Ask 10 electrical contractors what business they are in, and nine of them will probably say something like, “We install and service electrical wiring (and/or) voice/data systems.” A key nuance is missing here — these companies should see themselves as being in the business of profitably installing or servicing these systems. It's an important distinction to make, because with the proper training, many people can safely provide these services, but over time, only smart businesspeople can make money doing it.
With all of the focus on the technical complexities of electrical contracting, such as safely installing electrical systems, performing electrical design calculations and keeping up with changes in N.E. Code regulations, it's easy to overlook the business side of the electrical contracting equation.
An electrical contractor could be an absolute Einstein in the field and calculate conduit-fill rates while brushing his teeth in the morning, but if he can't make money doing it, then it's not a skill that will ensure his continued financial success. It reminds me of the time one of my sons asked a major league catcher who had caught both Roger Clemens and Kevin Appier (former Kansas City Royals starting pitcher now in the midst of a mediocre pitching career with the New York Mets) who was had a better fastball. “Kevin Appier throws pretty fast,” he said. “But Roger Clemens knows how to pitch.”
In other words, being able to throw a fastball 95 m.p.h.-plus, doesn't necessarily make you a major-league pitcher. If you don't know when to throw that fastball in a game or how to throw it consistently for strikes, you aren't going to have a whole lot of success in the big leagues.
The same goes for electrical contractors. If they can't run their business profitably, they won't be around long. Yet, plenty of electrical contractors of all sizes are equally adept on the job-site and back in the office on the business side. For instance, in this month's cover feature, “Intex on the fast track,” Staff Writer Amy Fischbach explores the business philosophy that Keith Bell at Intex Electrical Contractors Inc., Forney, Texas, has used to build a $13 million-a-year electrical contracting business focusing on fast-track construction projects in the Dallas area. Key to Bell's success in completing fast-track jobs is “goal-based management” — setting realistic goals and then planning out the timelines that will meet those goals.
“I think the hardest thing that most contractors have to overcome is the ability to delegate,” Bell said. “The key to learning that is learning how to manage with goals-based management. You establish the goals and then you hold someone accountable for achieving those goals. It's a no-brainer. It's not emotional. It's black and white… If you see that each task for each crew is completed each day, you'll wake up on the last day and as long as you didn't leave out anything within your critical path schedule, the job will be completed.”
Bell like other electrical contractors as well as carpenters, plumbers, sheet rockers, masons, painters and other tradespeople on job-sites, are, in their purest form, entrepreneurs. They all have the technical skills to complete their part of construction project. But for all their ability to harness electricity and use it to power so much of our everyday lives, electrical contractors still have to know how to make a buck doing it.