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Joined: Feb 2003
Posts: 687
Why would the HVAC company want to stop subbing work out but not hire a lic electrician except to save money by cheating taxes, insurance, and risk? Sounds like they want to pay like your an employee but treat you like a sub.

If you want to work for them tell em $xx per hour or week paid as an employee whith the same benifits as the other HVAC workers (like helth care, workers comp, unemployeement, paid vacation, paid sick days, bonous, or retirement. Maybe even a Co truck with material stock, fuel and equipment. If you can find your own work then tell the HVAC Co you can provide electrical job leads for his Co but you want a small percentage of $$ from the work done from that customer. My guess is they wont go for any of this because they don't want an employee they want a sucker.

Starting a seperate business as a partnership with the HVAC owner would be dumb. If you owned only 1/2 the electrical business (give or take) 1/2 the money you earned after the bills are paid would go into the other persons pocket. You would still have overhead and insurance.

Some sample math to show what would happen.
Labor Rate $75/hour.
O/H $35/hour
For each hour you clock you only get $20/hr
$75-35=$40 $40/2=$20 Per hour each
That $20 per hr probibly would not pay for estimates, desk time, phone time, material handeling, cleaning / fixing truck, etc..

If you manage to spend 75% of your time on a paying job in 40 hours you whould bring home $600 before taxes ($15/hour).

If we just charge more say $115 per hour you would bring home $30 / hour with the above numbers. Remember the HVAC owner is also making the same $30 an hour for your work.

Also conciter confilcts of intrest. Such as inflating the overhead of the shared electric business to cover the costs on the HVAC biz. It may be the same office, utilities, or even the person that answers the phone. Also is the HVAC owner going to want to pay $115 / hr to his other company so you can make a living? I sure HVAC guy would want a discount rate for his HVAC electric work. Maybe just a bit over cost so you do HVAC work for almost free.


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Joined: Nov 2005
Posts: 507

again, it seems to me that the only reason Nov is considering any kind of relationship with the HVAC contractor is because he doesn't want to build a company from scratch.

by forming a new company as a partnership, the HVAC contractor could provide the financing, insurance, truck, etc. Nov would provide the knowledge and the license.

And yeah, he would have to give a % to his new "partner", but it 90% of the work is done for the HVAC contractor, it would be like working for the HVAC contractor as an employee, but with more say in how things are done. If it doesn't work out, dissolve the company and proceed with your exit stratagy.

my main issue, I have never met an HVAC contractor who wants to take in someone who isn't family in a situation like this because he wants to pay the guy more money. (i know, a bad run on sentence)

the HVAC contractor wants to save money. A partnership does that, but it gives Nov a leg up in starting an EC company. The initial financing could/would be by the HVAC contractor. The partnership lasts for 3 yrs, np. Nov now has an existing business that he could buy out or just roll over.

working for the HVAC contractor and lending him the license is a recipe for disaster. Nov would have no control over the situation and the HVAC will always be looking for another license that will work for less. A partnership gives Nov a say in what goes on and he can't just be fired and sent packing.

I happen to completely disagree with your numbers though. especially if this is residential. the HVAC contractor wants the license to do service upgrades and hookups. And unlike electricians, HVAC and plumbers actually charge enough to make a profit.

Most HVAC companies around here will do a 200A upgrade for around $3k. However, they sell it based on putting the cost in with the cost for a new system. Then they finance the whole deal for the customer. Customer only pays $200/month.

But don't forget, as part of the setup, the HVAC contractor provides the financing needed. Thats what he brings to the table.

If Nov plays his cards right, he could feasibly build a nice business on the HVAC contractors back before it falls apart.

Joined: Jan 2005
Posts: 5,370
Likes: 1
Cat Servant
You know, I have an HVAC guy I often work with....and two plumbers, a carpenter, two Generals, A Mechanical contractor, and a rocker....and not one of them has ever suggested "sharing" my license.

That alone makes me think there is something squirrely going on.

Joined: Dec 2004
Posts: 52
kd Offline
In Calif. the laws are specific on these matters-- this is called an RME, responsible managing employee. GC wants to contract electrical, GC hires an electrical contractor who signs on as an RME. This allows the GC to bid and hire electricians to do electrical work. RME may or may not work on the job sites. The RME also has his own separate EC business. The RME is responsible for job safety, etc. but not for any financial obligations of the GC. The RME is paid $ to qualify and be an ongoing RME for the GC company. I have was an RME with a union contractor for 4 years.

Joined: Nov 2005
Posts: 507
Nov- What did you decide?

Joined: Jan 2003
Posts: 1,429
LK Offline
"RME may or may not work on the job sites."

So, another words, he is loaning his Lic.

Joined: Dec 2004
Posts: 52
kd Offline
True, the EC is loaning, we hope renting, his or her license--but under a legally detailed program that specifies rights and responsibilities. That is a horse of a different color than a shoot from the hip type of set up.

Joined: Aug 2005
Posts: 251
Definately get an attorney. Cover your butt.

Shake n Bake
Joined: Aug 2004
Posts: 69
nov Offline OP
sorry it took so long to reply I was on vaction in Vermont all last week no dam snow though.
Thank you for all the replies some very good information definatly not something to rush into. Mahlere described the set up that I was looking to do the best. I still have to sit down with the HVAC owner and go over exactly what he was looking for and wanted to do, we only had a brief conversation about it three weeks ago. Celtic I worked with this person at a different company where we were both employees under someone else elec lic. He left that company and started his bussiness.
LK I though that the 51% was only for plumbers in NJ though I could definately be wrong. I will with out a doubt see a lawer if I go ahead with this. I will post more after a long detailed sit down with the HVAC owner.
Thanks again

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