Making your 1st Million as an Electrician
I am borrowing this post for Dan. There are some good lessons here and I have added my take.
Since entering the electrical trade, I have always heard people say that electricians are loaded and they earn loads of money, but do they really earn that much? I have read in media articles that electricians are earning more than £100k, but can you become a millionaire as an electrician?
100 pounds is like $130K so obviously England pays more than the US for electrical contracting.
The average rate in TN may be $25ish and the average rate in California may be $45ish
I grew up on a council estate and from a very young age I wanted to be rich. I dreamt of owning a massive house, boats and a plane. Isn’t it everyone’s dream to become a millionaire?
As I am reading Dan’s post I never thought of being a millionaire. I was a musician at an early age and I wanted to be famous but not for the money.
I didn’t start my electrical apprenticeship purely based on money. (Who does?) I was told that electricians earn a good living but I was very much attracted to a hands-on job in construction which also involved plenty of theory. However, once I started my electrical apprenticeship after quitting A-Levels, I got the taste for money very quickly. At 16 years old, I was earning £135 a week, plus I worked in a tropical fish shop on Sundays for £35 a day. It felt like I was raking it in. Especially compared to my friends. Not many of them worked. My pay gave me freedom and independence. I bought a moped which allowed me to roam off the council estate.
At the age of 21 I was earning £60k a year
In the second year of my apprenticeship my wages doubled and I qualified in my third year. At the age of 19 I was earning £600 a week, over £31k a year! I worked for a JIB company so after two years with the relevant experience and further training, I applied to become an approved electrician which boosted my pay once again. At the age of 21, I was earning almost £60k a year. In fact, one year I was told that I earned more than anyone else on the company… including directors! Money became my pure motivation and I earned more than most people I knew.
I bought a house with a years’ worth of savings
I am not going to lie, I put in the hours. I would work any day of the week, any night, days and nights, weekends, you name it, I would do it. I was paid by the hour so the goal was to work as many hours as I could. I was employed and on the books so was also entitled to holiday and employee benefits. My decent wage allowed me to save for a deposit for a house and I achieved this in one year. I pride myself that I was never given a penny and earned my house through good old fashioned hard work and being good at my job. (you can read my career progression story here)
As you train as an electrician, your wage rises very quickly, but once you qualify and then become an approved electrician, the pay is generally capped. Electricians may be paid by the hour or by day rate so they can only earn their rate or the maximum hours you can fit in a day. Sometimes they may be on a price so if they complete a job quickly, it’ll maximize profits but regardless, you won’t become that millionaire when you work for somebody.
This is such a true statement. A guy once told me you never get rich by working hard. It took me a few years to understand what he was saying but it is true.
A while back I bumped into an old colleague and he was trying to impress me by bragging how much he was earning. He told me that he’s going to be a millionaire one day and the job he’s currently on is paying £220 a day. I got my calculator out and informed him that to earn a million pound at that rate, he would have to work 7 days a week for 13 years! Idiot.
Not everyone is cut out to own a business. Not everyone has that desire. There is nothing wrong with being satisfied. Money is not as important as being happy and healthy. But most people that start out in business should go at it as one day I will start my company. There is more than one reason to do so. One is this is a way to secure your future and two one day you will not want to be working with your tools.
In 2010 I started my company after being made redundant (you can read my redundancy story here). I was an electrician one day and a company director the next and wow, what a change. I didn’t start up a business for the money. It just happened after the company I worked for went bust and I jumped on the opportunity.
When I was an electrician, I concentrated on installing and maintaining electrical systems to a high standard in a safe manner. I took pride in my work and always wanted to progress my career by learning and experience. As a company director my focus changed. Although I wanted the usual high standard that I was known by, I wasn’t doing the hands-on work as much as I had other priorities such as sourcing work, compliance, marketing, finances and many more director tasks. It was hard at times because I was putting trust into others to complete jobs to how I perceived it should be done. I learnt very quickly that I couldn’t be carrying out the jobs and running the company. I couldn’t do everything and my company was quickly growing. It started with 5 people and within a year we had some fantastic contracts with some very well-known UK companies. Everything seemed positive.
As we grew, naturally we took on more staff. I have always found recruiting very tricky because in the electrical industry there are so many qualifications available and ways to enter the industry. I have had guys work for me who have completed apprenticeships. Others have completed evening courses. Some have had JIB gold cards and some have had 20 years plus experience. The truth is even the qualifications and experience do not guarantee competency. I used to go on recommendations by people I know but even then, I have had issues.
** I have had to grow up a lot since starting my business
The company was thriving, work was coming in and I was learning; learning to become a business man. I was landing project after project. The goal became less about quality and workmanship and became more about turnover and profit. All I was interested in was increasing the monthly turnover. It became a less about ohms and amps and more about pounds. I am not sure why because my wage as a director has not really increased as the business grew but I suppose that childhood dream of being rich was always there.
I took on men purely to complete jobs. The vetting became less important because of penalty clauses on missing project completion dates and the need to employ electricians to complete projects. Did I care about quality? Less than I should have. The intention of quality was always there and we certainly completed some fantastic jobs but often it wasn’t quite where I wanted it to be. We had a core team of guys whose work was brilliant but there were a few guys who were not at the same level. The desire for growth got in the way. I suppose you could call it greed. I was after hitting that million pound a year turnover mark. Turnover increased each year in the first five years of trading but I still wasn’t hitting that all important million-pound mark! I was sitting just underneath it.
