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Are we expecting a big slow down ?

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Hey Guys new member long time lurker. I was wondering what everyone else’s experience is. I know everyones busy right now but with this looming recession and high interest rates are we expecting a big slow down like 2008. I was hoping to open my own shop in Ontario but I’m wondering if maybe it’s a better idea to hold off a year and then open shop once things get better Regardless I’ll be out of work for a year (I’m a ibew guy was really busy past couple years looking slow for the next year or so) so any advice or insight would be greatly appreciate.
thanks I’m advance guys! Cheers!
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Master Electrician - Ontario
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I know this sounds like I am a hypocritic, but I am not sure why anyone would want to be an LEC in Ontario anymore. It is not cost effective to try to be legit with a one-man show and the constant fight with the underground economy makes you weary.

If you are going to do that, I would go find a small contractor that needs part-time help and go work for them, because in the end you will make the same money or more and not have the hassles. Now if you want to go big... you need to be able to live without income for a year at least, maybe more so you can put every drop of money back into the business.

Cheers
John
 

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Electrician
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Discussion Starter · #8 ·
I know this sounds like I am a hypocritic, but I am not sure why anyone would want to be an LEC in Ontario anymore. It is not cost effective to try to be legit with a one-man show and the constant fight with the underground economy makes you weary.

If you are going to do that, I would go find a small contractor that needs part-time help and go work for them, because in the end you will make the same money or more and not have the hassles. Now if you want to go big... you need to be able to live without income for a year at least, maybe more so you can put every drop of money back into the business.

Cheers
John
You think I’d make working part time then to open my own shop? I know a few guys who are one man shows and do great why do you say it’s not cost effective?
 

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Chief Flunky
Field Service Engineer
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When your costs go up you raise prices. Or you go out of business…which raises demand and thus prices.

Any time the government gets involved in trying to regulate business, they automatically create a black market. The more severe the restrictions, the bigger the black market. At the extreme you see places like the Soviet Union where the black market was bigger than the legal market. If this is happening at some point you can’t fight it but that doesn’t mean you can’t have a reputable business. Prices are less on the black market but so are costs since “anything goes”.
 

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University maintenance
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I don't think it will be as bad as 2008. It's hard to say though because there is a lot of backed up demand waiting for labor or materials. So for now it seems like there is a fair amount of work in the pipeline. My concern is that all of the deals that are currently sitting on hold end up falling through and then all of a sudden there isn't much work at all. In a recession many projects get scaled back or cancelled outright but you never know until it happens.
I'm in quebec though so things may be different than your area.
I didn't think 2008 was all that bad, now go back to the early 80s, ouch.
I had to find a part time job in high school in 2009 and it was awful. Once I finally got a job most of my colleagues were my parents' age who had lost their career jobs and couldn't find anything better than working at canadian tire.
Apparently in quebec in the early 90s the union hall would tell people to find something else to do because there was effectively no work at all.
 

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Master Electrician - Ontario
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You think I’d make working part time then to open my own shop? I know a few guys who are one man shows and do great why do you say it’s not cost effective?
I have done the math a number of times, and I find if you are actually true to the real cost of running a business you will realize (for many) that it is not cost effective in Ontario as a “one-man” show.

I suspect these guys you know, likely are not truly costing out the value of what they are doing and are simply looking at the “cash-in-hand” and really don’t have a business plan.

Somewhere on this forum are many posts about the true costs of running a business, but to get you started, you need to figure out your billable hours are so you might want to take a look at this Overhead/Higher Profit Margin

Only once you determine what your costs are, that is when you can determine an hourly rate to attempt to recover (not including wages). One thing that people tend to say is that “I don’t have that cost”… but more often then not they do. The biggest two items are vehicle costs and storage / office costs. A lot of people will say that their truck is paid for, so they don’t need to account for that, but they fail to realize that they need to replace that truck in the future. Also there is a cost associate with sitting at your kitchen table to paying invoices, creating estimates, creating invoices, etc. Yes you may be using your kitchen table at “no cost”, but that is in effect “rented space”, no different then the crap you have in your garage or basement because you don’t have room on your truck to haul it around. That is also labour you are contributing to, but have no where to bill it to. These are the true costs to running a business and just because you are getting something for free, does not mean that you cannot account for that when planning your business expenses. If you got a free pack of receptacles at the suppliers, would you give it to your clients for free? The same applies for the costs of operating the business.

Once you have put this all together, you will find a price (a cost) that I suspect will not bear the market because you do not have any scales of economy as a one-man shop. A very simple example is the ECRA license. While the cost is minimal (about $450 per year) you have to account for that in every hour worked as a one-man show. However if there were 10 employees, the cost of that is still the same ($450), but that is spread out over all the billable hours and is only a fraction and brings your costs closer to what the market will bear.

Generally every “odd number” person is the most expensive because you have to set them up in a truck, stock that truck and find them work for one person. The even numbers just tag on to those existing costs and hopefully are the actual revenue generators.

