Looking for your opinions in running a small Electrical Business. Based on experience: What are the secrets/mistakes you have experienced? I have encountered several during my career as a Contractor.

Mistakes: Too little cash flow
Starting in a market down time.

Secrets: Advertise
Networking
Quality Work

Thanks in advance for your responses. I hope to add and subtract from my business based on your opinions.

RockJo

Hi RocyJo,
probably the single biggest mistake I made was to plunge into biz with little to no 'people' skills.

being simply 'good in your trade' does not a bizman make......

secrets
well they're not really that sercet...
Advertise...
big town, more towards the masses, yellow pages, web sites, your mug on the bus, etc.
small town, word of mouth rules...
Networking
well that's why i'm here!, allbeit the feel for locale must be a coffee shop aproach....
Quality Work
what else? quantity work? , ok....how about a specialty? nitch? i.e.-fiber optics, power quality, photvoltaics,stray voltage etc....

Good Luck

Aside from the obvious, ie good workmanship fair pricing, dependability, think about your image. Arrive in a decent truck, clean on the outside organized inside just incase customer happens to look in. If you arrive in a jalopy with material and tools piled up inside this will reflect how you will treat their home or business. Wear good work clothes not torn jeans and sneakers. A little effort on this end goes along way with first impressions. One thing that I think is very imporatnt is to know that it is ok to say no to work. If you do not feel comfortable with a client at the initial meeting you might try meeting again. If you still feel uneasy it may be time to walk away. One point to remember is try to avoid taking on more than you can handle. Nobody wins in this situation and the only thing you will gain is added stress.

#1- if all you're doing is working for wages, go get a job.

#2 Figure out what is your cost of doing business (this is called overhead) & don't forget to include it in the material and/or labor markup.

3. Don't forget to include direct job expenses when quoting a job. This would include things like mileage charge for your vehicle, equipment rentals, motel if you're out of town, permits, inspection fees, business license if working out of your normal area, etc.

4. Don't forget to give yourself benefits such as a retirement plan (see an accountant or financial advisor to open a SEP). Cover yourself with your states workers compensation plan or purchase disability insurance. Include medical insurance if you can afford it. Remember that you will now be paying both ends of social security & medicare. All these items should be added to your hourly rate for labor.

5. The book called "Small Time Operator", which was published at least 20 years ago, is worth the effort trying to find & read. If you can't find it, see if your library has anything on starting a small business.

6. Always pass up the opportunity to do substandard work. It may cost you a few customers in the beginning but in the long run, it will assure your reputation as a first class craftsman.

Best of luck

Tom

I agree with the comments and advice given so far. I'll add a few miscellaneous thoughts:

1) Contact the Small Business Administration or other resource for literature or assistance in developing your business, even if you're not going to use 100% of their services. Search the web, go to the library, talk to others in your area about both the errors to avoid and good advice that will give you any advantage in your business. Then ask each person, "Are there any questions I should ask but haven't yet?" and you may find they offer a true gem.

2) Do the difficult work ahead of time, as suggested, to determine your minimum rate and make sure it includes that retirement benefit mentioned. Establish a rate, compare it to your competition and then never feel guilty about what you must charge, especially if this is the livelihood that will feed, clothe, protect, and educate yourself & your family.

3) Do get organized ahead of time. If you can locate or develop standardized forms for any quotes, contracts, design, invoices, statements, etc. It will leave a much better impression that you know what you're doing and how to get it done accurately. They don't have to be elaborate but they do need to be accurate and complete.

4) Be realistic in your planning. In your business you may need a year of 'try it and see' before you know whether a plan, a rate, or a process will work out over the long haul.

Here's another important item. Don't ever put off paperwork, especially bookkeeping. Send invoices within 24 hours of completing a job.

If you plan on doing your own bookkeeping, I can recommend QuickBooks. It will do your invoicing & check writing.

For other forms, try NEBS, they've been around for years & give good service http://www.nebs.com/NASApp/nebsEcat/index.jsp

Good point Tom. I try to get a bill together for a job when I get home on the day I finish. It is easier to remember what you did, and the sooner you get it out to someone the less time they have to forget how much work you did as well. Also I use Quickbooks Pro and NEBS both are excellent.

Just a note to add to BuggabooBren's
SCORE is a part of the SBA that I've found a great resource....