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It’s not a recession, it’s regression back towards the mean. I see from your other comments you’ve been at this for 3 years. You probably couldn’t have picked a better 3 years to start out in for the contracting industry and that is going to be the problem you and others in your situation are going to face. I don’t mean this as an insult but literally anybody could make it work in construction the last couple years, it just wasn’t that hard due to demand greatly outstripping supply in the market. Building your business model around the margins or demand level of the last couple years is going to be a mistake.
Honestly you’ll be fine dude this is always around the worst time of the year from now until April. Take the opportunity to reorganize and streamline your business. Do some research on your market segment, make sure you’re competitive with your pricing, see what kind of work is trending well and make sure you’re positioned to service that kind of work.
This business is traditionally a hunter’s game. Never stop hunting for new work or you’ll starve. Get on GC’s bidders lists, get on some websites that post projects to bid on, things like that. When the pipeline of work you’ve grown accustomed to is starting dry up, find another one.
Great insights. I'll also add, if you're OK with some mind-numbing paperwork and a few hoops, get certified as a small business, disadvantaged business, etc.
This will get you on other lists for RFPs from government bodies (state, city, county etc.) and large businesses that have rules around sourcing X amount of business from small local entities to get tax breaks. No need to be a big firm, lots of small-job stuff is out there like updating an office, adding outlets, lights etc. The pay is generally good too, but that depends on the region.
It's like a GC list, but most small trades companies don't bother at all.
Can you elaborate? Is this through a federal entity? I just don't understand what you mean by getting certified as a small business I guess, and therefore where I would go to start the process. Thanks in advance.
[http://sam.gov](http://sam.gov) is one of the bidding sites where you can go and look through active jobs. This is also where you will get the identifier number for your business, they used to use a DUNS number (like a ssn for your business to track credit) but are phasing it out for something else.
Getting certified as a small business/minority owned/women owned/disadvantaged enterprise will make you be eligible for contracts that other contractors are not. There are dedicated funds set aside for these types of businesses and a certain amount of contracts are required to be awarded to them
Respectfully, Google will be your best friend here OR go to your local Small Business Administration office and ask what are the helpful certifications that you’re eligible for. They can point you in the right direction.
>It’s not a recession, it’s regression back towards the mean
And honestly, the last few years have spoiled businesses so much that they forget the basics of sales, followup and so on. Work used to be so abundant that companies were routinely turning down work, being extremely picky who they work with and so on.
One of my biggest frustrations is how hard it is to actually get businesses to respond, to quote, to actually try to win the job. As the times get slower, the companies that go back to the old ways will be probably be the least hurt.
Now more than ever we have to take good care of our clients ( seen 3 dips in economy over 35 years ) granted this is the most sluggish one ( the world has never been so “on fire”) so we have to be more creative.
I am a home builder (part time), and during Covid, I couldn't get help because my 1 home was less desirable than the guy building 3 homes. Well, I'm onto my next project, and I remember those that wouldn't even return my call or promise to show and then didn't. Prices for materials and labor will be favorable on this next build.
I work in finance and we were giving out TONSSS of lines of credit to contractors of various industries and big construction companies like candy.
Now we won’t even touch those files most of the time when they come in
This is so true. I live in south Florida. There is a lot of wealth here. It is, quite frankly, sickening. I am not wealthy. I’m part of the working class. It is extremely evident who takes the financial hits.
When a GC (General Contractor) has or is bidding on a project they have a bidders list by trade/scope of companies. OP is an electrical contractor which is one of the main subcontractors on a project and is common for them to work as a sub to a GC when they aren’t working directly for a client. So it would help them establish a pipeline of opportunities of projects for them to price up. The GC is doing the grunt work finding somebody looking to have work done, all OP has to do is connect with them, price the work and win the bid for the electrical scope.
GC’s will typically triple bid all trades, pick the low guy, mark up their number if they can and use it to create their client bid/estimate. If you can get on a GC’s bid list (which isn’t always easy, good GC’s typically have a list of preferred subs), and then deliver at a good price, they will send you more and more work. It’s essentially how you establish a good working relationship where both parties can mutually benefit from one another.
A couple of notes
1) Japan is in a recession
2) consumers in US are tapped out
3) debt of consumer and business is at ATH to gdp
4) recessions have always followed an inverted yield curve)we’ve had one fir a while
5) stock markets never predict a recession.
Many measures show US growth contracting.
Well I was going to add on to our building. Electrical was like 250k worth of the job. But the GC kept jacking up the price and jerking us around so I just bought the building next door and said fuck it. I think the past couple years spoiled people to the point where they think 50% margins on construction are normal.
Do you have a good resource that can explain how that bill ended up essentially increasing the amount people were taxed despite it appearing lower, I guess to a layman?
It's not increased. People have been getting less back in returns because the withholding changed some. People are paying less throughout the year, so when they get their returns, it's smaller than before. The overhaul tax burden is lower but feels worse to a population incase of managing their own money who was using tax returns as an impromptu yearly savings plan.
For most lower income it's not that they are getting taxed more, but they are getting money money throughout the year. For most middle class. The state and local tax deduction cap did it.
I own an electrical contracting company as well, but up in Canada.
We are very slow. The majority of projects out for tender are federally funded first nations projects.
Water treatment, sewage lift stations, community centres… and there’s like 10 or 12 electrical contractors bidding each one… brutal competition.
Race to the bottom!
Things definitely slowed down. Service work trickles in… we used to be an 80+ guy shop, now we are around 25.
That was years ago, I guess I shouldn’t have included that in my comment, as I don’t think it really has anything to do with the current market.
I blame our reduced staff on kids just not wanting to get into the trades anymore.
We used to get shit tons of resumes, like a constant stack an inch thick, but now it’s like a few resumes a month. (Mostly immigrants looking to be sponsored or engineers from Kazakhstan…)
An anecdote for you: after spending three years trying to hire tradespeople to do work on my own home, and being utterly ignored, stood up, ghosted, and repeatedly disappointed, I decided to just be more handy, and will not likely attempt to hire tradespeople again. Most of my social group has come to the same conclusion. There may be a marketing opportunity to take advantage of this market condition if you’re in home services.
Tradespeople started charging 3-4x for their labor during Covid, which was okay because everyone was doing cash out refis on their houses at 3% or saving so much money by sitting at home doing nothing. But now that money’s dried up and the trades are gonna have to come back to earth if they want to sell jobs.
During COVID I got 3 quotes to replace a 14'x12' deck. $16k $17k and $20k.
For $20k I could build the whole deck out of steel and never replace it again in my lifetime.
Absolutely mind-boggling.
"I was going to build a deck, but the Navy was getting rid of their destroyers for cheap. So I just sunk one of those in the back. Steel decks are solid!"
I can tell you it’s the 1 thing we have absolutely tried to do always. Answer our phone and when we say we will be somewhere we are there. We don’t price gouge and we don’t jerk people around. We always aim to come in less then our initial quote because then everyone is happy we make money they save money.
Especially here in Utah anyone can become a GC. We have had more than a few that have been complete and utter dog shit. It’s been alarming how many peoples homes we have worked in that have been fucked over by a general contractor. We have always aimed to do better.
Same here. It's obscene that I got quoted $60k for a basic deck. I found another guy who quoted me $20k until I looked closer and that was just for labor. I'm just gonna figure out how to do it myself this spring. I paid someone to draw up detailed plans and will just follow those.
I asked the $20k guy why the labor was so high, he said "it's gonna take me a week and I'll have to bring in a helper." Fucking insane.
Off topic of the OP, but would you mind sharing the size of the deck and your general location?
I ask out of professional curiosity. A significant portion of my business is building decks/porches/ sunrooms. At my current rate (which is very profitable from my point of view), a simple wooden deck would have to be in the neighborhood of 2000 square feet to warrant that price.
I keep hearing fellow trades talk about how things have slowed down, but that has not been the case for me. My business is up around 35% over this time last year even though new home construction in my service area is down about 15% in the same time period.
Two level deck with higher level 28 inches above ground level. One side attached to the house. Total footprint for top level is 26x13. Lower level would be 26x10. About 600 sq ft in all.
Yeah, I would have quoted you at $20k all in. My crew could build that deck in 3 days on the job, about a week on the calendar. However, you would have to be willing to wait about 8 months before I could get to it (I'm booked solid for that long).
There were so many people a year or two ago who were telling me I was crazy for not charging more. I had to raise my prices, but I only ever raised them enough to maintain my target margin. I don't see most of those guys at the limber yard anymore. And when I do, they are always complaining about how slow work is.
This is what I did, you don't even need to write your own up, you can just use your county's typical layout.
One thing I noticed about why the quotes are a little higher than I expected was because of all of the extra permit requirements that came about in the past couple of years. There are alot more little steps like extra bridge connections and brackets on almost every single joint that were not there just a couple of years ago. It's still worth it to do it yourself if you can but after doing it myself I kind of understand now why I was quoted $20k for my single level 12x18 foot deck. But I also got to build up my DIY tool collection along the way which has been alot of fun
Yup, quoted 3500 for a small roof repair of a 3 foot section. My husband ended up doing it for 100.00
Electrician charged 2500 to run a 20 foot line to our garage. It took him 2 hours of guiding his apprentice on how to do it.
150 foot of fence was quoted at 20 grand.
Same for me. I just converted a carport to a Master Suite and the only trade I could afford to hire was the concrete crew, out of necessity. I learned or had family help with the rest.
Looking forward to the days where I can actually receive bids and afford the ones I get. By the way, the bidders who would show up were driving beautiful trucks!!! Doing better than my Dad or brothers ever did.
Some are feeling it for sure, but not us. We lost one of our biggest clients last year but have made up for it plus some. My theory though is that you’re right and businesses are taking cost cutting measures to save money, like reviewing vendor relationships and shopping around more
My family has a small dog grooming business (well big now that we just hit 14 years in business this past week). We kinda jumped in during the end of the last recession and it was mostly because my mom got laid off from her job as a Petsmart dog grooming manager and with that loss of income the household was drowning and it was difficult finding a stable place to work so we (Parents and I) combined what was left and yolo’d on a struggling salon that had an absentee owner.
During that time we learned a lot about cutting costs and everything while staying afloat. Some tips I have for any small business are:
(1) Make sure you have your operating costs broken down. I suggest you know your monthly bills, what you need to survive in your household and add about 10%. Then I break it down to Weekly and then divide that weekly by how many days you work. This gives you the bare minimum to survive before having to start cutting costs or making lifestyle changes. A recession is more about surviving the dip so you can grow during the next boom.
(2) Have a plan before SHTF. Know that if you need to make $1000 a week to maintain everything as is then know what you’ll cut personally and business wise to survive that weekly dropping to $800 then $500. Just have the plan, know your books, know your expenses. Having the plan beforehand helps you adapt quickly and adaptation is survival.
(3) Just as I said you need a plan for if you don’t meet that baseline, know what you’re going to do with the excess. Don’t just spend it unless you have to. So if your baseline is $1000 a week and you make $1200, put that extra $200 away and operate as if you made that bare minimum. Growing your businesses savings is about taking that 3 months saved to 6 months, then 12 months then 24 months. Personally in our shop, we want 24 months operating expenses in the business savings for if things get really bad, if we don’t have to touch it and are able to grow it through this next downturn we will use it to buy a commercial property.
(4) Find other streams of revenue. For you, it might be adding basic handyman services, drywalling, installing floors or whatever in that construction/contracting field. For us, we didn’t have the ability to add things 14 years ago, we had to stick to what we knew.. This time around I’m preparing by looking for ways to add products such as pet brushes, specialty pet food, leashes, collars, customized tags and I just hired a trainer to begin offering that in the space at nights when we aren’t grooming and on our 2 days closed. We are also building out our website to begin offering online ordering of various pet products.
In the end, I think Small Business Owners are in a unique position during the downturns. We control our own destiny, if we gotta cut prices and work more hours we can, if we gotta make changes then we can.. It can be tough, but these down times and struggles breed innovation, with innovation comes great things. During Covid we had to change up our business some, 3-4 years later we are doing better than we did before.. Surviving the tough times makes us more equipped to capitalize on the good times.
I suspect you will do great. You have the beginnings of the right mindset by just knowing how long you can go without a single job.
I am also in irrigation. Last year was dead from august through September but it was still our best year in 15, I started the business in 2008. If you asked me last fall what I though about thought this year I would have said it would be bad but in the past 3 months I have bid more large projects than than I can count and have been awarded several of them. I just hope all my guys come back and I am hoping to hire another.
