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Old 04-06-2016, 08:58 AM   #1
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Default Advice for electric vs hvac business or both

I am at a crossroads and I need to figure some things out. Looking for informative opinions on my dilemma.

I work at a small hvac/electric company on the coast of North Carolina. When I say small, I mean it's the owner, which is my uncle, my aunt in the office and me doing all aspects of the work. We occasionally get a couple extra hands to help part time and employ them full time during summer. I handle everything from quoting the jobs, to installation, and collecting the money. My uncle is on his way out and there will be an offer soon to buy this company. We have a lot of material on hand and equipment. We are out county's oldest mechanical company and that resonates well in the community that is constantly changing because this county is a retirement Mecca.

I just turned 25, I've been in this family business ever since I was 11. I have my masters license for electric and my commercial and residential license for hvac. I really prefer electrical work personally and I feel like in our area electric does not bring in as much money but does make more pennies on the dollar. There is no reason I can't build a larger business with my good attitude and hard work. I realize that replacements for hvac make quick money and I'd be giving that up if I went solely electric but it's what I'm considering. After extras are calculated, most of the time electric brings as much cash in the job per house as hvac, it's just the lack of that quick money like hvac has that concerns me.

We are a residential market with a little commercial work. New houses is the thing around here for electric and I'd be competing with the largest company which has about 9-10 employees and a bunch of one guy shops.

My question is do you think it is wise to switch to all electric and forget the hvac? I don't like how unreliable any brand equipment is nowadays and also don't really want to spend my whole life doing service calls after hours and having to charge less because the idiots around me make my price look high because they are charging too little . Thanks for any help


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Old 04-06-2016, 09:16 AM   #2
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You have your masters and your ready to run your own business?
Didn't you ask the very basic question "AC current flow questions"
just the other day?
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Old 04-06-2016, 09:19 AM   #3
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Lol I was waiting for it. Yes, I do have an electrical license. I needed to understand the how of current flow, not the general knowledge involved in checking and installing electrical systems. Haven't found good resources to read about what I was asking, and my experience level is hands on and a lot of studying for the exam. I do quality work, I just need to understand all facets of electricity more in depth than I do now.


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Old 04-06-2016, 09:22 AM   #4
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You would also be surprised at our market makeup of electricians. They basically for the most part understand very little, they can just pull wire and make up boxes. I don't want to be like that.


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Old 04-06-2016, 11:14 AM   #5
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Quote:
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You would also be surprised at our market makeup of electricians. They basically for the most part understand very little, they can just pull wire and make up boxes. I don't want to be like that.



Electricians do not just pull wire and make up boxes .



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Old 04-06-2016, 12:21 PM   #6
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Yes I know that, I'm saying that other electricians in my area only do that. They don't have much knowledge as to why they are doing what they are doing.


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Old 04-06-2016, 02:30 PM   #7
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I think if I could do both I would. Both are great skill sets. With us the customer always says how much ??? With no heat or ac they say when????
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Old 04-06-2016, 02:31 PM   #8
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stick with hvac. hvac is always in demand. you will do better. keep your electrical license and do it as a hobby when jobs come along. you are equipped to do hvac, you are not equipped to do electrical. stick with what you know.
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Old 04-06-2016, 03:41 PM   #9
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definitely do both! if not another on top! countless times are we asked " hey do you know a good HVAC guy, hey do you know a good plumber. I would love to be able to do other trades work, I think its a faster way to have the monopoly in your area.
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Old 04-06-2016, 04:23 PM   #10
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We (which was just me in the beginning) started out as an electrical shop in 1985. In 1995 we brought on HVAC. This was also the year I took off the tool belt. Also the year we quit doing new construction and working for GC's. In 1999/2000 we moved into our new and current 14,000 ft. commercial location.

In 2001 we got serious about plumbing and developed it as a separate department. In 2005 we became a Generac dealer, got into water treatment and sewer and drain. In 2009 we opened a Hearth & Stove business. Currently we have 33 employees and are on goal for 7.5M this year.

Everything is profitable, but HVAC installations have the highest margins. Plumbing numbers are awesome and yes as an electrician by heart that feels weird to say it.

HVAC and electric service run about the same margins wise. Generator installations are low, but service and maintenance are good plus we cross sell to other services.

So yes, it's my experience that having multiple trades in your business is a good thing, but you have to bring them on at the right time. We made a lot of mistakes, especially with the plumbing department.

Don't bring on a trade until you have the one your doing running profitably.

Feel free to PM me if you want to learn more about this.

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Old 04-06-2016, 05:42 PM   #11
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Thanks everyone. Like I mentioned before, our market is residential. Very little commercial but our city is growing. Currently we are equipped to do both businesses but we definitely do more hvac because of our reputation. A lot of people do not know that we offer electric but we could work on that marketing wise. This is pretty much a personal decision to me. I enjoy electrical work, not so much the hvac. I would like to know that I'm doing something I love but at the end of the day I don't want to leave a lot of potential money on the table. Tough decision..


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Old 04-06-2016, 05:45 PM   #12
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A major problem is hvac is so consuming. It is easier to get hvac work, and it's also easier to lose it. Electricians around here are trusted by contractors. Once they feel comfortable with your pricing strategy they can figure an expectation for your cost and they feel good about you. Hvac isn't that way at all. I am all the time getting new contractors and they are ready to switch. I can take one van and have enough boxes and wire to rough in three houses, hvac I need three trucks to bring material to do one house. Lots more overhead and also the call backs are often because the equipment is not what it used to be.


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Old 04-06-2016, 10:46 PM   #13
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Sounds like to me that you want to do electrical.. thought of hiring out HVAC and just overseeing?
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Old 04-06-2016, 10:47 PM   #14
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Oh and trust me Square D isnt what it use to be from what ive seen in my lastest installs.
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Old 04-06-2016, 10:51 PM   #15
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The bottom line is that electrical contractors simply don't have the items to mark up the way HVAC contractors do. An average boiler change out is $5-8K here and average a/c install here for a starter home (cool only, basement or attic installation, no heat strips) is anywhere from 5-10K. There's nothing we do that can even touch that. Even a generator job isn't going to be that profitable when the prices of generators is online and every hack installs generators now.
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Old 04-06-2016, 11:08 PM   #16
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Quote:
Originally Posted by MTW
The bottom line is that electrical contractors simply don't have the items to mark up the way HVAC contractors do. An average boiler change out is $5-8K here and average a/c install here for a starter home (cool only, basement or attic installation, no heat strips) is anywhere from 5-10K. There's nothing we do that can even touch that. Even a generator job isn't going to be that profitable when the prices of generators is online and every hack installs generators now.
I'm not going to read this thread but I'm sure MTW has it right.

The entire industry has a different swagger on the AC side.
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Old 04-06-2016, 11:16 PM   #17
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I would not close a profitable business.

Your problems are "good" problems.
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Old 04-07-2016, 08:30 AM   #18
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Right, thanks for everyone's input. I guess maybe I can strive to become profitable enough to just oversee the hvac and I can get in there with the guys and wire up houses being its what I enjoy. I just know there are a lot of extra headaches with the hvac side of things but maybe it'll be worth it. In regards to square d quality, that's why I use cutler hammer lol


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Old 04-07-2016, 08:31 AM   #19
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You can tighten a home line for days and set it in the panel and the wire falls out practically


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Old 04-07-2016, 11:54 AM   #20
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Quote:
Originally Posted by ZBat910 View Post
You can tighten a home line for days and set it in the panel and the wire falls out practically


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I'm not having this problem, are you doing it wrong?
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