EICR Before A Consumer Unit Upgrade

EICR before a consumer unit replacement

Do You Carry Out An EICR Before A Consumer Unit Upgrade?

Let’s talk about the real world, what really goes down in the day to day life as an “electrician”.

There are typically two methods many electricians use when upgrading a consumer unit:

  1. Carry out an EICR beforehand, identifying any defects and ensuring the cabling is all okay to connect to the new consumer unit. Fit the new consumer unit and testing again to verify the circuits are compliant.
  2. No test beforehand. Upgrading the consumer unit and test once complete.

Option 1 is advised by many technical publications produced by recognised trade bodies. The downside is that it tends to cost a little more for the client.

Option 2 is risky for both contractor and client because you may find defects on the installation which you then have to charge the client more or if they refuse to pay, leave the installation unsafe.

In my opinion, we should always strive for high standards and ensuring everything we do as professionals to ensure client installations are safe (without money as a factor). Option 2 provides can leave a client at risk due to a unsatisfactory non-compliant electrical installation.

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What do most electrician’s do?

When I was contracting, I often had enquiries regarding consumer unit upgrades. I would always ask why they believe their consumer unit requires replacement and often the answer is that someone told them so.

When I explained that we need to carry out an electrical installation condition report before we upgrade the consumer unit to assess the condition of the existing electrics, the customer was often wondering why I would suggest such a thing because 3 other local electricians said that they just take the fuseboard off the wall and fit a new one.

Let me explain why that is wrong from the perspective of both parties. It increases RISK.

Replacing or upgrading a consumer unit is not a minor alteration, it is a large change to the design of the installation. You may be introducing RCD protection, different types of circuit breakers and SPD’s. When a consumer is replaced, often is due to age. The IET wiring regulations BS7671 are regularly updated so British Standards are constantly evolving along with user trends and technology. It is an opportunity to ensure that the main earthing and bonding meets current standards and other basic electrical principles to ensure SAFETY.

What is involved replacing a consumer unit?

When we carry out electrical work on any circuit, we are to ensure that the basic electrical principles are met. Sometimes this requires upgrading parts of the electrical system that we are not physically altering because we have to ensure all connected parts function how they should do to meet BS7671.

Changing a fuseboard alone will likely increase the safety of an installation but I have seen recently instances of replacements being made but the installation has no main earth! In this situation safety is still being compromised.

The Electricity At Work Regulations 1989

When you work on electrical systems you must always remember that the Electricity At Work Regulations 1989 is statutory meaning it is the law and must be adhered to. If you don’t meet the EAWR 1989, you could face fines and/or imprisonment.

Regulation 29 applies only in criminal proceedings. It provides a defence for a dutyholder who can establish that they took all reasonable steps and exercised all due diligence to avoid committing an offence under regulations 4(4), 5, 8, 9, 10, 11, 12, 13, 14, 15 or 16.

Extract from the Electricity At Work Regulations 1989

Have you done everything you can to take reasonable steps and exercised all due diligence to avoid someone getting an electric shock which could cause injury or death or cause a fire?

The above statement is the first principle anyone working in the electrical trade should be working to.

Electrical Safety First Best Practice Guide

Sections 4.2 and 4.3 of the Electrical Safety First Best Practice Guide 1 advises that existing circuits do not need upgrading to current standards when the consumer unit is upgraded, but if any circuits provide any immediate or potential danger, they must not be re-connected to the new consumer unit.

4.2. BS 7671 does not require existing circuits to be upgraded to current standards in order for them to be connected to the outgoing ways of the replacement consumer unit.

4.3. However, circuits that are defective or noncompliant with the requirements of BS 7671 in a way that would result in immediate or potential danger must not be reconnected to the consumer unit

Section 6 of the guide advises that an Electrical Installation Condition Report (EICR) is recommended to highlight any immediate or potential dangers. Of course, we cannot make the customers have this carried out and if they do not wish for a report a survey must be taken out BEFORE replacing the consumer unit to ensure the existing circuits are free from immediate or potential danger.