In mid-2015 I landed exciting large projects and took on more guys. It became a disaster. The quality was diluted further and I had a really bad end of year. I ended up going out to jobs to do them myself because I wasn’t happy with some of the newbies work. I was used to managing my core team who I trusted but some of the extended team were really hard work and unreliable. I didn’t trust many of them and caught a couple taking the piss which really doesn’t go down well with me. I hate liars. The stress was unbearable because ultimately my business is built up on customer relations and service. If one of the team does not perform, I do not get repeat work and therefore my future revenue is compromised. Giving the client, the full package was what I became known for as an electrician and company director. I didn’t want to lose that.
This is the same story we hear from a lot of people. Lesson learned bigger is not always better.
Find your sweet spot. Don’t take on more work than you can manage.
Over the 2015 Christmas period I took two weeks off and didn’t work at all which was the first time I have ever done that. I re-evaluated by future and business plans. I needed to make changes and to reinstate the core values of what my career was built upon – quality, competence, customer service, reliability and ethics.
I came back in the new year totally refreshed and ready! I made changes immediately. I had realized that I had been very harsh on everyone who worked for me for a number of years. Many of the team I had known for many years. We had been clubbing together as youngsters, I have seen some of them get married, have kids and grown up! I had to stop being a boss and become a leader. I realized that some work we done was really crap that nobody liked. That was one of the reasons why the odd person left. We were busy and had a good enough reputation that instead of taking on every job that would come my way, I would concentrate on the clients and jobs that we all enjoyed. I was working for customers who would always try and drive a high bargain and subsequently it puts pressure on me to deliver and I put pressure on my team. Whereas I had many clients who accepted a job costs what it costs and let us get on with it and were happy providing we delivered. The guys prefer this type of work because although there is pressure on most projects, too much pressure leads to mistakes and everybody becomes unhappy. If I motivate the team by being proud of their work, keeping their hours to a sensible amount and creating a professional culture; it boosts morale and efficiency increases.
I have learned many years ago that a pat on the back goes farther than a raise. People want to feel needed and that they are doing a good job.
After time I concentrated more on caring about my team, aiming to be as professional as we could and providing the client with the best service possible. I stopped obsessing with profit and loss and balance sheets and enjoyed my job. Before I knew it, profits increased and efficiency was at an all-time high. I then hit that million-pound mark with ease! I hit my million-pound turnover target. How did I feel? Absolutely no different. It wasn’t exciting as I had hoped but that didn’t bother me.
Making a million was an anti-climax
A million pounds sounds like a money and it is a lot of money but remember, this is turnover. That is the amount invoiced to clients. From that million, you pay for the materials used to complete works, labour wages and general overheads. The profit is arguably the important part but as I mentioned earlier, my wage hasn’t really increased much particularly since owning a business. It requires a lot of cash in the bank to run an electrical contracting company due to cash flow. I have no doubt in my mind that if I wanted to increase profits I could do it quite easily but it wouldn’t be ethical. I could take on additional work and increase growth but quality would decrease again. I don’t want that. Instead, I want to make sure my team are enjoying work, are healthy and are developing their skills and experience. I don’t want a high staff turnover.
I decided to spend more time with my family, concentrating on growing my reputation and doing the right thing. Since then, my business bloomed
I decided to spend more time with my family, concentrating on growing my reputation and doing the right thing. All hard work may I add. Since then, my business has bloomed. I work for some great clients whom I have developed fantastic relationships with. If I come across a situation that is not right, unsafe or dangerous, as a duty of care I will act on that situation even if it has financial repercussions. And do you know what, I find that the clients that understand are the ones to look after. The clients who want to turn a blind eye due to financial reasons are the ones to be wary of. They know their responsibilities and I have come across organizations that boast millions of pounds record profits in news articles who scrape on £200 which could potentially prevent a fire or death. I make it clear that I am not interested in working for peanuts and will happily advise a new client that my services are by no means the cheapest. I attract a particular type of customer. One that appreciates value for money.
I have learned that money is just numbers that holds a value. I occasionally have £200k go into my bank and a large portion goes out the account the next day to pay out what I owe. Money has become less important to me.
Employers and business owners have a lot of responsibility and what they do can affect many people, not just themselves
What I have taken from my goal of making a million pound with the realization what goes into that, is that it is very possible to achieve earning a high amount but I strongly believe business owners should be ethical in their business practices. They should be conscious about their colleague’s health and well-being, should always be looking to help develop individuals and understand that without employees, you wouldn’t have a business. Employers and business owners have a lot of responsibility and what they do can affect many people, not just themselves.
Since changing my attitude towards business, I have increased turnover, increased profits and increased opportunities and I can happily sleep at night knowing that what we achieved is done through hard work and professionalism.
I want to sum this up:
We all need money to survive: The LOVE of money is the root of all evil. There isn’t anything wrong with wanting to be comfortable and not worry about paying your bills but being right with God, being happy, and healthy is what it is all about.
At Best Bid we quit worrying about money years ago and our focus is truly on helping others better themselves.
Learning good estimating skills.
Learning electrical estimating software.
Electrical estimation-Job Tracking-Drafting-Project Managing, these are things we can help you with.
Let us help you may your 1st Million Dollars.