OK Sparky 93
Senior Member
- Location
- Iridea14Strat
- Occupation
- Electrician
Forbes online article says 1 in 4, 25 out of 100 have a plan for retiring.
Do You?
I'm 56, I have a $1000 that I started a Roth with earlier this year.
Started this adventure of being the man, that seemed so alluring, yet is so difficult.
For those of you that are running your own shop, whether you hire many, or are a one man operation and are a part of the elite 25%, how do you fund your future.
Ive read that an electrical contractor makes around $65K a year. Now I am not sure if that is gross or take home, either way it seems like chump change.
I am not talking about gross sales on the business.
Does you customers fund your retirement?
Now I am taking a little detour! I just finished a book, that was geared toward people in construction, written by a Shawn Van Dyke, owned his own and contributes to The Journal of Light Construction (never heard of it).
Anyway the book is an eye opener about the health of ones business financial health, and is written for the sole purpose of getting one to realize a profit.
It let me know that I paid myself money, that I didn't really have, and although I put money into an account for profit, I didn't really have it.
A pill that I had to swallow and it sucks. My revenue went down this year but I paid myself roughly the same amount as I did the previous year, and it was tight at that.
And I am quiet sure, although I did not track every single hour, that I had well under a 1000 hours.
When I look at my P&L it has my COGS, but it is just materials, so the best I can come up with is that 1/2 of the money I paid myself Is contributed to labor and then figure for burden plus fuel cost/ wear and tear, to get a truer Cost of Goods, and the determine how much the multiplier needed for markup in order to pay myself a liveable wage, at a recommended PTR of 33%. It also would not hurt for me to have more billable hours.
Sorry for crying in my beer!
In the book an excerpt; Profit First for Contractors (PFC), also name of book, Percentage of total revenue (PTRs) for a healthy construction business:
Tax: 6%-10%
Owner's Comp: 10%-15%
Net Profit: 8%-10%
Total OPEX: 76%-65% Operating Expenditures.
That's not me!
My metrics and I believe it to be this way for anyone with gross revenue under $250K is
Materials I have no subs 25%
Profit 7.4%
Owners Comp 33.7%
Tax 11.2%
OPEX 22.4%
I don't know about the rest of you but, and sense I dont have any rule book, my OPEX has a larger footprint than what my owners comp does.
Apparently, (I know) you have to sell your jobs for more than they cost. The real question is how much more.
Unless I am wrong, and I could be, the math is,
Hourly OPEX $78.xx, and to make enough revenue to cover that would be to divide by 22.4%, based on 1000 hours, I would need to produce over $350K. I don't see that happening either.
Do you spend money on marketing? That could be costly. A truck, it may be possible to find one for under $20,000, but I am sure that there are some, because I have seen them, that are probably closer to $60K if not more, and then for the brilliant that wits until he is pushing 60 to think about trying to prepare for the future, there is the retirement. To have a chance at not working until I am in the grave, it would be somewhere between $12-$25K per year.
With all of the other small ticket items its between $60-$70K on OH.
All of the things swirling around in my head and probably more. I figure if I write and someone else sees it, They are either experiencing the same or thay have gone through it and made it to the other side. Maybe someone has some insight or advice, maybe that I will see things differently.
Good night!
Do You?
I'm 56, I have a $1000 that I started a Roth with earlier this year.
Started this adventure of being the man, that seemed so alluring, yet is so difficult.
For those of you that are running your own shop, whether you hire many, or are a one man operation and are a part of the elite 25%, how do you fund your future.
Ive read that an electrical contractor makes around $65K a year. Now I am not sure if that is gross or take home, either way it seems like chump change.
I am not talking about gross sales on the business.
Does you customers fund your retirement?
Now I am taking a little detour! I just finished a book, that was geared toward people in construction, written by a Shawn Van Dyke, owned his own and contributes to The Journal of Light Construction (never heard of it).
Anyway the book is an eye opener about the health of ones business financial health, and is written for the sole purpose of getting one to realize a profit.
It let me know that I paid myself money, that I didn't really have, and although I put money into an account for profit, I didn't really have it.
A pill that I had to swallow and it sucks. My revenue went down this year but I paid myself roughly the same amount as I did the previous year, and it was tight at that.
And I am quiet sure, although I did not track every single hour, that I had well under a 1000 hours.
When I look at my P&L it has my COGS, but it is just materials, so the best I can come up with is that 1/2 of the money I paid myself Is contributed to labor and then figure for burden plus fuel cost/ wear and tear, to get a truer Cost of Goods, and the determine how much the multiplier needed for markup in order to pay myself a liveable wage, at a recommended PTR of 33%. It also would not hurt for me to have more billable hours.
Sorry for crying in my beer!
In the book an excerpt; Profit First for Contractors (PFC), also name of book, Percentage of total revenue (PTRs) for a healthy construction business:
Tax: 6%-10%
Owner's Comp: 10%-15%
Net Profit: 8%-10%
Total OPEX: 76%-65% Operating Expenditures.
That's not me!
My metrics and I believe it to be this way for anyone with gross revenue under $250K is
Materials I have no subs 25%
Profit 7.4%
Owners Comp 33.7%
Tax 11.2%
OPEX 22.4%
I don't know about the rest of you but, and sense I dont have any rule book, my OPEX has a larger footprint than what my owners comp does.
Apparently, (I know) you have to sell your jobs for more than they cost. The real question is how much more.
Unless I am wrong, and I could be, the math is,
Hourly OPEX $78.xx, and to make enough revenue to cover that would be to divide by 22.4%, based on 1000 hours, I would need to produce over $350K. I don't see that happening either.
Do you spend money on marketing? That could be costly. A truck, it may be possible to find one for under $20,000, but I am sure that there are some, because I have seen them, that are probably closer to $60K if not more, and then for the brilliant that wits until he is pushing 60 to think about trying to prepare for the future, there is the retirement. To have a chance at not working until I am in the grave, it would be somewhere between $12-$25K per year.
With all of the other small ticket items its between $60-$70K on OH.
All of the things swirling around in my head and probably more. I figure if I write and someone else sees it, They are either experiencing the same or thay have gone through it and made it to the other side. Maybe someone has some insight or advice, maybe that I will see things differently.
Good night!