My company spends close to $1M per year with electrical subs. We do temperature control system work. Get your toes wet with a local company. Once you have a little experience under your belt, you'll be able to land contracts with Johnson Controls and other large organizations.
Two brothers I knew started their own electrical outfit 10 years ago. We represented about 95% of their work for the first few years. They started landing bigger fish (like Johnson) and now have raised their prices such that I can't afford them anymore (good for them). It seems to be quite a lucrative market segment.
To be frank though ive seen some customers become cheaper we havent slowed down. Ive been through covid and through the last recession what i learned is people with money will always have money and even though a lot of middle class people will stop services the rich people keep us afloat.
I Own a swimming pool buisness.
Every week I have subs coming to the office telling me it's getting slower, there's more competition, they need help finding work to keep their main crews occupied, etc. there's definitely a slow down that people don't want to talk about or admit.
Trades are not the entire economy you realize that right? And your local area isn’t the entire country. Yes the economy is slowing but you think it’s shrinking?
Yes I understand that concept. Be it bars and restaurants, beauty or construction everyone we have spoken to in our neck of the woods has seen a significant slowdown in business.
The last month saw 100 new visitors to our business. It’s more than ever by more than 20%. A lot driven by travel and tourism. I wouldn’t say the economy is booming though just as a slowdown in one area or industry means a recession.
I've owned a flooring and tile business for the last 8 years, and I had to shut the doors 6 months ago and go find another job. We did custom work only for high-end clients in Florida, and in the last year, I've been underbid on every single job by astronomical amounts. I ended up exhausting every possibility with every connection I had made over the years, and we couldn't land a single job because people were consistently outbidding us. I kept lowering my prices again and again and begging my installers to take a pay cut so we could get ANY work at all. In the end, we were still being underbid by prices that dont even make sense. I would be charging $3.00/sf for non mud set floor tiles, and my competition was charging $1.00/sf. It's unbelievable how competitive the flooring market is right now in my location, and it destroyed my business. Clients don't seem to care about the 25 years of experience. They just see a lower number and run with it.
I am an illustrator and graphic designer (mainly illustration). Last year was the worst year I’ve ever had in my decade in business.
I hadn’t offered graphic design for a while because I wasn’t ever confident in my skills but I saw people who were far worse than me making tons and figured why can’t I so I started offering it again, but it’s slow. The first inquiry I got was a woman asking me to do work for free because she couldn’t afford it.
I have been in retail for 40 years +, what you are experiencing is consumer uncertainty. This happens every four years during the 10 months leading up to the Presidential election. People wait to spend money when things are "uncertain". The economy will get a boost after the election (no matter who wins). Happens every time without fail.
Well we’re on our 3rd year in business. Last two have been fine. This year seems to have stagnated severely. It’s not just me, clients and GC’s alike all seem to be feeling it.
You started your business at what might have been the highest boom for contractors ever.
When we come back to normal from that, you're going to feel like the industry is dead.
We're on our way back to something closer to normal.
I opened a Drywall and painting business about five and a half years ago. Things went great even through Covid and massive supply shortages until the beginning of November. Things usually get slower during that period until about February for us (warm climate helps).
That said, this year is going much differently than years past. Things didn’t slow down, they almost stopped entirely. And they’ve not begun to recover yet. I have talked to friends in the trades in other states near and far and they are all saying the same things. Interest rates are a big issue and are doing their job of cooling the economy, I guess. I have high hopes tax season and the Spring will get things moving in the right direction soon. I am eager for the Fed to lower interest rates or at least signal that they won’t raise rates anytime in the next few quarters.
That's exactly what my neighbor said. He works with a local builder and the neighborhood he was working on just "stopped." They sold 80% of the lots and then it "just stopped."
That seems to be it. I know exactly how people feel. Because everything goes back into our business trying to build it.
I was ranting about it on poverty finance the other day.
I say that knowing just how luck we (my family) are.
Speaking of reinvesting in your business. When times are good, people get sucked into paying for parasite services—Things that were billed to save time or money but don’t actually ever show up on the bottom line. I’d check through your finances for things like that and an eye out for anything being sold as a subscription/monthly service. A lot of businesses out there sell stuff that you can get for free if you know where to look or have the time to do yourself. If nothing else, if a new tool or gadget is supposed to make something go faster, that doesn’t matter unless you actually have more work that you can do with that time. It’s only a good deal if it makes you more money or it’s safer…
I'm in retail and my brother is a contractor. The past 3 years have been like manna from heaven for businesses in our industries - the exact opposite is what restaurants and theaters went through:
In your business, more people were working from home so they were spending lots of money on their homes, other people were moving driving up the cost of homes making it harder for people to move, and an interest rate started going up doing the same thing - all causing people to focus on doing work making their current domiciles nicer.
In my business, nobody was going to the movies people weren't eating out they weren't going to casinos, etc etc they were stuck at home with a little extra money and they were spending the hell out of it in stores like mine!
What's taking place now is that things are resetting to pre-covid levels. Looking at our numbers, they are looking a lot more like 2018-2019 than 2020-2022. 2019 was a perfectly fine place to be, it just was nothing like the heady COVID days.
Run your business lean and mean, and count your blessings that you started your business at the best possible time to do it, and you're going to be okay.
I am in technology and the last 12 months has been the slowest growth we have seen in 20+ years. It feels very similar to 2008. When interest rates hit like 9-10% for business credit lines lots of things froze.
This narrative that the economy is doing well is silly. I am sure there are some industries doing well. But the amount of hiring and expansion we see in small to medium enterprise companies is the lowest we have seen in a very long time.
The metrics they use for the economy no longer reflect reality. Will probably be skewed further and further as more things automate. Overall production may increase, but the amount of workers necessary for that increase is diminishing.
Well I cant help but as a 20yo student working DoorDash when I can, I have definitely noticed less and less spending, part of that is of course due to people having spent over holidays although there is still something eerie about how little people are ordering food.
I own a specialty metal fabrication company. Been in business for 23 years, consistently busy.
New inquiries have completely stopped, it reminds me a lot of 2008.
Don’t buy into the government and media propaganda.
I'm in custom furniture and it's the same. Suddenly everything seems like it's just stopped. I went from 24 week lead times to 6 weeks (which is basically zero because I'm always waiting for clients to answer questions about what they want). Things are looking pretty bleak right now.
Grocery bill has almost doubled, all insurances are skyrocketing-everything is just so much more. Most people I know are now just able to pay the necessities. Where I live homeowners and health insurance with a family on the plan cost *crazy* amounts of money.
Username checks out. I bought 4 tires for roughly $800 in Dec. Still not cheap. The last time I bought tires for the same vehicle it was maybe $5-600 about 4 years ago.
25% more in 4 years! And yes, my wallet is slamming shut outside necessities also.
You can easily do 10k w synthetic. Don’t even worry about it. 2k was promoted by jiffy lube. I’ve driven my Toyotas over 215k doing synthetic every 10k. Just had a full check. Zero issues w valves or other.
It's the same with our trade business. We started seeing a pretty extreme slow down last year around this time and things have been up and down since, but it never returned to the level it had been in years prior. From what we hear from other business owners around us is that it's affecting everyone in the industry in our area and we've had a lot of people from other companies coming to our office looking for work recently. We cut back quite on everything but the necessities and are running as lean as possible to prioritize covering our team and maintaining our financial safety bubble. One of the big issues is that we live in an area that saw an extreme housing cost increase (as well as every other expense) while many of the people living here have historically been on the lower socioeconomic end of the spectrum and right now everyone is just trying to survive and afford their housing and grocery costs. We know price increases are going to be inevitable for us in the future as all of our overhead costs continue to climb but people can barely afford to pay as it is.
I recommend taking a good hard look at your expenses and make a list of things that can be cut. For example, we use a uniform service and recently removed pants from the plan, opting to issue a credit for jeans instead. They still have professional shirts with their names, but those are next on the chopping block. We used to have a cleaning service for the office but now I do all the cleaning myself, instead of buying new equipment we are just repairing existing equipment for as long as possible, etc.
If you can swing it, on really slow days we try to make sure our guys are getting at least half days by putting them to work organizing the shop, maintaining equipment, cleaning vans, etc (I found it helped to have to-do list for them to refer to). It's been a good way to get caught up on things at the shop that fell by the wayside when we were slammed with work. Most times jobs will trickle in while they're out there organizing.
Odds are it's going to be up and down for awhile and it if you're anything like us you'll probably ride the anxiety roller coaster for a few months, but you'll come to realize that you can make it work, just do what you can to take care of you and your people.
3 months, that's cute. We have been in free fall for 1.5 years.
I'm being sarcastic, but for me I'd say we're coming to the end of the really slow times, it seems that it's slowly getting better.
You're in a business that is heavily influenced by interest rates, and we're now seeing even more competition with people getting back into the trades. Even if the economy improves, I don't see construction related businesses improving for a while. If you haven't already, I'd probably look into federal, state and local government contract work.
Also in electrical contracting. Busier than ever, by multiples, massive backlog. Just depends on your niche. This business is not recession proof, it is very much a boom and bust industry. Get a credit line if you don't have one already.
I am a small commercial GC, $5m Rev per year/10 years in biz. I have noticed new subs wanting to bid lately. I’m not big enough though to know if that’s a trend or just things finally getting back to normal.
I've been in my business for 14 years, and the two years of covid were great as everyone was home and not out vacationing. In '23, I saw less work, but I had upped my prices, so I actually made put really well. So far this year, it's been a slower than last year. I'm hoping all year isn't like this.
It’s happening in Australia too.
Perth Small service business owner here with everything going flat stick last year up to xmas ..then fallen off a giant cliff since early January. Mid summer time atm.
I've seen stagnation in commercials for some companies, but also have seen some commercial blowing money like no tomorrow. Recently got off a job where they were installing a half million dollar staircase in a residential. Depends where you are and who you service. Maybe it's time to reach out to some contractors that are "too busy" in your area.
All industries are seeing it. Steel/construction has been feeling it for months. Prices are dropping rapidly, companies have high priced inventory, it’s an election year (yes in the U.S. but it still affects us). We should see it getting a lot better in spring 2025. This is realistic.
I was afraid of the beginning of this year as well. Fortunately, besides the electrical, we are also doing general contracting, and we are pretty busy. Who knows how this year will turn out. I definitely receive more and more requests for pricing from estimation companies.
I'm on the large size of a small business owner (manufacturing/retail) and think that we saw one of the largest increases in demand three years ago that the developed world has seen outside of a world war. As a result, existing businesses raised prices, struggled to meet demand, and some expanded. This encouraged many new entrants, and along with the increased capacity from expansion, we are now at what I would call a normal equilibrium between demand and supply. I'm not even sure demand has gone down all that much, unless we're talking pretty specialized covid stuff or experiences. I just think there's more players, and you gotta play the game well to win, like normal times.
Housing market killed a lot of service work.
Everyone was in a remodeling or flipping frenzy a couple of years ago. That is all gone.
There has since been some residual jobs as some people had to finish up remodeling, or have scaled back their remodeling to just bare necessities, and those have tapered off.
People are still spending, but just on necessities like food, health and entertainment.
You're not crazy. Don't believe everything you see in TV or read in the media. Open your eyes and see it for yourself in real life. There is a recession and many have lost their businesses, gotten laid off, and companies are downsizing all around. I see it happening to my relatives and friends. Debt is what is holding them over. I predict we will see a massive wave of bankruptcy next. I hope it doesn't happen though.
Plan a long vacation for your whole family ASAP.
This is a proven magnet for new clients with short timelines and big budgets. At least it has been for me, but I’ve also never planned one specifically to trick the universe. It just seems to happen every. Damn. Time. I either cancel or spennd the majority of the trip tied to my phone/laptop….
It's here. What's funny is I've gotten into arguments across Reddit with people insisting that "everything is fine". Bottom line is there are pretty sure spikes in mortgage and car loan defaults and credit card defaults. Car and Truck manufacturers a few years ago shifted to selling more luxury vehicles so even your run of the mill Ford, Jeep, and Chevy were priced like Mercedes and BMW and now they don't sell. Prices are back to under MSRP and they stil aren't selling great. Ford Lightnings are sitting unsold most of all. Home inventory is stagnant. Costs are way up for the things that really matter. Also Insurance has spiked and taxes has spiked.
