Taxes and overheads

[Isetech]

One good thing about being a small one man business, the paper work should be minimal. less taxes and overheads. You run your little operation from home, dont have labour issue to deal with and everyone is happy.

Well that seems to be changing and faster than I expected, one of the reasons I down scaled back in 2015, deregistered from VAT etc, was more to cut back on the admin requirements.

Going into solar has created more headaches than they are worth, or so it seems, one of the worse things that happened was over shooting the VAT thresh hold, now I have to charge VAT on labour, which wouldn't be a problem if I only did work for industries. When A domestic customer sees a R5000 Vat figure on top of the labour cost, they tend to comment.

Then there is the additional accounting bill for VAT every 2 months, plus the vat that has to be paid over.

You might be thinking so what is the big deal, well for a person like me who has dropped all my expenses, overdrafts, credit cards, loans, vehicle HP, etc, everything is paid for and I dont have any overheads or business loans, Now I remember why I use to by so many tools and always drive brand new vehicles, take customers for lunch and all that stuff.


I need to get back into debt, replace my old second hand vehicle with a brand new one, dump all the old equipment and start eating out more often.

[skatingsparks]

I find running cost have just got so stupid in general for me and my small business - me, one electrican and one labourer.

You can't compete in the domestic market - because everyone can have bash at wiring a house.
Solar - again everyone and there mum is having a go (i quoted against a jewler, a cabinet maker and decking guy a while back - all had someone to sign of the CoC's for them).

Commercial has go tricky - I used to do a lot of independant shops but that work has vanished as no one can afford floor rates in malls.

I also find that commercial aperations, office hotels. There always some new guy who's "got a guy who is and electrcian who is cheaper"

Industrial - we still do but to have all your paper work in order. You need another memeber of staff just to deal with that.

I'm at the point of closing doors. I'll sell the vans before they crap out (can't afford to replace anyway)

Back to the UK 8-5, usually 200 quid a day. No staff to worry about.

14 years in Africa has taken its toll.

[Isetech]

Talking about industrial, I was looking into a small project, the safety file was 250 pages for a job that would take us 2 days. R39 000 in safety induction courses, medical checks and you wait 60 -90 days for payments, no thanks.

Commercial is another rats nest, I stay away from, unless you also do aircons, there is some good money in commercial aircons and electrical. People cant go without the aircons

I learnt something a while back, someone commented that I am too expensive, IT took me a while to get my head around it, but I decided to try something different and change the way I see my rate.

You need to understand how it all works, if a customers says you are too expensive, you are not the problem, its the customer who is shopping in the wrong place. People who buy a Rolls Royce dont complain about the price. Move away from the customer looking for an i10.

Just make sure you can stay in the lane and offer the service people expect when they pay you a premium rate.

Dont arrive in a 40 year old bakkie full of rust and dump a bunch of unskilled labour on site, then disappear for the day, chances are you will be back to working for the budget customers.

[Isetech]

If you doing R10 bar plus industrial project, then it is worth the hassle.

The only time I go onto industrial sites now, when I get called in to wire DB's or handle critical parts of a project or if the company is running behind schedule and the penalties are going to bust the project.

With some consultants requesting a second opinion on COC's , because they dont trust the company who was awarded the contract to do things right, that is anotehr quick way to make a buck or 2.

Just be careful of these type projects, if they pay per DB, walk away.

[Derlyn]

@skatingsparks.

So, so sorry to hear of the predicament you find yourself in.

Yes, it's not easy and had I not had any parrallel income streams, I, as a one man band, would have found myself in exactly the same position.

I am of the opinion that a large majority of the small guys find themselves in a similar position as yourself, but, they are silent and don't talk about it.

Explore other ways of creating an income whilst not giving up on electrical. Call me a jack of all trades if you want, I couldn't care, but other than electrical, I flip cars, chicken and plants.

Good luck my brother. I sincerely hope things work out for you.

[Isetech]

They say small business is the way forward in this country, only if they cut all the red tape for the little guys.

You are either small (one man operation) operating below the radar with no overheads and a couple side hustles to pay the bills when you not riding the crest the the wave.

or you are big enough (at least 3 teams) to pay the overheads, admin staff, rentals, registrations, insurances, pensions, medical aid etc etc etc etc .

[Isetech]

It takes one year end, leave pay, bonuses and slow payments to shut down a small business trying to do the right thing.

I have literally no overheads, no vehicle hP, no loans, no overdraft, no credit debt, no workshop rental, no admin staff, no reps, no, no accounts ( I pay COD for everything) and my bond is just about paid up.

