USE OF LICENSE, Fair Percentage ?

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I will leave it at this , so we do not Hijack this thread .

Yes Gold Man , " J License " , at the least is required , as well as working in the shops area . When working on the road , different issues come up , and can be dealt with . I think the OP has some issues to work out to Legally comply .






Don
 
Working under my license would be illegal here as well. If I for some reason were to allow you to do such work and call you an employee under some arrangement - it may get us off the hook of using someone else's license - but for you to work unsupervised you still need at least a journeyman license. You can not file for permits here only a contractor license holder can - or homeowners working on their primary residence. If you get correction notices - they are sent to the contractor that pulled the permit, and they are the ones that will have possible licensing issues should you want to stir up trouble over a permit or inspection, so if I were to get involved you would be buying my materials, installing them per my specifications, and charging my labor rates - kind of starting to sound like you will be an employee to me. If you burn down someone's house or elecrocute someone and I can't prove you were an employee of mine, or a subcontractor of mine, and we were paying the right liability premium for what activities I do or allow - I may be stuck with paying for your mess - no thank you.
 
hugh6177 said:
Here's what I was thinking, using an actual example from last year:

200A Service Change
Bid: $1,300

Costs
6 hrs @ $28/hr $168
6 hrs @ $10 $60
Parts $435
Permit $80
Total Apparent Expenses: $743
Total "Profit": $557

I was thinking I would offer them 30% of this profit ($167) for assuming the liability. The Expenses that a shop incurs such as overhead, unemployment insurance, vehicle insurance/repairs/licensing, tools and other "hidden" costs would be removed from their equation. The way I view it, they get a check every month for doing nothing; just as long as I don't burn anything down. (And they know my work). Final question: How many of you in Michigan are making 13% net on your bid price at the end of the year?
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Probably illegal, but done nonetheless. I don't do it but I know someone who does. He keeps it simple, $350 to pull a permit. Here is something interesting though. A certain city in my state knows about it, one inspector wanted to do something about it, they didn't and they still give him permits.
 
GerryB said:
Probably illegal, but done nonetheless. I don't do it but I know someone who does. He keeps it simple, $350 to pull a permit. Here is something interesting though. A certain city in my state knows about it, one inspector wanted to do something about it, they didn't and they still give him permits.
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Why are you uncomfortable naming it? :ashamed:
Any chance that there's a corporate client who golfs with members of city council?

http://www.bostonglobe.com/business...tions-sites/q2yZt39X9bw1gaLvjlMARK/story.html
 
hugh6177 said:
So I worked for a company 15 years (got my apprentice card @ 14, been with them since age 17). A year ago I quit and moved two hours away to pursue selling electrical tools full time on Ebay, [Seller:electricdealsforyou, just FYI ;) ] as I had been doing that for 3+ years on the side. It appears there is a shortage of electricians in the area I moved to, and I would like to pick up some of those jobs under their license. Long story short; these guys are like family to me, and I want to treat them right. We have already batted this back and forth, and they are open to the idea, but I want to give them an actual proposal. What do you feel would be a fair percentage of the PROFIT on a job for using a license; IF THEY ARE NOT SHARING IN THE LOSSES? IE, I assume the bidding risks, their only 'risk' would be liability/office expenses for handling permits? I guess I should add that these jobs would be one man jobs, ie residential/pole barns/panel changeouts/etc. And yes, I could get my master's and EC, but this isn't my primary income and I just don't want the headache...
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Sorry dude , I used 10% as of the GROSS .The straight fee way is another . By the way your prices are low . Good Luck .



Don
 
If you needed surgery done would you settle for someone working under some other surgeon's credentials to do the procedure, especially if the licensed person wasn't even there for the procedure? I know the threat to life is not exactly on the same level in these two examples, but there is still something to compare here. Now how does that licensed surgeon feel about letting someone use his credentials in such a way? How does licensing authorities, liability insurance companies, or any other parties that have something at risk feel about this arrangement?

Get the proper license and follow proper procedures or fill out a W-4 and get back on their payroll.
 
hugh6177 said:
But really, it's no different than an hourly wage with profit sharing; with me being a higher up "employee" trusted to make any/all decisions I may be faced with. In fact, now that you guys have brought this idea up, I think that's just how I'll pitch it. Pay me minimum wage and a percentage of the profits... I'd still love to hear from any actual EC's as to any reservations/concerns/etc a proposal like this would bring to their mind...
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I don't see any problems with a company making you an employee and carrying you on their books but it's going to cost a lot more than 10%.

They hire you say as a part time employee and you use their company name. They are responsible for all work, not just warranty but any type of legal action a customer decides to bring. Next comes insurance. Not just liability but workers compensation and unemployment and social security. They wouldn't have any less of an adminstrative cost on you than any other regular employee.

