Hello again everyone. I am in the process of forming a small electrical contracting business. I should have a business plan completed in 2 months, which will provide valid information on whether or not my idea is a valid one. My plan is to focus on high end new residential construction, and residential and small commercial service work. I am not doing this because of the hard economic times, but to challenge myself. In addition, I have always felt at the mercy of my employers, and even though I always had the mind set that I would try to make every project profitable, I found that no matter how much I loved the company, it never loved me back. Although I have a stable job working as a maintenence electrician, it can be terminated at the employers whim. I am tired of being at the mercy of someone else, and while I have the fear of going alone, I have to do it to for the one thing I really want, which is freedom from dependence on one employer. I estimate that it will take 18 months to put the business together, and learn as much as I can about how to make it successful. I may fail, but if I make it, perhaps I can offer work to other electricians. While I enjoy my current job as a physical plant electrician at a local university, I am ready to leave it behind when the time is right. I just wanted to share this with the electricians on the forum, as that is what I am honestly planning to do. I know from the posts that some of you are very succesful contractors, and most of you are top of the line electricians, so it is important for me to share this with you. I will keep posting as things develope, first for your feedback and opinions, secondly to share what I may learn. Thankyoufor allowing me to be a member of this very professional forum.
You're launching into the most hostile general and specific business climate since the Great Depression.
A better approach would be to stay put, build $$$$, and watch your competition go belly up.
After the economy turns around start your new business. Profits will be excellent, most older outfits will have been destroyed, you'll have a real shot at real money.
Not long after the good times you'll see bidding become more competitive, but by then you'll be established.
As it stands, all of the old hands are engaged in cut-throat bid wars and most GC's are at serious risk of insolvency.
Timing is everything for a business start-up...
Right now is the worst possible time.
Be thankful you've got a job. Most electricians will be unemployed soon. California statistics show construction unemployment at 18% ( true number is double that ) which is headed ever higher. I'd expect that 80% unemployment in the trades will be witnessed before things turn around. There is a ton of commercial real estate that is not getting rented, and the banks are panicking.
I agree with you Tesla about the climate for business right now, and I will be doing things exactly as you suggest. I estimate that I won't even have things in place for about 18 months, but I will be working toward that time in the future. I don't really know if conditions will have changed by then, in fact they could get worse. I would at least like to be ready though. This is going to take quite a bit of effort, and admission of and correction of my areas of ignorance, especially as concerns business, but I am willing to do it to be successful. I have no illusions about the long hours and work this will require, but I have to at least do it, or I will regrett not trying. Liverstos out.
You should try to learn as much as you can about solar PV and maybe even a little about fuel cells. I believe if they actually do this carbon tax scheme they are talking about there will be a lot of money made in new technology. I doubt it will actually achieve any of the stated objectives but it will make a few people a lot of money.
The first constant has been the folks who succeeded simply because failure was not an option. For example, many immigrants attribute their success to the discrimination that precluded their getting 'good' or 'real' jobs; as a result, they turned money-losing mini-marts into cash cows, often succeeding where the corporate giants failed.
Another constant has been the failure of the 'experts.' The record for going bust is probably held by a local business professor who tried starting a small business. I woder how many MBA's work for GM?
Among the self-employed, I am amazed at the positive feedback and encouragement I have received. The nay-sayers have all been, without exception, the failures and the hourly workers. Even my competitors have been cheering for me - rather than resenting a new player.
Indeed, the biggest changes since I 'went solo' have been internal, personality changes. I'm not the same person I was a year ago, and I'm sure I'll be quite different next year!
To illustrate the point: Had I met someone a year ago with a good job, good pay, good benefits, and job security, I would have felt perhaps a little mad; I mean, why him and not I? I was certainly as deserving as he.
Today I can spot such a person a block away. To my eye, they appear somehow limited, stunted - as if they have not grown to their fullest potential. Think "bonsai tree" for personality, rather than soaring Redwood.
