# Thinking about going out on my own.



## kgb62 (Oct 23, 2011)

Have 17 yrs exp. first 10 working residential for small company. Last 7 commercial industrial for a big company. I do alot of side work and make better money working on my own with no boss or pm breathing down my neck. 

Hoping to get some good advice on where to start if i were to go out on my own from you guys who have been there done that.


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## electricmanscott (Feb 11, 2010)

Ok, how much do you make at work and for yourself. Any worthwhile advice has to start there.


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## BurtiElectric (Jan 11, 2011)

Are you licensed? Do you carry insurance? You make more money bc you have little overhead as a side jobber


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## McClary’s Electrical (Feb 21, 2009)

BurtiElectric said:


> Are you licensed? Do you carry insurance? You make more money bc you have little overhead as a side jobber


 
Nice floyd sig:thumbsup:


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## BurtiElectric (Jan 11, 2011)

mcclary's electrical said:


> Nice floyd sig:thumbsup:


Shine on you crazy diamond :thumbup:


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## tkb (Jan 21, 2009)

kgb62 said:


> Have 17 yrs exp. first 10 working residential for small company. Last 7 commercial industrial for a big company. I do alot of side work and make better money working on my own with no boss or pm breathing down my neck.
> 
> Hoping to get some good advice on where to start if i were to go out on my own from you guys who have been there done that.


You make money on side jobs because you don't,

Pull Permits
Pay for liability insurance
Pay taxes
Pay for health insurance
pay into workers comp


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## kgb62 (Oct 23, 2011)

I carry insurance and pull permits on bigger jobs. I understand how the overhead works. Just looking for some advice on getting started.

Sole prop, llc, incorporate? Do i need to talk to an accountant? Thats what im looking for. Not an explanation on why sidework is more profitable due to lack of overhead.


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## wendon (Sep 27, 2010)

kgb62 said:


> Have 17 yrs exp. first 10 working residential for small company. Last 7 commercial industrial for a big company. I do alot of side work and make better money working on my own with no boss or pm breathing down my neck.
> 
> Hoping to get some good advice on where to start if i were to go out on my own from you guys who have been there done that.


Go for it if you think you can handle it. After working for someone else for 23 years I went on my own. There are many challenges to running your own business but the rewards are all your own. If you do a good job and build up your reputation, you should do fine. Right now, with the economy the way it is, you might want to make sure you have work lined up before you take the plunge. Also, unless you have a rich uncle, you'll need a line of credit etc. etc. If you can handle it by yourself for a while it might be the best before hiring anyone.


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## B4T (Feb 10, 2009)

Go for it and never look back.. :thumbsup:

Best thing is to incorporate your business.. you start out fresh and clean as a brand new business.. 

Good luck..


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## BurtiElectric (Jan 11, 2011)

If you carry ins, and pull permits you should have already talked to an accountant.


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## BurtiElectric (Jan 11, 2011)

The reason for the overhead comment was bc imo, side jobbers are ruining the electrical business. You are driving the cost down of what legitimate contractors can charge.


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## MechanicalDVR (Dec 29, 2007)

The rules as I learned:

Your accountant can be your best friend, get a great one.

Never rent what you can borrow.

Never buy what you can rent (big stuff).

Lease your truck.

Rent a shop.


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## wendon (Sep 27, 2010)

I'm still the sole prop but I think your better off tax-wise and from a liability standpoint to at least have a LLC. I'll probably do that when I go into partnership with my son someday:thumbup:


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## wendon (Sep 27, 2010)

BurtiElectric said:


> The reason for the overhead comment was bc imo, side jobbers are ruining the electrical business. You are driving the cost down of what legitimate contractors can charge.



You mean that ISN'T GW's fault?????:laughing:


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## B4T (Feb 10, 2009)

MechanicalDVR said:


> The rules as I learned:
> 
> Your accountant can be your best friend, get a great one.
> 
> ...


Leasing your truck is something I would be against.. you get nothing at the end of the rainbow..

I would rather have truck notes for almost the same amount of money it cost to lease..

Renting a shop is another expense that is not needed when starting out.. there is always the living room to store materials.. :laughing:


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## Cletis (Aug 20, 2010)

Have a well off wife/girlfriend, low maintaiance, and 1 yr in living expenses then go for it


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## B4T (Feb 10, 2009)

BurtiElectric said:


> The reason for the overhead comment was bc imo, side jobbers are ruining the electrical business. You are driving the cost down of what legitimate contractors can charge.


There will always be side jobbers.. I have Union men, cops, and firemen for competition.. just a fact of life..


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## BurtiElectric (Jan 11, 2011)

wendon said:


> You mean that ISN'T GW's fault?????:laughing:


He has nothing to do with it, I like George Washington :laughing:


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## wendon (Sep 27, 2010)

Cletis said:


> Have a well off wife/girlfriend, low maintaiance, and 1 yr in living expenses then go for it


A bonus would be if she would have a nice boat. Fishing is a whole lot cheaper than seeing a shrink to help you get over the headaches of running your own business.