What's to prevent you from useing others to work for you so as to try and make some money? The very minute you bring a helper on the job that's not covered you would put the company in danger.

I don't see any advantages to working this way at all.
 
hugh6177 said:
200A Service Change
Bid: $1,300

Costs
6 hrs @ $28/hr $168
6 hrs @ $10 $60
Parts $435
Permit $80
Total Apparent Expenses: $743
Total "Profit": $557

The way I view it, they get a check every month for doing nothing; just as long as I don't burn anything down. (And they know my work). Final question: How many of you in Michigan are making 13% net on your bid price at the end of the year?
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What about that 6hrs @ $10 $60 ? Sounds like a helper that's not insured and if he gets hurt then who will cover the cost?
 
growler said:
What about that 6hrs @ $10 $60 ? Sounds like a helper that's not insured and if he gets hurt then who will cover the cost?
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Also sounds like that helper is not paying any self employment taxes or if not under contract not having witholding of payroll taxes or administration of unemployment taxes. All is fine until someone gets audited or something just doesn't add up and this gets discovered. All those playing the game by the rules have reasons why they have to charge higher rates then those that don't play by the rules. Employees are a valuable asset to businesses - but they are not free, and they cost more then just their net paycheck.
 
GoldDigger said:
They cost more than their gross income too!
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Correct. Some can't seem to get why they only make 15-20 even 25 bucks an hour yet their boss charges the client 75-100-150 for their labor. Yes there is some profit in there, but it is not all profit that is in that mark up.

Then these guys decide they can make a lot of money by opening their own shop and undercut the prices their former employer charged clients. May work out for a while, but as your overhead grows, and especially if you need employees of your own, you begin to realize why your former boss had to charge what he did.
 
kwired said:
If you needed surgery done would you settle for someone working under some other surgeon's credentials to do the procedure, especially if the licensed person wasn't even there for the procedure? I know the threat to life is not exactly on the same level in these two examples, but there is still something to compare here. Now how does that licensed surgeon feel about letting someone use his credentials in such a way? How does licensing authorities, liability insurance companies, or any other parties that have something at risk feel about this arrangement?

Get the proper license and follow proper procedures or fill out a W-4 and get back on their payroll.
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Not a good example, most electrical contractors have employees who do the work and the owner never touches the tools or supervises the job.
 
JoeyD74 said:
Not a good example, most electrical contractors have employees who do the work and the owner never touches the tools or supervises the job.
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Maybe so and like I said the direct threat to life is not the same, but is it wise for a business owner to just turn them loose? I bet most have some ways of checking up to some degree on what goes on. Even if it is easy money a good manager wants to know what threats are there that will end that easy money and find ways to prevent that end. Now the cutthroat residential work is a different animal - it is full of people out to get whatever they can whether it be huge profit off of others, or just enough to survive another day for some people. I am not competing in those markets, if a customer wants me to compete with some of those installers - they are welcome to keep me me out of the loop. I can save more by staying at home then I can working for net losses:happyyes:
 
Thanks for the replys, interesting reading. :) Growler, Kwired... $1200-$1500 is a common quote from us in our area; and as a larger shop (with more overhead), we often can't compete with the 'one man shows' on these types of residential/service change jobs. That's just our market. :happysad: As far as a $10 apprentice, I know for a fact that we are starting guys @ $9/hr, and moving them up to $10 after first year+. I also know many of you are going to recoil at those #'s and say "it's not right". That's ok, but please refrain from making yourselves look foolish by saying you "just have to charge more/pay more". We are already at the top end of the local market, and if you don't understand that markets are different by area, then it's probably best your working where you are. :happyyes: I started my Ebay business by going to our competitition's bank liquidation auctions, and even the original company I started with closed two years ago (BTW, the owner/electrical contractor was living in ANOTHER COUNTRY!!!, so don't try to tell me that the Master has to be on every jobsite- I know the law; a j-man's license is all that is required to run a job. He also walks through with inspectors and get's handed a copy of any violations at end of inspection (as well as it being faxed to office). As I stated in earlier posts, I've worked with these guys my whole life, they know the quality of my work. I suspect if they started getting calls/red tags from the AHJ they might start rethinking any arrangement, but c'mon; your fooling yourself if you think the Master of Record in any company with, say, 10?+ employees knows what's going on. I worked with the first company for 7 years, did schools/hospitals/box stores/etc and saw the owner on a total of TWO jobsites. The office hires Masters/j-men who he ??trusts?? to run jobs/control quality; and in all actuality the "way" you agree to get paid doesn't affect that at all.