I have a very good neighbor with a holiday home just across the meadow. We share an interest in amateur woodworking. He has a small company in the north of England, producing custom stock from stainless steel strip. Until last summer he had begun to wind down for retirement, leaving his company to coast for weeks on end while he lolled about here with his wife sampling la dolce vita. He had taken his eye off the ball.
Disaster struck. First the local 'jobsworths' at the Council Offices revoked the [admittedly verbal] planning permit for his new workshop. Then, it turned out his top employee, left in charge, had started up in competition, and had been operating his own company on the QT for a year while still drawing a good salary. He 'borrowed' my friend's best customer, used his spare's store to build the required machines - and was suspected of using the firm's transport as well. Then we got the recession. My friend has many years experience of booms and busts, and came out in round four punching above his weight. He shut the workshop, [ 4 guys sadly lost their jobs] and went back to where he started 25 years ago, in the garden shed. Using his many contacts and experience he managed to survive, working 25 hours a day, even sub-contracting work out so all he touched was the invoices! The ex-employee is really struggling in a near depression with one customer, for while he's a really skilled machinist, he's inexperienced in business.
Point is, successful business is not just techniques and good manual skills, it's luck, good contacts, downright cunning, forethought, strategys for 'what-ifs', the determination to work your socks off and then some. As eny fule no, it's easy to make money in a boom.
When you work 9-5, that's all you do. When you work for yourself, you not only make the product, you market it, you handle the complaints, the work wear, the soft soaping of the customers, do the quotations, run the front office, get the finance, fight off the IRS, run the transport, make the coffee, organise the tool inventory, keep the stock, run the overdraft, chase the bad payers.... all of which usually add up to 16 hours a day and weekends.
Starting up now in the present economic climate would be hard. Some ECs will go bust, yes, but the tough nuts will stick in there 'till judgement day, using all their experience and life skills to survive. Wresting work off them will be a real challenge!
Yesterday my friend emailed that he was in a position to move back to proper premises as business had picked up, and they were hoping to snatch a weekend soon in the Bocage. We'll have a rib of beef and a few bottles of 'Old Speckled Hen' ready!
Reno, you have gotten right to the heart of the matter, at least as far as my motivation goes. I have to know if I can make a go of it, and grow as you have. I also used to envy the well employed. However, during the early part of this decade things were very tough for my wife and I, we lost everything we owned, and I filed Chapter 7. We came very close to being homeless. We survived without the "stuff" that we used to think we needed. Things have turned around, and I have been lucky enough to work in environments where I had to be my own foreman, designer, and troubleshooter of last resort. I had to step out of my comfort zone to do this, and now I am going to go a little further. It is not just for the freedom from dependence on one employer, it is to challenge myself to succeed on my own in a trade that I genuinely enjoy. I hope to experience the personal changes that you have undergone over the past year. Who knows, I might actually make it. Thanks to everyone for the feedback.
Hey Ricker, I have been an electrician for 22 yrs, 14yrs in business for myself. My wife and I started this adventure while I was unemployed, just moved into a new fixeruper house, 1st son was 2yrs old and she being 8 mos along with #2. We now have 1 full time employee and a brother in law who is in law enforcement and works part time. The last couple of years have been a new experiance as we hired our 1st full time guy. Still learning as we speak. This is part of why I enjoy this trade. It never stops growing. I say go for it . Do good work , work for good people and don't work for contractors. Do service and work direct for customers. I have customers who call after years of not hereing from them, they remembered that I treated them fair and did my best and right. Beleive in yourself and do it. I get a rush when I get bid jobs and my price is the highest:) PS Join some service clubs and get involved in the community, thats where its at.
PV is growing. I think Greg hit it. That would probably be the best form of start up now. I have met several roofers who now do just PV,and are keeping some EC's busy with just that.may not be every day but consistent. So with that it may work around your current employment. Now, you have stability and a rolling start to freedom.
I have a good friend who is an 'inside'guy. He changed to 3rd shift. Best of both worlds.