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I started in business in 1987. About four years ago, I noticed a new local electrical contractor, growing very quickly. In four years, he went from a one man show, to five employees, with four vans. I saw some of his prices and he was about 30% less than me on commercial work.
It didn't concern me too much because I'm busy, but I always wondered how he could do it.
Last week, he called all his employees together and told them to find new jobs, he was going out of business.

Here's my advice:
Job Cost every job.
This doesn't just mean sitting with a calculator and adding material & labor. It means using software, like Quickbooks Pro and recording every hour, every material and applying it to a job. Enter the invoices & labor for that job and in the end, you can see a profit.
This is not your true profit.
Enter every invoice for items like vehicle expenses, Workmens comp, liability insurance, office, tools, phone, internet, and every bill that comes in.
Give each bill a job name, or for overhead, a category. Enter every bill and pay them through the software.
After awhile, you can get reports for any period of profit/loss.
You can also get profit/loss on each job.
Reports on profit/loss are also available on categories like data, new homes, commercial, service calls, etc.
From looking at all of this, you can decide whether you should increase certain categories or maybe quit offering them.
After a year or two, you'll have more accurate data to help make decisions and guide your business based on profit/loss.

Now the important part:
Figure out what it costs you to be in business per day - whether you work or not.
Use reports for overhead and divide by the number of days you work per year, like 250 or 200.
This will give you an overhead cost per day.

It takes time to do this, I suggest doing it at the end of each day for 30 minutes. Doing this will guide you through a long and profitable career.
 

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My advice is about the same.
I took an Electrical cost estimating class at a local college.
We learned using both the book and software on the computer.
Knowing how to estimate a job will keep you from going broke.
Forget how long it takes you to install a simple one hole strap in the field, there are a lot of things involved with that strap other than just field installation of that strap.
This is the book I've used for years.
Never lost money on a job, except for the non-payers.

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Electrical contractor 37 years. Electrical inspector 2 years
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All this book learning, computers, QB, time tracking.... etc takes time and costs money and while good might not pay off. You need a target market that has money to spend and willing to spend it. I cannot afford to spend $40,000. for a book keeper and don't have the time every day to follow all the recommendations. I took a collage class 25 years ago on running a successful business and it cost me jobs and money. After applying the formula I raised my prices and wound up staying home for 3 months. There was no way I could add a 15% contingency and a 10% profit margin on new construction.
 

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All this book learning, computers, QB, time tracking.... etc takes time and costs money and while good might not pay off. You need a target market that has money to spend and willing to spend it. I cannot afford to spend $40,000. for a book keeper and don't have the time every day to follow all the recommendations. I took a collage class 25 years ago on running a successful business and it cost me jobs and money. After applying the formula I raised my prices and wound up staying home for 3 months. There was no way I could add a 15% contingency and a 10% profit margin on new construction.
I don’t know any of my small contractor buddy’s that hire a full time bookkeeper.
My bookkeeper has access to all of my accounts and gives me wonderful monthly and quarterly reports.
If I needs something more specific he can give me that too.
I have a job, he has a job.
 

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I started in business in 1987. About four years ago, I noticed a new local electrical contractor, growing very quickly. In four years, he went from a one man show, to five employees, with four vans. I saw some of his prices and he was about 30% less than me on commercial work.
It didn't concern me too much because I'm busy, but I always wondered how he could do it.
Last week, he called all his employees together and told them to find new jobs, he was going out of business.

Here's my advice:
Job Cost every job.
This doesn't just mean sitting with a calculator and adding material & labor. It means using software, like Quickbooks Pro and recording every hour, every material and applying it to a job. Enter the invoices & labor for that job and in the end, you can see a profit.
This is not your true profit.
Enter every invoice for items like vehicle expenses, Workmens comp, liability insurance, office, tools, phone, internet, and every bill that comes in.
Give each bill a job name, or for overhead, a category. Enter every bill and pay them through the software.
After awhile, you can get reports for any period of profit/loss.
You can also get profit/loss on each job.
Reports on profit/loss are also available on categories like data, new homes, commercial, service calls, etc.
From looking at all of this, you can decide whether you should increase certain categories or maybe quit offering them.
After a year or two, you'll have more accurate data to help make decisions and guide your business based on profit/loss.

Now the important part:
Figure out what it costs you to be in business per day - whether you work or not.
Use reports for overhead and divide by the number of days you work per year, like 250 or 200.
This will give you an overhead cost per day.

It takes time to do this, I suggest doing it at the end of each day for 30 minutes. Doing this will guide you through a long and profitable career.
WOW! Great freaking post! I dont know how I missed this!???
 

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Electrical Contractor
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I don’t know any of my small contractor buddy’s that hire a full time bookkeeper.
My bookkeeper has access to all of my accounts and gives me wonderful monthly and quarterly reports.
If I needs something more specific he can give me that too.
I have a job, he has a job.
I'm a one man show. My bookkeeper shows up at my door quarterly, takes a box of stuff with him when he walks out, and brings it back the next day. At the end of my business year he has that box of stuff for two days. I get one invoice per year from him. I keep pretty good day-to-day records of my business and everything he takes in that box is well organized. So yes, he has a job and I have a job also.
 
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Electrical contractor 37 years. Electrical inspector 2 years
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I'm a one man show. My bookkeeper shows up at my door quarterly, takes a box of stuff with him when he walks out, and brings it back the next day. At the end of my business year he has that box of stuff for two days. I get one invoice per year from him. I keep pretty good day-to-day records of my business and everything he takes in that box is well organized. So yes, he has a job and I have a job also.
I have to find someone like that. I also need some one to check all the mail each day and emails, and phone calls. I have been getting inundated with tons of junk mail, email, and phone solicitations which has to be looked at so as not to miss important stuff. I miss the old days when I used the " left hand right hand " method and stayed below the radar. Once you incorporate with all the structure and requirements then the record keeping starts.
 
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