Who's making money?

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peter d

peter d

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New England
It seems like the most profitable areas of our trade are the flat rate residential service and service and construction in the commercial sector. Problem is, it takes a lot of money to get into either one of those markets.

Beyond that, profitability can be had with any niche of the trade (except new residential in most cases) when your rate factors in profit and overhead. The problem is that most EC's don't charge nearly enough to make more than a paycheck every week.

Thoughts?
 
Depends on how much money you want to make and how much work you want to do yourself. I have figured out that if i want to make enough money for me and only run the company do no electrical work I need three trucks running full time. Getting there with very little starting capital takes time and patience and a lot of hard work.
 
peter d said:
It seems like the most profitable areas of our trade are the flat rate residential service and service and construction in the commercial sector. Problem is, it takes a lot of money to get into either one of those markets.
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Maybe, maybe not.

A guy making the leap from employee to business owner can work 2 good days a week and profit after expenses as much as he was making in a week as a typical employee. You need to work the other 3 days of that week to grow the biz.
 
i'm pricing myself out of residential right now. i just can't compete any longer with people that don't know they're not making money. i had three phone calls this afternoon from people telling me they were going to use someone else for their resi new construction. i've had several of those calls over the past couple of weeks. my service work is going good right now. it takes me 12 hours doing service work to clear what i made in 40 hours of new construction. i'm about to go balls-to-the-wall service; i have one new construction contractor that i'm going to keep only because i've gotten a lot of service work out of our relationship, and he doesn't mind paying what i ask for on new construction (likes HQ work). i'm confused about your comment that it takes a lot of money to get into service work. right now it hasn't cost me any more to do service. i'm using the same truck, tools, etc. . . i'm about to do some print and outdoor advertising; that'll be the only extra expense at the moment.
 
+1 Doctor Shunk, well put. I love this guy, full of great knowledge......

When I first started out, I sat on my rump for a while, but going to networking events, BNI meetings, placing ads in local papers and publications, posting business cards on strategic bulliten boards....... and something as easy as going to Church on Sundays pays off.

In the first two years of being in business, 75% of my gross was put back into the business, whether it be into overhead, advertising, or material. Just starting out is tough, but I feel that it would be hard to go back working for someone else. Someday I will make money.......
 
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I could never work for anyone else again (well if I had too). Heck the reason I am in business is because others thought I was nuts.

I do work for other electrical contractors and I see contractors large and small making money in all aspects of our profession. It can be done, you just have to have a game plan for your end of the trade.
 
brantmacga said:
i'm pricing myself out of residential right now. i just can't compete any longer with people that don't know they're not making money. i had three phone calls this afternoon from people telling me they were going to use someone else for their resi new construction. i've had several of those calls over the past couple of weeks. my service work is going good right now. it takes me 12 hours doing service work to clear what i made in 40 hours of new construction. i'm about to go balls-to-the-wall service; i have one new construction contractor that i'm going to keep only because i've gotten a lot of service work out of our relationship, and he doesn't mind paying what i ask for on new construction (likes HQ work). i'm confused about your comment that it takes a lot of money to get into service work. right now it hasn't cost me any more to do service. i'm using the same truck, tools, etc. . . i'm about to do some print and outdoor advertising; that'll be the only extra expense at the moment.
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I know what you are talking about I have been losing some new home wiring jobs due to price.But if iam going to lose money . I"ll stay home.
 
Teaspoon said:
I know what you are talking about I have been losing some new home wiring jobs due to price.But if iam going to lose money . I"ll stay home.
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well i haven't been so much losing them; its more like my bids are being rejected. :D i have found a big time-saver to be when someone calls and asks me to do the install on their new home, i say "are you looking for the best or are you looking for the cheapest?" if they say anything other than "the best", our conversation is over.
 
brantmacga said:
... i say "are you looking for the best or are you looking for the cheapest?" if they say anything other than "the best", our conversation is over.
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When I call for pricing if the joker on the other end of the phone uses a line like that, I hang up on them.

