Ive been in business officially for 4 mths 1st mth about 3k sales 2nd mth 5k 3rd mth 20k 4th mth 25k I have realised now that I am maxed out on my own at around 20k worth of work per month, I could probably get more work if I could handle more,but I cant seem to come up with a plan on how to handle taking on a employee. Where i live you cant hire helpers only regd apprentices and you cannot leave apprentices on a job alone or you could be fined, and they check.I want my business to grow and eventually have many employees, so I can be loaded, but I have heard so many horror stories about growing to fast and going broke, does anyone have any positive stories or advise on how they made the transition.
1. as you said take it slow 2. be careful hiring someone you know directly ie. family or long time buddy [made that mistake] 3. don't pirate someone away intentionally from another company, they then think you owe them cause they left their last job for you [there right now] 4. don't be afraid to reprimand for big errors, or lots of little things, even if you just talk to them about the problem, do not let it fester. 5. compliment them if they do a really good job, and let them know when the customers say the same. 6. STAY ON TOP OF PAPERWORK!!!!! Failing in this area can be the death of your business, espically with employees. Employees equals instant overhead, like payroll taxes, unemployent insurance any benifits, etc.. one paperwork screwup and you can watch that 25k turn right into 2k right before your eyes.
All this said, employees can be a real benifit, you just need to do double duty as an electrician and manager.
If your moving that well along, getting someone who you don't have to show the ropes or hold thier hands, will enable you to take care of more business stuff. You will need time to sort through paperwork, meet new customers, and sell more services.
Yes, get a good Journeyman its so much easier with a guy who knows what hes doing. Then add an apprentice when you need.
Also I would fire people that are not working out within 90 days. Its harsh, but I have seen 2 companies get in some bad situations due to employees who aren't working. For some reason it seems companys wanna just keep taking the hit long term, instead of just letting the guy go and having to deal with short term unemployment fees.
The one thing that I would caution is to make sure that your hourly rates and estimated job times are realistic for an employee.
As Mahlere has mentioned many times, something that you can do in 4 hours will take an employee 6 to 8 hours. And make sure that you are charging enough to cover the full burdened cost per manhour and still make a profit.
I made that mistake when I had my first company. I just wasn't prepared to cover the expenses of employees.
Something else that you could try though, I work with two other small contractors. The three of us will pool our resources when necessary. In this way, we are working for one another as subcontractors.
Help when you need it, without the concern of costs when you're slow. I realize this isn't a permanent solution, but if you know a fellow contractor well, and can work this sort of thing out, it works quite well until you are sure you want to take the next step to hiring an employee.
Iam doing commercial work mostly, hvac , controls ,ddc systems, a guy I used to work with moved into a new position at a new job and I am lucky to know him thats for sure. I have also hooked up with a guy who owns 10 buildings in the city where I live,I met him through a friend of mine who works in the mechanical trade and this guys buildings need work so hes been flipping some stuff my way. I live in Canada(Manitoba)
I tryed the first employee as a JW and it didn't work out so well. I had to spend a lot of my time explaining things to him and following up on his work. Almost broke me. It takes a few weeks to get the feel of what a guy knows and doesn't know. By that time I'm in a hole.
Unloaded him and hired a part time secretary to do the daily acoounting work, receipts entry, paying bills, etc. That freed up about 6-8 hours a week for me to do more 'real work'. She also helped out with collecting on delinquent debts. I'd be too busy on the jobs to worry about those who didn't get me paid. Things would slip and some people never got billed right.
I'd start with a part time office help, once the office is straight you'll feel better focusing on running the business rather than the business running you.
[This message has been edited by PE&Master (edited 10-06-2006).]
I am half of a two-man operation, so what I will describe is a 'wish list,' more than anything else.
What do you need to have a functioning business? Well, to start with, someone's got to answer the phone, make appointments, etc. You also need someone to keep the books, send out the bills, track expenses, and do all the other paperwork. Maybe that's why so many small businesses have the wife in the "office!"
You actually need to be able to do work. Quite often, this means having a helper- say, someone to feed while you pull.
Finally, you need a qualified person to actually work while you're planning jobs, bidding jobs, meeting customers, meeting inspectors, etc.
So, it appears that fewer then four people is too few.
Now... for that paperwork person.... there is some experience that suggests that three earning folks are needed to support one office person. Our four person firm just became a six person shop.
Grow to a 9 person place, and it's time for person #10 / Office #2. This person will be needed as a parts runner, shop person, etc.
Think of that number :10. Ten folks, and you have it all covered. Is bigger than this better? I submit that, once you have more than that, the crew will start fragmenting into differing groups. You will have to forsake real work, and 'manage,' lest these groups start drifting into trouble.
"The one thing that I would caution is to make sure that your hourly rates and estimated job times are realistic for an employee. As Mahlere has mentioned many times, something that you can do in 4 hours will take an employee 6 to 8 hours. And make sure that you are charging enough to cover the full burdened cost per manhour and still make a profit."
Don't forget the employee liability builds up fast, just ask my partner Mr IRS.
And when you do service calls, there is no more $60 or $70 calls, they will be more like $200 plus, an hour, and even at that you may take a loss, review all your overhead, and operating expenses to be sure your charging eniough, many contractors that do either remod, or long term work, have no idea how much a service call really costs them, they may just look, at what someone else, has been getting, and use that figure, they can go on for years like this, because their base income, comes from the long term jobs, not service calls, so they loose and never know it.
Could it be your rate is too low, and that is why your getting more work then you can do? In that case, hiring on may not be the answer.
[This message has been edited by LK (edited 10-07-2006).]