Electrical Contractor Growing Pains

In Electrical Contracting Articles by David Parden

How many times has it been said “he is a great electrician but he doesn’t understand how to run a business”? As a contractor in Alabama in the 90s this definitely applied to me. I got my master electrician certificate at the tender age of 27 and jumped right into the world of contracting. What I endured for the next decade was really painful at times but this does not have to be your fate as well!

After I got my master electricians certificate I picked up a good contractor that my former boss managed to loose. His work was not near enough to keep me busy but it was a good foundation to start my electrical contracting company. I was on my way. I got some business cards printed up and ran an ad in the local shopper magazine. That is where the fun started.

 End users (home owners & business owners), were for the most part great to work with. Figuring out the average hourly rate to bill them was easy and usually they’re check books was ready when I finished the work.

 The problem was a certain breed of general contractor who feeds on the never ending supply of new electrical contractors. They are like sharks swimming through the services section of the local paper hunting their prey. Like most new electrical contractors that are so happy when their phone finally rings they willingly go to the shark’s feeding grounds aka the job-site.

 If you’re lucky they’ll have a contract ready for you to sign. Don’t worry they have already filled in the amount they are willing to pay. It doesn’t really matter what your price is, it is a take it or leave it deal but “if you do a good job on this project” they have other work to come and they usually do. On the other hand they may not have a contract but he seems like a nice guy (at first) and in the scheme of things it’s a small job.

 Once on the job these job sharks commence with the feeding. It usually starts with verbal abuse. They complain that you’re not doing the job quickly enough. They try to force you to do work that was not part of the original scope of work and expect you to just do it. They could care less that you took the job too cheap and will not even be sympathetic to you when you need to go do a quick service call that you can actually make some money on but that is just the beginning. After you have willingly submitted to the shark’s will now you have the audacity to want to be paid. How dare you!

 It does not have to be this way folks! Before you start your contracting business take some time to learn how to properly bid work. Know what your true cost is and do not take work that is doomed to be a looser before you even start. Learn how to write a descent scope letter (proposal) that spells out exactly what you are including and not including. Unless you can decipher legal jargon hire an attorney to read your contracts. Understand your contracts! Understand how to read a schedule and maintain it.

 The best way to work with more professional general contractors is present a more professional quote and that starts with your scope letter. Many times it will be the first point of contact you have with a general contractor especially if you are using a job report such as Dodge. Savvy general contractors know just by looking at your scope letter whether you are a savvy electrical contractor. Reputable general contractors want to work with reputable sub contractors and please the client. Sharks just care about the money.

 DBP Electrical Consulting can teach you a sound methodology to quoting work, writing scope letters, and setting up workable budgets. Just because you’re new to contracting does not mean you have to pay your dues to the sharks. Project a professional image from day one and you will be miles ahead of your competition!