The pre-replacement survey consists of:

  • making enquiries with the user as to whether there are any known defects, faults or damage,
  • an internal visual inspection of the existing consumer unit to determine, amongst other things, the type and condition of the wiring system used for the installation,
  • an external visual inspection of other readily accessible parts of the installation,
  • a measurement of the external earth fault loop impedance (Ze ),
  • a test of circuit protective conductor continuity at the end of each final circuit,
  • a test of earth fault loop impedance at readily accessible socket-outlets and
  • an insulation resistance measurement of the whole installation at the consumer unit, between the live conductors connected together and the protective conductor connected to the earthing arrangement.

Does the above sound familiar??? It sounds like an Electrical Installation Condition Report!

What happens in the ‘Real World’?

The truth is, what really happens in the real world is often an electrician quotes a consumer unit upgrade without a survey. They turn up in the morning, rip the existing consumer unit off the wall, slap on a new consumer unit, turn it on and hey presto. They will then do a couple of Zs readings, calculate the R1+R2, count the number of points on each circuit if they can be arsed, take the RCD readings with minimum effort and produce an Electrical Installation Certificate. Often this certificate will say >299 M ohms insulation resistance readings because well, the RCD’s are okay so the IR readings must be fine. Jobs a goodun.

The above is NOT ACCEPTABLE.

It is a complete risk for both contractor and client. If the electrician finds an issue once the consumer unit has been upgraded, they client is then in a position where they may need to spend quite a lot of money to rectify any immediate or potentially dangerous items. Worst still, they don’t have the money, so they are left with a non-compliant dangerous installation without any certification.

Is it likely an electrical installation will have defects?

I can count on two hands how many domestic properties my team have tested in 10 years that were satisfactory and had no code C1 or C2 items out of hundreds and hundreds of properties tested. Unless an installation is fairly new and was installed to a high standard, I do not believe many consumer unit changes do not need additional works to rectify any immediate or potentially dangerous items. I have carried out an EICR before and all cabling under the floor was VIR and damaged throughout, but someone had joined it in modern T+E so visually it all looked okay. You cannot accurately assess the safety of a circuit without calibrated test equipment.

From a business perspective I also think this is financially risky carrying out option 2 because quoting a job and then asking for more money often can breakdown relationships and part of ensuring payment is maintaining good relationships (check out my post on Top Tips To Prevent Non-Payment).

Therefore, in my opinion I would always advise option 1 is undertaken and an Electrical Installation Condition Report is strongly considered BEFORE replacing a consumer unit to reduce risk to you as a contractor and business owner and for public safety.

You can download a FREE guide – Electrical Safety First Best Practice Guide 1 – Replacing a consumer unit is a domestic premises

Written by Dan Jackson AKA Dans the Engineer in Essex, United Kingdom

Disclaimer: All content within this blog post are the opinion only of Dans the Engineer and should you choose to take any of the advice or information given, we accept no responsibility for any loss you may occur.

Best Bank For Business And Sole Traders

Best bank for business and sole traders

Best Bank For Business And Sole Traders with Starling Bank. I have found an amazing bank for business and would love to share why I reckon you should consider using them for your business and personal banking.

Starling Business Banking
Starling Business Banking

Best Bank For Business And Sole Traders… I have finally found a UK bank that keeps up with the times and makes banking simple, easy and enjoyable…. Yes, I used the words banking and enjoyable in the same sentence!

Starling Bank is here, and I am so glad to have stumbled across them.

I found Starling Bank when I was preparing to leave the UK and was googling the best travel debit card. Starling popped up and when I looked into them, it sounded a little too good to be true; no charges for cash withdrawals or card payment abroad.

Opening an account is easy… Scroll down to find out how

To apply for an account, you just download the Starling app on Android or iOS, enter your phone number and click on the verification code that’s sent via SMS. With this, you’ll be able to create your account by filling some personal details and verifying your ID (using your passport is quicker but you can also use your drivers license).To confirm, verify your ID with a short recording of a selfie video. You’ll be approved once the credit checks are completed and your documents verified. Scroll to the bottom of the page to find out the easiest way on how to open an account.

