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Joined: Jan 2005
Posts: 5,316
Cat Servant
What sparky hasn't thought of one day having his own license? Heck - what first year apprentice doesn't look to the day he 'goes solo?'

Well, with the retirement of my long-time business partner, that's exactly what I get to do these days. I suppose you could say I'm doing it under the most favorable of conditions: support of "the boss," established customers, and an established reputation.

I thought I'd start this thread as a 'reality check,' as well as a 'blog,' of the process as it develops. I'm sure many will find it enlightening - and some will surely have some old memories come back!

Feel free to comment - that's what makes ECN work smile

Anyway, here the process began with my submitting a 32 page application, together with a 5 page financial statement ... and paying a $300 application fee. Part of the application were five notarized statements as to the minimum five years' worth of journeyman level work. This paperwork was submitted on June 3rd.

After two weeks' of review, I was granted permission to take the tests. One on the trade, and one on contracting / business law. To begin with, I got to buy a book ($40) on Nevada law .... and dig out my 99 NEC.

Scheduling the tests was more of a challenge, and I wasn't able to take them until yesterday (July 10th). The test center expressed surprise that I was taking both at once, that I finished early, and that I managed to pass both. Another hurdle overcome.

Now I have to do four more things in order to get the contractors' license:
-1 Post a $2000 bond. I can either go to an insurance agency ($100/yr), or put up my own money ($200/yr processing fee in addition to the $2000);
-2 Pay the license fee ($600/ 2 yrs.);
-3 Pay for Workmans' comp, or sign the necessary waiver; and,
- 4 Pay $200/yr into the "residential recovery fund." (I thought only tract builders had to do that!)

Once these requirements are met, I will be issued a license number. Then I can do the "other" paperwork, for everyone else:
-1 Obtain an ID number from the IRS;
-2 Obtain a tax certificate from the State;
-3 Pay the State employment tax ($25/quarter/person);
-4 Register company name with the County; and,
-5 Get a city business license.

Only after all these steps are complied with can I open bank accounts, print up stationary, and actually start contracting for work.

Then of course, it will be time to make the first quarterly tax payments ...

Joined: Jul 2004
Posts: 9,667
Likes: 6
That bond seems low. I think it is $75,000 for a full EC license in Florida and the limited low voltage license was $10,000 when I was looking at it 10 years ago.

Anyway, good luck in your new endeavor. I know this is a slow time to start a business but that could be a good thing. It gives you a chance to learn.

BTW if you have a sharp pencil on your schedule C, I doubt if you will really "make" much money for a while.
The IRS doesn't expect you to and if you are good at itemizing your start up expenses you probably won't.
The hardest part of running a business is actually the business part, not the trade part but when you master that you are on your way to a satisfying career.

Greg Fretwell
Joined: Jul 2002
Posts: 680
Interesting to see what you have to do to open up as Reno Electric smile. In Maine you can just start up once you get a Masters. I know guys who have their sales tax paid at the wholesale house and don't even have a tax number for resale. No contractor license needed, no city business license.

Joined: Jan 2005
Posts: 5,316
Cat Servant
Looks like things are just a wee bit simpler in your neck of the woods, Walrus.

I'd have to go through nearly every one of these same hoops even is I simply 'took over' the existing business. In fact, that's pretty much what I'm doing ... but, absent any advantage, I might as well give it my own name. Since the existing business is now "John Smith dba Electrical," with me at the helm it would become "Reno dba Electrical," so even the county filing would still be necessary.

I'm not completely clear as to the sales tax issue; I think it's similar to your arrangement, but I need to make sure.

The real shocker for me was the nearly $1500 in fees to the Contractors' board alone .... with about $600 repeating every year. frown This is about double what I had expected - AFTER talking with the board a few times. I almost feel like I'm dealing with a GC laugh

Joined: Feb 2008
Posts: 193
Sounds like it's almost enough to discourage somebody from starting a business. I passed my ec exam two weeks ago and am now waiting on the liscensing paperwork to come through. I'm in the middle of transitioning a fully incorporated electrical business from my dad to myself. All that's required when I get the liscense is to change ownership and names on paperwork. Everything is in the company's name. Total fees to get liscense -$90.00.

