http://www.score.org/ Virgil, this is a worthy link, with some good people who could answer some of your Q's. The one thing i have found out for sure is that my apprenticeship taught me nothing about running a biz. So anything i would have to offer would be a 'fly-by-the-seat-of-my-pants' perspective.
#2602 - 07/15/0107:55 PMRe: Making my business grow...
I had replied before reading GJ & Geralds replies. I am the 'one man show' , but only because of lack of options. That's the way it is in the sticks. I trade notes with my Bro, who in the Boston area makes prevailing wage, makes me green, but opportunities like those simply do not exist for a sparky out here.
Better the rednecks in the woods than the homies in the hood I say.
#2603 - 07/15/0109:37 PMRe: Making my business grow...
How do I attract investors? Are your sure that you want investors?? I had the opportunity to buy into the company last year. I decided to leave my money in the stock market, HAH!! But really, investors make life much more difficult. They have every right to expect a return on their investment. You are no longer working for yourself.
How do I avoid the loan trap?
don't borrow money! For years we drove 20 year old service vehicles. Only in the past two years have we been upgrading trucks. We have no investment in buildings or other overhead. Our office is a closet in the boss's basement. We have two rental storage units that hold materials. There is no shop. We do $600,000 gross sales/ year with this.
How do I get my business from "barely making it with lots of time invested" to "making a decent living, with or without lots of time invested"...?
Look at the most successful contractors in your area. That is about the best you can expect to achieve. If you live in a poor rural area, then you may be limited to being a poor rural contractor. Are you willing to move?? I live in a rural area, but it is fairly wealthy by agri standards.
I'd consider $35K net a pretty good living. Our apprentices do that. Really man, you should consider moving and working for someone else until you get established.
#2604 - 07/16/0106:56 AMRe: Making my business grow...
I have never made $35K, but then again I owe nothing living very unamerican , as one banker told me. So there is some relative perspective to rolling ### around.
In balancing assetts againt liabilities, by far and large Health insurance is the killer for any small biz. The fact that it IS NOT a write off is hotly debated, and has been brought before congress many time any Donahue Report readers here?
#2605 - 07/16/0108:58 AMRe: Making my business grow...
The statements I made in the "Anyone want to play?" Thread really applied to me and what my desires would be as a business owner in the area of the country where I now live (Dallas, TX). Having grown up in a small South Carolina town and still in touch with family and friends back there I know that $50 K here relates to around $30K there. Another thing to think about is the labor pool in the area. Dallas has a lot of Mexicans who will work for cheap. It is hard to compete in the residential new construction arena here if you are legal, insured and try to pay people decent wages and give them any benefits. I know a guy who set up business as an electrical contractor in Dallas using someone else's master license, subbed all the work out to individuals with no license at all and had more work in apartment building than he could find people to do. He did okay until the Feds caught up to him for his use of "contract labor." But while he was in business he took work away from the legitimate companies and the general contractors used him because of his price, probably knowing he would not last. I'm sure they found someone like him to finish his uncompleted contracts.
No matter what the income level where you are in business, don't be the low man in price. Even if you think you are doing okay, you are bringing the prices down for everybody and not maximizing your earning potential. In addition to covering all the apparent overhead costs you need to have allowance in for rainy days, vacations and retirement. Set a reasonable time you are willing to struggle to get the business doing well and if the business and you are not both doing well then, make extreme changes. If you realize your prices are too low and go up, you may lose some longtime customers. Also you may look at the customers who stay with you differently. If you figure you have saved one of them enough over the years to afford his nice boat, you will realize that boat could have been yours. Or the hard times you and your family went through could have been avoided.
The link to SCORE is a good one. SCORE (Service Corps of Retired Executives) is composed of volunteers that were in business for themselves or ran other peoples' companies. They know what the actual costs of business are and give their knowledge away for free. Don't think they don't know what they are talking about if their background is not electrical. Their background is BUSINESS and that is where the majority of electricians are weak.
[This message has been edited by gpowellpec (edited 07-16-2001).]
#2607 - 07/16/0102:35 PMRe: Making my business grow...
Be careful about raising the prices to your best and continued customers. I work for a large engineering/procurement/construction company. We have lost two good long time customers recently. I believe those losses were because we raised our rates. Now we have to bid to these same companies, whereas before it was just gravy in the door. The profits weren't big but, bread and butter on the table is worth something compared to an empty table. But then maybe the other post are correct in that you may have to move in order to make more, but moving may also cost you more to provide for your family in increased housing and other cost. Consider all your options carefully.
#2609 - 07/16/0103:03 PMRe: Making my business grow...
I would have to summarize by emphasizing the need to be competitive. My Bro and I partnered 15 yrs ago, he would call up the local competition and ask for a ph quote on a 100A service, price per stop, that sort of thing. All those adolescent prank calls to the general store about Sir Walter Riley in a can paid off..
yes Bill, i write off a home office, despite the statistical potential for the IRS investigating...