Kwired, thanks for bringing that up, valid point. My dad always told me general rule was an employee had to be generating 3X his wage to be profitable for a company. I understand about work comp/dead time/admin costs/etc.
 
hugh6177 said:
I know the law; a j-man's license is all that is required to run a job.
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No one said that you couldn't run a job. Here you don't even need a journeyman's card but you do have to be an employee of a licensed EC. The EC is responsibible for the job.

What you were talking about is pretty much subing work from and EC. Work can be sub-contracted but only to another licensed EC.

You are only thinking about getting around the license requirement with a permit from others and this may work. Things don't end with getting past the AHJ, then there is the IRS and and the insurance carriers to deal with. If a company subs work to you they still have to account for any money paid out. Their workman's comp carrier would want the name of your workman's comp carrier and policy number and so would the liability carrier. They have to take out taxes and pay unemployment insurance. What you suggest is a bookkeeping nightmare.

Kwired said it right, their is no way to run an EC business other than actually getting a license and actually running an EC business.
 
GO TAKE THE TEST

GO TAKE THE TEST

hugh6177 said:
So I worked for a company 15 years (got my apprentice card @ 14, been with them since age 17). A year ago I quit and moved two hours away to pursue selling electrical tools full time on Ebay, [Seller:electricdealsforyou, just FYI ;) ] as I had been doing that for 3+ years on the side. It appears there is a shortage of electricians in the area I moved to, and I would like to pick up some of those jobs under their license. Long story short; these guys are like family to me, and I want to treat them right. We have already batted this back and forth, and they are open to the idea, but I want to give them an actual proposal. What do you feel would be a fair percentage of the PROFIT on a job for using a license; IF THEY ARE NOT SHARING IN THE LOSSES? IE, I assume the bidding risks, their only 'risk' would be liability/office expenses for handling permits? I guess I should add that these jobs would be one man jobs, ie residential/pole barns/panel changeouts/etc. And yes, I could get my master's and EC, but this isn't my primary income and I just don't want the headache...
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Have you priced the actual costs of Insurance and licence fees?

GO TAKE THE TEST (I know of a lot of contractors that are not that smart)and do whatever is necessary to pass it !!!! Depending on the state, an"inactive contractor" is not much more than a journeyman. it is the insurance and bonding that can be the 'kicker'

An inspector is like to go easier on a inactive contractor as opposed to a bootlegger.


Compare the price that you would pay your previous boss vs Tag-title-license, and then decide.

P.S I sell Appox $20K partime on ebay , it beats crawling in attics,or, cold weather...
 
hugh6177 said:
Thanks for the replys, interesting reading. :) Growler, Kwired... $1200-$1500 is a common quote from us in our area; and as a larger shop (with more overhead), we often can't compete with the 'one man shows' on these types of residential/service change jobs.
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I'm a one man show and can't compete with some of those quotes either, and do not wish to. I've got enough steady light industrial and farm customers I don't want to play the cutthroat game that goes with a lot of residential work. I still do residential work but it is typically for people that want me to work for them - not those that find the cheapest guy they can.
 
Change of question.

Change of question.

Ok, so you guys have convinced me it's an accounting/legal/liability/insurance nightmare to "sub-contract" work; and I don't want to even appear questionable to anyone (esp the AHJ). So let me tweak the question. Assuming a $50/hr bill/bid rate, what would you think fair to pay someone as a W-2 employee (truck and tools provided by employee; brings in 100% of his jobs, and in 15 years has NEVER taken longer than he bid the job for?) ((ok, ok, maybe in reality that's not true, but sometimes by the time I get around to filling out a time card my memory gets hazy...)) Assume a total of 700 hours/yr for this equation.
 
donaldelectrician said:
Guys , Truck and Tools is nothing new . It has been around forever and is Totally Legal and compliant . So is doing a job for Salary , Expenses with the incentive to share in the profits . Nothing new here , and If it is new to you and you find yourself always short of experienced competent men , you might look into it . Some people live quite differently and enjoy this . How is your Golf Game by the way ?
Who runs your job trucks ? There is nothing silly about business .



Don
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Here, one of two conditions are required for the proposal -- you are an employee of the company (you are on thier payroll) or you are an independant contractor who has his own insurance. To be an EC you shall have a Masters lic, & state contractor Lic and if you had both there is no need for partnership. Electrical contractors have required regulations to follow so for a truck & tools to be able to bid & perform work without following the required regulations is an unfair advantage. Usually a truck & tools will under bid contractors as overhead is not part of the daily cost and most the time a quailfied EC will have to finish the project. If you are that good then pass the test & get the required Lic to go into business.
 
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