Best business bank

Digital banking through a mobile app

I love an app. I love simplicity. So, I was hooked in. Starling Bank is truly a digital bank and everything is done via the Starling Bank mobile app.

I was a little wary at first because I had never heard of them. They are not a high street bank but are featured on trusted websites such as moneysupermarket.com. I had a look at their T&Cs, I found out they’re fully regulated like any other bank. I was quickly reassured and opened a personal account

Bank for sole traders

I used the debit card and bank account whilst travelling which made managing my travel money really simple. The app is perfectly designed for ease of use. It looks good and functions well. I connected my personal account and joint account and I could swipe between the two. When me or my wife spend on the joint account, or I spend on my personal account I get a little notification. It makes tracking spending very easy in real time.

Starling travel bank card

The app shows a breakdown per category of spending so you can monitor how much you spend on items such as groceries or petrol. It is a doddle to transfer money and when you receive money, you get a notification.

Best travel bank card

Using Starling Bank is Easy

I have banked with many of the usual UK banks and have never been impressed. Nothing makes me want to remain loyal to any of them and all have made banking boring and a chore. Customer care has always been a huge issue when banking. Starling Bank is the opposite.

When I started my business – Dans the Engineer in 2018, I discovered that Starling Bank offered business banking! Timing couldn’t have been more perfect. Naturally I opened a business account. Because I had a personal account, it took seconds.

It is so easy to open an account. I cannot express how Starling Bank have nailed perfection where no other bank even comes close in comparison. Scroll to the bottom of the page to find out the easiest way on how to open an account.

Best business banking

Personal, Joint, Business and Sole Trader Accounts

Starling Bank offer Sole Trader banking accounts as well as Business banking accounts. You can have your personal and business banking accounts on the app and can switch between them with ease. To get a statement, you press a few buttons and you can export a PDF or CSV file to your email or cloud drive. You can share your transactions with accounting software such as Xero and FreeAgent.

Guess what? The business banking is free. There is no monthly or setup fee to use the business banking. They don’t charge fees on electronic payments, domestic transfers, monthly account fees or ATM withdrawals if you have fewer than 10 employees and less than £1.7M annual turnover.

As they haven’t got any high street branches due to being a digital bank, you can pay in cash and cheques at over 11,500 post office branches across the country for a small fee.

They offer flexible overdrafts should you need it at a clear reasonable rate.

The Banking Customer Care Is Brilliant

I have had to call customer services a couple of times which is a London landline number to a British customer care team who were more than helpful. It was so refreshing to receive such great customer care for a bank! The online help chat is also brilliant.

Best Bank For Business And Sole Traders

Starling have really embraced bringing banking into the modern world. From the easy method of opening the account via the app, the way you take photos of your identification as proof of identity to the cool packaging when your debit card arrives, Starling Bank make the whole process fun.

As you can tell, I love this product and have been recommending them to family and friends for months. I now have the opportunity to recommend business banking to you.

This is the Best Bank For Business And Sole Traders and is perfect for owners of limited companies and the self-employed.

If you fancy opening an account, it is simple…

  1. Click the links below depending if you want to open a personal or business account
  2. Once through to the link, download the app for Android or iOS 3
  3. Open an account via the app using easy instructions
  4. Put at least a fiver in the account. You can also easily transfer your existing current or business account.

Click Here To Open A Business Account

Click Here To Open A Personal Account

Happy banking.

Written by Dan Jackson AKA Dans the Engineer

Let’s be open and honest: This blog post contains an affiliate link meaning that if you follow the link and end up opening a bank account with Starling Bank and credit funds into the new account, I earn a small commission. This has absolutely no favour on the content of this post as everything mentioned are my genuine thoughts. I use Starling Bank myself and I highly recommend it. I pride myself on honesty, clarity and highlighting the best products and services to my audience to help them develop their business. If you are thinking of changing bank accounts, using my link really helps me by giving me a small income to help produce free content to HELP YOU!! Please follow the instructions above on how to download the app and open the account.

