don't count on your employers' health plan to cover you!). Paying yourself - and remitting taxes on those earnings - will open the door to your later collecting unemployment; why not hedge your bets? I think you're beginning to see the advantages to having a corporation- you're actually 'working' for 'somebody.'

Tools, tools, tools - and the means to transport and store them. There's no end to the 'company supplied' stuff you get to provide for yourself. PPE. Lock-outs. Fall arresting gear. Job Boxes. It's amazing how much you'll pour into your office. You'll want a generator, ladders, scaffolding, jackhammer, roto-hammers, core drills, trailers, etc. The list never ends. Then you get to mark / ID / alarm / inventory all of it.

These are all things you can do when work is slow.
 
GUNNING

GUNNING

Senior Member
Location
Gainesville, Florida
Network.

Network.

Keep track of your expenses.
Just because you start out with an inventory supplied by somebody else doesn't mean you are now an electrical contractor.
There are two separate and distinct parts to this business; nuts and bolts, and Paperwork. One is VERY different from the other.
Good luck.
See if you can team up with a morning business group. They will have run into problems you cant even imagine yet.
Pay Taxes, Employees, Suppliers and in that order.

The Government WILL show up and take your stuff if you don't pay them first.
 
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dieselram752

Member
Location
mass
Treat every customer and there property with respect.
If a customer is a jerk do not work for them.
Call everyone back as soon as possible even if you can not do the work they need done.
Mabey they will call you again.
Good luck and keep the real job(weekly check) going as long as possible.
 
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