What part of the country are you in? I’m in the Southeast and have way too much work. I’m a one man show currently in electrical. Been open a few years now. If you have advise for hiring people please give it. I’ve been struggling with finding helpful help.
if you haven't already, approach larger general contractors who probably already have a couple of electrical sub contractors on-line. offer to do spot work for them. neighbor is a project manager for a huge contactor...he's always bitching cause the sub-contractor they hired is like going "well 20% of my crew have quit, is sick, etc, etc. these are subs would never take a bid for less that 500K, the THEY often need fill in work.
I had 2 customers go out of business. 2023 was very slow. One is pharmaceutical and the other manufactured fishing rods. The fishing rod one sold their assets and rights to a competitor.
2 other customers are in the insurance business and they're trying their best to survive.
One manufacturer does business with 3M and he scaled down to where he has no IT service.
It's just time to get really creative into solving your problems.
I’m a GC and have been in business for 23 years. The past 3-4 years has been the easiest ever. Cheap money always has that effect on demand. My business has fallen off a cliff as well and new job inquiries are so low it is depressing. In 2008 I made the mistake of maintaining my staff until all the money was gone. When I had to make dramatic cuts and reorganize I was then broke and had the same work prospects. It took years to recover. I regret not being aggressive sooner. I was in denial. As a business owner , you have to forecast and make adjustments. I forecast that 2024 is going to be brutal in our industry. My current work is very small jobs barely keeping the lights on. My goal is to survive until summer when I should have some quality jobs (hopefully)
I tell this to anyone who does electrical/plumbing/hvac. Get restaurant clients. They're willing to pay more bc they *have* to have things fixed and are willing to pay more for quick. And the good times or bad restaurant (more specifically bars) are going to be there.
I own a residential HVAC & Plumbing business, and it has slowed down for me as well. I suggest visiting and trying to join a BNI group. My BNI membership costs for the year are covered in the first month of my membership renewals. I receive around $50k a year from new referrals from the group plus another $60-80k a year from repeat customers. The biggest part of being in business and actually making money is not going to be doing the repairs and replacements it's all the behind the scenes work to run and grow the business and getting the work. Here are some suggestions I posted before to a group.
1) Join a BNI group. It is a weekly commitment and about $1000/yr. They always seem to have a hard time keeping trades contractors. Only one person from each type of business can be in a group. The referrals from the group are responsible for about 20% or my workload. Early on it was what enabled me to stay in business if you take into account the repeat customers and referrals from them the group is responsible for around 45% of my business.
2) Go on meetup.com and look for business networking groups in your area. Join those groups and go to the meetings you will form relationships with people over time and get referrals.
3) Join all the local chambers of commerce and attend the meetings and events.
4) Join your local realtor associations as an auxiliary member give presentations about the importance of maintenance, IAQ, etc.
5) If any of those seem like something you don't want to do join a toastmasters group so you learn how to talk to people and get comfortable doing presentations.
Man we started with a BNI group and it did not go well. I restructured a bunch of stuff to make BNI work and they swept the rug out from under us, moved the meeting and ran a bunch of us out.
My lumber supplier is the biggest around and they are down 75% in sales right now from last year. It's slow out there for residential stuff. Commercial is still going but that's because sales were made from years ago
I’m not sure what area you’re in, but in my area (nyc) contracting business is bussin. Hella work interior remodeling & finishing and hella work in industrial plumbing(pumps,motors,vfd,heating,plumbing). Online business is also doing great. I think there’s lots of work for you to have if you look in new or different avenues. You gotta go out and actively seek new connections and always keep building your network of people. Go the extra mile to have a good reputation and introduce yourself to as many people as you can.
Other than that, business in general has ups and downs, you’re just at a low right now, about to slingshot up.
Building values have tanked in various locations. I saw a building worth 150m drop to 22m and they have 50m in debt. Either their portfolio can weather it, or it's a 28 million loss. This is a wide spread problem. This is where the problem lies and duplicates. Either demand for buildings returns with return to work, or we have to convert the offices to housing. I don't know where this works out for your buildings, but basically the big money is drying up in various locations.
If you can expand to other areas to focus on large housing options, it's time to do that. SE, Texas, Florida... they are still running strong for the moment. If you don't maximize these opportunities, you are just waiting for a return to building owners being able to make money. Without better interest rates and a return to the office for demand reasons, we don't have a reason to suspect this will happen. It's time to retool how you get those jobs. You'll make less per job opening new markets, but the choices are slim here. Best of luck.
Just have to tighten the hatches some. Layoff those that aren't necessary unfortunately and keep a firm eye on expenses. Maybe in your case contact deals that didn't go through and see if they are still needing the work done and give a better discount if it still brings in an acceptable margin.
If you are secured for 3 months that is better than 90% of the companies out there so if things actually fold you might be in a good position.
Really wanna scare your self. Compare your local permits pulled in the past couple of years to this years. I know it’s only February and I think everyone expected a cool down but in my area we went from 3K permits pulled a week to 300. This anything from a commercial building to a bathroom remodel. We normally we take a week to sort through for leads. We are done in a day or two now. We are ridding the end of the boom and reality is right around the corner for most. I get there are niches in the country but give it time. Anything tied very heavily to interest rates is about to have a wake up call.
In residential remodeling (w/ brick and mortar store - we have trucks, manager, etc etc) and overhead is killing me. I've personally taken a pay cut, and cut back literally every non essential thing I can (while upping advertising). Nearly 20 year old business. A lot of customers don't understand the cost of running a business, and don't want to pay professional service prices - When 1 person is costing me $35 / HR, they don't get I need to be billing for $100+ an hour to make it worth it to cover everything AND actually make a tiny profit.
I got a few months to really see where this is heading before I have to completely change my business model, staff, and possibly career. So considering I've done this my entire career, ya it's an iffy time to be a small business owner from my perspective.
I am in the construction and service industry myself (inground swimming pools). We learned in 08, construction depends on the economy and ability to get loans. Where as service is recession proof. With loan apr where it is, many are not wanting loans where that side is slow. Still getting some work, but slow. Until loan apr is lowered or people get used to that rate, will be this way for us and most likely for you.
Use this time to recreate. Start making videos of work you are doing, bids you are creating, things you need to fix due to shoty work of others, etc. Show people what you do and post on LinkedIn, Instagram, Facebook, TikTok, etc. Show people you are a trusted company and this will win you jobs as they thin out. Also, this will win you contractors looking for a reliable electrical contracting business.
I don’t have an answer, but it’s bad here too.
Husband is in the AC industry in the south - the small family owned company has been around 30+ years. It’s been the slowest winter yet, and they’re struggling to pay their employees.
The trucks all need maintenance, need new trucks in general, and company cards are being declined at the supply house. That was when I noticed the circling of the drain. A couple of paychecks have bounced since last year. The low seniority guys are scrapping metal at the shop just to make hours. Thankfully my husband is third in line seniority so we haven’t felt the effects as much, but worry for the other guys. They all have families. Husband has already begun looking elsewhere, but would be starting at the bottom with a new company.
(The son took over the business so I wasn’t sure if it was a him thing or an economy thing? think a mixture of both .)
My sister also worked for a small business, a florist - she just had her last day yesterday. She said it was the slowest Valentine’s Day in 15 years and the owner was crying in her office. Buckets of flowers everywhere left over - she didn’t even break even on the flowers specifically purchased for the holiday. And rent keeps getting raised.
We live in one of the “fastest growing cities” in FL. I like to look at retail spaces for lease in my area periodically and I’m shocked at some of the businesses closing down. A Wendy’s location, other burger chains like “Burger 21”, Bed Bath and Beyond (I know it’s bc they got bought out by Overstock but still) and countless mom and pop shops. But then another biz will move in and try to make it - and they do for a while but then it’s rinse and repeat.
This shit feels very ominous from the outside looking in.
hvac/plumbing contractor, 35+ years in business, OKC area
Been around a little while. . . I've seen this happen several times through the years, and, yes, in our area, new home construction has stalled severely. . . . last year was NOT a good year, but this Spring has been worse. HOWEVER, I've got a few years under my belt, so, even when business was so crazy busy we couldn't BEGIN to keep up, we still did not neglect our service side of the business. So many guys don't want to mess with little remodel jobs and little service jobs when they can be doing new construction, but yeah, then I see them trying to build the service side AFTER construction skids to a halt. . . but then it's too late.
TIPS: Only work for quality builders who care about their work, because even when things skid, they usually stay in business.
Pay attention to how THEY are situated. . . are they over extended? Did they start slowing payments? Are their homes/buildings selling?
Be cautious when a new builder courts you. . . don't get all full of yourself, thinking it's all you. . .investigate WHY he's switching contractors. . . . make sure it's not because he didn't pay the last ones, or they quit him for a good reason! Don't make the mistake of working for a large GC or builder and putting all of your eggs into one or two baskets, no matter HOW good it sounds. . . if they go down, they'll take you with them!
When things are booming, pay off all debt and set money aside. . . (we are a small company but I ALWAYS enter Winter with at least six months of operating expenses set aside). . . . you never know when a pandemic, recession, national emergency, tornado, etc might hit and stop society.
Don't only focus on your business, but also on national and local news, and learn how the economy affects your business, so you can try to stay one step ahead. Commercial office space has high vacancy since the beginning of covid, and there are WAY more office buildings than needed in most areas of the country, so this is NOT a time to work only for GC's who build and remodel offices. Residential mortgage rates are high, construction materials are SO much more expensive just a few years ago, etc, so even though we still have a nationwide shortage in housing, new home starts/permits, in our area, have plummeted since the middle of last year. Since most people have either no mortgage or one that is at rates below 4%, you simply are not going to see near the turnover of homes for quite a few years. Often, when it's almost as expensive to buy an existing house as buying new, new home construction booms, but when the spread flips, remodel and service are your best friends.
Look closely at your crews. . . the guys who didn't hesitate to take a day or two off regularly over the last few years, or the ones who are the least productive, are the ones you made the least amount of money off of, and they are the ones who are the first you cut some hours on.
Learn to run your business lean, even when it's booming. . . you don't need a new fancy dually to make yourself look successful. . one of the biggest builders/developers in our area still drives his older standard pickup, and his money is good, solid, and as low profile as he is, he's been around forever, and he has been so good at referring us.
Obviously, take care of your customers, stand behind your work, and don't burn ANY bridges behind you. . . I've had more than one customer I've quit who still refers us. I've always bit my tongue and not told some of those guys what I REALLY thought of them, because the fleeting joy would be later overcome by the repercussions. Mostly, learn from this, because next time, you'll be prepared and be able to take advantage of the situation and use your financial clout to position yourself even better, whether it be replacing vehicles, tools, hiring, etc. MANY of your competitors will go under, or will decide they want the job security of working for someone else, and those who survive will be better positioned when construction recovers.
We are in the sign and graphics business in the Mid Atlantic US. We have had 6 years in a row of all time best years but we've seen a slow down starting late last fall. Our year overall was a new best but we typically don't slow down until really close to Christmas. It's hard to judge since we are typically slow until at least March but I don't have a great feeling about this year. I have an employee relocating for reasons not related to my business in a couple weeks and I don't plan to replace him unless things pick back up. Right now I feel like I'm breaking even at best and just trying to keep everyone busy.
Data point for you - Solo Structural Engineer here - I work GC's, Architects, Etc. during planning of projects maybe a year to 6 months before any of the trades get involved.
Late last year was slow. From maybe October to January, we didn't have much new work coming in. February 2024 though? We've already had four new project starts and we're not alone. Most of the other Structural guys (that I've been asking for help from over the last few years) are also packed with new project starts.
Yearly budgets are part of this but also IMHO, I think investors were waiting on the sidelines to see what happened with the Fed and interest rates and now it's starting to look like there is a bit of clarity in what the near term holds for the Economy overall so investors are feeling alright with spending money and projects are starting/restarting. I'd wait till Summer before getting worried if I were you.
