ECN Forum Forums General Topics of the Trade Business Related Discussion New business sharing profits & other expenses help

LK I think you are getting a little riled up.

There is no liability, in taking work from another company. They like this guys work and if hes going else where then so are they. (I don't know if this is the case.) But I don't see any legal issues in taking work from a former employee unless that is in the company handbook. Am I missing something.

I know I have builders that only will have me wire their homes. Reguardless of who I work for.

And honestly I have no clue if this guy is doing work without a permit right now. If he is, oh well, we know everyone on this board has done work without a permit at one time or another.

I think your making extreme judgements to quickly. With all do respect, lets just keep on topic.

And please for the record, this guy in my mind is an electrician, who wants to better himself, he also is interested in more than just the labor, he wants to get his suit on, and go out and get some business. I ain't gonna hate on anybody who wants bigger and better things. ... Especially if he needs my help and I could use his to get there.

I have seen no indication of wrong doing, nor am I going to make any jumps to conclusions.

Thank you Doug for that list. Theres a few things on there I did not consider. Like advertising... not sure how I missed that little one.

LK has reason to be a bit paranoid. While it certainly is possible for an electrician to have a "following" .... there are also less ethical things pulled by vindictive or overly ambitious employees.

"Land Mine #1" is the former employee who takes the customer list with him ... then approaches the customers with his offer. He's actively trying to undermine his former employer, and that isn't right. Indeed, this can lead to a very messy lawsuit - with you named as a party. Even if you end up in the clear ... it'll cost you.

"Land Mine #2" is the current employee who has been performing work for the employers' customers as "side jobs." Many would consider this simple theft - even if it is NOT done on company time, or with company materials and tools. Such an arrangement is generally both dishonest and illegal.

Otherwise, your idea has merit. The guy who brings in the work deserves a slice of the pie. You are not, however, running a charity. Figure your cost ... then ADD his commission to the total to get the price.

Anyhow on the topic of overhead its so easy not to have it all in perceptive. I second Macmikemans response in this thread "how much I should charge"

https://www.electrical-contractor.n...showflat/Number/169058/page/1#Post169058

With apologies, please allow me to stand up for LK here, he has been in business for a long time, and therefore has seen many things. Some of those things may not happen all the time, but over the course of a career you do get to see most of them one time or another. You are just starting up. Young Padawan, listen and learn.....

I know who LK is I have been on these boards for a few years. I'm not meaning to disrespect, just want to focus more on the topic. Sorry if it came off that way.

Which at this point is the Sales commission percentage. Right now I'm leaning towards 30% with a bonus if a goal is reached.

I thought industry standard for sales commission was 10%.

I have wrestled in the past trying to make something work with another guy. We hemmed and hawed and couldn't come up with anything that appealed to us both. Then a year later he closed up and came to work for me, which was the best possible scenario, and it still was a huge headache until I finally let him go.

I wouldn't look at it as a partnership. I'd look at it as he can be your top man with profit sharing and incentives. I wouldn't give up control over decisions that affect the direction I want to steer my company, such as where to invest profits, etc.

So if he is really going to be just a salesman, I don't know what percentage to use, 30% of net profit sounds fine to me. But one rule of negotiation I've heard before is first one to name a price (or term) loses. Ask him what he thinks is a good arrangement. He might say 20%.

Also don’t forget that job costing is one of the biggest headaches of contracting. Getting good numbers and tracking them, especially when the schedule gets really busy. Who is going to track all this info to decide who gets how much? Just make sure that expense gets thrown in before you start calling things profit.

I'd be weary of anybody bringing clients from his current employer. Someday, he'll have enough hours to be his own master, and take 'your' clients with him for his new business.

I was a juror in a Federal Court where something very similar happened. Two guys formed a business, one knoew the work the other was the salesman. The salesman learned the trade tricks and started his 'own' business. He grew very quickly in two years. (Commercial swimming pool builder.)
He did advertise across state lines, thus making it a federal offense. They did no work out of state but since they used the US Post Office to send out flyers, it was considered a federal offense. He'd claimed to do all the work in the flyers when in fact they were pictures of the work he did while partnered up.

He's in federal prison now on several counts.

I read up on partnerships alot before jumping in. I'm sure there are some good references that will spell out most of the pitfalls and how to avoid them.

The guys are trying to give you good advice.

Quote: " Also don’t forget that job costing is one of the biggest headaches of contracting. Getting good numbers and tracking them, especially when the schedule gets really busy. Who is going to track all this info to decide who gets how much? Just make sure that expense gets thrown in before you start calling things profit."

If you have employees don't forget their libalties have to be paid out, and workers comp can become one big expense, as work picks up.

I never worked without premits, and I din't know anyone other electricians that did either, I did not work, illeg side side work,I waited until, I had all my licenses, and insurances, there must be real don't give a hoot guys your looking at. Not getting permits for jobs, when and where required, shows a lack of good judgement. Not the type of people you would want to think of partening with.

I think that I'd want to know a good deal more about your partner. You don't seem to know much about him at all.
Did he sign a non-competition agreement with his employer?
A lawsuit is going to be quite a blemish on you, as the license holder.

You came here looking for advice. Too bad if it isn't what you want to hear, but these posts have not been off topic at all.

I have the EC's come here, after they get themself in deep, then, want want to know how to get out of trouble, had they taken caution in the beginning, they could of saved time and money, along with all the damages.

The guys are just trying to help, you before you jump in.