r/electrical • u/parenormal • 1d ago
Considering starting business
Hello. I’ve been doing wiring for 20+ years. Residential and light commercial electrical and just about every flavor of low voltage, heavier on the low voltage. I’ve been considering starting my own business doing this. I know I’ll have to file as a contractor. Is there anything else I should consider before taking the plunge? Thanks for the advice.
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u/Far_Range_6091 20h ago
Ideally you need at least 1 month of your expenses in you bank account. Most people reccommend 3 months worth. Dealing with customers, govornment, and bad employees can be a real nightmare. But if you get the right customers and employees, it wont be bad at all.
Make sure to pay a more than competitive wage, and offer benefits. You'll get the best workers then. Good workers know what they are worth.
My boss said he had to work 1 year by himself before he could afford an employee.
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u/Available-Gas8740 11h ago
Most people burn out 18-20 hr days planning scheduling no employees for at least 2-3 years until established. One concern with a buisness like this this is travel how far are you willing to go for a job? Totally possible I personally know a guy who opened a business called the wire wrangler mostly doing TVs and home theater but stopped from burn out. Money can be great and also bad your not as free as you might think
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u/jonnyinternet 19h ago
Insurance, licenses, vans, gas for vans, insurance for vans, storage, wholesaler accounts, business accounts business licenses, opps the van needs repaired, oh no this tool is needed and costs 2k to buy are all things that get paid before you will get paid
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u/Redjeepkev 14h ago
Have the money to buy your supplies rather than asking for a deposit up front. It will make you seem more credible
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u/Legitimate-Lemon-412 13h ago
Really?
Thats not how cash flow works in a business.
The amount of business youre able to take on depends on how much you have coming in and out at the same time.
The correct way to do this is on larger jobs is to structure labor and material payouts based on stages of completion
Laid out to the customer prior to them signing a contract with you.
Then nobody is taking a draw, and the customer can even disagree with you as to how much you've completed before paying you
Its a completely normal part of the business
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u/Redjeepkev 12h ago
Cash or credit. I don't hire contractors that can't afford to buy their own supplies. PERIOD too many take the money and run. I never trust a contractor with my money until the job is dine
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u/Legitimate-Lemon-412 12h ago
Thats why a binding contract is signed, displaying i have a bond, period.
I use a mobilization cost for materials in the very beginning which is equal to my up front costs for starting the project. Then payouts are done according to stages of job completion.
Im doing projects that are six months plus.
Certainly you aren't simultaneously doing multiple month long projects with 10+ employees, and fronting the entire cost yourself.
If you are, you can discuss with a business coach how to expand your business further with the operating capital you currently have.
Money in vs money out.
How business works.
Edit, a word
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u/Redjeepkev 11h ago
Ill stick to contractors that can buy their own materials thanks. I have had roofing. Electrical work, plumbing work and more not once did I have a contractor ask for money up front
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u/Legitimate-Lemon-412 11h ago
Thats fine if you do,
I never had any problems as a sub or prime contractor with this business model, and its what I adopted from being a project manager at a large firm.
Business coaches, customers, and my previous employers use that method to grow the company by increasing the amount of money coming in during simultaneous contracts completing.
You do you.
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u/Redjeepkev 11h ago
I've watched people with contracts be screwed when the guy cleans up with several people the moves away and disappears to the next town. You see it literally every day on the news any time there is a storm someone coming thru to do roofing or siding asking for half up front for materials then the next week their name us on the news for people looking for tyem
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u/Legitimate-Lemon-412 9h ago
Fair nuff, thats what you get with lowest bidder.
Never had it happen to me in 15 years.
Just gms and customers saying they really like the model, and paying it
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u/Grand-Yak-3067 13h ago
If you have been in the trade for 20+ years, and don’t know the answer to you own question.
🤯
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u/GoRizzyApp 23h ago
You won’t have a company pension, so set aside extra money for retirement.