Starting a business

[Gary Fowler]

This is not really tractor related although it might run into some tractor work down the line.
My neighbor wants me to start up a business doing electrical fixture upgrades. This would be working with a lighting distributor (his brother) who has several contracts to upgrade business light fixtures from fluorescent to LED. The work does not require a licensed electrician just need some basic wiring knowledge. I would have to get a contractors license with something like an LLC company and could entail working in several different states.

Does anyone know how I would go about doing that? I would also need some basic company liability insurance, I have no idea how much that would cost. This would be a small operation starting out with 4 employees with max of about 15 employees.

Anyone with business experience chime in here!!!

 

[jenkinsph]

There are companies that will go into large buildings and replace all the existing lamps at one time. You would think that this would be an easy transition for them to install the newer led T8 and T12 tubes. No need for a new business unless there is more work than the existing companies can handle.

I have had employees working in many states across the country years ago, some were good with traveling and others were an absolute pita. Caution is advised. IIRC you have traveled quite a lot in your work in the past and maybe you have a handle on some good employees for this work. .

Federal government buildings might be ideal work to consider because with tax exempt status you would not need to track a lot of paperwork or deal with local inspectors and the like. Even if you found a need for an electrical license you could get your license in Arkansas and use it throughout the US and it's territories on government sites. You would not need to deal with the local or state license or their inspections. That reduces the red tape and a lot of extra paperwork.

If you go for it I hope you have success, nothing ventured nothing gained. Think it through carefully.

 

[Handloader109]

So, you would set up the llc, (pretty simple and relatively cheap). Your company it seems from your description. Probably local license as contractor is all you need, check with the city of Bismarck. You as owner would be responsible for the liability insurance. Check with whoever you buy insurance from to see if they offer or could direct you to a company. (something like a 1 million dollar policy would be plenty.) if your friend is looking for a partnership, I would decline. it would be better to be an employee than a partner. (and as employee you would not need insurance nor business license)

 

[Gary Fowler]

So, you would set up the llc, (pretty simple and relatively cheap). Your company it seems from your description. Probably local license as contractor is all you need, check with the city of Bismarck. You as owner would be responsible for the liability insurance. Check with whoever you buy insurance from to see if they offer or could direct you to a company. (something like a 1 million dollar policy would be plenty.) if your friend is looking for a partnership, I would decline. it would be better to be an employee than a partner. (and as employee you would not need insurance nor business license)

No partner, my neighbor is working for his brother getting a new company started up. His brother is the district lighting distributor for most all lighting fixture companies and has recently bought a couple companies that do work for schools in Texas and another that he is bidding jobs for internationally to furnish and install LED lights to replace every type including one contract for Ho Chi Minh City to replace all of their street lights (I wouldn't be involved at all with that one)> I don't see this venture as lasting indefinitely since once the new LED lights are in, it is supposed to be a 10 year bulb. Right now they have more jobs than they can find people to do and everyone wants the work done right now. One contract is for 360,000 lights to be replaced, so lots of work to be done. I just don't know what the pricing structure of this type work would be, although some videos show less than 3 minutes to replace 4 foot x 2 foot fluorescent fixture. Of course that does not include getting material in place, removing packaging and disposing of the fluorescent bulb hazardous waste.
The labor to do the work can be estimated pretty easily but all the ancillary costs like waste disposal, and even daily out of town living expenses would have to figured into the overhead.

 

[murphy1244]

Don't know a thing about it but Good luck I hope its a success.

 

[Jkott]

I assume you have tried to replace a few to see what you are in for?

I've had the ends of old fluorescent light bulb holders disintegrate. Then it becomes a lot more than 3 minutes.

Are they all the same type of fixture? All low enough to use a ladder or scaffolding? Will you need lifts?

They replaced all the can lights with LED's in our building's lobby. I think it was a couple dozen bulbs, but I seem to remember them needing an articulating lift to get over the stairs and "raised landscaping". It was a couple years ago, but I seem to remember them taking much more than a couple days (I'm thinking more like a week) to change those out.

 

[Gary Fowler]

I don't have much info at this time other than it would be on a per unit basis. I have been thinking about how I would entice a person to come work for me and I don't think there is enough money in this to afford to pay for employee health insurance which most folks would want. Plus working out of town, I would have to pay per diem in order to get permanent employee to work on this and I just don't think the lighting distributor is going to want to divvy up the profits enough for me to make any money.
I am really thinking this would not be a good endeavor given the proposed price structure.
I have to get more info before committing the first $ to this.

 

[Complete Turf Care]

Getting a business set up is easy. I've done a few over the years. I just go to my Secretary of State's web site and fill out a few forms and pay $60 and it's set up. Then, you have to go to the IRS site and get a Federal Tax ID number. That too, is fairly simple. You will need the tax ID number to open a bank account.

After that, I would suggest you get an accounting program to keep track of everything. I use QuickBooks, but there are others out there.

And, contact any insurance agent for insurance. You will need liability and worker's comp. Cost for both of these are based on payroll. I pay about $0.05 to $0.10 per dollar of payroll, but I have heard of some occupations as high as $0.95 per dollar. Check on this before you start setting up your pricing.

Having said all of this, I think you should think long and hard about starting a business in something you know nothing about. I highly recommend you start your own business, but do something you know.

 

[Omega Woods]

Having said all of this, I think you should think long and hard about starting a business in something you know nothing about. I highly recommend you start your own business, but do something you know.

This.

You should get as much information about this business from your neighbor and his brother. If you're satisfied, Mr. LawnCare has the basic steps for starting a business listed above.