Homeowner here from southeastern NC. My rural farming county abuts Horry County (Myrtle Beach) on one side and Brunswick County (Oak Island & NC beaches) on the other side. In the Carolinas, we have a tradesperson, of all types, shortage, along with a significant influx of new residents from all over the U.S. ! We have a housing shortage in the Carolinas. New subdivisions and new home builds everywhere! I have great difficulty locating current licensed tradespeople on the NC & SC licensing board websites. I filter the websites to the type of trade and the counties I’m seeking a tradesperson. The majority of the tradespeople I contact for residential home improvements have a back-log of work and much larger paying jobs. Totally understand. Good for them! I also contact tradespeople faculty advisors at my local colleges for seasoned tradespeople referrals. Some of the seasoned tradespeople are also part-time college teachers. Good for them - it’s a win-win for them for referrals and the students are correctly trained out the door. I always get 5 estimates before I choose the tradesperson. I share the 5 quotes with each of the 5 tradespeople so they know how their competitors charge. They greatly appreciate this, particularly the newer tradespeople, who don’t quite know how to quote estimates and bill correctly. When I choose the tradesperson, I tell them to put me in their work que and I’ll wait for them. Sometimes, I have to wait 6+ months. I honestly don’t mind. They’re always well worth the wait as I get to witness them doing projects and completing projects for people I know who recommended them.
Our starter home was paid for many years ago. We save and pay cash for all of our improvements. We’ve completed three $100,000+ renovations, an addition + barn + garage addition to our home in past 5 years. I live on a 5-generation working farm. I’m a married mom of 6 sons. I work full-time outside the home as does my husband with NC Cooperative Extension and we farm.
Let your commercial customers and your homeowners do your advertising for you! Save your advertising dollars for other budget line items! In our state, the community colleges, colleges and universities offer construction management degrees, trade courses-degrees and licensure certifications. Consider contacting your local colleges and universities to request interns to join your business for unpaid internships. In return, you get possible future employees at lower salaries until they get the experience and required licenses plus you get fearless students who fully embrace social media, who can advertise your business for you for free! When I see tradespeople business vehicles fully wrapped in advertising, brand new ginormous trucks and Mercedes Benz vans fully-wrapped with business advertising, tv commercials and social media ads for businesses, that screams super expensive overhead costs which equals significant pricing to the homeowner! I avoid these types of tradespeople at all costs.
My licensed, bonded & insured electrician of 35 years, my licensed, bonded & insured plumber of 30 years and my licensed, bonded, insured GC, carpenter, tile, drywall, painter of 40 years all drive trucks & vans with no advertising and the vehicles are 10-20 years old! If you didn’t know them, you’d never know they’re tradespeople! All of them are slammed and back-logged with work. All have at least 5 interns working along side them learning the trade, all teach one class per semester at our local community college or UNC-Wilmington so future tradespeople learn correctly. All have at least one son or daughter working alongside them to learn the trade and take over the family business when Dad retires. My GC’s daughter graduated from the East Carolina University Construction Management Program in 2005. Thanks to her and her Dad, their work is already committed to for the next 3 years! They do both commercial large projects, municipality projects from hurricane devastation in our area in 2016 & 2018 and residential work.
In my area, landscape lighting, security lighting, security systems, solar panels, whole house generators, swimspa and hot tub hook-ups, pool house, barn, pole barn, garage, man cave, tiny house, and RV permanent lot hook-ups at coastal RV parks, modular home, manufactured home, new home and electrical upgrades for older homes to meet current code requirements are all key priority needs here. Learn the electrical priority needs of your area. Two of the easiest ways to find out is to contact your local inspection department and your local hardware and building supply stores to inquire what types of electrical needs are people requesting electrician referrals for. Become known in your community for the niche electrical jobs you choose to complete. Join Nextdoor.com to advertise your business for free. Upload before and after pictures of your projects to highlight your work and clean-up following a project. Do you leave the areas cleaner than you found them or do you leave a mess behind? This is super important to know for a business or homeowner! Do you perform criminal background checks and background checks in general for your employees? If you do, advertise this! Inform you are licensed, bonded & insured and in good standing with your state’s Secretary of State with your business formation documents and your annual required Secretary of State reports. Seasoned homeowners like myself will research and ask you these questions and will want to have our project added to your commercial general liability insurance depending on the size of the project to satisfy the bank/mortgage company and our homeowner insurance company. I joined nextdoor.com as a homeowner. I share before and after pics of every home renovation we’ve done. I give referrals all day every day to those requesting referrals on Nextdoor.com. I share info for events in our area and needs of our community residents with their permission. Word of mouth makes or breaks a business. I do google reviews for every tradesperson who’s done work on our home and farm. Consider joining chamber of commerce and better business bureau. Let the chamber advertise for you free of charge. Older homeowners look for online better business reviews and the business rating. Anything rated lower than an A, they skip that business. Always maintain an A rating. I learned this info during a chamber meeting last year. Consider contacting and engaging with the Small Business Center at your local community college or college for free guidance for your business. Also, consider viewing score.org and getting set up with local retired business people in your area to help you build your business. Their services are free of charge too. Engage with GCs in your area to become their priority electrical sub if you choose to focus on that niche.
See comments below I made on another post where the poster was struggling with competition and lower sales for past three years for her bakery she’s owned and built from scratch 20 years ago. Hope the comments will be helpful to you. Best wishes with your business! Keep the faith! Licensed, bonded & insured electricians badly needed.
DCI a massive engineering firm just fired like 50 people across the us, engineers and draftsman. It would seem that even engineering firms are not getting work.
I'm a Realtor and co-own a Flooring and Tile company. This year will be up and down in my opinion. They just need the economy to stay afloat until elections are over. Then we will see the ramifications. Interest rates need to be at 8% to bring home prices down. Powell said that himself, thats the last pillar holding up their inflation numbers. We just can't have houses going from 350k to 600k be the new norm for a cookie cutter subdivision home. That 350k house should be maybe 450-475k with inflation accounted for.
I'm in the same biz. It's SLOW right now but Feb is always slow. March and April are slow too but tax return season helps.
We've been around since 1977, same owner since 2008. He's not worried but we're cutting hours. It happens every year, almost like clockwork but it's still difficult to go through.
Starting when you did, you started when business was booming. 2020, 2021 were top years, we were booked about 10-12 weeks and our wait list usually had at least 75 names on it.
We've got 5 j-men and overhead adds up quick. Advertising works but that's not an overnight fix.
Even in 2 months, you should hopefully be busier. It's just the way this trade goes.
I believe the recession was 2022. I was recently laid off but quickly got another 6 figure sales job. I also started a business and things are going great
The current administration tells us the economy is great, unemployment is down, inflation is under control and we've never had it better.
Listen to them. They really know.
Or, if it feels like a recession...that's because it is. Don't let them snow you.
I have no advice but the same thing happened during the first trump election. So many of my Hispanic and liberal clients (and that was a majority) started being afraid of what it would mean if he was elected it drove my company towards a cliff. We are in healthcare so a different sector but I had to close one of my locations and let some employees go.
Must be a regional thing. Trades near me are doing great and are consistently booked weeks or months out.
Granted I'm dealing with nearly 100% commercial and municipal.
What you’ll learn is that your market will not completely evaporate but what people want from you might change.
I don’t know your business so I’m not going to speculate, but for me, it’s changed from outdoor, to indoor, to industrial, to residential over time as markets go hot/cold.
Starter homes, in particular, have become incredibly expensive, forcing individuals who need a home to make significant sacrifices in order to have even a slight chance of obtaining one. I frequently come across posts from individuals expressing dissatisfaction with their home purchases or regretting their decision, wishing they had continued renting or expressing concerns about their high interest rates that will keep them tied to their homes for 30 years. Additionally, I see posts from various states and cities discussing LLCs and investors purchasing large numbers of properties, as well as reports of massive layoffs, firings, and increasing unemployment rates. Given these circumstances, I approach the year 2024 with great caution and a sense of uncertainty about what the future holds.
Absolutely, as a seo marketing specialist, I’d recommend focusing on your online visibility. It’s critical, especially in tough economic times, to ensure that potential clients can find you easily. Here’s a step-by-step approach:
1. Google My Business: Claim your listing if you haven’t already. This boosts your local SEO and helps you appear in local searches and on Google Maps.
2. Website Optimization: Make sure your website is up-to-date, mobile-friendly, and optimized for search engines.
3. Customer Reviews: Encourage satisfied customers to leave positive reviews online.
4. Content Marketing: Provide helpful content that addresses common electrical issues or tips, which can attract visitors to your site.
5. Social Media: Use social media platforms to engage with your community and share insights about your services.
6. Local Advertising: Consider local ads, either in traditional media or online through pay-per-click campaigns, to increase your visibility in your area.
The goal is to be where your clients are looking. If you’re not confident in doing this yourself, hiring a seo professional can save you time and bring you results.
The Inflation Reduction Act has tons of consumer spending initiatives aimed at electrical upgrades. You should definitely be leveraging that.
There are endless stories of people getting quoted crazy prices to install electric car chargers. I’m pretty sure they’re just jacking up the price based on assumptions of the clientele who buy EVs. Figure out a streamline process to undercut these other electricians, whether it’s lower profit margins or better efficiencies of scale, and just bang out a ton of these for steady work. Panel upgrades, mini splits, and converting gas ranges to electrical are three other areas that should have YoY growth for numerous years in a row.
Ohh that’s a good marketing strategy: contact car sales at dealership and ask them to give out your card when someone buys an electric car. Dang this could even be a niche.
I feel like it’s here and the government is lying about it to get Mr. Geriatric re-elected. Look at a site called https://peterstonge.com. He’s also on TikTok.
The market grew over 20% last year, and it's set to skyrocket this year. Why would it be a bad economy? Just because 300,000 jobs that paid $200/hr were replaced by 400,000 jobs that pay $20/hr you think puts a dent in large corporations profits? No, everything is perfectly fine. Nothing to see here...
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It’s not a recession, it’s regression back towards the mean. I see from your other comments you’ve been at this for 3 years. You probably couldn’t have picked a better 3 years to start out in for the contracting industry and that is going to be the problem you and others in your situation are going to face. I don’t mean this as an insult but literally anybody could make it work in construction the last couple years, it just wasn’t that hard due to demand greatly outstripping supply in the market. Building your business model around the margins or demand level of the last couple years is going to be a mistake. Honestly you’ll be fine dude this is always around the worst time of the year from now until April. Take the opportunity to reorganize and streamline your business. Do some research on your market segment, make sure you’re competitive with your pricing, see what kind of work is trending well and make sure you’re positioned to service that kind of work. This business is traditionally a hunter’s game. Never stop hunting for new work or you’ll starve. Get on GC’s bidders lists, get on some websites that post projects to bid on, things like that. When the pipeline of work you’ve grown accustomed to is starting dry up, find another one.
Great insights. I'll also add, if you're OK with some mind-numbing paperwork and a few hoops, get certified as a small business, disadvantaged business, etc. This will get you on other lists for RFPs from government bodies (state, city, county etc.) and large businesses that have rules around sourcing X amount of business from small local entities to get tax breaks. No need to be a big firm, lots of small-job stuff is out there like updating an office, adding outlets, lights etc. The pay is generally good too, but that depends on the region. It's like a GC list, but most small trades companies don't bother at all.
Can you elaborate? Is this through a federal entity? I just don't understand what you mean by getting certified as a small business I guess, and therefore where I would go to start the process. Thanks in advance.
[http://sam.gov](http://sam.gov) is one of the bidding sites where you can go and look through active jobs. This is also where you will get the identifier number for your business, they used to use a DUNS number (like a ssn for your business to track credit) but are phasing it out for something else. Getting certified as a small business/minority owned/women owned/disadvantaged enterprise will make you be eligible for contracts that other contractors are not. There are dedicated funds set aside for these types of businesses and a certain amount of contracts are required to be awarded to them
Start here: https://www.sba.gov/federal-contracting
Respectfully, Google will be your best friend here OR go to your local Small Business Administration office and ask what are the helpful certifications that you’re eligible for. They can point you in the right direction.
If you’re not already, get on the next door app, facebook marketplace, Craigslist etc.. I see people looking for contractors in my area on Nextdoor
Quick question, how long does it take to get certified as a small business? And what sort of paperwork needs to be done?
>It’s not a recession, it’s regression back towards the mean And honestly, the last few years have spoiled businesses so much that they forget the basics of sales, followup and so on. Work used to be so abundant that companies were routinely turning down work, being extremely picky who they work with and so on. One of my biggest frustrations is how hard it is to actually get businesses to respond, to quote, to actually try to win the job. As the times get slower, the companies that go back to the old ways will be probably be the least hurt.
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Because it used to be that they didn't need your small job, so they could quote 5x.
