The following is an outline from " The Electrical Contractor's Blueprint for Success" - [ 153 Pages ], Copyrighted 2006 by CCES,LLC. (SAN 851-4089)---Authored by John Frezados ISBN-13: 978-0-9787351-0-4 , ISBN-10: 0-9787351-0-2
This material is not permitted to be reproduced, copied or used in any manner without the prior written consent of the author and publisher. Violators of U.S. copyright laws will be subject to the maximum fines and penalties allowed by law.
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The Electrical Contractor’s Blueprint for Success
Electrical Contracting as a Business
Foreword
1) Transitioning From Electrician to Business Owner
a) The difference between being a good electrician and running a successful electrical contracting business.
b) What type of work would you like to focus on?
c) How large would you like to grow and how fast would you like to get there?
d) Can the geographic area of your operations support the type of business you want to establish?
e) Do you have enough capital to start a business and support it (and yourself) while it’s growing?
f) Getting around the “Contractor’s Dead Zone”.
2) Getting Started
a) Legal Requirements, Licenses
b) Incorporating, L.L.C., Sole Proprietorship and the
c) Accounting
d) Insurances
1) Can insurance be a selling point?
2) If you work as a subcontractor, do general contractors have minimum insurance requirements and can not having enough insurance hurt your chances of getting a profitable job?
3) Business Plan
a) What is a business plan?
b) Do you have one and why do you need one?
c) Electrical Contractor’s Business Plan
1) A Description of your business
2) Where do you see your business in 1, 2, 5, 10,…..years
3) Analysis of the Market and your Competition
4) What are your Strategies to compete in the Current Market?
5) More detailed description of your Services and Products
6) Marketing and Advertising Strategies
7) Describe your Operations
8) Your Financial Plan
9) Business Plan Software
4) Initial Capital
a) Making a realistic assessment of your finances and your available funds and do you have enough?
b) Building your business structure or customer base first?
c) Sources of capital:
1) Bridge loans versus Longer term loans.
2) Small Business Administration and their loan requirements,
Sample 3 Year Comparative Balance Sheet
Column Chart of Comparative Balance Sheet
Chart analysis
3) Credit cards as temporary sources of revenue
4) Partners and Investors
5) Friends and relatives (remember the old adage
“Never go into business with friends and relatives”?)
5) Locating and Setting Up your Business
a) Local Zoning
b) Does it make sense to work out of your home and save the money you would have otherwise spent on rent?
c) Will the type of business or specialty area you choose dictate where and how you need to operate?
d) Does having a P.O.Box as a business address affect the types of jobs you get?
e) Will you have employees working out of your house?
1) Safety Issues
2) Privacy Concerns
3) Personal liabilities and general coverage
f) How much of a difference does having a live person answer the phone actually make?
g) Can you attract good employees by working out of your home?
6) Hiring Employees
Sample Organizational Chart for an Electrical Contracting business
a) When and where do you really need them?
b) How much can you afford to pay and what is the going rate.
c) More benefits versus more salary.
d) Means of finding employees
1) Placing Classified Ads
Sample Classified Ads for Electricians
e) Screening prospective employees over the phone.
f) Interviews, Hiring and Probationary Periods
Sample -Work Experience Questionnaire for Electrician
Sample - Non-Compete Clause
g) Negligent hiring and your liabilities.
7) How to be an Effective Manager
a) Setting an example.
b) Company Policies
Sample of a Company Policy & Procedure form
c) Scheduling Employer – Employee meetings
d) Make it your business to know where they are and what they’re doing
e) Don’t make your favorite employee obvious to everyone and try not to make exceptions to your own rules.
f) Show your employees your appreciation, but don’t overdo it!
g) Know what and when to discuss with your employees regarding your business finances
h) Avoid micro-managing.
i) Give your employees incentives to work harder and better.
j) Why your employees should be asked not to discuss their salary and benefits packages between each other.
k) Disciplining employees and documenting it.
l) What to do when employees don’t get along with each other.
m) What to do when it’s time to fire an employee.
