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Re: Starting a Electrical Company... [Re: pooL8] #199702 03/05/11 05:12 AM
Joined: Feb 2011
Posts: 56
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pooL8 Offline OP
Member
Thank you both.


Business, Office, Estimating, Legal:
Re: Starting a Electrical Company... [Re: pooL8] #199763 03/07/11 03:12 PM
Joined: Jun 2004
Posts: 1,273
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Tesla Offline
Member
Local conditions are critical.

Out my way the veterans are folding their tents and calling it quits.

The very established firms are laying off right and left.

New hires are expected to under-cut the current troops by 30% to 50% -- if you believe the ads.

Folks, we're coming off of the largest building bubble in the history of the planet. That means something.

The first thing it means is that profits and wages in our profession are being hammered across the board.

It means that there is a vast over supply of talent and tools.

It means that even when bidding government work there is no profit to be had.

As bad as it is for us...

We're not alone: real estate trading commissions have fallen 80%.

Obama took the government spending and used it to support schools, hospitals, government pension plans at the state level -- and generally spent the money on women -- per Reich's request. He did not shower it on the construction trades -- you would've noticed if he did.

So what happened in the Great Depression WRT the trades/ construction is not on offer.

We're probably looking at another massive slump downward.

Money printing = hyperinflation.

Right now the government is printing 40% to 50% of the money it spends. Without exception such policies drive the currency downward until a shift in public behavior causes currency revulsion. Then the second phase of hyperinflation kicks in: fantastic price movements -- which is why it is so named.

Hyperinflation is NOT inflation. It's a whole 'nother beast. When it's over the government will have eliminated its debts across the board. Anyone holding credit investments gets flat-lined.

The flipping point traditionally has been triggered by foreign traders. They stop accepting the currency. Next, all of the overseas currency comes back to the issuer in a flood.

What it means to us small guys: don't get caught extending credit.


Tesla
Re: Starting a Electrical Company... [Re: pooL8] #199765 03/07/11 05:48 PM
Joined: Jul 2004
Posts: 9,612
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gfretwell Offline
Member
I talked about this before but there is one thriving business out there ... Gates!

The people who didn't lose their butts in the recession want to live behind gates and they break a lot.
The gate company who hired away my wife's assistant is still growing and it is a pretty lucrative field. The assistant now makes well over $50k and he is just a kid.


Greg Fretwell
Re: Starting a Electrical Company... [Re: pooL8] #200018 03/17/11 06:37 PM
Joined: Jun 2006
Posts: 613
M
mikesh Offline
Member
I have never been a contractor so take my advice with a grain of salt. I have seen a lot of contractors make the same mistake. The were and are good electricians but typically lousy business men.
First thing you need to know is how much does it cost to make my expenses each day. It cost you money to make money.
Include everything that does not earn or is billable and this includes the time you spend here. Start your retirement plan the day you open or you will never retire.
Set your rates based on cost + profit + exit strategy + your cost to the company including feeding your family.
A contracting business is worth what ever depreciated assetts you have. Sell all your materials, trucks and customer lists and you will retire for a month. I had opportunity to buy in to the company I was working for with 3 other partners. I instead took a job with the municipality i work for now. The 3 remaining guys paid about $40,000 for a million dollar business. The owner took the cash money for his retirement or about $600,000. The three guys bought the physical assets, current contracts and the book keeper was hired by the new owners. They got a lot of old materials, old trucks and a great reputation. In addition to the 40 K they had to buy bonding insurance to service the customer base. No one was allowed to take a penny from the company beyond agreed upon wages until the company paid the purchase and was able to increase their bonding to allow about A million dollars work.
shortly after the accountant allowed a dividend the company suffered a huge loss and had an outstanding bill of near $90,0000. So back to no dividends.
They are still in business and recovered in short order from that unpaid bill.

I think they are doing fine but it required a good plan, discipline and good luck.

Once you make your plan test it constantly and adjust to meet it. Find the office work is overwhelming, you might need help. Office help is a cost and places demands on you to earn more to pay it.

Be darn careful about carrying employees too long in lean times. Yes loosing a good employee can set you back but construction is like that. I might also add don't buy work, it will ruin your plans and set you back often further than if you laid a guy or two off. This will be a hard one every time you have to do it because it generally means you are putting the tools on.

Good luck

Re: Starting a Electrical Company... [Re: mikesh] #200050 03/18/11 04:03 PM
Joined: Feb 2011
Posts: 56
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pooL8 Offline OP
Member
Thanks for that.

Re: Starting a Electrical Company... [Re: pooL8] #200902 04/26/11 10:27 PM
Joined: Mar 2011
Posts: 28
mersadrad Offline
Member
How not to love this forum... smile chears



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