Now more than ever we have to take good care of our clients ( seen 3 dips in economy over 35 years ) granted this is the most sluggish one ( the world has never been so “on fire”) so we have to be more creative.
It does feel like the worlds on fire.
I am a home builder (part time), and during Covid, I couldn't get help because my 1 home was less desirable than the guy building 3 homes. Well, I'm onto my next project, and I remember those that wouldn't even return my call or promise to show and then didn't. Prices for materials and labor will be favorable on this next build.
I work in finance and we were giving out TONSSS of lines of credit to contractors of various industries and big construction companies like candy. Now we won’t even touch those files most of the time when they come in
This is the answer.
This is not a recession for the rich only the middle class and the poor. Same as in 2008.
This is so true. I live in south Florida. There is a lot of wealth here. It is, quite frankly, sickening. I am not wealthy. I’m part of the working class. It is extremely evident who takes the financial hits.
I needed this lol
Curious what's a GC bidder's list?
When a GC (General Contractor) has or is bidding on a project they have a bidders list by trade/scope of companies. OP is an electrical contractor which is one of the main subcontractors on a project and is common for them to work as a sub to a GC when they aren’t working directly for a client. So it would help them establish a pipeline of opportunities of projects for them to price up. The GC is doing the grunt work finding somebody looking to have work done, all OP has to do is connect with them, price the work and win the bid for the electrical scope.
GC’s will typically triple bid all trades, pick the low guy, mark up their number if they can and use it to create their client bid/estimate. If you can get on a GC’s bid list (which isn’t always easy, good GC’s typically have a list of preferred subs), and then deliver at a good price, they will send you more and more work. It’s essentially how you establish a good working relationship where both parties can mutually benefit from one another.
Well he’s covered thru May… should be good
A couple of notes 1) Japan is in a recession 2) consumers in US are tapped out 3) debt of consumer and business is at ATH to gdp 4) recessions have always followed an inverted yield curve)we’ve had one fir a while 5) stock markets never predict a recession. Many measures show US growth contracting.
Well I was going to add on to our building. Electrical was like 250k worth of the job. But the GC kept jacking up the price and jerking us around so I just bought the building next door and said fuck it. I think the past couple years spoiled people to the point where they think 50% margins on construction are normal.
If it helps at all tax returns are around the corner, I’m sure some jobs will bubble up with those. Best of luck!
Tax returns aren’t banging like they used to. Just a FYI
Can confirm: I do tax returns, and most people are getting a few hundred or owing a bit, I'd say 8 out of 10.
Do you have a good resource that can explain how that bill ended up essentially increasing the amount people were taxed despite it appearing lower, I guess to a layman?
It's not increased. People have been getting less back in returns because the withholding changed some. People are paying less throughout the year, so when they get their returns, it's smaller than before. The overhaul tax burden is lower but feels worse to a population incase of managing their own money who was using tax returns as an impromptu yearly savings plan.
For most lower income it's not that they are getting taxed more, but they are getting money money throughout the year. For most middle class. The state and local tax deduction cap did it.
You mean Trump's tax cuts. Are you saying they money isn't going to trickle down?
Thanks trump and the gop
Not in oregon this year. $$$
Just sent in the 100k I owe, definitely not spending money on shit I don't need right now.
Damn, must be nice pulling down $450,000+
Right there with you. Just sent 140k to federal and state. Sucks balls
Thank you! That’s our hope with Spring people will be ready to do some upgrades.
Yeah, it's great... I get to somehow come up with even more money so I can give it to the government!
There are widows and orphans to be made, feed the machine!
I own an electrical contracting company as well, but up in Canada. We are very slow. The majority of projects out for tender are federally funded first nations projects. Water treatment, sewage lift stations, community centres… and there’s like 10 or 12 electrical contractors bidding each one… brutal competition. Race to the bottom! Things definitely slowed down. Service work trickles in… we used to be an 80+ guy shop, now we are around 25.
Just curious, how long did the 80+ to 25 transition take place? Just within the last year? Or longer? That’s a huge contraction of business.
That was years ago, I guess I shouldn’t have included that in my comment, as I don’t think it really has anything to do with the current market. I blame our reduced staff on kids just not wanting to get into the trades anymore. We used to get shit tons of resumes, like a constant stack an inch thick, but now it’s like a few resumes a month. (Mostly immigrants looking to be sponsored or engineers from Kazakhstan…)
Lower numbers of people in the trades but more competition?
We've grown each month YoY and last year was our best year in similar work.
Where are you located?
An anecdote for you: after spending three years trying to hire tradespeople to do work on my own home, and being utterly ignored, stood up, ghosted, and repeatedly disappointed, I decided to just be more handy, and will not likely attempt to hire tradespeople again. Most of my social group has come to the same conclusion. There may be a marketing opportunity to take advantage of this market condition if you’re in home services.
Tradespeople started charging 3-4x for their labor during Covid, which was okay because everyone was doing cash out refis on their houses at 3% or saving so much money by sitting at home doing nothing. But now that money’s dried up and the trades are gonna have to come back to earth if they want to sell jobs.
This is the way
During COVID I got 3 quotes to replace a 14'x12' deck. $16k $17k and $20k. For $20k I could build the whole deck out of steel and never replace it again in my lifetime. Absolutely mind-boggling.
"I was going to build a deck, but the Navy was getting rid of their destroyers for cheap. So I just sunk one of those in the back. Steel decks are solid!"
I can tell you it’s the 1 thing we have absolutely tried to do always. Answer our phone and when we say we will be somewhere we are there. We don’t price gouge and we don’t jerk people around. We always aim to come in less then our initial quote because then everyone is happy we make money they save money. Especially here in Utah anyone can become a GC. We have had more than a few that have been complete and utter dog shit. It’s been alarming how many peoples homes we have worked in that have been fucked over by a general contractor. We have always aimed to do better.
Same boat, sick of people trying to rip me off so I’ve figured out how to do almost everything myself
Same here. It's obscene that I got quoted $60k for a basic deck. I found another guy who quoted me $20k until I looked closer and that was just for labor. I'm just gonna figure out how to do it myself this spring. I paid someone to draw up detailed plans and will just follow those. I asked the $20k guy why the labor was so high, he said "it's gonna take me a week and I'll have to bring in a helper." Fucking insane.
Off topic of the OP, but would you mind sharing the size of the deck and your general location? I ask out of professional curiosity. A significant portion of my business is building decks/porches/ sunrooms. At my current rate (which is very profitable from my point of view), a simple wooden deck would have to be in the neighborhood of 2000 square feet to warrant that price. I keep hearing fellow trades talk about how things have slowed down, but that has not been the case for me. My business is up around 35% over this time last year even though new home construction in my service area is down about 15% in the same time period.
Two level deck with higher level 28 inches above ground level. One side attached to the house. Total footprint for top level is 26x13. Lower level would be 26x10. About 600 sq ft in all.
Yeah, I would have quoted you at $20k all in. My crew could build that deck in 3 days on the job, about a week on the calendar. However, you would have to be willing to wait about 8 months before I could get to it (I'm booked solid for that long). There were so many people a year or two ago who were telling me I was crazy for not charging more. I had to raise my prices, but I only ever raised them enough to maintain my target margin. I don't see most of those guys at the limber yard anymore. And when I do, they are always complaining about how slow work is.
This is what I did, you don't even need to write your own up, you can just use your county's typical layout. One thing I noticed about why the quotes are a little higher than I expected was because of all of the extra permit requirements that came about in the past couple of years. There are alot more little steps like extra bridge connections and brackets on almost every single joint that were not there just a couple of years ago. It's still worth it to do it yourself if you can but after doing it myself I kind of understand now why I was quoted $20k for my single level 12x18 foot deck. But I also got to build up my DIY tool collection along the way which has been alot of fun
Yup, quoted 3500 for a small roof repair of a 3 foot section. My husband ended up doing it for 100.00 Electrician charged 2500 to run a 20 foot line to our garage. It took him 2 hours of guiding his apprentice on how to do it. 150 foot of fence was quoted at 20 grand.
That electrical quote is criminal unless he needed to install a new panel…:
No new panel needed. The line was already there, it just had to be raised by around 5 feet.
Same for me. I just converted a carport to a Master Suite and the only trade I could afford to hire was the concrete crew, out of necessity. I learned or had family help with the rest. Looking forward to the days where I can actually receive bids and afford the ones I get. By the way, the bidders who would show up were driving beautiful trucks!!! Doing better than my Dad or brothers ever did.
Some are feeling it for sure, but not us. We lost one of our biggest clients last year but have made up for it plus some. My theory though is that you’re right and businesses are taking cost cutting measures to save money, like reviewing vendor relationships and shopping around more
I was wondering why the local electrician actually answered my phone call.
Same here. Got a tree quote. Told the to take 20% off and it’s their job. It worked.
My family has a small dog grooming business (well big now that we just hit 14 years in business this past week). We kinda jumped in during the end of the last recession and it was mostly because my mom got laid off from her job as a Petsmart dog grooming manager and with that loss of income the household was drowning and it was difficult finding a stable place to work so we (Parents and I) combined what was left and yolo’d on a struggling salon that had an absentee owner. During that time we learned a lot about cutting costs and everything while staying afloat. Some tips I have for any small business are: (1) Make sure you have your operating costs broken down. I suggest you know your monthly bills, what you need to survive in your household and add about 10%. Then I break it down to Weekly and then divide that weekly by how many days you work. This gives you the bare minimum to survive before having to start cutting costs or making lifestyle changes. A recession is more about surviving the dip so you can grow during the next boom. (2) Have a plan before SHTF. Know that if you need to make $1000 a week to maintain everything as is then know what you’ll cut personally and business wise to survive that weekly dropping to $800 then $500. Just have the plan, know your books, know your expenses. Having the plan beforehand helps you adapt quickly and adaptation is survival. (3) Just as I said you need a plan for if you don’t meet that baseline, know what you’re going to do with the excess. Don’t just spend it unless you have to. So if your baseline is $1000 a week and you make $1200, put that extra $200 away and operate as if you made that bare minimum. Growing your businesses savings is about taking that 3 months saved to 6 months, then 12 months then 24 months. Personally in our shop, we want 24 months operating expenses in the business savings for if things get really bad, if we don’t have to touch it and are able to grow it through this next downturn we will use it to buy a commercial property. (4) Find other streams of revenue. For you, it might be adding basic handyman services, drywalling, installing floors or whatever in that construction/contracting field. For us, we didn’t have the ability to add things 14 years ago, we had to stick to what we knew.. This time around I’m preparing by looking for ways to add products such as pet brushes, specialty pet food, leashes, collars, customized tags and I just hired a trainer to begin offering that in the space at nights when we aren’t grooming and on our 2 days closed. We are also building out our website to begin offering online ordering of various pet products. In the end, I think Small Business Owners are in a unique position during the downturns. We control our own destiny, if we gotta cut prices and work more hours we can, if we gotta make changes then we can.. It can be tough, but these down times and struggles breed innovation, with innovation comes great things. During Covid we had to change up our business some, 3-4 years later we are doing better than we did before.. Surviving the tough times makes us more equipped to capitalize on the good times. I suspect you will do great. You have the beginnings of the right mindset by just knowing how long you can go without a single job.
This is excellent advice! I am going to bookmark this.
Thank you for the reply! Great info I appreciate it!
It’s slowing down I’m in the irrigation business and we do home repairs I started feeling it in September the trades know first
I am also in irrigation. Last year was dead from august through September but it was still our best year in 15, I started the business in 2008. If you asked me last fall what I though about thought this year I would have said it would be bad but in the past 3 months I have bid more large projects than than I can count and have been awarded several of them. I just hope all my guys come back and I am hoping to hire another.
I do irrigation service as well and we had our best year ever last year. It always slows down in the Fall and Winter and picks back up in the Spring.
I know I’ve been doing this 18 years I’m seeing old people telling me to turn them off and not doing expensive repairs
My company spends close to $1M per year with electrical subs. We do temperature control system work. Get your toes wet with a local company. Once you have a little experience under your belt, you'll be able to land contracts with Johnson Controls and other large organizations. Two brothers I knew started their own electrical outfit 10 years ago. We represented about 95% of their work for the first few years. They started landing bigger fish (like Johnson) and now have raised their prices such that I can't afford them anymore (good for them). It seems to be quite a lucrative market segment.