Changes to VAT system in construction October 2019

Changes to VAT system in construction October 2019

Changes to VAT system in construction October 2019. Major changes to VAT in the construction industry can lead to serious cashflow issues for your small business.

The new VAT reverse charge rules will apply to specified construction services from 1st October 2019.

Put simply, if you are a VAT registered business supplying services under the construction industry scheme (CIS) to another VAT registered CIS business you will no longer receive VAT on top of your invoice unless you are invoicing the end user.

The changes to VAT system in construction October 2019 are being brought in by HMRC in an attempt to tackle the £100m annual VAT losses from ‘missing trader fraud’

How can I prepare before October?

If you think your services will be affected by the introduction of the reverse charge VAT, it’s important to make changes and understand the day to day impact this will have on your business to avoid penalties and being out of pocket.

As a business you should consider working with a specialist construction accountant who can:

  • Help determine when the VAT reversal will or won’t apply to a project you work on
  • Help forecast your cashflow to reduce the impact of the change
  • File your new VAT returns correctly
  • Raise your invoices in the correct new format
  • Look at options for monthly VAT returns so you can claim VAT back on costs much faster

Reviewing supplies to existing clients

Establish whether the supply of services to your existing VAT registered clients would be subject to the new VAT reversal rules after the 1st October 19.

Consider funding solutions

With cashflow being one of the biggest implications of the change, it is worth considering options such as VAT funding or invoice finance to help pay for your outgoing costs whilst waiting for invoices to be paid by clients.

Negotiate shorter payment terms

Shortening the length of time customers have to pay for your services will improve the cashflow of your business.

What happens if I get it wrong?

HMRC acknowledges that the changes to VAT system in construction October 2019 will be significant for everybody across the industry, especially small businesses who will be the most heavily impacted.

HMRC will operate a light touch for genuine compliance mistakes within the first six-month period. Penalties will only be considered in this period if someone is deliberately taking advantage of the new measure.

It will be the responsibility of the customer to inform you, the supplier, if they are the end user or not so that you can determine if the VAT reversal applies.

What is the VAT reverse charge for construction services?

The VAT reverse charge will come into effect across the UK in October 2019 and has been introduced by the government to combat missing trader fraud.

The new taxation charge will mean that VAT cash will no longer flow between construction businesses. Come October, for every transaction that is made, the VAT will be registered and stated on the invoice as a reverse charge.

This means that rather than the supplier charging and accounting for the VAT, it will be the customer of the supplies who will hold the VAT and pay this over to HMRC on their return.

Will my construction business be affected by reverse charge VAT?

The reverse VAT charge will apply to the same range of construction services between VAT registered businesses that are covered by the Construction Industry Scheme and where the customer makes an onward supply of the same construction services.

For example, an office block needs a fit out. The person who owns the building is the end user. They engage with a main contractor for the work. You are the electrical firm who is brought in, by the main contractor, to fit the lighting on the project. Because you are supplying a construction service to the main contractor, who isn’t the end user in this case, the reverse charge will apply, and you will no longer receive VAT on top of the value of your services. Instead, the main contractor will hold the VAT money and pay this to HMRC on their VAT return.

How will the reverse charge affect business?

Any VAT-registered contractor that pays another VAT-registered contractor will need to adjust their accounting systems to include a VAT reversal code on all invoices in order to remain compliant.

Small businesses who are reliant on VAT income moving up the supply chain may suffer financially as a result of the reverse charge. Many businesses currently rely on the additional 20% as working capital before paying it over to HMRC on their quarterly VAT return.

It is vital that businesses prepare for potential cashflow issues way in advance of when the reverse charge is introduced.

How will it work?

Changes to VAT system in construction October 2019
Changes to VAT system in construction October 2019

Which services are affected by the reverse charge?

The reverse charge only applies to supplies of specific construction services to other businesses in the construction sector. A few examples include:

  • Installation of heating systems, air-conditioning, lighting, power supply, drainage, ventilation, water supply, sanitation and fire protection in any structure or building.
  • Painting or decorating the external or internal surface of any structure or building.
  • Construction, repair, extension, alteration, demolition and dismantling of structures or buildings (including offshore installations) whether they are permanent or not

Which services are excluded from the reverse charge?

