Setting Up Your MEP Trade Business on the Right Foundation
When you’re setting up a new trade business, there are any number of issues that need to be addressed, licensed that must be procured and plans that need to be made. Fortunately, with the number of successful trade businesses in the economy, as well as other business practices, it’s easier than ever to build a checklist of steps to complete so that your company can be set up on a solid foundation. The areas of concern listed below include not only tried and true methods that have been used for decades, but also upcoming tools and digitization methods that will help ensure your company will be able to do well for decades to come. Let’s get started:
Setting Up Your MEP Trade Business on the Right Foundation
Planning a Business
To start, you’ll need to take a few hours to decide exactly what your basic business will be like. Are you planning on creating a partnership with an entrepreneur in the area or are you going to go it alone? Will you specialize in one particular area of MEP trades or do you want to diversify? Are you going to focus on residential, industrial or commercial work or work across these subsets? Take a few minutes to think about what kind of jobs you enjoy working on and how much responsibility you want to shoulder versus how much you’d like to outsource or hire in help.
The next step you’ll need to take is creating an actual business plan. This document helps you document your experience, how you’ll organize and run the business, expected marketing plans, projected income, the objective of the business, start-up costs, costs for overhead expenses and an estimate of the cost/revenue ratios you can expect. This documentation will help you secure funding if needed to get your business started with the vehicles, office, equipment and similar expenses.
Taking Care of Legalities
Once you’ve nailed down these details, you’ll have a better idea of what you’ll need. Are you going to operate with a different business name? If so, you’ll need to register that name with the government, typically a state’s Secretary of State office. Are you going to incorporate your business or form a partnership? You will need to go through the process of having that organization set up legally. Do you need a business license or permit to operate a business within a particular area, such as a city, county or state? That will also need to be addressed.
What about trade-specific issues? Will you need a license to practice that particular trade or set of trades? If there is, you’ll need to learn what the process is and what the requirements are. Are there trade organizations you should be involved with from the beginning? These can improve your overall knowledge or help you gain networking opportunities. Is there a local union for your trade? If there is, you may need to meet specific union requirements to ensure your business remains in compliance.
Are you planning on hiring employees to help get the work done? If you do, you’ll need to get an Employer Identification Number from the IRS, secure worker’s comp and unemployment insurance, determine what benefits you’ll offer and consider what other legalities you need to meet to ensure compliance with federal, state and local law. What about insurance? In addition to coverage for your office, equipment and vehicle, you’ll want to have liability coverage to ensure you don’t lose your business in a lawsuit.
Start as You Intend to Go Forward
The next area to consider is where your business will go. Though MEP trades have worked for decades with pen and paper, today’s customer may expect additional options. Have you thought about adding a tracking option so the customer can get a more accurate estimate of when you’ll arrive to make a repair? What about going digital with your operation to ensure you have business continuity in a disaster or capability to reach out to customers automatically for periodic maintenance? You could work with traditional invoices and pens, but digitization is making a big change in how we do business. Starting out with a system that will handle these changes ensures you won’t have to go through big changes just a few years down the road.
But what should you look for when setting up the systems that will keep your business moving? You’ll want cross-compatibility with other programs, such as Adobe Acrobat that allows you to look at plans when performing an HVAC takeoff. Another example is Office compatibility to make creating customized estimates much easier by simply exporting your figures to the document. What about a tie-in with Quickbooks to allow you to automate the process of moving from a quote to an invoice in a few simple steps?
Beyond compatibility, what options does the system open up for your company? Can you use it in the field with mobile connectivity? Can you automate more of your workflow to send out reminder emails to your current customers and follow up on prospects? Are you able to assign tasks to other employees? What about checking your plumbing estimate against national averages to ensure you didn’t make a simple calculation error? Does it automatically update the database of materials to save you time? Though these may seem like futuristic capabilities, they’re not.
The future is now, and these options are available at a rate that even a new start up can handle in the budget. By adding digitization capabilities to your take off and estimating process, you can ensure that you’re keeping pace with the best in the industry while still retaining your autonomy as an independent business owner. When you add these capabilities, you gain more time in the field, making money, while spending less time pushing paperwork in the office. Esticom can take you there and our free trial gives you the chance to see how easy it is.
As a former Director of Sales & Estimating, Chris Lee has over 10 years of experience building high performance sales and estimating teams focused on increasing revenue and profit by winning large commercial projects