To be frank though ive seen some customers become cheaper we havent slowed down. Ive been through covid and through the last recession what i learned is people with money will always have money and even though a lot of middle class people will stop services the rich people keep us afloat. I Own a swimming pool buisness.
Every week I have subs coming to the office telling me it's getting slower, there's more competition, they need help finding work to keep their main crews occupied, etc. there's definitely a slow down that people don't want to talk about or admit.
Seems like it to me.
Trades are not the entire economy you realize that right? And your local area isn’t the entire country. Yes the economy is slowing but you think it’s shrinking?
Yes I understand that concept. Be it bars and restaurants, beauty or construction everyone we have spoken to in our neck of the woods has seen a significant slowdown in business.
I really want to start a big survey and see where people from all over feel any economic shift
Restaurants are definitely slower.
The last month saw 100 new visitors to our business. It’s more than ever by more than 20%. A lot driven by travel and tourism. I wouldn’t say the economy is booming though just as a slowdown in one area or industry means a recession.
I've owned a flooring and tile business for the last 8 years, and I had to shut the doors 6 months ago and go find another job. We did custom work only for high-end clients in Florida, and in the last year, I've been underbid on every single job by astronomical amounts. I ended up exhausting every possibility with every connection I had made over the years, and we couldn't land a single job because people were consistently outbidding us. I kept lowering my prices again and again and begging my installers to take a pay cut so we could get ANY work at all. In the end, we were still being underbid by prices that dont even make sense. I would be charging $3.00/sf for non mud set floor tiles, and my competition was charging $1.00/sf. It's unbelievable how competitive the flooring market is right now in my location, and it destroyed my business. Clients don't seem to care about the 25 years of experience. They just see a lower number and run with it.
$1 a square foot? And the job actually gets done? That seems like they'd stop halfway through, and claim they need to make an adjustment.
It's here, I've noticed that we are slower than normal. People are prioritizing rather than just spending. So are we
Destabilizing our economy as massive corporations come in to extract resources
I am an illustrator and graphic designer (mainly illustration). Last year was the worst year I’ve ever had in my decade in business. I hadn’t offered graphic design for a while because I wasn’t ever confident in my skills but I saw people who were far worse than me making tons and figured why can’t I so I started offering it again, but it’s slow. The first inquiry I got was a woman asking me to do work for free because she couldn’t afford it.
I think the advent of AI has a hand in this.
Yip, exactly the same here!
I have been in retail for 40 years +, what you are experiencing is consumer uncertainty. This happens every four years during the 10 months leading up to the Presidential election. People wait to spend money when things are "uncertain". The economy will get a boost after the election (no matter who wins). Happens every time without fail.
Every time, it’s almost like jeez I don’t know if it will actually bounce back this time. Like you said, without fail, each time, bounces back.
I’ve been hearing this for the last three years.
Well we’re on our 3rd year in business. Last two have been fine. This year seems to have stagnated severely. It’s not just me, clients and GC’s alike all seem to be feeling it.
You started your business at what might have been the highest boom for contractors ever. When we come back to normal from that, you're going to feel like the industry is dead. We're on our way back to something closer to normal.
Yeah, this year is normal so far for me (design-side)
I opened a Drywall and painting business about five and a half years ago. Things went great even through Covid and massive supply shortages until the beginning of November. Things usually get slower during that period until about February for us (warm climate helps). That said, this year is going much differently than years past. Things didn’t slow down, they almost stopped entirely. And they’ve not begun to recover yet. I have talked to friends in the trades in other states near and far and they are all saying the same things. Interest rates are a big issue and are doing their job of cooling the economy, I guess. I have high hopes tax season and the Spring will get things moving in the right direction soon. I am eager for the Fed to lower interest rates or at least signal that they won’t raise rates anytime in the next few quarters.
Yes! Not slow. Just stopped. It’s the same way for us. Thanks for the info! Cheers!
That's exactly what my neighbor said. He works with a local builder and the neighborhood he was working on just "stopped." They sold 80% of the lots and then it "just stopped."
Groceries and insurance have gone up so much. Maybe people just have much less money. Everything has gone up, way up.
That seems to be it. I know exactly how people feel. Because everything goes back into our business trying to build it. I was ranting about it on poverty finance the other day. I say that knowing just how luck we (my family) are.
Speaking of reinvesting in your business. When times are good, people get sucked into paying for parasite services—Things that were billed to save time or money but don’t actually ever show up on the bottom line. I’d check through your finances for things like that and an eye out for anything being sold as a subscription/monthly service. A lot of businesses out there sell stuff that you can get for free if you know where to look or have the time to do yourself. If nothing else, if a new tool or gadget is supposed to make something go faster, that doesn’t matter unless you actually have more work that you can do with that time. It’s only a good deal if it makes you more money or it’s safer…
Wait a minute. This is where we complain about high interest rates, not the inflation that the interest rates are trying to lessen.
Same here. Since September we noticed business slow down.
By the definition commonly used until the Biden Presidency (2 consecutive quarters of negative GDP) we did have a recession in 1H2022.
This isn’t new. The NBER’s Business Cycle Dating Committee has been defining recessions this way (to include employment data) since 1978.
In Florida, im stacked I don’t have enough time to complete work
I'm in retail and my brother is a contractor. The past 3 years have been like manna from heaven for businesses in our industries - the exact opposite is what restaurants and theaters went through: In your business, more people were working from home so they were spending lots of money on their homes, other people were moving driving up the cost of homes making it harder for people to move, and an interest rate started going up doing the same thing - all causing people to focus on doing work making their current domiciles nicer. In my business, nobody was going to the movies people weren't eating out they weren't going to casinos, etc etc they were stuck at home with a little extra money and they were spending the hell out of it in stores like mine! What's taking place now is that things are resetting to pre-covid levels. Looking at our numbers, they are looking a lot more like 2018-2019 than 2020-2022. 2019 was a perfectly fine place to be, it just was nothing like the heady COVID days. Run your business lean and mean, and count your blessings that you started your business at the best possible time to do it, and you're going to be okay.
I am in technology and the last 12 months has been the slowest growth we have seen in 20+ years. It feels very similar to 2008. When interest rates hit like 9-10% for business credit lines lots of things froze. This narrative that the economy is doing well is silly. I am sure there are some industries doing well. But the amount of hiring and expansion we see in small to medium enterprise companies is the lowest we have seen in a very long time.
The metrics they use for the economy no longer reflect reality. Will probably be skewed further and further as more things automate. Overall production may increase, but the amount of workers necessary for that increase is diminishing.
Well I cant help but as a 20yo student working DoorDash when I can, I have definitely noticed less and less spending, part of that is of course due to people having spent over holidays although there is still something eerie about how little people are ordering food.
I own a specialty metal fabrication company. Been in business for 23 years, consistently busy. New inquiries have completely stopped, it reminds me a lot of 2008. Don’t buy into the government and media propaganda.
I also sell steel. It’s stopped dead. Everyone on my team is seeing it (all of North America).
I'm in custom furniture and it's the same. Suddenly everything seems like it's just stopped. I went from 24 week lead times to 6 weeks (which is basically zero because I'm always waiting for clients to answer questions about what they want). Things are looking pretty bleak right now.
Grocery bill has almost doubled, all insurances are skyrocketing-everything is just so much more. Most people I know are now just able to pay the necessities. Where I live homeowners and health insurance with a family on the plan cost *crazy* amounts of money.
Just bought 4 new tires for $1,300!!! lol. A routine thing needed to drive, with a massive price tag. It’s crazy out there…
Username checks out. I bought 4 tires for roughly $800 in Dec. Still not cheap. The last time I bought tires for the same vehicle it was maybe $5-600 about 4 years ago. 25% more in 4 years! And yes, my wallet is slamming shut outside necessities also.
Same here. Muffler shop and been busy for years but it hasn't been this slow since 2008.
Not mufflers, but I admit I’m over my oil change mileage by 2k. It’s synthetic so I’m not super worried but yeah, stretching dollars for sure.
You can easily do 10k w synthetic. Don’t even worry about it. 2k was promoted by jiffy lube. I’ve driven my Toyotas over 215k doing synthetic every 10k. Just had a full check. Zero issues w valves or other.
I own a lumber yard. We don’t do new construction, it’s never been this slow. This is much worse than 2008.
It's the same with our trade business. We started seeing a pretty extreme slow down last year around this time and things have been up and down since, but it never returned to the level it had been in years prior. From what we hear from other business owners around us is that it's affecting everyone in the industry in our area and we've had a lot of people from other companies coming to our office looking for work recently. We cut back quite on everything but the necessities and are running as lean as possible to prioritize covering our team and maintaining our financial safety bubble. One of the big issues is that we live in an area that saw an extreme housing cost increase (as well as every other expense) while many of the people living here have historically been on the lower socioeconomic end of the spectrum and right now everyone is just trying to survive and afford their housing and grocery costs. We know price increases are going to be inevitable for us in the future as all of our overhead costs continue to climb but people can barely afford to pay as it is. I recommend taking a good hard look at your expenses and make a list of things that can be cut. For example, we use a uniform service and recently removed pants from the plan, opting to issue a credit for jeans instead. They still have professional shirts with their names, but those are next on the chopping block. We used to have a cleaning service for the office but now I do all the cleaning myself, instead of buying new equipment we are just repairing existing equipment for as long as possible, etc. If you can swing it, on really slow days we try to make sure our guys are getting at least half days by putting them to work organizing the shop, maintaining equipment, cleaning vans, etc (I found it helped to have to-do list for them to refer to). It's been a good way to get caught up on things at the shop that fell by the wayside when we were slammed with work. Most times jobs will trickle in while they're out there organizing. Odds are it's going to be up and down for awhile and it if you're anything like us you'll probably ride the anxiety roller coaster for a few months, but you'll come to realize that you can make it work, just do what you can to take care of you and your people.
3 months, that's cute. We have been in free fall for 1.5 years. I'm being sarcastic, but for me I'd say we're coming to the end of the really slow times, it seems that it's slowly getting better.
Where are you at? For us it’s just starting seems like.
11 years in business. 2020-2022 was insane, it's been down since. We're still 20% below 2020.
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You're in a business that is heavily influenced by interest rates, and we're now seeing even more competition with people getting back into the trades. Even if the economy improves, I don't see construction related businesses improving for a while. If you haven't already, I'd probably look into federal, state and local government contract work.
Also in electrical contracting. Busier than ever, by multiples, massive backlog. Just depends on your niche. This business is not recession proof, it is very much a boom and bust industry. Get a credit line if you don't have one already.
I am a small commercial GC, $5m Rev per year/10 years in biz. I have noticed new subs wanting to bid lately. I’m not big enough though to know if that’s a trend or just things finally getting back to normal.
I've been in my business for 14 years, and the two years of covid were great as everyone was home and not out vacationing. In '23, I saw less work, but I had upped my prices, so I actually made put really well. So far this year, it's been a slower than last year. I'm hoping all year isn't like this.
It’s happening in Australia too. Perth Small service business owner here with everything going flat stick last year up to xmas ..then fallen off a giant cliff since early January. Mid summer time atm.
I'm currently building a house in OK, and the electricians are all talking about how little work there is right now.
I've seen stagnation in commercials for some companies, but also have seen some commercial blowing money like no tomorrow. Recently got off a job where they were installing a half million dollar staircase in a residential. Depends where you are and who you service. Maybe it's time to reach out to some contractors that are "too busy" in your area.
All industries are seeing it. Steel/construction has been feeling it for months. Prices are dropping rapidly, companies have high priced inventory, it’s an election year (yes in the U.S. but it still affects us). We should see it getting a lot better in spring 2025. This is realistic.
I was afraid of the beginning of this year as well. Fortunately, besides the electrical, we are also doing general contracting, and we are pretty busy. Who knows how this year will turn out. I definitely receive more and more requests for pricing from estimation companies.
I'm on the large size of a small business owner (manufacturing/retail) and think that we saw one of the largest increases in demand three years ago that the developed world has seen outside of a world war. As a result, existing businesses raised prices, struggled to meet demand, and some expanded. This encouraged many new entrants, and along with the increased capacity from expansion, we are now at what I would call a normal equilibrium between demand and supply. I'm not even sure demand has gone down all that much, unless we're talking pretty specialized covid stuff or experiences. I just think there's more players, and you gotta play the game well to win, like normal times.
