Buying an electrical contractor in Florida

An electrical contractor wires, repairs and upgrades the electrical systems in buildings. Most small ones follow one of a few models, and the model matters more than the label. Residential service companies handle troubleshooting, panel upgrades, generator installs, EV chargers, surge protection and remodel wiring, paid by the job. Commercial and industrial contractors do tenant build-outs, service work for property managers, and maintenance for plants and warehouses. New construction electricians wire homes and buildings for builders and general contractors. They bid each project and get paid in stages, often with retainage (part of each payment held back until the job is finished).

Many companies mix these. Standby generators add a Florida twist: interest often rises after a major storm, and maintenance plans for installed generators can bring repeat visits. The team is usually licensed electricians and apprentices, a project manager or estimator for bid work, an office person for permits and billing, and an owner who often holds the license.

• Customers spread across several builders and contractors. If one customer is a third of the work, its next slowdown is yours.
• Service and maintenance work that repeats: facility contracts, generator maintenance plans, property managers who call for every tenant change.
• Careful estimating on bid work, and job costs that show which projects made money and why.
• A foreman or operations manager who runs the field without the owner.
• Trained electricians who stay, and apprentices coming up behind them.
• A licensed qualifier who stays, or a believable replacement.
• Few old unpaid customer bills, and a habit of filing lien notices on time.
• Stocked, tracked service vans, so a technician can finish most calls in one trip.

The Electrical Contractors' Licensing Board at the Florida DBPR licenses electrical contractors. A certified electrical contractor (license numbers starting EC) can work statewide. A registered one (ER) can work only where it holds a local license. There are also narrower certified specialty licenses, such as residential electrical, sign work and lighting maintenance. Alarm system work has its own license categories under the same board.

You don't need to be an electrician to own the company, but a licensed officer or supervising employee must qualify it. That person's certificate is issued in their name, with the company noted on it. If they stop qualifying the company, they must notify the board within 30 days. The company then has 60 days from their departure to qualify someone else, or it loses its qualification. If you buy the assets into a new company, it must be qualified before it can contract.

• Backlog: signed work not yet done, its expected margin, and how much is with one customer.
• Job-by-job results on the last two or three years of bid work. A few bad jobs can erase a good year.
• Retainage owed to the company, and how long it usually takes to collect.
• Unpaid customer invoices by age. Construction customers can pay slowly.
• Liens, payment disputes and any lawsuits over defective work.
• Electricians' pay and overtime, and whether the best foremen will stay.
• Bonding capacity (how much a surety will guarantee) if the company bids public or larger commercial jobs, and whether the surety will stay with a new owner.
• Past insurance claims, especially for fires or injuries.
• For generator installs, who hooks up the gas line. That's work for a plumbing, mechanical or gas licensee, not an electrical contractor.

• Whose license does the company work under, and would they stay after the sale?
• How much of your work is service, commercial and new construction?
• How much signed work do you have lined up, and who are the biggest customers in it?
• How do you price bid jobs, and how often do costs run over your estimate?
• Do you have maintenance contracts or generator service plans, and how many renew each year?
• Who runs the crews when you're not there?
• Has a job ever gone badly wrong? What happened, and what changed afterward?