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## BurtiElectric (Jan 11, 2011)

B4T said:


> There will always be side jobbers.. I have Union men, cops, and firemen for competition.. just a fact of life..


I know, just pi$$es me off. In PA, there are only license requirements in larger cities. Everybody and there brother is doing electrical work in smaller municipalities, towns and boroughs. Its disgusting. I looked at a rough in job that needed to be finished the guy who started it was a chiropractor. He also has an electrical business:whistling2:, he carries insurance and doesnt need a license to work most places. You should have seen this job, I walked away


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## kgb62 (Oct 23, 2011)

Thanks for the advice (most of you). Burti, just so you know, 90% of my "sidejobbing" is for friends and family and Im still making decent money. I'm getting these jobs regardless of price. I dont work for free and i dont work cheap but I believe they are fair rates. If I'm giving up my weekends and time with my kids to work for strangers I dont get off the couch for less than $500 for the day. I do live in PA but I dont believe I'm one of the sidejobbers you have a beef with. 

That being said, I agree with you 100%. Nothing worse than a hack who undercuts someone who is more qualified and is going to do the job right.


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## mbednarik (Oct 10, 2011)

I have just started out on my own back in oct of 11. My best customers have been general contractors. You move with them and they will spread your name for you if your good. PR is very important. Take time to talk to people it's now part of the job. Lastly paperwork. Find a good accounting software and keep track of everything everynight, it makes things a lot easier. You could be the best electrician around, but if you don't stay on top of the books, it will take care of you.


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## woodchuck2 (Sep 18, 2009)

I opted for sole proprietor and i own everything. I did take out a home equity loan against my house "bought and paid for" to help buy the big ticket items like trailers, mini-ex, the large tools, etc. I also do other home maintenance things such as mowing, plowing, sanding, small excavation, tree cutting and such to help with the slow economy. Talk to an accountant about how to set up for taxes, get a decent program for estimates, invoices, schedule-c's, etc. I use an older Quickbooks program and i have been using it for 4yrs now. It took me some time to figure it out to my liking. I hire an older accountant to do my filing for me in the spring. I have a tax number but i do not claim sales "this will start some flaming" . I do pay all taxes up front and that is all i am going to say about that. According to NYS i have to have the tax number for Capital Improvements which i have never done, not even with some of the new homes i have wired. It seems these people did not want the State to know anything as they were using the home to "bury" money.

Be careful of debt, be sure you pay off all your accounts as quickly as possible. Use contracts, get at least 1/2 money down for most projects so you will not be hanging out to dry for funds if there is a hold up. I say if they HO cannot pay 1/2 up front or at least some kind of payment plan then they cannot afford to do the job. Big items such as stand-by generators i ask for the cost of the generator up front. I got burned on one of those once, never again!


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## Dfresh64 (Sep 10, 2011)

U GO!!! . I'm starting my new business come Monday The place I worked for closed after 20 y of working ... I'm getting excited !! Looking forward to asking alot of business question !!


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## backstay (Feb 3, 2011)

If $500 a day is good money, you are in for a surprise. In a 8 hr day you should be double that. Cost of doing business for most contractors will be $40/hr and up. Think hard about going out on your own. There is no paycheck on Friday, you will spend your evenings doing paper work, looking at jobs, billing and so on. Weekends, same thing. You never leave the work at the job. The benefits, if you work hard are there. Do you like where you work now? Maybe you should just side job to pickup extra work, like the chiropractor.


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## Hairbone (Feb 16, 2011)

tkb said:


> You make money on side jobs because you don't,
> 
> Pull Permits
> Pay for liability insurance
> ...


 
You left off:

Use the boss's vehicle, gas,tools & materials to do said "side Jobs":blink: Heck, i know a pm that did that when he was supposed to be on the clock for his day job also


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## Cletis (Aug 20, 2010)

*oh*



Hairbone said:


> You left off:
> 
> Use the boss's vehicle, gas,tools & materials to do said "side Jobs":blink: Heck, i know a pm that did that when he was supposed to be on the clock for his day job also


Oh, and say one of your helpers is carrying up a $400 fixture and he drops it. Guess who sucks it up now...lol


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## Bkessler (Feb 14, 2007)

BurtiElectric said:


> The reason for the overhead comment was bc imo, side jobbers are ruining the electrical business. You are driving the cost down of what legitimate contractors can charge.


If you can't compete with side jobbers you might as well quit now and retire or go back to work for someone else.


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## electricmanscott (Feb 11, 2010)

Cletis said:


> Oh, and say one of your helpers is carrying up a $400 fixture and he drops it. Guess who sucks it up now...lol


Does the helper pay if the owner drops it? :laughing:


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## woodchuck2 (Sep 18, 2009)

backstay said:


> If $500 a day is good money, you are in for a surprise. In a 8 hr day you should be double that. Cost of doing business for most contractors will be $40/hr and up. Think hard about going out on your own. There is no paycheck on Friday, you will spend your evenings doing paper work, looking at jobs, billing and so on. Weekends, same thing. You never leave the work at the job. The benefits, if you work hard are there. Do you like where you work now? Maybe you should just side job to pickup extra work, like the chiropractor.


