ELECTRICIAN BUSINESS

[notyou]

Hello Fellow traders,
Have started a electrical contracting business, this year one man operation in north east england, and am generally doing OK.
However unlike a painting decorating the repeat business from domestic customers is low as after rewiring a house thats it for 25 years, and trying to attaract new customers every week is not easy nor cheap trough advirtising media, so I would be grateful for any hints tips etc, I do things like leave cards etc half decent website etc and get quite a bit of referal work etc, I win most of my quotes (85-90%) but getting in the new enquires into the business seems to be the hard thing. Most of customers are amazed that I can come next week as I tend not to get booked to far in advance. ( a bit hand to mouth at present but generally getting 4.5 days of work a week by hook or by crook and things do seem to crop up just when i need them but on the downside I'm probably not maxing profitability so that get the work. I looking to add quality to my working week with respect to ammounts I'm invoicing etc. Instead of running around doing 3-4 £40 jobs etcgetiing the £200 jobs instead.
Also the work I've done for business' I'm having grief about getting paid etc, does anyone offer suggestions etc to speed up the process? or what to say /do when you are still unpaid after 6 weeks, do you get agressive,persausive, cheeky? any tips appreciated
While I submit written quotes for most work, do I need to submit terms and conditions etc on these and get signed agreements before starting (especially for commercial stuff) or is it not worth the bother as if they aint gonna pay they aint gonna pay (letting agents are the worst)
I dont expect to run before i can walk but any advice will be appreciated.

 

[breezer]

you could try writing paymet terms on any invoices

i.e payment must be within xx days, where x is your choice

 

[timmy74]

ive just set up too as a gas engineer/plumber and have been going for about 7-8 weeks the same here. once you established you'll be ok

 

[Diyisfun]

Why not try & get involved with small builders. They always need sparkies

 

[JohnD]

payment:

Firm and businesslike

When dealing with businesses, before you start, ask who deals with bill payments (ask name and direct line phone no). Before accepting the order phone this person and ask if they will be able to pay with xx days of invoice. Listen carefully, they may say "no, we pay all bills 30 days after approval by Mr. x" or "we pay on monthly statement" or "all bills must show our official order no." or "we pay bills the end of month following approval of payment by Mr X" in which case phone Mr X and see what other hoops he wants you to jump through before you get paid. Do this before you start work, not after when you're waiting for your money. Price up or reject work where payment seems slow. Payment offices will be immune to your threats or sob stories and will have been instructed to follow procedures. If you can't find out contacts and procedures for payments before you start work... don't start work. If you're on (say) a 20% profit margin, one unpaid job means to have to take FIVE paid jobs to get back to where you would have been if you'd turned it down.

One polite letter reminding them its overdue and asking them to explain if there's a reason for non payment

one firm letter

then say you will be making a claim against them which will include costs.

then do it

never make a threat you don't carry out.

Letting agents are in business and know the score. If they think you're silly enough to let them get away with it some will take advantage. don't accept if they say "we haven't received the money from the owner". That's their problem if they placed the order with you, not yours. With business people assume they will take (e.g.) 6 weeks to pay even if you say less, and price accordingly. Explain that you have to price higher because they are slow payers and offer e.g. 5% discount for payment within 7 days of invoice.

If unpaid after your letter, don't mess about, go to the small claims court. Insist on a written order before starting work with the name of the signatory shown. This should be a director as they might otherwise claim the person was not authorised to enter into contracts.

Send your invoices out promptly or take them round by hand and stand there waiting for then to pay you or give their unconvincing excuse. Don't enter into conversations while you're waiting for your money and don't walk away until they ask you to leave.

Better not to accept work from people you don't trust.

Small busineses most often go bust while waiting for payment.

I once went round to repossess stuff from an unpaid account... when I got there the office had gone (they hadn't paid rent and the landlord had repossessed the building and demolished it for redevelopment).

 

[WoodYouLike]

However unlike a painting decorating the repeat business from domestic customers is low as after rewiring a house thats it for 25 years, and trying to attaract new customers every week is not easy nor cheap trough advirtising media, so I would be grateful for any hints tips etc,

Landlords need checks on their electrical system every year (or is it every two years?) = repeat business (small sums, but many small sums still make a lot!)
PAT-testing, you do that?
Is there a business network group (like BNI) in your neighbourhood? Join that - their contacts can become your contacts.
'Join' up with your local plumber, kitchen installer etc and refer business to each other.
Another tip: if you install a new system in a house put a sticker with your company details on the groupbox - any problems with the electra in the house the box is the first place someone looks for.

 

[Pensdown]

However unlike a painting decorating the repeat business from domestic customers is low as after rewiring a house thats it for 25 years, and trying to attaract new customers every week is not easy nor cheap trough advirtising media, so I would be grateful for any hints tips etc, .

Although repeat business may be slow, after a while most of your work will come from their recommendations so the way your customers perceive your company is extremely important.