If you even get a whiff of something not being on the level with your neighbor's brother (cash investment, non-specific information about the scope and timing of jobs, contracts to sign in order to get "more information", large capital outlay, etc.), politely make your exit or at least talk to a business attorney.

Good Luck!

 

[Handloader109]

Be careful of locking yourself into a cheap time-frame per light.... My company did a contract about 5yrs ago that went in and relamped about 20 of our locations. Replaced all fluorescent bulbs. (like for like unfortunately). Any bad ballast were charged separately. Then quarterly the contractor would inspect and replace bulbs that failed. Again, bad ballast were charged separately. Most location had some high lights that required 16ft ladder and two employees. Required. We just ended it I don't really think there was a cost savings (was based on us calling for service as bulbs died) we paid a lot for this contract...... Wasn't cheap at all.

 

[Streetcar]

I would hesitate to get into unknown business .
Will you replace indoor or exterior lights. Exterior can be rusted in place. Exterior need to account for weather
Travel can be expensive and you can lose workers quickly

 

[Gary Fowler]

It is all indoor at this point but there are some contracts available to replace street lighting but I wont go into that.

As for not knowing anything about the work, I didn't say I didn't know anything about it, I just always worked for a large company and never did any contract work. I have supervised crews doing electrical work and managed quality control of electrical and all other crafts of a construction project on new construction. I am just a bit reserved on doing these short term jobs of 2-4 days in may instances and moving all over the USA doing it without knowing a lot more. I have had discussion on doing this per fixture but no indication of getting travel time, mileage etc. between jobs nor a per diem for the workers. I can see this as being a deal breaker if not included.

 

[DaveNJ]

This.

You should get as much information about this business from your neighbor and his brother. If you're satisfied, Mr. LawnCare has the basic steps for starting a business listed above.

If you even get a whiff of something not being on the level with your neighbor's brother (cash investment, non-specific information about the scope and timing of jobs, contracts to sign in order to get "more information", large capital outlay, etc.), politely make your exit or at least talk to a business attorney.

Good Luck!

Agreed. As a lawyer years ago I helped to set up many small businesses. Usually, the ones that lasted were ones formed by folks that were employed for at least a few years in that type of trade or business, and had put a business plan to paper.

 

[kevin37b]

Do you want to be on the road again ? I thought you were retired and happy . I would keep playing with my tractors and stay home . Take care of the family and homestead .

 

[jenkinsph]

Do you want to be on the road again ? I thought you were retired and happy . I would keep playing with my tractors and stay home . Take care of the family and homestead .

Good point.
Even if he plans to oversee this from home base that would never work.

 

[Industrial Toys]

I have been self employed for almost thirty years. Be carefull. There is always someone around trying to get you to work (hard) cheap, take the risk, while they put their feet up and collect the (easy) money.

I did quite a bit of lighting repair back when I was an apprentice electician. Both indoor and outdoor. Don't know whey people wait til the snow flies to get their outdoor lighting and signs repaired.

Worst shock I ever got was up in a ceiling, 347 volt lighting. Someone had stripped the wires way too long and I was tucking them back into a Junction box. Everything was worked on live back then. Finding the appropriate breaker would have cut into the bosses profits.

 

[powerscol]

Multiple states may be an issue. You state can set you up with an LLC In Colorado it is easy. Some states will use your other state LLC if you pay a license or contractor fee to be able to work there. Hook up with you local better business bureau or state SBA (small business administration) office. There are folks that love to help other get going. Double check that no electrical license is needed. Here in Colorado one would be depending where you worked. Some cities have stricter rules and require a separate contracting fee to work there.

The suggestion above on being an employee, even under contract, may be the way to go.

Bottom line after talking with the BBB and SBA and an attorney, you will know more. BTW - Check out you neighbors business through the BBB first. You might be suprised. You might also need a tax account too.

Good luck

 

[kevin37b]

Gary , Hello , can you hear us now ?

 

[AxleHub]

Gary,

Congrats on considering a new business opportunity.

I'll make a few suggestions and ask a few questions:

1. Definitely get eithet a Sub S or LLC depending on the ownrtship structure of the small business.

2. Insurance is a critical consideration. "Any insurance company" is not wise imo, you want a good agent working for a company that does business insurance and if they do contractor insurance . . even better.

3. The same business insurance agency can sldo handle the workman's comp.

4. Imo I'd consider starting out limiting myself to 2 or 3 states and no more. Why? Learn while you earn. You can then verify licensing needs or new employees etc etc..

A. Will you hire employees or do you plan on have them be sub contractors?

B. Is pricing based on a formula or do you need to bid each job?

 

[Gary Fowler]

Thanks guys for all the info. Now some near to home personal things have thrown a monkey wrench into this even if I could make the LLC work. My brother in law (lives right across my pond from me) had to be rushed to the hospital last week for shortness of breath. He is now on oxygen 100% of the time and his pulmonary specialist says he will be that way for the rest of his life. He is diagnose with pulmonary fibrosis. Funny how it manifested itself seemingly overnight. The doctor says it has been a long time in the works but just now got so bad likely from the pneumonia episode a week or so before.
I suppose now I should not even consider going on the road with a new business prospective because he cant do any work around the farm. I have been taking care of his lawn care issues along with mine and that takes at least a full day of work to keep the grass down. I have to go move some hay for his cows this morning. His wife is somewhat like my wife in that she cant run motorized equipment other than a electric string trimmer and a push lawnmower without running over something so I will be helping out there for the immediate future. I think he has plans to sell all of his cows prior to winter feeding time so that chore wont be needed.

It is an awakening to all of the family as to how quickly something can turn from good to bad as far as health is concerned.