Types of electrical contractors

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vilasman

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I have a question for those of you who have been long time in the trade. As i see this game there about 3 ways to set up your business. You could do strictly commercial work, you could do strictly service calls and short jobs like heavy ups and the like... things that take less than a week of work, You could do strictly large scale renovations and new houses. Now of course any electrician can do any of these things, but if you get deep into new houses and renovations, service calls become a distraction, because those owners demand a lot of hand holding and customized work. Commercial work is rigourous and after doing a 8-10hrs of that you wont feel like doing anything.
And besides the 3 take slightly different skill sets, tools sets, customer relations skills, they are just different.
Of course you could set up a company, hire workers and farm out who-ever is good at whatever to that job.
But I am trying to see a pathway from where I am,
I have a BS in Electrical Engineering as well as 14 years in the trade, I'll be taking my masters test this year, I'm married to a wonderful woman who has degree's in communications, adveritising and business management. (No that was not accident, it wasnt the main entrance requirement, but when you want to be a contractor, after she laid me out with her cooking skills it was a deal clincher).
The master that I work for now has a stable group of rich customers, that cant decided what they want to do in thier houses so we are constantly redoing, moving, adding rearranging this, that and the other in thier houses, their friends houses , so on so forth and we are also in good with several high end real estate agents. He is old with about 3 years left to work, before he hangs up his tool belt and becomes strict a permit writer.
What would you do?
I think i see more and more that the devices we use and the controls that we use are going electronic. Which half way makes me want to develop a buisness that can one stop , install and service the stuff that is too deep into electronics for your average electricians and so much power that your average electronics tech is scared of it.
But I love doing new houses with a passion. There is nothing quite like being off in the woods in a newly framed, huge house, on a bright sunny morning, with a new auger bit in your hole shooter and 4 or 5 thousand feet of romex to pull.
but those jobs, while time consuming tend to drag, and leave you for months without a check.
Also I hate the thought of managing people unless I found some guys who were really geeked on doing electrical work like I am.
Anyway... any thoughts?
 
Re: Types of electrical contractors

The trend here seems to be very large companies that hire 50 plus men,mostly installers,to wire new buildings mostly track homes.They enjoy a major price break on materials as well as the ability to use cheap help where ever possible.You will not be able to bid under them.If your headed that way sell your tools and buy a suit,your now a salesman and permit signer.
There are smaller companies maybe 4 to 10 employees that go after custom home builders and store build outs.
As a one man with maybe 1 employee you will be too small to be wiring homes.You will find yourself either swamped or dead.Most GC don't want to hear you can't get to there job for 2 weeks because your in the middle of a large rough.
I am currently in that situation of either work for other companies or work alone.
Should i reinstate my masters i will only go after service work and small remodels,service changes,maybe one large house a year for a non rush custom builder.
You will find as a 1 man company that the amount of paper work can consume many non paid hours.
On the bright side you get to pick your hours and reject jobs you don't want.
Is nice to know you work m-f 7:00 to 3:30 and take home xxx$ every week.
So think it all over real hard and go for what you will enjoy the most.
 
Re: Types of electrical contractors

It takes a long time to build what your boss already has. I would look into buying him out or taking over his business when he retires.

I don't think you would ever find employees who love the work as much as you do. Treat them with respect and the good ones will hang around. The not so good ones, let them go on down the road.

Good luck
 
Re: Types of electrical contractors

I'd vote for buying out the guy you're with now too.

Hard to beat a prefab customer base that keeps coming back, has the $$$ to pay the bill.

My mom has a neighbor in FL who's a ceramic/marble tile guy. Virtually all his business is this sort of high end, recommendation stuff. He doesn't touch tract housing or low cost commercial at all. Keep the rich folks happy and it seems you never lack for work...
 
Re: Types of electrical contractors

If your smart you have gathered all the names of who he has done work for.And they know your ability if your the one that has been doing the work.Buying him out might be an option if he intends to sell and price is right.If not you have some customers to go talk to.
 
Re: Types of electrical contractors

All kinds of people make a living at this trade and finding a niche is great, IMO. And most of us find a niche of some sort. If you’re small the bigger contractors will always think your niche should be something they should do and they may try. If you're small you will look at the big boys and think HMMMMMMMMM if I only had the manpower, capital, trucks ect.......... Grass is always greener.

I believe buying out an existing (GOOD) contractor is a wise decision if this option is available. I also believe soliciting any of his customers , while you work for him is UNFAIR to him and not very ethical. When we started this business we did not tell any of our old employers's customers we were leaving (we were forced out). After leaving we called them and told them we had gone into business and were available for work should they need assistance. We got some of our work from these customers and over the years more have called us. Our old employer’s (all 3 I worked over the years) now refer customers to us or use us as a sub contractor.
 
