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E L E CT R I C AL CONNE CT I ON
S P R I NG 2 01 5
BUSINESS BASICS
How to make a profit and get paid
W
hen I’m out and about talking
to members of the electrical
industry, I’m often asked what
I perceive to be the major challenges
facing electrical contractors.
Yes, there are non-conforming
products, OHS compliance issues, too
much unenforced regulation and too few
tradesmen fully embracing smart new
technologies – but let’s hold it there.
None of those things are responsible for
the far too many jobs not returning a profit,
or that sizeable industry creditor trail that
starts at the contracting level and has a
nasty knock-on effect up the supply chain
to the merchants and suppliers, who are
ultimately left holding the materials bill.
Quite clearly, the two issues this
industry lacks focus on are accurate
estimating and debt collection.
The effect of these two factors can
result in families losing homes, contractors
working ridiculous hours to pay off debts
and, of course, the associated mental
health issues caused by the pressure of
deemed personal failure.
Thus, for good reason, this section of
the magazine revolves around these two
major issues.
Further, it’s the basis of an ongoing
commitment by
Electrical Connection
to provide comprehensive, ongoing
guidance on these two critically important
subjects.
We can’t hope to fully cover these issues
in one edition but we can commence a
process that encourages contractors to
put aside time for something that will
likely provide them with the greatest
upside to their business.
Of course, these subjects are not solely
the domain of the electrical sector, the same
can be said for plumbers and other sub-
trades, as well as the builders who ultimately
screw down the trades (due in part to their
own poor management - either by way of
incompetence or intention).
When we started to ask some questions
around Australia about what there is in the
way of estimating training (at an apprentice
and continuing professional development
level) as well as debt collection, there was a
fairly shallow response.
The industry seems to acknowledge
there is a problem but too many pass it
off as industry culture and the fact that it’s
always been that way.
Some want to say it’s a TAFE issue –
how what is taught is out of a textbook
and how lecturers, in some cases,
have no practical experience. But what
has the industry really done to solve
those problems? Finding anyone with
experience to teach others is as rare as
hen’s teeth.
Due to ignorance, the industry
continually pumps out new contractors
whose first aim is to take on their old
boss and commence undercutting their
old firm. And few of them have any grasp
of what it really costs to run a profitable
business these days.
So, this is the start of a journey and we
want you (the industry) to get involved. I
know it’s not in the nature of contractors
to spend money on education but
this issue really needs some serious
consideration.
Having a start in the electrical industry
is quite a leg up in this day and age. You
get paid well to learn on the job in an
age when most ~22 year olds coming out
of uni have gotten by on slim pickings
from after-hours retail jobs. They also
have a HECS/HELP burden to shoulder
for many years afterwards and, generally,
pay packets on entering their chosen
career (let’s put aside law, investment
banking and specialist medicine) are fairly
mediocre.
In putting this first edition together,
we spoke with long-time
Electrical
Connection
contributor, author, trainer
and electrical estimator Brian Seymour to
get a few tips that contractors can use wo
ensure they are making the most out of
every possible job.
We’re also pleased to support the
online debt recovery training services
from Anthony Igra, which you can access
anytime over the web.
I’m sure there are lots of ideas and
tips about these two issues hidden away
in electrical offices around the nation –
it’s time you shared a few with us
and others.
Jeff Patchell
Electrical Connection
is on a
mission to help contractors
ensure the longevity of their
businesses, by looking at the
crucial topics of estimating
and debt recovery.
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Be sure to keep an eye out for the
Business Basics logo in future editions
of
Electrical Connection
.