Cheers
John
 

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Electrician
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Discussion Starter · #14 ·
I have done the math a number of times, and I find if you are actually true to the real cost of running a business you will realize (for many) that it is not cost effective in Ontario as a “one-man” show.

I suspect these guys you know, likely are not truly costing out the value of what they are doing and are simply looking at the “cash-in-hand” and really don’t have a business plan.

Somewhere on this forum are many posts about the true costs of running a business, but to get you started, you need to figure out your billable hours are so you might want to take a look at this Overhead/Higher Profit M

Once you have put this all together, you will find a price (a cost) that I suspect will not bear the market because you do not have any scales of economy as a one-man shop. A very simple example is the ECRA license. While the cost is minimal (about $450 per year) you have to account for that in every hour worked as a one-man show. However if there were 10 employees, the cost of that is still the same ($450), but that is spread out over all the billable hours and is only a fraction and brings your costs closer to what the market will bear.

Generally every “odd number” person is the most expensive because you have to set them up in a truck, stock that truck and find them work for one person. The even numbers just tag on to those existing costs and hopefully are the actual revenue generators.

Cheers
John
I understand what you‘re saying. It doesn't mean one can’t still make a good living as a LEC one man show or with employee’s. I wanted to start as a one man show and hire as the work picks up. My biggest worry is if there will be work to get with all this recession stuff and high interest rates which would make it less likely for people to spend money. Also if people are tight on money they can wait on those pot lights or panel change. The thing is I’d rather be in control at least with self employment I can go out and look for work. while in the ibew if there’s no work I just sit at home bored out of my mind. Also don’t say to just go non union because at that point I might as well start my own company.
 

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The thing is I’d rather be in control at least with self employment I can go out and look for work. while in the ibew if there’s no work I just sit at home bored out of my mind. Also don’t say to just go non union because at that point I might as well start my own company.
What you have missed in that picture is union work that isn't ibew. I never realized working union could be so varied.
 

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No other union worth joining that I’m aware of CUSW is all work in the Bruce nuclear which I’m not willing to do and CLAC is the same as non union
There's likely more unions that you're unaware of.

Mine is a company union; you cannot join until you're hired. It has its own quirks, but work or pay shortfall isn't in the recipe for regulars.
 

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I wanted to start as a one man show and hire as the work picks up. My biggest worry is if there will be work to get with all this recession stuff and high interest rates which would make it less likely for people to spend money.
I think that is how many try it and most fail. If you are really worried about money, they you do not have the backstop to start you own LEC. IMHO, you need to have at least a years salary put away plus any costs related to starting up and running a business for a year.

If you have to worry about putting food on the table every week with your income, you will never have time to "look out the window" and run you business, you will constantly be running from any job to any job just to make scratch. That is not running a business, that is survival.

There is no doubt that you are going to do what you want, and if you want to be an LEC that is your call. All I am saying that (with my experience) being both a one-man shop and having larger numbers of crew, I never made any money by myself. The only reason any of us go into business is to make money... if we are not making money there is nothing good that can come from that.

My last question / statement... I am not sure where you are from and what your family situation is; but you need to determine why you want to be an LEC. If it is to work more (since it does not sound like you want to work less), you can get any number of jobs out there, I for one am hiring for special projects literally around the world. If it is to make money, there are lots of ways to make money that do not involve being an LEC; buy some houses, become a landlord, flip rentals, etc. Sell wood carvings, refinish furniture, tutor, teach at the college, cut lawns and shovel snow... lots of ways to make money that do not have the risk of all that is required to be an LEC.

Cheers
John
 

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Journeyman
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I started out about 2 years ago. The future was uncertain to say the least.
In a small enough town where enough people know you I found business picked up pretty quick.
No advertising, I've paid myself since week one. I made money on every job, not a killing, but by staying busy doing something it pays the bills. Some days im not sure how my bills get paid, its not the work I remember doing before.

This year it looks like I will clear between 3-4X what I made working 44hrs as a journeyman.
I dont think I am the usual case, but it can be done.
Ive hired an apprentice, and took an OYAP student to get familiar with parts enough to be useful while my apprentice is away at school.

Finding all of your yearly expenses and accounting for everything is super important. Putting money away for taxes is super important. Having a good accountant is super important. Saving money and having plenty of float is super important. As the jobs get bigger the payments get slower.

Nothing good in life has ever just fallen in my lap, you have to put yourself out there and risk it a bit to get somewhere.
 

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Can't Remember
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Sometimes it feels like survival. I realize I'm so busy that I don't have enough time to steer the ship so to speak. I didn't raise prices quick enough. Starting to make a bit of a recovery towards the end of the year. For me it's still a lifestyle thing. Sometimes love/hate relationship. I don't begrudge or look down upon people who have chosen different paths, union, non union, employee or otherwise. To each their own.
 
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