How have I survived for all these years, considering I dont have a trust fund or pension or anything like that, screwed myself by investing money in policies with big name brokers and lost everything ( a couple million), I use to blame the broker, but I should have got a second opinion which would have identified that the broker had linked life cover to every policy including my kids education policies, lesson learnt too late.

When work is quiet, I go into the workshop and build stuff and sell it,

I keep my overheads as low as possible.

I learn as much as I can as often as I can. Why because if there electrical work, or solar is the trend, I have done the research and made sure I have enough knowledge to do it.

I have a fully equipment workshop, which means I can build anything I need to.

When I take on a domestic project I have the training, knowledge and experience to do what ever the customer wants me to do, electrical, gate motor, garage door motor, alarm systems, CCTV basic to advanced, network cabling, solar and backup systems, automation and control. By the way this is opening up a whole new idea which I have been looking into ( unfortunately I cant share because if it takes of I will be the only company offering the service )

I have all the qualifications I need cant really go higher than an MIE, certificates for all the courses I have completed, a skippers license in case and even a code 14 just in case I need to drive a crane truck to plant poles when I did streetlight for the council

[Isetech]

Go for a long walk, think about what you are doing and how you can streamline the operation, sometimes you just have to walk away for a short period of time, think about what is costing you money and how you can improve it.

I have thought about creating a group for small business, like many have done in the past, where they tried to bring small business together and have one central point of operation, like a call center and you pay a small fee every month and a small commission per job.

I have been giving away so much work in the past year, and every day I get calls which I turn away because I just dont have the time.

Sometime I forward other small contractors number to customers, for some jobs are small and others a little bigger. the catch is that all my customer onyl want me to do the job, so most of them are prepared to wait 6 months, one even waited just over a year, and as he mentioned it was worth the wait, because we fixed the other crap jobs, done by alarm and CCTV installers.

I find running cost have just got so stupid in general for me and my small business - me, one electrican and one labourer.

You can't compete in the domestic market - because everyone can have bash at wiring a house.
Solar - again everyone and there mum is having a go (i quoted against a jewler, a cabinet maker and decking guy a while back - all had someone to sign of the CoC's for them).

Commercial has go tricky - I used to do a lot of independant shops but that work has vanished as no one can afford floor rates in malls.

I also find that commercial aperations, office hotels. There always some new guy who's "got a guy who is and electrcian who is cheaper"

Industrial - we still do but to have all your paper work in order. You need another memeber of staff just to deal with that.

I'm at the point of closing doors. I'll sell the vans before they crap out (can't afford to replace anyway)

Back to the UK 8-5, usually 200 quid a day. No staff to worry about.

14 years in Africa has taken its toll.

[Dylboy]

I am finding it extremely hard at the moment as a one man show with a helper, I had a second helper but not enough to keep him. Sad as he is great.

The jobs I am getting take up about 4 days but it's not viable to charge those 4 days of normal rate as it's not market related.

Sure I only went on my own a couple years back, the work is there and coming in but it's nearly a full days work at a market rate that does not cover much.

I have been keeping an eye out for graft out there which I can be employed and learn new things however they need experience in that field which I don't have. Bit of a catch 22.

I do sometimes think having a second team would help but then what they bring in vs. the overheads means I am in the same position.

With that going back to basics of me and 1 guy seems to help but I am no where even near making rent, fortunately my wife is a clever one and does ok. I feel crap 90% of the time as work hard yet nothing to show.


So at the moment it's carry on and do my best.

I also think the general cost of living is impacting everyone so it funnels through.

Heck I reckon I could earn more being a bicycle or motorbike salesman at the moment.



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[Isetech]

Let me tell you what has happened to the electrical industry, it has nothing to do with the market, it all boils down to the elctrical industry and the people working in it. I recall back in the day of being an association member, there would be meetings with free drinks and snacks and the same tune would play every single meeting, " rates are too low" 2 days later you would be quoting against the same person complaining about the the rates, and I would loose hands down because I was tooooooo expensive.

Let me paint a picture for you, you want to become a sparkie, great you look for an apprenticeship, unless you are very lucky or it is back in the 80's chances are you going to be looking for a long time. Back in the 80's they were mass producing tradesmen at a rate they could not employ us. When I qualified there was 1600 of us who given an option, leave the company or work as a trade hand at half the rate of an artisan. It then got to a point that they were offering R200 000 packages to try get rid of the people who wouldn't leave (this is how many small electrical businesses were started back then. I left 6 months too early, so I lost out on the package deal )

Lets say you do get lucky and find a position with a private company and spend the next few years training, chances are you going to be used as cheap labour and maybe learn the absolute basics, dumped on site to try figure it out, pull wire, chase walls and dig holes. The chance that you will be put in a position with a really skilled person (mentor) with and abundance of experience, is very small.