Certain supplies are excluded from the reverse charge, they include:

  • Professional work of surveyors, architects or consultants
  • Machinery and the delivery of the machinery to a building site
  • Drilling for the extraction of natural gas or oil
  • The supply of staff or workers (including that of an employment agency)

Written by Emily Lightfoot Exchequer Accountancy

The original blog post was created by the construction industry experts at Exchequer Accountancy who can help you through these VAT changes to ensure that the day to day running of your business remains the same. They allowed us to use the blog post so we can inform you of the important changes. You can read the HMRC guidance on the October VAT changes in construction here.

Electrium Podcast From Sockets To Sunsets


Electrium Podcast From Sockets to Sunsets – Episode 4 The Electrium Podcast. Electrium talk to Dan Jackson AKA Dans the Engineer about travel, his career and business coaching for electricians.

Electrium Podcast From Sockets To Sunsets
Electrium Podast – Episode 4 “From Sockets To Sunsets”


Electrium Podcast From Sockets To Sunsets

Have you thought of just giving it all up and travelling the world?

Sounds like a pipe dream, but that’s what Dan Jackson (aka ‘Dan’s the Engineer) and his family did last year. Dan sold his share of his electrical contractor business and with his wife and two children travelled the world to seek new horizons.

A popular YouTuber and now business coach, Dan talked to us about:

– Making that decision to travel
– What he learned from his experiences
– Creating a YouTube channel for your business
– Coaching advice 
– Unusual installations around the world


Written by Dan Jackson AKA Dans the Engineer written in Essex, information taken from the Electrium Podcast

Electrician Made Redundant So Started Business

Electrician made redundant

Electrician made redundant so started business. HELP! I got made redundant as an electrician. This post is about my experience of being made redundant and taking the opportunity to set up an electrical contracting company.

I remember it well. I was 22 years old working away from home on an 18 month project in Nottingham and we got called to the office at short notice on a Monday.

Everybody within the company was there. There were many concerned faces and a lot of confusion. You knew something serious was happening because why would every employee be called into the office on the same day? The management were all quiet and looking down at the floor. The atmosphere was intense.

Then we hear the words “You’re being made redundant”.

You could see on most peoples faces that they were worried. Worried about money and worried about what they were supposed to do next! Some had worked for the company for a very long time since leaving school and didn’t know any different. It was the end of an era for many.

I’m an electrician. I’m a good electrician. What am I worried about being laid off for?

Was I worried about being made redundant?

Was I worried? Nope. I was as cool as a cucumber. I’m an electrician. I’m a good electrician. What am I worried about being laid off for?

The company had been going for over 50 years. It was well established and made a good name for itself in various sectors, primarily working on petrol filling stations. Guys who had worked there for 20 years were laid off. Just like that with no warning.

When the 2008 recession struck, the industry changed. Nobody wanted to spend money. It was a worrying and uncertain time. In my career it was the first of its kind and my god it affected a lot of people. I know so many people who were made redundant and businesses that went bust. Some trades people were out of work for over a year!

However, the company I worked for were busy. Our clients still had projects starting and all in all I saw many buildings being constructed, particularly in London. My hours didn’t decrease at all. I suppose there must have been changes within the company itself but due to my work ethic and making myself available at any time, I believe I was at the front of peoples minds when a job came in because I was more capable than most. I would work anywhere, do anything, at any time. Forgetting employment law for a second, if there was a list of engineers and they had to choose a few to get rid of, let’s just say I would be high up the ‘safe’ list.

At the time of redundancy in June 2010, I was working on a new build house. It was enormous and high end. It was a fantastic project which I was running. I had spent nearly a year there and Nottingham felt like my second home. We made friends up there, went to BBQ’s, went out drinking in town and started to get to know the area.