Re: Types of electrical contractors

I wasn't saying go after his customers while your working for him,that might even be illegal.But when you split from him i see nothing wrong in going thru doors that already know you.
You might find at first that you take any and all that you find and then weed out the stuff you don't find of interest.
Very hard to gear up a van to do service calls and then take on residential custom homes.
 
Re: Types of electrical contractors

this trade is changing every day-- i found it funny over the twenty two years i've been in business that it is important to watch your trade magazines - get into new areas and then know when to get out of it! we were completely involved in high end office buildouts -- and started into computer cabling -- it soon was 70 per cent of our work - but then everybody got into it!!! we jumped into metering for two years and left the cabling to all those who were cutting each other's throats! do not take your present boss's accounts - and if he has established "paying" customers i whould sit down with him and discuss your intensions to go into business without competing with him - and see if you can work out a deal which would be good for him - you - and the customer base??? the most important suggestion i have for you is "do not" get your wife involved in your business - let her be "a wife" and good cook as you now enjoy... i am talking from expeiriance as well as other contractors i know. great- let her set things up and then hire a secretary to do the work while see stays home and out of your business. when you get home from work - you don't want to sit at the dinner table and discuss your actions at work and weather she approves of it or not!!! human nature enters the picture---believe me!
 
Re: Types of electrical contractors

I kinda liked it when my wife was part of the company.Can sexually harrass her LOL
And if the customer thinks i am an a-- wait till she answers the phone!!!!!!!!!!!!
 
Re: Types of electrical contractors

Charlie:

I have a partner and one steadfast rule we made day one. No wives allowed in the office.

I have seen to many partnerships end because she thinks her hubby works to hard, puts more in the business la de da de da……..Another ploy used in our area is to make the wife a majority owner, allowing the contractor to be a minority company. I know of three firms that the wife (who knew nothing of the business) took the business to bankruptcy in a divorce. When these friends/associates set up their shop I told them not to do this, but they knew their marriage was rock solid.

Two other customers (electrical contractors) came to work and found out their were shut off by the supply houses, wife had embezzled all the funds. Both wives were in for a shock when they found out what they had done was illegal. One friend threatened to have her arrested, she returned, with most of the money, their divorced.. The other friend did not locate his wife, till after she had spent all the funds and returned for forgiveness. He did not prosecute, nor did he forgive her.
 
Re: Types of electrical contractors

it's a human nature thing. i have known at least eight contractors with this problem. i am living it myself - and seen it coming years ago. i wanted her to hire a girl and supervise the office. little by little they think they know better how to handle business operations outside of the office limitations. four years ago i began to ask myself "who is in charge here?". between her and my accountant i don't know who's worse? when it comes to collecting overdue money, i have no trouble, she gets everybody's a$$ in the air. and then, if she leaves the office and forgets to forward the phone - thats not a big problem! she has her own way of keeping records - "and nobody else could do it" ---- she is correct in her operations - billing-payroll-recievables- but it's the "none of her business" areas that get out of control! and other contractors i know have the same problems. one contractor lost his partner over it and they had a very successful operation - now, after loosing his partner - he can't make it on his own because her - she trys to tell him how to operate his business. his ex-partner is back in business (without wives in charge) and doing good.... human nature is very powerful! eight hours a day is enough - hire your wife to run your office and you've just gone to sixteen hours a day!!
 