Hope it goes well. We're all pulling for you.

Joined: Oct 2002
Posts: 482
It sure seems like that when your looking down the barrel schenimann, but everything makes sense when you break it down.

If nothing else, all the hurdles help to weed out (some of) the undesireables that would seek to make and "easy" buck at the expense of all of our reputations.

By the way, best of luck to you Reno! I see no reason that you wouldn't succeed in grand fashion.

One bit of advise for you and everyone starting in this or any business - PAPERWORK. Stay on top of it. Record EVERYTHING, and never get lazy with documentation or detailed notes. If you ever do, it will bite you in the booty.

Joined: Jan 2005
Posts: 5,316
Cat Servant
The entire concept of licensing has been asserted by some ... including Milton Friedman, as little but a sham on the part of those already licensed to restrain trade. That is, to reduce competition.

Many studies have shown little -or no- correlation between licensing and incompetent / dishonest trade practices.

I do know that, if I treated a customer the way the contractors' board has behaved, and they complained, I would be disciplined. The statement as to fees required led me to expect a figure $500 lower.

However, this is not a rant against the contractors' board. I hope I've also identified some of the other hurdles to be overcome, and paperwork to be completed.

Another development has been all the "best friends" I am suddenly finding frown
Two realtors have expressed great interest in hiring me when I get my own license .... why my current license is unacceptable to them, I fail to understand. There is absolutely no bar to my working -the license holder hasn't retired yet- but they want to wait.
Others have hastened to put me in contact with other contractors they have dealt with ... not one of whom is licensed, and several seem to have departed California recently, just ahead of the law.
Then there are the real contractors, with limited licenses (mine will be unlimited as to type of electrical work) who seem to think my main reason for going into business is to feed them jobs. Or, they are trying to discover my customer base. I'm sure their motives are pure laugh
Finally, there are the salesmen, who insist I must use their forms, their billing software, their forms templates, etc. That I am already holding in hand perfectly acceptable paperwork doesn't seem to discourage them at all. As for a web site .... trust me, when that time comes - I already have plenty of sources.

Joined: Jan 2005
Posts: 5,316
Cat Servant
A new hurdle has been discovered ...

It appears that a 'squatter' has filed for the name I wish to use, with the county. That is, this person has absolutely no connection with the trade, with contracting, and operatyes no company. My preliminary search suggests that the name was filed solely for the purpose of selling it, or generating nuisance suits.

On the plus side, his work appears to be that of an amateur, and it will be quite easy to defeat.

Joined: Jan 2005
Posts: 5,316
Cat Servant
Let today's efforts emphasize the importance of paying attention to detail.

I wish to operate as "Amish Electric." No power- no problem ... seems simple enough!

A local gent had registered the name with the county. However, the county filing offers exactly ZERO protection. All it accomplishes is that it allows you to enforce your contracts. As far as the county is concerned, there can be a hundred firms with exactly the same name.

The 'squatter' is not in the trade, registered with the state's corporations office (Secretary of State), and has no city business license. He is not electrician, apprentice, or contractor. His squatting effort is a failure.
My registration of the name with the Secretary of State will protect it for 90 days - plenty of time for me to get issued the license number. Once I have that number, I'm pretty well set as far as the name is concerned.

Another gent - this one in Illinois - is squatting on the 'dot com' version. Alas for him, there is absolutely no bar to being 'dot net' or 'dot biz.' Well, there is now - I've got 'dot biz.' laugh Give me a few days to figure out how to use it.

Joined: Jul 2004
Posts: 9,667
Likes: 6
Great name.
Bear in mind the jokes write themselves when people are mad at you but when they love you it will be easy to remember your name.
When I left IBM, thinking about doing that sort of stuff, I registered with the county as "Blue Light" and my tag line was "Same quality less fat" (an IBM joke)

Where I screwed up was not in registering before Kmart figured it out.

Greg Fretwell
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