Well I started my business 2 years ago, no business plan ,no overhead analysis,no idea of what to do as far as advertizing,marketing,what price to charge per hour,ect... Today since things have been slow I did the unthinkable,I said well lets see were I stand.I learn that to run my business with all the overhead cost and future needs to break even I have to charge 80.00 and hour.Total overhead is 165,000 that is in south jersey. What do You guys think compared to yours,any opinions and suggestions welcome.
Last year $82 was a good number for Central South Jersey, provided you din't plan on replacing your truck, and that was with a 3% net profit figured in, and already this year that number is bad, due to the increased, WC rates, and the business friendly, new jersey state taxes, and penalty system.
Thanks for Your reply LK , that was is what I found was the break even for me with no return. That is why now I have to learn how to make the business profitable, I will no longer give free estimates and screen calls for the best leads, also will attack and look for work instead of waiting by the phone. Here in Camden I am also competing with non license individuals, the state should make a sting operation for guys that do this for a living and do not bother to get there business license. There are about 3 hardware stores that people ask the owners for electricians and I have met the customer and gave my price they tell me i am to high That the other guy gave them a better price,they only have to apply for there permit and say that they are performing the work themselves,another one has a license holders sign of on the work. But me I am going to keep going and figure a way to get more good customers.
Codewar, the competition against unlicensed "contractors" and handy quacks goes on in every area of every state. In my area people have been working unlicensed for so long that the AHJ actually thought they were licensed! You just have to sell yourself, the fact that you have insurance, you are experienced. Some home owners will always go for a price that is a nickel cheaper, if you fall into the low price game you will work yourself right out of business. I had a GC tell me he would let me wire a new house he was building, but he would only pay me $2.50 per foot, and wanted me to supply all the materials except the fixtures. That is $4000.00 for a 1600ft house. Needless to say I thanked him and walked away, there was another sparky on the job within an hour. Just bid the way you know is right and remember the ones you do not get, you probably do not want. good luck
Life is tough, Life is tougher when you are stupid
Agreed. Good customers will pay for your services if you provide good service. In order to be sucessful in any market, you must make your services stand out form the rest. Granted you can not always pick and choose your customers. Competing against DYI'er is and always will be a challenge. If running business was easy, everyone would be doing it.
In 1996 my old employer started his own EC business. He started with one apprentice and after that I became an employee. Things were really busy, more employees came on board.. we were the busiest contractor in our area. My employer opened up a new store in town (he was working out of his home)selling lights to compliment the EC business. About 5 years into this things started to fall apart, the economy tanked somewhat, some big pie in the sky general contractors and developers stopped paying their bills. At this point my employer stated that even when he was busy he wasn't making any money and now things were looking grim. After taking two wage cuts I bailed to greener pastures before the layoffs started. My (now ex-employer) ended up moving back to his shop at home, running one truck and one apprentice (his daughter). Speaking to him after the fact, he thinks it is best to work out of your home shop, screw the retail lighting sales etc, stay small, don't let the general contractor get too deep into you....and watch your estimates.
You bring up an excellent aspect of business wacked, and that is the need to stay up on your accounts payable.
I think it's safe to say that all of us here take our work seriously, and provide our customers with the best value we can. We take enough interest in our craft to come to places like this forum to contantly learn even in our free time, just as one example.
However, the work is only one aspect of staying in business. All of our hard work amounts to zero if we cannot show a profit and move forward. The point being - get paid for your work! Never loan money (or let payment go) if you cannot afford to do without it. I've seen uncollected debts bury more hard working people than I'd like to recall.