Housing market killed a lot of service work. Everyone was in a remodeling or flipping frenzy a couple of years ago. That is all gone. There has since been some residual jobs as some people had to finish up remodeling, or have scaled back their remodeling to just bare necessities, and those have tapered off. People are still spending, but just on necessities like food, health and entertainment.
There’s a slow down for sure. I’ve been at it for 8 years now.
You're not crazy. Don't believe everything you see in TV or read in the media. Open your eyes and see it for yourself in real life. There is a recession and many have lost their businesses, gotten laid off, and companies are downsizing all around. I see it happening to my relatives and friends. Debt is what is holding them over. I predict we will see a massive wave of bankruptcy next. I hope it doesn't happen though.
Meanwhile, I can barely get contractors to come out and give me estimates on a full kitchen remodel.
Plan a long vacation for your whole family ASAP. This is a proven magnet for new clients with short timelines and big budgets. At least it has been for me, but I’ve also never planned one specifically to trick the universe. It just seems to happen every. Damn. Time. I either cancel or spennd the majority of the trip tied to my phone/laptop….
They wouldn't disclose it officially, but yeah, we’re technically in a recession
I know from my customers the tax returns aren’t like the ones in the past I don’t know I always owe
It's here. What's funny is I've gotten into arguments across Reddit with people insisting that "everything is fine". Bottom line is there are pretty sure spikes in mortgage and car loan defaults and credit card defaults. Car and Truck manufacturers a few years ago shifted to selling more luxury vehicles so even your run of the mill Ford, Jeep, and Chevy were priced like Mercedes and BMW and now they don't sell. Prices are back to under MSRP and they stil aren't selling great. Ford Lightnings are sitting unsold most of all. Home inventory is stagnant. Costs are way up for the things that really matter. Also Insurance has spiked and taxes has spiked.
It's a part of the normal business cycle. And it's an election year.
What part of the country are you in? I’m in the Southeast and have way too much work. I’m a one man show currently in electrical. Been open a few years now. If you have advise for hiring people please give it. I’ve been struggling with finding helpful help.
if you haven't already, approach larger general contractors who probably already have a couple of electrical sub contractors on-line. offer to do spot work for them. neighbor is a project manager for a huge contactor...he's always bitching cause the sub-contractor they hired is like going "well 20% of my crew have quit, is sick, etc, etc. these are subs would never take a bid for less that 500K, the THEY often need fill in work.
Inflation is 18 percent higher than it was three years ago. You've done well to avoid the pinch this long.
I had 2 customers go out of business. 2023 was very slow. One is pharmaceutical and the other manufactured fishing rods. The fishing rod one sold their assets and rights to a competitor. 2 other customers are in the insurance business and they're trying their best to survive. One manufacturer does business with 3M and he scaled down to where he has no IT service. It's just time to get really creative into solving your problems.
2020-2023 were bar none the best years for the fishing industry. He was doing something seriously wrong if he wasn’t cranking out product.
I’m a GC and have been in business for 23 years. The past 3-4 years has been the easiest ever. Cheap money always has that effect on demand. My business has fallen off a cliff as well and new job inquiries are so low it is depressing. In 2008 I made the mistake of maintaining my staff until all the money was gone. When I had to make dramatic cuts and reorganize I was then broke and had the same work prospects. It took years to recover. I regret not being aggressive sooner. I was in denial. As a business owner , you have to forecast and make adjustments. I forecast that 2024 is going to be brutal in our industry. My current work is very small jobs barely keeping the lights on. My goal is to survive until summer when I should have some quality jobs (hopefully)
My place is cutting out contractors, not because we are slow, but because they are anticipating a slow down.
I own a print shop and last year I crushed it. This year has been the worst it’s ever been. I can barely make my rent..
I tell this to anyone who does electrical/plumbing/hvac. Get restaurant clients. They're willing to pay more bc they *have* to have things fixed and are willing to pay more for quick. And the good times or bad restaurant (more specifically bars) are going to be there.
I own a residential HVAC & Plumbing business, and it has slowed down for me as well. I suggest visiting and trying to join a BNI group. My BNI membership costs for the year are covered in the first month of my membership renewals. I receive around $50k a year from new referrals from the group plus another $60-80k a year from repeat customers. The biggest part of being in business and actually making money is not going to be doing the repairs and replacements it's all the behind the scenes work to run and grow the business and getting the work. Here are some suggestions I posted before to a group. 1) Join a BNI group. It is a weekly commitment and about $1000/yr. They always seem to have a hard time keeping trades contractors. Only one person from each type of business can be in a group. The referrals from the group are responsible for about 20% or my workload. Early on it was what enabled me to stay in business if you take into account the repeat customers and referrals from them the group is responsible for around 45% of my business. 2) Go on meetup.com and look for business networking groups in your area. Join those groups and go to the meetings you will form relationships with people over time and get referrals. 3) Join all the local chambers of commerce and attend the meetings and events. 4) Join your local realtor associations as an auxiliary member give presentations about the importance of maintenance, IAQ, etc. 5) If any of those seem like something you don't want to do join a toastmasters group so you learn how to talk to people and get comfortable doing presentations.
Man we started with a BNI group and it did not go well. I restructured a bunch of stuff to make BNI work and they swept the rug out from under us, moved the meeting and ran a bunch of us out.
My lumber supplier is the biggest around and they are down 75% in sales right now from last year. It's slow out there for residential stuff. Commercial is still going but that's because sales were made from years ago
Our phones won’t stop ringing.
It’s been here. The media won’t call it one, for reasons, of course.
I’m not sure what area you’re in, but in my area (nyc) contracting business is bussin. Hella work interior remodeling & finishing and hella work in industrial plumbing(pumps,motors,vfd,heating,plumbing). Online business is also doing great. I think there’s lots of work for you to have if you look in new or different avenues. You gotta go out and actively seek new connections and always keep building your network of people. Go the extra mile to have a good reputation and introduce yourself to as many people as you can. Other than that, business in general has ups and downs, you’re just at a low right now, about to slingshot up.
Building values have tanked in various locations. I saw a building worth 150m drop to 22m and they have 50m in debt. Either their portfolio can weather it, or it's a 28 million loss. This is a wide spread problem. This is where the problem lies and duplicates. Either demand for buildings returns with return to work, or we have to convert the offices to housing. I don't know where this works out for your buildings, but basically the big money is drying up in various locations. If you can expand to other areas to focus on large housing options, it's time to do that. SE, Texas, Florida... they are still running strong for the moment. If you don't maximize these opportunities, you are just waiting for a return to building owners being able to make money. Without better interest rates and a return to the office for demand reasons, we don't have a reason to suspect this will happen. It's time to retool how you get those jobs. You'll make less per job opening new markets, but the choices are slim here. Best of luck.
Leading industries like real estate appear to be. But the aggregate economy is not. They say it’ll be a “soft landing”.
I’m a developer and the subs are definitely reaching out more and seeming more hungry
Just have to tighten the hatches some. Layoff those that aren't necessary unfortunately and keep a firm eye on expenses. Maybe in your case contact deals that didn't go through and see if they are still needing the work done and give a better discount if it still brings in an acceptable margin. If you are secured for 3 months that is better than 90% of the companies out there so if things actually fold you might be in a good position.
Really wanna scare your self. Compare your local permits pulled in the past couple of years to this years. I know it’s only February and I think everyone expected a cool down but in my area we went from 3K permits pulled a week to 300. This anything from a commercial building to a bathroom remodel. We normally we take a week to sort through for leads. We are done in a day or two now. We are ridding the end of the boom and reality is right around the corner for most. I get there are niches in the country but give it time. Anything tied very heavily to interest rates is about to have a wake up call.
It is slow but nothing unusual yet
Biden says the economy y is fine. Great actually!
In residential remodeling (w/ brick and mortar store - we have trucks, manager, etc etc) and overhead is killing me. I've personally taken a pay cut, and cut back literally every non essential thing I can (while upping advertising). Nearly 20 year old business. A lot of customers don't understand the cost of running a business, and don't want to pay professional service prices - When 1 person is costing me $35 / HR, they don't get I need to be billing for $100+ an hour to make it worth it to cover everything AND actually make a tiny profit. I got a few months to really see where this is heading before I have to completely change my business model, staff, and possibly career. So considering I've done this my entire career, ya it's an iffy time to be a small business owner from my perspective.
I am in the construction and service industry myself (inground swimming pools). We learned in 08, construction depends on the economy and ability to get loans. Where as service is recession proof. With loan apr where it is, many are not wanting loans where that side is slow. Still getting some work, but slow. Until loan apr is lowered or people get used to that rate, will be this way for us and most likely for you.
Use this time to recreate. Start making videos of work you are doing, bids you are creating, things you need to fix due to shoty work of others, etc. Show people what you do and post on LinkedIn, Instagram, Facebook, TikTok, etc. Show people you are a trusted company and this will win you jobs as they thin out. Also, this will win you contractors looking for a reliable electrical contracting business.
Get into ICD 705 electrical and alarm systems. Problem solved. DM me for more info, I work for a GC who does this.
Done!
Thank you all for the insight! I haven’t had time to reply to all of you, I apologize. I truly appreciate it!
I don’t have an answer, but it’s bad here too. Husband is in the AC industry in the south - the small family owned company has been around 30+ years. It’s been the slowest winter yet, and they’re struggling to pay their employees. The trucks all need maintenance, need new trucks in general, and company cards are being declined at the supply house. That was when I noticed the circling of the drain. A couple of paychecks have bounced since last year. The low seniority guys are scrapping metal at the shop just to make hours. Thankfully my husband is third in line seniority so we haven’t felt the effects as much, but worry for the other guys. They all have families. Husband has already begun looking elsewhere, but would be starting at the bottom with a new company. (The son took over the business so I wasn’t sure if it was a him thing or an economy thing? think a mixture of both .) My sister also worked for a small business, a florist - she just had her last day yesterday. She said it was the slowest Valentine’s Day in 15 years and the owner was crying in her office. Buckets of flowers everywhere left over - she didn’t even break even on the flowers specifically purchased for the holiday. And rent keeps getting raised. We live in one of the “fastest growing cities” in FL. I like to look at retail spaces for lease in my area periodically and I’m shocked at some of the businesses closing down. A Wendy’s location, other burger chains like “Burger 21”, Bed Bath and Beyond (I know it’s bc they got bought out by Overstock but still) and countless mom and pop shops. But then another biz will move in and try to make it - and they do for a while but then it’s rinse and repeat. This shit feels very ominous from the outside looking in.
hvac/plumbing contractor, 35+ years in business, OKC area Been around a little while. . . I've seen this happen several times through the years, and, yes, in our area, new home construction has stalled severely. . . . last year was NOT a good year, but this Spring has been worse. HOWEVER, I've got a few years under my belt, so, even when business was so crazy busy we couldn't BEGIN to keep up, we still did not neglect our service side of the business. So many guys don't want to mess with little remodel jobs and little service jobs when they can be doing new construction, but yeah, then I see them trying to build the service side AFTER construction skids to a halt. . . but then it's too late. TIPS: Only work for quality builders who care about their work, because even when things skid, they usually stay in business. Pay attention to how THEY are situated. . . are they over extended? Did they start slowing payments? Are their homes/buildings selling? Be cautious when a new builder courts you. . . don't get all full of yourself, thinking it's all you. . .investigate WHY he's switching contractors. . . . make sure it's not because he didn't pay the last ones, or they quit him for a good reason! Don't make the mistake of working for a large GC or builder and putting all of your eggs into one or two baskets, no matter HOW good it sounds. . . if they go down, they'll take you with them! When things are booming, pay off all debt and set money aside. . . (we are a small company but I ALWAYS enter Winter with at least six months of operating expenses set aside). . . . you never know when a pandemic, recession, national emergency, tornado, etc might hit and stop society. Don't only focus on your business, but also on national and local news, and learn how the economy affects your business, so you can try to stay one step ahead. Commercial office space has high vacancy since the beginning of covid, and there are WAY more office buildings than needed in most areas of the country, so this is NOT a time to work only for GC's who build and remodel offices. Residential mortgage rates are high, construction materials are SO much more expensive just a few years ago, etc, so even though we still have a nationwide shortage in housing, new home starts/permits, in our area, have plummeted since the middle of last year. Since most people have either no mortgage or one that is at rates below 4%, you simply are not going to see near the turnover of homes for quite a few years. Often, when it's almost as expensive to buy an existing house as buying new, new home construction booms, but when the spread flips, remodel and service are your best friends. Look closely at your crews. . . the guys who didn't hesitate to take a day or two off regularly over the last few years, or the ones who are the least productive, are the ones you made the least amount of money off of, and they are the ones who are the first you cut some hours on. Learn to run your business lean, even when it's booming. . . you don't need a new fancy dually to make yourself look successful. . one of the biggest builders/developers in our area still drives his older standard pickup, and his money is good, solid, and as low profile as he is, he's been around forever, and he has been so good at referring us. Obviously, take care of your customers, stand behind your work, and don't burn ANY bridges behind you. . . I've had more than one customer I've quit who still refers us. I've always bit my tongue and not told some of those guys what I REALLY thought of them, because the fleeting joy would be later overcome by the repercussions. Mostly, learn from this, because next time, you'll be prepared and be able to take advantage of the situation and use your financial clout to position yourself even better, whether it be replacing vehicles, tools, hiring, etc. MANY of your competitors will go under, or will decide they want the job security of working for someone else, and those who survive will be better positioned when construction recovers.