Electrician made redundant in the middle of the recession after buying first home

The previous summer I had just bought my first home; a right dive but due to the recession, prices were low and I got myself a bargain. One that I planned to refurbish. I used to get home Friday evening from working away and got straight to work on my house by stripping back the walls, rewiring, and erecting stud walls. Life seemed busy like normal. I was thoroughly enjoying myself.

When we were told on the Sunday to come to the office the next day, I suspected something like what would happen but the unknown didn’t bother me. I enjoyed my Sunday, had a roast and drinks and slept well.

When we were told the ‘bad’ news I instantly felt sorry for the many people who were out of jobs. After all, many of them were my friends. We were told that the company relied on a bank overdraft of £70k due to the directors borrowing money to buy the company from the previous owner. Allegedly, due to the recession, Barclays bank pulled the overdraft whilst the company was heavily into it and went into administration even though they had plenty of work including purchase orders and contract maintenance. It’s disgusting really to think a bank doesn’t care in the slightest about an individual but is always happy to take your money and gamble with it as they wish. Sorry, did I say gamble? I meant invest. Or did I?

I got made redundant and I was working a couple of hours later!

What did I do after being told I am redundant?

My old contracts manager pulled me to one side and said “do you fancy starting up a new company?” I thought he meant work for him, but he wanted to start a business with me. I didn’t expect that in the slightest. I told him I’d let him know tomorrow. There was a lot to think about, I didn’t know the first thing about business! I was just an electrician. He told me we have to act quick. He was due to send a couple of lads to a pre-planned shut down that Monday night for a very good client and didn’t want to let them down so I agreed to help out. I literally drove home, had a bite to eat and went back out to work. I got made redundant and I was working a couple of hours later!

News travels fast. I had three job offers by the end of the day! That is the exact reason why I wasn’t worried. I knew what I was worth. I am confident in my ability and skill and know how to land on my feet. I have always put myself out there. Although the offers were fantastic which I really appreciated, I thought I’d try my luck and take up my old boss’s offer.

I went from electrician to company director over night!

There you go, I had set up my first business

The following day we met up and made an action plan. Our new Limited company was incorporated! I went from being an electrician to a company director over night.

Funnily enough I had already thought of the name and made the logo a few months prior. I wasn’t planning on leaving my old company but I am always coming up with ideas and potential plans. I don’t think my new business partner was too impressed with the name at the time but quite frankly he didn’t have much of a choice. We were working to make things happen on a tight time frame.

That day we asked 3 of the best engineers from the old company to work for us. They all agreed and were all in work by the end of the week. Two of them still work for us. The other retired whilst working for us.

Not a bad little number to land

We concentrated on contacting the clients who were good payers. After all there were a load of clients who needed work doing. We hit the ground running. We had no option but to learn to run before we could walk. The Nottingham project was still unfinished and they needed an electrical contractor to complete so we simply took over as our new company. One of our guys was already working on the job underneath me so it was perfect. He took over running it.

A lot of people put great trust in us and I am forever grateful.

A lot of people put great trust in us and I am forever grateful. Believe me, I had to do my fair share of what I call juggling but I am am honest person and I feel honesty goes a long way. I delivered all of my promises.

Managing cash flow is so important in construction

The issue with starting up a company at such a rate is cash flow. Contrary to belief, it takes a lot of cash to run an electrical contractors. The bigger the jobs you take on, the more cash you need and bigger the risk. Good luck trying to get a bank loan at that time! I had to finance it somehow. This is where suppliers are more important than you may think. Most electrical wholesalers are fair sized companies with serious amounts of financial resource. They need it to buy in bulk to reduce their costs to maximise margins. Many will be supplying projects with hundreds of thousands of pounds worth of goods.

Two wholesalers in particular were willing to supply goods with very kind credit terms. Again, these people knew us. We had purchase orders from clients, most of which were clients regarded as financially safe so it was enough to satisfy providing credit. I also struck a deal with two large clients that they would purchase the materials direct from the supplier and we would supply labour only. They get reduced cost of works due to zero mark up from us on materials which formed the bulk of the cost. Everyone was happy. It would allow us to trade for a couple of months without having to buy materials.