8) Procuring Vehicles - Equipment and Supplies
a) Vehicles and Equipment - Buy, Rent or Lease?
b) Tools
c) Supplies
d) Discounts
9) Estimating - Pricing Methods – Contracts
a) Residential Service and Light Commercial Work:
1) Time plus Materials Method
Estimating Example #1:
2) Flat Rate Pricing Method
Estimating Example # 2
Sample #1 of Flat Rate Pricing System
Sample #2 of Flat Rate Pricing System
3) Custom Pricing Systems
b) Commercial and Industrial Work
1) Architectural / Engineered – Blueprints - Plan Take-offs
Sample Electrical Blueprint of a 1600 sq. ft. residential home
Plan Note(s)
Electrical Legend
Electrical Plan - Itemized Take-off
2) Electronic Estimating
Qualifying your Bid
List of common reasons to qualify your bid
c) Estimating Example # 3
Estimating Example # 4 A
Estimating Example # 4 B
d) Copper as a Fluctuating Commodity- the Need for Contract Clauses and Qualifying your Bids.
10) Marketing Strategies - Advertising and Bids
a) Do you know who your target customers are?
b) What is your advertising budget?
Example # 1
c) Where to Advertise
1) Yellow Pages (local phone book)
2) Newspapers and Magazines
Sample Newspaper Ads
d) Assessing your Advertising
Example # 1
e) Direct Mail
Sample #1 Direct Mailing – Letter of Introduction
Sample #2 Direct Mailing – Letter of Introduction
f) Networking
g) Web sites
Web Site Layout
1) Home Page
Sample Home Page of an Electrical Contractor’s Web Site.
2) Electrical & Lighting
Sample of an Electrical and Lighting Services Page
3) I.T. & Computer Networking - Video Surveillance or other services
4) Service Contracts
Sample Service Contract Page
5) Electrical Evaluations
Sample Electrical Evaluation Report
Sample Electrical Evaluation Agreement
6) Estimate(s)
Sample Request an Estimate Page
7) References
8) Employees and their Positions
9) Code Violations / Safe Electrical Practices / Lighting Examples
10) Employment Application(s)
11) Employee Section
h) When can you start decreasing the amount of money spent on advertising?
i) Should you join an online service that promises to find you new customers (or leads)?
j) Home warranty companies and should you sign on?
k) Bids and where to find them-(linked)
Small Business Administration
Central Contractor Registration
Federal Business Opportunities
Federal Acquisition Regulation
Dun and Bradstreet
l) Are you keeping an eye on your competition?
m) Realistic Self Assessments and their Importance
11) Daily Operations and the Different types of Work and Customers
a) The difference between going to work for someone else and opening up your own business.
b) Unless you have a substantial initial capital, you are going to be wearing many hats.
c) NEC versus Municipal / Local Power Utility Co.
d) State Regulations and Permits Requirements
e) Why taking out Permits and having the work inspected is so important
Sample of a Completed - NJ Electrical Permit
Sample of blank VA – Electrical Permit
f) Inspectors and how to deal with them
g) Different types of Work and Customers and what you need to know.
1) Residential customers
Sample Residential - Questionnaire
2) Commercial - Industrial customers
3) Municipal and Federal Contracts
4) Maintenance and Service Contracts
5) General Contractors and Sub-contracting
12) Profit Margins - Determining the Value of your Service,
Getting Paid and Collections
a) Profit Margins
b) Real or Theoretical Value?
1) You’re in the business of selling value.
Example # 1:
Example # 2:
2) Perceived Value and Marketing
c) Making the
d) Collecting your money
1) Payment policies
2) Collection Scenarios
Sample Collection Letters
Example #1
Example #2
Example #3
3) Small Claims Court
4) Collection Services
Sample Credit Card Authorization Form (with a non-cancellation clause)
13) Forming Strategic Partnerships with other Trades
a) HVAC (heating ventilation and air conditioning)
b) Pool Builders and Landscapers
c) IT (information technologies) & Computer Networking & Video Surveillance and Security Systems
d) Acting as a General Contractor
14) Project Management
a) Planning - Scheduling the Work – Gantt Charts
Example #1
Sample Gantt Chart
b) Estimating Work Time Accurately
15) Cash Flow Management
Cash Flow / Business Software
16) Common Pitfalls and How to Deal them
Scenarios #1 - 5
Problems Presented
Answers
17) Maintaining your Business
Retaining your customers
Customer Service
18) Planning for the Future (exit strategies & selling your business)
a) Determine the market value of the business
b) Prepare a Profit-and-Loss Statement
Example #1
Sample 3 Year Comparative Income (Profit and Loss) Statement
Column Chart for Comparative Income Statement
c) Find a business broker
d) Determine the terms of sale and financing options
Stop Wasting Time and Learn how to Make Money !
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