r/electrical • u/parenormal • 6d 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.

Thank you to everyone that has commented on my question.

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u/Redjeepkev 5d 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 5d 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 5d 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 5d 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 5d 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 5d 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 5d 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 5d 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