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#169058 - 09/24/07 07:17 PM Business Advice  
Jim M  Offline
Member
Joined: Aug 2001
Posts: 457
Chestertown, MD, USA
For anyone that is struggling with financial issues in business.

This was in the September issue of ECP magazine in the column Cotractors corner.

http://www.ecpzone.com/print/ECP-Magazine/Sales-Up--Profits-Down-Wondering-Why/1$2845

There are also other articles listed on the Grandy website that are free to read.


Business, Office, Estimating, Legal:

#169062 - 09/24/07 07:47 PM Re: Business Advice [Re: Jim M]  
LK  Offline
Member
Joined: Jan 2003
Posts: 1,429
New Jersey
Worst of all, the average owner doesn't know how much they need to charge to cover their "real" costs of doing business while still generating a reasonable profit.

And the parade, goes on, and on!


#169233 - 09/29/07 11:49 AM Re: Business Advice [Re: LK]  
Obsaleet  Offline
Member
Joined: Apr 2003
Posts: 362
Pa
So do you have an easy, consice template for figuring costs and expensces. Or should we make one here and now with this post?

I am always interested in cost analysis!

Ob


Choose your customers, don't let them choose you.

#169246 - 09/29/07 08:48 PM Re: Business Advice [Re: Obsaleet]  
sparky 134  Offline
Member
Joined: Sep 2004
Posts: 91
Joliet, Il, USA
This is my third year in business. Business has picked up but I've been so busy I haven't had time to sit down and see where the company is at financially. Oh I know there's money in the bank but I'm not sure if I'm making more or less than last year.

My biggest problem is too small of a customer base. I have one GC I have done many projects for but my days with him are numbered (slow payer, demands quick response times, questions pricing, etc.)

I have one other GC that I have done four commercial build-outs for and he is the type of guy who stays with one EC for a long time. His last EC was with him for 15 years but their level of service to him started dropping so he dropped them and I got in. He is the nicest guy to deal with. No BS, pays on time, laid back, etc. He had problems with his elevator not working so the elevator tech comes out and narrows the problem down to a faulty 3pole 100amp shunt trip breaker. I arrive and find the actual problem. A bolt that held the 200amp breaker in the gear outside was installed incorrectly from the factory. It had been arcing for two years and a quarter of the screw was melted away. I showed the GC the problem, replaced the bolt and the GC was thrilled. A 10cent screw compared to a breaker that probably costs around three hundred dollars !

Anyway, I really need to sit down and try to figure out what my overhead percentage should be but I'd be lying if I said I knew how to figure this out.


#169254 - 09/30/07 05:26 AM Re: Business Advice [Re: sparky 134]  
macmikeman  Offline
Member
Joined: Jul 2002
Posts: 717
Honolulu, Hawaii
Originally Posted by sparky 134
This is my third year in business. Business has picked up but I've been so busy I haven't had time to sit down and see where the company is at financially. Oh I know there's money in the bank but I'm not sure if I'm making more or less than last year.

Anyway, I really need to sit down and try to figure out what my overhead percentage should be but I'd be lying if I said I knew how to figure this out.


May I suggest you purchase and read the following short book- How Much Should I Charge? You can find it at Amazon. It will help you find the answers to how you are doing and what you should know about your overhead. Good luck.


#169262 - 09/30/07 12:14 PM Re: Business Advice [Re: macmikeman]  
LK  Offline
Member
Joined: Jan 2003
Posts: 1,429
New Jersey

Quote: "haven't had time to sit down and see where the company is at financially"

something you need to do every day, know hwere you stand from day to day.

doing electrical work 30% of the business, running the business to make it profitable 70%





"His last EC was with him for 15 years but their level of service to him started dropping so he dropped"


You will most likely find, his level of service dropped, because, he was not being paid, for the level of work he was going, of the GC's figure if they get someone new, they can play, the more work for less money game.

after you find your real cost of going business, you may see that the other EC was most likely giving him a good deal.

Last edited by LK; 09/30/07 02:44 PM.

#169278 - 09/30/07 08:42 PM Re: Business Advice [Re: LK]  
sparky 134  Offline
Member
Joined: Sep 2004
Posts: 91
Joliet, Il, USA
My first job with this GC I was skeptical. I presented a contract to him, he signed it without hesitation. I asked for a deposit and received a check within 2 hours, I sent him an invoice for a rough draw and had a check within a week. Sent him a final invoice and received a check within a week. Never bickered about Change Orders either.

The second job I did for him I took a gamble and didn't use a contract, never asked for a rough draw and just sent him a final invoice and had a check within a week.

To date I have done 4 projects for him and have never had a problem. He doesn't bother calling 3 different EC's for prices. He has the subs he can count on and that matters more than a few dollars. He is also using me for his new house.

This man has been in construction for 39 years. He knows where the prices should be.

I've talked with the other sub's and all have nothing but nice things to say about him.

If I had a few GC's like him I would be a lot happier and less stressed......



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