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    12 Replies Latest reply on Mar 17, 2009 2:23 PM by pezz26

    Between a Rock and a hard place!

    jslatt27 Wayfarer
      Hello to all,
      I am glad I found this web site because getting accurate information from people that you can trust is sometimes difficult. I am a Master Electrician and have been in the trade 18 years, I have worked for a large union shop as a superintendant for several years. Last year, I decided to start my own business on the side (Electrical Contractor) becuase working for myself is something I have always wanted to do. I didnt take out any bank loans or 2nd mortgages on my house but I did aquire 3 or 4 credit cards that are close to beinig maxed out as I am writing this. Everything went well for about 8 or 9 months now work has slowed down and I am struggling to pay the bills that I have racked up through the business, I can't use any of the money from my full time job because that pays all of the bills in the household budget, child care ,mortgage, utilities, vehicle payments and so on.

      I really do want to make this work and eventually take the leap and go full-time but right now, it's stressfull on all involved I really can't dedicate a whole lot of time in finding new work because of my full time job.

      I am sure someone can relate to this and give me some tips. Thanks
        • Re: Between a Rock and a hard place!
          lowdose Wayfarer
          You need to organize those credit balances under a single, low-to-zero interest account. You'll likely find an offer from any of the major credit cards for a free balance transfer to an account with a promotional APR. You need to make some sacrifices to budget 12 payments (one a month) to pay down that balance within a year. But I can't stress this enough: you can't run a business with credit card debt. It will kill you.
          • Re: Between a Rock and a hard place!
            LUCKIEST Guide
            27, Welcome to this web site and good luck.
            Starting a new business is the American Dream.
            It is great that you have a full time job and a salary. that is a plus.
            Suggestions Do you know about SCORE?? SCORE is FREE
            Do you have a Business and Marketing Plan??
            Do you know why work has slowed down??
              • Re: Between a Rock and a hard place!
                jslatt27 Wayfarer
                Thanks for responding, no I do not know about SCORE what is it? I do not have a business and marketing plan that was my next question, who would I contact about both? Is this something that an accountant can do?
                • Re: Between a Rock and a hard place!
                  jslatt27 Wayfarer
                  I did not answer the 2nd part of your question, you asked if I know why work has slowed down? I live in the Washington DC metropolitan area (DC,Maryland,Virginia)work is plentiful in the construction/skilled trades industry. I guess lack of marketing is the reason for MY slow down, I am doing work for 1 builder who does all residential and you know how the housing market is these days.I have other work as well which is all word of mouth but nothing steady.It is frustrating for me in the position that I am in right now because there is so much work in this area and I know I can get the work if I bid on it, but these general contractors out here work full time during the day and I couldnt be there during the day having a full-time job.
                    • Re: Between a Rock and a hard place!
                      FCPainter Adventurer
                      I agree that a) you need to consolidate this debt b) you need to figure out why you'd generate so much debt for work you are doing on the side and c) you need to start drumming up business again.

                      Do you know where the money went? I would think for an electrician doing side jobs you would make really great margins. Are you charging enough money? Did you buy things that you really at the end of the day did not need to buy for your business (e.g. could you rent them on a per job basis or do without or share the cost with another electrician who also does side jobs)

                      I am really alarmed that you are generating so much debt for a side business. I would sit down with a trusted SCORE counselor or reasonable accountant ASAP to better understand where your money is going.

                      Let us know how we can help
                      • Re: Between a Rock and a hard place!
                        pezz26 Newbie

                        Since you and the general contractors are both working during the day, the evening is a perfect chance to catch them by phone. I'd pick up the phone to call and introduce yourself. Ask if you can send them your business card and if they'd consider using you in the future. If you don't hear from them, call them back. Just because they haven't called doesn't mean they aren't interested. Sometimes they get busy, etc. Don't give up. Persistance is the key in sales and that's basically what you're doing..selling yourself. Good luck!
                    • Re: Between a Rock and a hard place!
                      Ed O'Gee Adventurer
                      Painter gives a good explanation, either he has lived through it or is a smart guy. If you are maxed out on credit cards, consolidating the debt isn't as easy as some people have made it sound. However they are absolutely right you do need to consolidate, (not sure how low your interest will be) but this will help you with one single payment per month.

                      One thing that Painter pointed out that is dead on is that you have to figure out where the money is going. If you have a full time job, I assume you are not taking personal money from the business, therefore where is the money going? If you are losing money now, without taking a salary, the prospects for quitting your job one day and running the business full time are grim.

                      If you don't have an accountant, find one that is also a financial planner, pay the person a few bucks to audit your books and help you develop an action plan around the business. They will be able to tell you if you need to find cheaper suppliers, cheaper labor (if you subcontract) or if you are simply not charging your clients enough.
                        • Re: Between a Rock and a hard place!
                          jslatt27 Wayfarer
                          Thank you both for your advice. I have a partner that is just a working partner he does not contribute to the busineess financially. I pay him 40% of what a job makes AFTER material and other expenses have been paid, he gets a 10-99 at the end of the year. Price wise I am comparable to other local electrical contractors maybe a little cheaper but not by much. Most of the debt stems from mismanagement, I will be the first to admit that I am not very good at managing my money. I know where I went wrong, I just need to turn it around and get this debt paid off and meet with a local SCORE counselor. Another mistake that I made was not getting an accountant. I have an appointment with one next week. Who do I get to help with a business plan and marketing strategies? Can SCORE help with that?