In any business they say cash is king. And in a small to medium sized business cash is well, emperor.
After having seen and spoken to lots of small, medium-sized and large registered electrical contractors over the past 4-5 weeks my observations are as under in terms of how they could squeeze more juice out of their existing businesses.
First let me go through what I observed regarding small to medium-sized REC’s. This segment (including the single person REC) suffers from the famine / feast that most small businesses face. It’s happy days when they are working. And then when work dries up through the year, they get up-ended by labour hire companies who give them work but for very low hourly rates, with the acquirer taking away $10, $20, $30 per hour for delivering the work to them. If you work a third of the year that way, given 1,800 hours available each year, you are losing 600 or so hours at $10, $20, $30 per hour or $6,000, $12,000, $18,000 each year - which could go directly into your pocket. Multiply that across your working life of 20-30 years and it’s a lot of money your business is bleeding out.
So, the first principle of getting more juice out of your business is to retain as much of the margin as you can by cutting out the middleman. And soon with electricianXchange you can.
electricianXchange is coming up with an electronic platform through which those seeking work and those having work will be brought together, without ever having to go through the labour hire company.
This is done by the REC registering their skills once and once only on the electricianXchange portal by selecting a series of simple drop-down boxes. Then there is a green light / red light system of letting potential employers know of their availability. Green light means – they are available. Red light means – they are not available. The REC aspiring for work turns the green light on and then the employer looking for staff jumps on this site, looks for those with a green light on and then searches further for those matching their exact requirement through a series of simple drop-down based search boxes. The two interact through the site, communicating directly on rates, times needed from and to, labour conditions and then when all of that is aligned, the two are introduced to each other for a small fee electricianXchange charges. The fee would be about a tenth of what the labour hire company charges, so that’s huge savings for all stakeholders involved.
For the larger REC’s, the observation I made was that demand for work was steady to crazy busy, and their need was more for staff when they needed them urgently. If they could not get the staff, they could not deliver on work won and that would eat into profits and margin. To accommodate that, they’d go to labour hire companies paying the same high rates I’ve spoken about earlier, which they’d then pass on to the ultimate client or absorb within a larger P&L. Alternatively they’d go to their regular sub-contractors, but there was no guarantee that when they needed the sub-contractor most, they’d be available. The issue of having staff not fully charged out was less of a situation for the larger boys because they could easily put them on non-urgent maintenance contracts, talk directly with each other to exchange staff or make the staff redundant (and re-hire them later) except for a core group of electrician staff the larger electrical contractors chose to retain long term.
electricianXchange brings the two stakeholders – those wanting work and those wanting labour together on the same electronic platform easily, effectively and in a much cheaper manner, a bit like how Uber does. That means very soon you won’t have to go to a labour hire company. Keep a look out on www.electricianxchange.com and sign up to our newsletter to be kept in touch with the developments on this which are just around the corner.
Get more juice out of your existing businesses!