With all do respect, that is a lousy sales pitch, and it always gives me the impression the other guy is an egomaniac.

IMHO, you have a better chance of selling your higher price with your reputation, and a humble sales pitch.

Not trying to push buttons, just offering different perspective.
 
ITO said:
When I call for pricing if the joker on the other end of the phone uses a line like that, I hang up on them.

With all do respect, that is a lousy sales pitch, and it always gives me the impression the other guy is an egomaniac.

IMHO, you have a better chance of selling your higher price with your reputation, and a humble sales pitch.

Not trying to push buttons, just offering different perspective.
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i can see your point, but its the truth. to me its not a sales pitch. i could take pictures of every job around me and you would laugh your head off, then wonder how it ever passed inspection. now i certainly don't think i'm the absolute best but 99% of contractors i come in contact with only want the cheapest price. why waste my time when i know that i'm far from the cheapest? maybe its a bad strategy but it leaves more hours in the day for getting work done.
 
brantmacga said:
99% of contractors i come in contact with only want the cheapest price. why waste my time when i know that i'm far from the cheapest?
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Brant I may be mistaken but I was just looking at the statistics for that area and it shows a population of less than 20 thousand ( county) with 107 electrical contractors listed ( yellow pages). If it's anywhere near that then those are not good odds.

Are there really that many contractors or are some of them listed multiple times are something?

I went up in North Georgia to do a job a few years back ( sparse population ) only 4 or 5 contractors listed in the local yellow pages. I was thinking, not many people but not much competition either. :D :D

I had to drive 30 miles to the nearest supply house. I didn't like that.
 
I tried the moonlighting while working for a full time company. Anyone that can have a profitable business in Electrical Contractoring "Hats off to you". Any one that can take a 4 man crew and turn it into a 120 man company "All hail king (Insert name here)".

Personally I would never work for a company full time again. Well I shouldn't say that. You never know when you will get hungry.
 
growler said:
Brant I may be mistaken but I was just looking at the statistics for that area and it shows a population of less than 20 thousand ( county) with 107 electrical contractors listed ( yellow pages). If it's anywhere near that then those are not good odds.

Are there really that many contractors or are some of them listed multiple times are something?

I went up in North Georgia to do a job a few years back ( sparse population ) only 4 or 5 contractors listed in the local yellow pages. I was thinking, not many people but not much competition either. :D :D

I had to drive 30 miles to the nearest supply house. I didn't like that.
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those population numbers are a little off. there are 130k in the 'metro' area. but yes we have well over 100 EC's. we have 7 electrical supply houses in valdosta alone, a town of 50k. most of the ec's are one and two man shops. we have a few 20+ man outfits, and two major electrical contractors; one doing around $20mil/yr and the largest probably does $50mil/yr. We have another two, maybe three shops in the $10mil/yr + range.

edit to add ---> the majority of the ec's we have are what's left over from the extremely large union that used to exist here. they did things such as the plant hatch nuclear facility, florida state capitol, various other high-rises and industrial facilities. the guy i worked under knows almost every one of them, as he was some high ranking official in the union. i think in the next 10 yrs that number will slowly taper down as most of these men are reaching retirement age. at least i hope so.
 
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cowboyjwc said:
There must be money to be made out there. I just saw the home that one of our local concrete contractors owns and is selling, for $950,000.
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But what's his reason for selling it?
 
I always tell people this is America, and you can make a living and/or get rich doing all kinds of things. The guy that owns the local porta potty and septic cleaning service makes millions pumping doo doo, others are making loads in trash. There are rich men in every aspect of our trade, from residential, commercial, industrial and all the specialities that fall into these groups. There are also making a decent living, others just barely making it and some going broke. This is America GO FOR IT.

If I listened to everybody that told me I was crazy for doing what I am doing when I started out I'd still be making scale or just over scale. Few people are just going to give it to you, it is called WORK, for a reason.
 
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