Never turn up in a dirty van and always look smart and be confident. Be polite but not over the top as that can make some people feel un-easy, a bit of trivial banter goes a long way. Above all learn to sell yourself to your customers.

Having people working in their house can be quite traumatic for some people so check that they are happy with your working hours. When you finish each day take a few minutes to tell them what you will be doing the following day so that they can be prepared and generally communicate everything.

Try and judge each customers expectations and then try to exceed them. Doing the work well is often not enough; the way you do it is just as important. At the end of the job, however small, your customer must like you and the more they like you the more they will talk about “my electrician” to their friends.

As for advertising, you could try a half page “additorial” in your local Friday free ads. This is an advert which reads like an editorial on your company and they can be very effective indeed. Read a few first then copy the format of the one that appeals to you.

Also the work I've done for business' I'm having grief about getting paid etc, does anyone offer suggestions etc to speed up the process? or what to say /do when you are still unpaid after 6 weeks, do you get agressive,persausive, cheeky? any tips appreciated
While I submit written quotes for most work, do I need to submit terms and conditions etc on these and get signed agreements before starting (especially for commercial stuff) or is it not worth the bother as if they aint gonna pay they aint gonna pay (letting agents are the worst)
I dont expect to run before i can walk but any advice will be appreciated.

Commercial work and late payment go hand in hand so if you’re not prepared to spend time chasing money then I would not bother with it. Most companies ignore your T&C’s and just impose there’s on you so always ask what their payment terms are before you accept their written purchase order. Tell them what your payment terms are and if they like you or if your quotes attractive they may accept your payment terms over theirs but make sure the terms are clearly stated on the order. 30-45days nett monthly is about the best you’re going to get so be sensible. Never, never, never, never start a job for a new commercial customer without a written purchase order.

When I started I pretended that I had an accounts department who were very strict. My wife would call my new customer’s accounts department a few days after the invoice had been sent to check that it had been received and it has gone for approval. She would call them again a week before the end of the month to make sure it had been approved and it was in the cheque run. If it wasn’t approved I would call the customer to find out why (normally it was on their desk under a pile of others invoices) and make sure they approved it a sent it back for payment.

I found that by using someone else to chase money it didn’t spoil my relationship with the people handling the work out and if it did I dropped the customer. I still belive in letting accounts departments deal with each other, they are a different breed

If they just refuse to pay and you have a written purchase order send them a 7 day letter (if you want a template drop me an e-mail). If they still refuse (unlikely) then call your local small claims court. You don’t need a solicitor, just fill out the form they send you, send it back and wait for the cheque to arrive complete with your out of pocket expenses.

You will soon get the hang of sniffing out undesirable customers.

And remember, you’re not doing it for love and 8-10 new start up companies fail in the first 3 years because they run out of cash not work.

 

[gas4you]

Any late payments are sent a reminder stating that future reminders are charged at £20 + VAT each. These go out weekly. If after about 6 reminders, depends on the mood I'm in at the time, I still do not get payment, I send a final reminder stating that if full payment including reminder fees are not paid within 7 days I will issue a small claims claim, end of, and charge them the cost of this. I also point out that it will be noted on their future credit history with credit reference agencies.

You have to be hard with them, give them an inch and they will take 10 miles I always tell them 'if they want money go to a bank' and that 'I'd rather lay in bed all day not getting paid than go to work and not get paid'. If a new business customer, I will not hand over any certificates until I receive full payment, no matter how much they complain.

Also refuse to do anymore work for them or to complete the job you are on if staged payments are late.

You are a business person, not a charity

As you can tell I don't give a damn who I upset to get my money and luckily I am too busy, therefore cannot be held to ransom

 

[Softus]

Why not try & get involved with small builders. They always need sparkies

Don't do any work for builders. They'll be a pain in the the neck and will take forever to pay you.

 

[JohnD]

I think I detect a common thread here....

Getting the money is really, really important.

The defining characteristic of being in business, is that you make money out of it.

 

[Softus]

The defining characteristic of being in business, is that you make money out of it.

JohnD, you have a knack of putting your finger on it.

That must come in handy in your bikini waxing work.

 

[gas4you]

JohnD, you have a knack of putting your finger on it.

That must come in handy in your bikini waxing work.

 

[theshogun]

A bit extreme i know, but i do know a carpenter who was working for some builder type, he kept getting told that his money would be made up next week,"i am a bit short this week", this was generally on a friday night in the pub this bloke did this to him for a few to many weeks until he took his chain saw in and rested it on the bar and then expressed a desire to be paid in full or he wood start it up, he got paid in full

 

[Softus]

There's nothing like a bit of sabre-rattling to get results, but threatening to take the law into his own hands with a chainsaw just makes him look a pratt. I wouldn't tell him that to his face of course; not until he put the chainsaw down.

 

[Softus]

BTW, @ builders - why are you so cr*p at paying?