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Management Preface

Anybody with a knowledge of electrical work, a license, and a few dollars can become a self-employed electrician. And, if he knows electrical work and takes good care of his customers, he can make a good living being a self-employed electrician.

But when that self-employed electrician begins to hire other electricians and helpers he becomes an electrical contractor. Once he does:

  • The odds are 50-50 he will fail in his first year.
  • If he doesn't, the odds are 50-50 he will fail in the next four years.
  • If he makes it to twenty-five years, the odds are that the business has not provided for a respectable income when he is ready to retire.

Why? Because he knows the trade but he doesn't know the business of his trade.

When a man "knows the trade" it means he knows how to do electrical work. He knows how electricity is supposed to work, and what to do to make it work properly. He knows certain laws of electricity (Ohm's Law, for example) that help him solve problems. And he has meters and testers that tell him what is happening electrically.

The business of the trade is something else. According to Business 101, a business is defined as a group of people with a common aim. The common aim is to earn a reasonable profit for the owner of that business.

That "common aim" however, is not the aim of the employees of the company. Their aim is to meet their personal needs. To meet their primary personal needs, they need money. They get that money by selling their skills to an employer.

It is the employer's responsibility to organize, direct, and control the work of his employees in order to earn a profit for himself. Organizing, directing, and controlling employees is the business of the trade. And the first thing the business needs is a manager.

To manage a business profitably the contractor must know how a business is supposed to work, and what to do to make it work properly. He must know the laws that govern a business. And he must have the information that tells him what is happening financially.

Where does he learn all this? Usually by trial and error, which is why so many fail the first four years. And after four years does he know what he needs to know? If he did, the average profit in the electrical contracting industry would be a lot more than 3.5%.

Can he learn what he needs to know about the business of electrical contracting? Yes. That's what our management workshop is all about. Business. Specifically, the business of electrical contracting.

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Louis J. Pokrywka, Owner
Master Estimating Service

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