Look around and see if you can see what is wrong with the big picture.

You waste years of your life trying to get to a point that you can do a trade test so that you can earn a reasonable wage or charge a decent rate. The longer the company can keep you as an appy the more money in the bank.

During this time you have to spends months in college.


Wait for it, here is the real kicker, the part that makes our industry really look stupid, after all this time, years wasted, to qualify, you go and do a job for a customer and you send a bill for R500 labour and everyone complains your rates are too expensive, wait for it, wait for it...... you see a invoice on the table for the guy who repaired the gate, labour rate R650 and they paid without even blinking and eye, why because a "TECHNICAN" who is a specialist in the field, has at least 2 days of training and 6 months experience. Who are the idiots wake up people.

People wonder why they say the elctrical industry is winning the race to the bottom.

If I were a youngster today, I certainly wouldn't waste my time trying to "qualify" as a sparkie, I would spend the next month , doing every single 2/3/4 days course to become any thing I want, a solar installer, alarm or CCTV installer ( I will share something that will blow your mind), thermographer (huge money in this industry) or any course that would make me a highly skilled "technician".

Why would you want to waste years of your life becoming a tradesman, who is seen as a fool who works with his hands, uses the back entrance or service lift.

Free tips for all you guys out there battling to make ends meet,

Open your eyes and look around, dont waste your time in an industry that is over burdened with rules and regulations, years of time wasted.

You wire a house and spend 2 weeks doing the job at rates way below living wage, buying materials that barely cover overheads.

Start looking at other industries which are making good money.

An example, a 2 day course you start installing outdoor beams (R2-3k) per unit marking up 30 % you looking at R900 per beam, install 10 of them, do the maths people.

Install a double socket outlet, 2-3 years of training required, Socket outlet R50 plus a 25 % markup R12, do the maths people.

Stage 6 load shedding, replace just 10 x 7 amp/hr batteries per day @R1200, do the maths.

[Isetech]

If you were really smart you would have already climbed on the solar band wagon and made a few million selling solar equipment out of an room with desk, a computer and internet connection, with a long list of installers who have a smart sparkie issuing COC's from the room next door to the guy selling the equipment

[Blurock]

@Isetech I agree that there is too much red tape and regulations such a BEE that kills business. There is no incentive to invest and start a business to create jobs and earn a decent living.

Once in business or a trade, one cannot be complacent. You have to learn all the time but you also have to keep your ear to the ground to be aware of new trends and products and which way the market is moving. A decent swot analysis should be able to highlight your strengths and weaknesses and also your opportunities and threats.

Sometimes one has to make a change to grab the opportunity or to avert the disaster. I started out as a musician, but could not compete with Mick Jagger. Banking did not pay, but I gained valuable knowledge and experience to start my own business. From manufacturing I went to distribution and new products and systems are adding to the success of my business. All thanks to decent and trustworthy suppliers.

[Isetech]

There is no better time than right now, there is never a better time.

I started this business when I had no idea what I was getting into, I had this idea that if I was self employed I would get rich really quickly, considering the time and effort I put into everything I do.

People say hard work will make you rich, dont be a fool, I dont know of one person who has worked as hard as I do, who got rich.

I do know of hundreds of people who got rich, not from hard work.

I know of people who were prepared to sell their soul to make a lot of cash, unfortunately I am not prepared to sell my soul for any amount of money.

I am also not prepared to use drugs, porn or a bunch stupid woman who are prepared to be used for only fans to make a ton of cash and become a hero driving material object to prove my worth , maybe when I was 20 and had not morals or standards.

If you want to make a lot of money save a portion of your income for long period of time, or just keep trying until you get lucky, because you have to get lucky or be blesses. Being in the right place at the right time will make all the difference.

[Derlyn]

I have started many businesses along the way. Not with the intention of getting rich, but out of necessity to eat, support my family and survive.

Just by employing the simple philosiphy of spending less than I earn, I've managed to buy a house and car for cash and live comfortably, not putting any pressure on myself to keep up with the Jones' who drive luxury German sedans and the latest double cabs.

It also helps having a wife who is happy with the simple things in life, not demanding to have all the latest gadgets, most of them being, in my opinion, unneccessary. We live a laid back, stress free life. Simple.

All the money in the world won't change that.

[Delta]

The way I see it, yes it's less headaches and admin if its just yourself and 1 or 2 labourers but realistically how much money can you make with just yourself and 2 guys.
We run our own companies to make money, not play games.

The successful / larger companies in my area have 5 or 6 teams each with their own vehicle. Yes, more overheads and stress etc but you can afford it if you have enough work.