Re: Types of electrical contractors

Fella's I hear your pain over hiring your wife's to work with you and it makes me glad i didnt marry a lawyer. :)
I woould never think of trying to take my bosses clients while I was still working for him, or while he was still alive and able to do the work himself. I am turning down side work from other general contracters that I know now and even other master electricians that he tries to farm me out to because...he dosent manage cash flow terribly well, For this reason, and you all are older than me and more expierenced, so tell me if this is good logic. I've worked in the ghetto and i mean I've worked crack houses where the people had jumped the meter on the neighboring building, before being kicked out, leaving food and dishes and clothes and all manner of other stuff stinking in rotting , that i will spare you the details of except to say that I got so , so bit up by fleas and no see-um's that I looked like i had chicken pox. On the other hand, tomorrow night I am going to help my now boss put in a Viking rangehood, in the home of individual who was closely related to the largest beer distributer on the east coast. Dinner and a fine specialty beer will be provided.
I have asked several people what is the difference between the plug or the switch that you install in section 8 housing and the one that install in a house where the addition to the house cost over a million dollars. And I believe that I have come to the conclusion that the difference is almost totally the person who is putting it in. I mean we all buy our switches at home depot. Some of us charge $30/ hr and have a heck of a time getting paid. Some of us charge $75/hr and people come looking for us to give us a check to make sure that we well actually get to them and get their work done because they know we are so busy.
That's what I am trying to soak up from the boss. The contractor who can walk into a million dollar house and have the owner say do the work, bill me and I have already given your name to a few people down the street, the food on the table and the drinks are for you and your check will be ready when you finish or would you like cash, I am trying to soak up every bit of that while I can. I know that at 73 next week , the man only has but so much more time.
And I have seen that and it freaks me out. Cause other people I know or running hither and yon, scrambling to catch a few hundred here, a few hundred there, What keeps my boss in a fix is that he knows to many strippers.
But my question! I know there comes a time when every eagle has to leave the nest and fly on his own. And the thing that woould best warm the old mans heart is to see me carry on in his tradition of quality service.
More over this year I will have enough time qualified to take my maryland master's and next year my DC Master's. And i have customers of my own already. But i dont quite know what to do with this. I think we can negotiate me taking over his business. I left him for 2 years, I got married moved to my parents farm, found out that everybody in SW Va. does electrical work, and that master's in the country make $11 and said later for that, I was making $15 as a helper, and never got this dirty or worked this hard. I came back to the same master I left from and I am working as if I never left.
I like your buy out idea, my wife drives me up a wall anyway, which is the great thing about having a trade...if your wife gets on your nerves, go to work. I had all my tools before i got married so if she splits i still get to keep them, and if you have your tools what else matters?
But as they say in science, the reason why one man is able to progress so far is because he stood on the shoulders of the man before him. I am standing on an excellant pair of shoulders. I am a good residential/renovation/problem solving electrician. I am the type that can go into a house that a plumber/carpenter/engineer has tried to wire and figure out there mess and make it right. But also have an electrical engineering degree.
I guess you guys are telling me I have to carve my own space, keep my wife out of it, and pay my taxes. If have seen what the tax man can do to you.
Thanks for your advice!
 
Re: Types of electrical contractors

If your a one man company ,and lucky enough to have a wife to help ,you will quickly see that running out of your home office will keep that secretary pay check in your pocket and a lot more stays in your household.
As to a switch being the same in crack house to mansion ,yes they are close.The high end stuff better be plumb, flush with wall,and wiped clean.They won't except less than perfect,not even a scratched screw(and it better be lined up).All of that might take 1 extra minute.
Have seen guys that will ruff in a small 3 bed house but get scared over a 5000 sq ft mansion.Why ?They all are broken down to simple circuits just more of them.You will get more for that same duplex ,on same romex ,going to same panel,in a custom home than a track home.Differance is you can not use installers on custom homes.
 
Re: Types of electrical contractors

there is a big difference between these homes! the mansion will require a large cash outlay -specialty fixtures - order problems -parts problems - and since the owner has the financil capabilities he can drag you over the coals before getting paid!! i know one contractor who is "frozen" due to a pi$$ing contest with a millionair owner and his general contractor. the electric on this house was over 1.25 million. i was called by the owner to set up power monitoring equipment that "he" says is causing problems with equipment within the house??? the g'c' will do whatever the owner says! the circuits were monitored and no abnormal readings were found??? i looked at the job and found it to be first class (both equipment and installation). the other home will be less than a thousand dollars in materials and the owner will be glad to see the lights come on!!!!
the wifey thing? you'll just have to learn the hard way---it has little to do with "success" -but everything to do with piece of mind!
 
Re: Types of electrical contractors

there is a big difference between these homes! the mansion will require a large cash outlay -specialty fixtures - order problems -parts problems - and since the owner has the financil capabilities he can drag you over the coals before getting paid!! i know one contractor who is "frozen" due to a pi$$ing contest with a millionair owner and his general contractor. the electric on this house was over 1.25 million. i was called by the owner to set up power monitoring equipment that "he" says is causing problems with equipment within the house??? the g'c' will do whatever the owner says! the circuits were monitored and no abnormal readings were found??? i looked at the job and found it to be first class (both equipment and installation). the other home will be less than a thousand dollars in materials and the owner will be glad to see the lights come on!!!!
the wifey thing? you'll just have to learn the hard way---it has little to do with "success" -but everything to do with piece of mind!
 
Re: Types of electrical contractors

The high price houses do tend to demand a bit more.Waiting on my money,no promlem 1 1/2 % a month.LIEN on property.Contract calls for lawyer fees when i win.
I kinda like my wife.Owned her 30 years .She has me trained .LOL
 
Re: Types of electrical contractors

well vilasman,
the old addage 'one that speculates accumulates' applies. perhaps the best advice i could forward is to have no fear about the future, dive right on in with both feet.

i didn't think i could build a 400A 3 ph system alone, or pull in 300' of 350 kcmil alone, or do datacom, or wire million dollar McManisions alone before i started.

contractors are inherently problem solvers , which is why the phone rings

as to buying your former boss out, remember your buying a customer base more than anything else, this can work well given the the proper planned 'passing of the torch' per se'

as to a wife/partner, this can also be done in a segregated sense where it is one partners responsibility as to 1/4ly taxes and bill outs for instance

i wish you luck vilasman
 
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