1. Don’t pay a lot for office or storage space. It may make you feel like a success by having a nice office and warehouse but is that what you went in business for? You can rent a heated and cooled storage building for a fraction of the price to store equipment and supplies and allow your office staff to work from home. Using virtual assistants, call forwarding, email, direct deposit, online scheduling, online check and credit card processing, texting and even using cell phone cameras can all be used to save you thousands of dollars per year in overhead fees.
2. Forget buying new vehicles and equipment. Let the contractor that went out of business because he couldn’t afford the high payments absorb all the depreciation. Look for a well maintained vehicle that is already equipped with racks and shelving and put a great looking logo on it. I promise, your customers will not care.
3. Keep your cash flow positive. If you don’t have work lined up it won’t take long for you to go out of business paying high electrician wages to do little or nothing. I know it is hard to lay anyone off but….. business is business and if you don’t keep the cash flow positive there will not be a business for them to come back to when the economy recovers.
4. Learn how to price your work for profit. One of the biggest mistakes contractors make is pricing the job to get it rather than pricing the job to cover overhead and profit. There will always be someone out there doing the work for cost or even in many uneducated cases, below cost. Don’t compete with those working themselves out of business. You are in business to make a profit, not break even. Learn how to earn!
5. Know when to put a credit hold on customers and stick to your guns. If a client can’t pay you as agreed, something is wrong with their cash flow. When you hear “Wait till we close” or “The bank hasn’t released the funds yet” or any other excuse, they are warning signs. If you are going to give them longer terms or extend their limit, remember this: If a bank will not lend them the money, there is a reason; therefore you shouldn’t either and if the bank will, then let THEM borrow the funds to pay you!
6. Learn how to be a businessman or woman. You may be the most knowledgeable and skilled electrician in the country but if you are not skilled in running a business you will not last! One of the common traits among successful business owners is their extensive library on business topics. If you have more NASCAR magazines on your book shelve than books on improving your business skills you are headed down the wrong track!
7. Network, Network, Network! It is, was and always will be who you know. The more people you know, the more the phone will ring. Referrals are always the best customers and rarely shop price. Spend as much time as possible expanding and nurturing your network.