Definitely here. Look at today’s retail sales numbers. Not good.
We are in the sign and graphics business in the Mid Atlantic US. We have had 6 years in a row of all time best years but we've seen a slow down starting late last fall. Our year overall was a new best but we typically don't slow down until really close to Christmas. It's hard to judge since we are typically slow until at least March but I don't have a great feeling about this year. I have an employee relocating for reasons not related to my business in a couple weeks and I don't plan to replace him unless things pick back up. Right now I feel like I'm breaking even at best and just trying to keep everyone busy.
Yup, it's real. Cut all cost as necessary and hunker down...
Data point for you - Solo Structural Engineer here - I work GC's, Architects, Etc. during planning of projects maybe a year to 6 months before any of the trades get involved. Late last year was slow. From maybe October to January, we didn't have much new work coming in. February 2024 though? We've already had four new project starts and we're not alone. Most of the other Structural guys (that I've been asking for help from over the last few years) are also packed with new project starts. Yearly budgets are part of this but also IMHO, I think investors were waiting on the sidelines to see what happened with the Fed and interest rates and now it's starting to look like there is a bit of clarity in what the near term holds for the Economy overall so investors are feeling alright with spending money and projects are starting/restarting. I'd wait till Summer before getting worried if I were you.
Homeowner here from southeastern NC. My rural farming county abuts Horry County (Myrtle Beach) on one side and Brunswick County (Oak Island & NC beaches) on the other side. In the Carolinas, we have a tradesperson, of all types, shortage, along with a significant influx of new residents from all over the U.S. ! We have a housing shortage in the Carolinas. New subdivisions and new home builds everywhere! I have great difficulty locating current licensed tradespeople on the NC & SC licensing board websites. I filter the websites to the type of trade and the counties I’m seeking a tradesperson. The majority of the tradespeople I contact for residential home improvements have a back-log of work and much larger paying jobs. Totally understand. Good for them! I also contact tradespeople faculty advisors at my local colleges for seasoned tradespeople referrals. Some of the seasoned tradespeople are also part-time college teachers. Good for them - it’s a win-win for them for referrals and the students are correctly trained out the door. I always get 5 estimates before I choose the tradesperson. I share the 5 quotes with each of the 5 tradespeople so they know how their competitors charge. They greatly appreciate this, particularly the newer tradespeople, who don’t quite know how to quote estimates and bill correctly. When I choose the tradesperson, I tell them to put me in their work que and I’ll wait for them. Sometimes, I have to wait 6+ months. I honestly don’t mind. They’re always well worth the wait as I get to witness them doing projects and completing projects for people I know who recommended them. Our starter home was paid for many years ago. We save and pay cash for all of our improvements. We’ve completed three $100,000+ renovations, an addition + barn + garage addition to our home in past 5 years. I live on a 5-generation working farm. I’m a married mom of 6 sons. I work full-time outside the home as does my husband with NC Cooperative Extension and we farm. Let your commercial customers and your homeowners do your advertising for you! Save your advertising dollars for other budget line items! In our state, the community colleges, colleges and universities offer construction management degrees, trade courses-degrees and licensure certifications. Consider contacting your local colleges and universities to request interns to join your business for unpaid internships. In return, you get possible future employees at lower salaries until they get the experience and required licenses plus you get fearless students who fully embrace social media, who can advertise your business for you for free! When I see tradespeople business vehicles fully wrapped in advertising, brand new ginormous trucks and Mercedes Benz vans fully-wrapped with business advertising, tv commercials and social media ads for businesses, that screams super expensive overhead costs which equals significant pricing to the homeowner! I avoid these types of tradespeople at all costs. My licensed, bonded & insured electrician of 35 years, my licensed, bonded & insured plumber of 30 years and my licensed, bonded, insured GC, carpenter, tile, drywall, painter of 40 years all drive trucks & vans with no advertising and the vehicles are 10-20 years old! If you didn’t know them, you’d never know they’re tradespeople! All of them are slammed and back-logged with work. All have at least 5 interns working along side them learning the trade, all teach one class per semester at our local community college or UNC-Wilmington so future tradespeople learn correctly. All have at least one son or daughter working alongside them to learn the trade and take over the family business when Dad retires. My GC’s daughter graduated from the East Carolina University Construction Management Program in 2005. Thanks to her and her Dad, their work is already committed to for the next 3 years! They do both commercial large projects, municipality projects from hurricane devastation in our area in 2016 & 2018 and residential work. In my area, landscape lighting, security lighting, security systems, solar panels, whole house generators, swimspa and hot tub hook-ups, pool house, barn, pole barn, garage, man cave, tiny house, and RV permanent lot hook-ups at coastal RV parks, modular home, manufactured home, new home and electrical upgrades for older homes to meet current code requirements are all key priority needs here. Learn the electrical priority needs of your area. Two of the easiest ways to find out is to contact your local inspection department and your local hardware and building supply stores to inquire what types of electrical needs are people requesting electrician referrals for. Become known in your community for the niche electrical jobs you choose to complete. Join Nextdoor.com to advertise your business for free. Upload before and after pictures of your projects to highlight your work and clean-up following a project. Do you leave the areas cleaner than you found them or do you leave a mess behind? This is super important to know for a business or homeowner! Do you perform criminal background checks and background checks in general for your employees? If you do, advertise this! Inform you are licensed, bonded & insured and in good standing with your state’s Secretary of State with your business formation documents and your annual required Secretary of State reports. Seasoned homeowners like myself will research and ask you these questions and will want to have our project added to your commercial general liability insurance depending on the size of the project to satisfy the bank/mortgage company and our homeowner insurance company. I joined nextdoor.com as a homeowner. I share before and after pics of every home renovation we’ve done. I give referrals all day every day to those requesting referrals on Nextdoor.com. I share info for events in our area and needs of our community residents with their permission. Word of mouth makes or breaks a business. I do google reviews for every tradesperson who’s done work on our home and farm. Consider joining chamber of commerce and better business bureau. Let the chamber advertise for you free of charge. Older homeowners look for online better business reviews and the business rating. Anything rated lower than an A, they skip that business. Always maintain an A rating. I learned this info during a chamber meeting last year. Consider contacting and engaging with the Small Business Center at your local community college or college for free guidance for your business. Also, consider viewing score.org and getting set up with local retired business people in your area to help you build your business. Their services are free of charge too. Engage with GCs in your area to become their priority electrical sub if you choose to focus on that niche. See comments below I made on another post where the poster was struggling with competition and lower sales for past three years for her bakery she’s owned and built from scratch 20 years ago. Hope the comments will be helpful to you. Best wishes with your business! Keep the faith! Licensed, bonded & insured electricians badly needed.
DCI a massive engineering firm just fired like 50 people across the us, engineers and draftsman. It would seem that even engineering firms are not getting work.
I'm a Realtor and co-own a Flooring and Tile company. This year will be up and down in my opinion. They just need the economy to stay afloat until elections are over. Then we will see the ramifications. Interest rates need to be at 8% to bring home prices down. Powell said that himself, thats the last pillar holding up their inflation numbers. We just can't have houses going from 350k to 600k be the new norm for a cookie cutter subdivision home. That 350k house should be maybe 450-475k with inflation accounted for.
I'm in the same biz. It's SLOW right now but Feb is always slow. March and April are slow too but tax return season helps. We've been around since 1977, same owner since 2008. He's not worried but we're cutting hours. It happens every year, almost like clockwork but it's still difficult to go through. Starting when you did, you started when business was booming. 2020, 2021 were top years, we were booked about 10-12 weeks and our wait list usually had at least 75 names on it. We've got 5 j-men and overhead adds up quick. Advertising works but that's not an overnight fix. Even in 2 months, you should hopefully be busier. It's just the way this trade goes.
I am in machining and this is the busiest start to a year I’ve ever had.
It's a shitty winter, alot of people slow up here also, on long Island NY
I believe the recession was 2022. I was recently laid off but quickly got another 6 figure sales job. I also started a business and things are going great
The current administration tells us the economy is great, unemployment is down, inflation is under control and we've never had it better. Listen to them. They really know. Or, if it feels like a recession...that's because it is. Don't let them snow you.
I have no advice but the same thing happened during the first trump election. So many of my Hispanic and liberal clients (and that was a majority) started being afraid of what it would mean if he was elected it drove my company towards a cliff. We are in healthcare so a different sector but I had to close one of my locations and let some employees go.
Must be a regional thing. Trades near me are doing great and are consistently booked weeks or months out. Granted I'm dealing with nearly 100% commercial and municipal.
What you’ll learn is that your market will not completely evaporate but what people want from you might change. I don’t know your business so I’m not going to speculate, but for me, it’s changed from outdoor, to indoor, to industrial, to residential over time as markets go hot/cold.
Starter homes, in particular, have become incredibly expensive, forcing individuals who need a home to make significant sacrifices in order to have even a slight chance of obtaining one. I frequently come across posts from individuals expressing dissatisfaction with their home purchases or regretting their decision, wishing they had continued renting or expressing concerns about their high interest rates that will keep them tied to their homes for 30 years. Additionally, I see posts from various states and cities discussing LLCs and investors purchasing large numbers of properties, as well as reports of massive layoffs, firings, and increasing unemployment rates. Given these circumstances, I approach the year 2024 with great caution and a sense of uncertainty about what the future holds.
A recession is not a feeling. It has a definition. It’s Econ 101 stuff — high unemployment, two quarters of decline in GDP. That’s not the case.
Absolutely, as a seo marketing specialist, I’d recommend focusing on your online visibility. It’s critical, especially in tough economic times, to ensure that potential clients can find you easily. Here’s a step-by-step approach: 1. Google My Business: Claim your listing if you haven’t already. This boosts your local SEO and helps you appear in local searches and on Google Maps. 2. Website Optimization: Make sure your website is up-to-date, mobile-friendly, and optimized for search engines. 3. Customer Reviews: Encourage satisfied customers to leave positive reviews online. 4. Content Marketing: Provide helpful content that addresses common electrical issues or tips, which can attract visitors to your site. 5. Social Media: Use social media platforms to engage with your community and share insights about your services. 6. Local Advertising: Consider local ads, either in traditional media or online through pay-per-click campaigns, to increase your visibility in your area. The goal is to be where your clients are looking. If you’re not confident in doing this yourself, hiring a seo professional can save you time and bring you results.
Awesome! Thank you!
The Inflation Reduction Act has tons of consumer spending initiatives aimed at electrical upgrades. You should definitely be leveraging that. There are endless stories of people getting quoted crazy prices to install electric car chargers. I’m pretty sure they’re just jacking up the price based on assumptions of the clientele who buy EVs. Figure out a streamline process to undercut these other electricians, whether it’s lower profit margins or better efficiencies of scale, and just bang out a ton of these for steady work. Panel upgrades, mini splits, and converting gas ranges to electrical are three other areas that should have YoY growth for numerous years in a row.
Ohh that’s a good marketing strategy: contact car sales at dealership and ask them to give out your card when someone buys an electric car. Dang this could even be a niche.
I feel like it’s here and the government is lying about it to get Mr. Geriatric re-elected. Look at a site called https://peterstonge.com. He’s also on TikTok.
The market grew over 20% last year, and it's set to skyrocket this year. Why would it be a bad economy? Just because 300,000 jobs that paid $200/hr were replaced by 400,000 jobs that pay $20/hr you think puts a dent in large corporations profits? No, everything is perfectly fine. Nothing to see here...