I can agree with most of this. The amount of money you make a day will vary by location, what you charge and the job you are doing. You may be on one job for 8hrs and make $500, the next day you may be on the job for 10hrs but make $1200 and the next day you may be sitting by the phone and make nothing. You may not be busy everyday, you may not be working full days, but then you may be working 14hr days and working weekends. 

The no pay check thing is dead on. You may go up to 3 weeks with no income but then all the checks come in at once and you think your loaded. Be careful and pay all your bills 1st before even thinking of splurging. Expect what has happened to me twice in 3 weeks, all my money is invested in several large jobs, i have no surplus of money due to excessive bills and slow economy, i finally chase down a check on Friday afternoon, i race to the bank to find they are closed. Now i face a 3day weekend broke, i cannot deposit the check until Tuesday and it will not clear until Wed. Meanwhile i have more work to do, the parts that have been ordered are in but now i have to wait until Wed for this check to clear so i can continue working. In the meantime i will be busting hump and chasing more money to keep working. This is why i stress to keep yourself out of debt and keep up on your payments. IMO when all my debt is cleared my goal is to have at least 6 months operating costs sitting in the bank to prevent short falls like this. It takes money to make money, my poor spending choices have had a large impact on my business and it takes far longer to get out of the hole that it was to dig it.


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## woodchuck2 (Sep 18, 2009)

Cletis said:


> Oh, and say one of your helpers is carrying up a $400 fixture and he drops it. Guess who sucks it up now...lol


Have good insurance and expect things like this to happen. Accidents do happen and more often than not you will take it out of pocket before claiming it. I had to replace a damaged window in a new home once, cost me $600 out of pocket. You will find sometimes on a job that a tool gets damaged or burns up due to neglect and that tool will cost you the days profit. That is part of the life as a contractor. Everyone of us has a pile of broken tools somewhere. Sometimes we have them rebuilt or just take the time to assemble one good tool from several others. Anything to save a dollar.


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## emahler (Oct 13, 2011)

MechanicalDVR said:


> The rules as I learned:
> 
> Your accountant can be your best friend, get a great one.
> 
> ...


1) yes...but unless you have a ton of capital and start with employees and overhead, you can start without a CPA

2&3) definitely

4) never on a traditional lease....but definitely on a TRAC Lease...if you've never heard of a track lease....Google it...

5) if your are a fortune 500, yes....for Joe Blow Electric, lease option option to buy....


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## backstay (Feb 3, 2011)

If you turn in $400 claims for damaging materials, you soon won't be able to afford insurance. That has to go into the overhead costs pile. Right next to lost tools.


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## captkirk (Nov 21, 2007)

Sole proprietor...? do guys acually still do that...? takes big cahones man...


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## kgb62 (Oct 23, 2011)

captkirk said:


> Sole proprietor...? do guys acually still do that...? takes big cahones man...


Why is that?


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## emahler (Oct 13, 2011)

kgb62 said:


> Why is that?


zero asset protection....and probably the highest tax rate...


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## BurtiElectric (Jan 11, 2011)

Bkessler said:


> If you can't compete with side jobbers you might as well quit now and retire or go back to work for someone else.


What are you talking about? Why would I want to compete with side jobbers? I dont work for 10 bucks an hour:whistling2:

If you want to waste your time competing against a side jobber knock yourself out man, I'll stay home if I cant get my price.

P.S..... I never worked for anyone else :thumbup:


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## BurtiElectric (Jan 11, 2011)

Cant retire I'm only 31


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## electrician&fireman (Jan 29, 2012)

*Going on your own*

I have been in business for 5 years now on my own. I am also grew up in a family business. This is what I know, and take it for what it's worth:

1) When you work for your self, you only have to work half a day. It does not matter which 12 hours it is.
2) You will need a darn good lawyer, accountant and maybe parole company.
3) If you are married, your wife will have to be very understanding, or don't go on your own. If you insist on going on your own, and she does not understand, leave her first.
5) There is no glory or sense in being sole proprietor. Incorporate, fast.
6) Get every liability and work mans comp.
7) The only thing done on a handshake is someone thanking you for a job welll done. Everything esle is under a signed contract, even service work.
8) Buy a van, a dependable one, and get an alarm system on it. Trust no one, or trust that your tools will walk away.
9) If you try to hire some one, plan on going through 10 guys to get one good one. Every one in between will work slower than you, tell you what you are doing wrong, and that 'the inspector will never see it'.
10) Finally, do enough jobs right, and request people to write you reviews on Angies List, and THEY will come to you to advertise your business. It's my biggest source of income.


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## bobelectric (Feb 24, 2007)

Jump on in. The work is enough for everyone.


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