Paying for labour was a different story. I had about £15k in the bank which I was using for my home refurbishment (this was before having kids by the way. Young free and little responsibility. Well, until this point). I set aside some money for setting up the company and to buy a van and the rest was there to last for a while because I didn’t know exactly when I was next getting paid.

Buying my first van

I had a few grand in my back pocket and set out to buy my first work horse

The week we started up, I literally searched on Auto Trader for a van, went with £4k in cash and was on mission to get one that day. I succeeded! The first van was the best of a bad bunch of second hand white vans that were being sold by Derek Trotter like characters.

Two of our new guys plus my business partner worked for the last company for about 15-17 years and were given VERY generous redundancy pay. That really helped because they didn’t need paying immediately. The other received help from family until we could pay him, but he was the first to be paid. Again, very grateful to those people who trusted me.

I cancelled gym membership, Sky and anything that I didn’t NEED to reduce my outgoings. I was screwed over by redundancy because you are only paid an amount from the age of 21. I was 22 and had worked for the company for 3 and a half years so was only entitled to redundancy for one year’s service which was a few hundred quid. Plus they only pay a set amount per week as a maximum regardless of your wage. Because I was working away, I had accumulated a large amount of expenses and I had worked a lot of hours that month so I was totally out of pocket. I didn’t even get paid expenses. I can’t help but feel my whole life I have worked my arse off, always paid my taxes, yet penalised more than others regarding any form of government benefit. I can see why this country is a complete mess because the less you work, the more you are entitled to! The system isn’t for people like me.

The money started rolling in

We started getting paid for work and the priority was to pay the guys who worked for us and suppliers. We had to make do with what we had including old laptops that were slower than a snail, working from our cars, and making it up as we went. Our office was a shed in the back garden using a shitty old Samsung printer that someone donated to us. God I hated that thing. It barely worked. I wanted to beat it with a stick on a regular basis. Times were tough! As soon as money came in, it went straight back out paying someone we owed in priority order or equipment that we needed to complete jobs.

Initially the business had been financed through generosity and trust. I didn’t have to dive into my pockets too much at first (later on I had to make investments into the company), but due to the nature of the business start up and the need to finance the cash flow, I couldn’t pay myself for 5 months. Yes 5 whole months of no pay! I was scraping the bottom of the barrel. The guys had to be paid before me and we owed suppliers. There literally wasn’t money in the bank to pay myself! I was at breaking point but the money started rolling in and we got paid for a couple of large jobs. I got paid 5 months of pay in one go just before Christmas!

What did I do? I went out and bought a £3k Tag Heuer watch!

I didn’t get paid for 5 months. What was the first thing I bought when I was paid? A £3k Tag Heuer watch!

That watch had sentimental value for obvious reasons but I recently sold it to buy a holiday! I bought it as a present to myself for the hard work I had put in. It felt good at the time and it was a great watch but I wouldn’t do the same now. Did the £3k watch bring me much joy? Not as much as I value experiences with my beautiful wife and children, but my goodness I loved that watch! These days I’d choose family experiences over luxury consumables any day of the week. Life changes, ey?

Electrician Made Redundant
After not being paid for 5 months, the first thing I bought was a Tag Heuer watch

Managing finance was vital

Besides the watch purchase, I made sure I was careful with money personally and within the business. Cash flow is key, without cash in the bank it wouldn’t have worked. We started investing in plant, equipment, vehicles, technology, training, etc… But all in priority order.

A business lesson I learnt was that you don’t necessarily need your own personal cash to fund anything. You can use money that belongs to others. I want to strongly follow up that statement with – don’t just gamble with someone’s money with little care. It has to be in their interest, often with a larger return and make sure you take extra care when it belongs to someone else. Debt isn’t necessarily a bad thing. Just make sure you’re on the right side of your debts and always pay your debts. Christ, I sound like a Lannister from Game of Thrones!

Debt isn’t necessarily a bad thing. Just make sure you’re on the right side of your debts and always pay your debts

I have never been a fan of banks,I always had terrible experiences with them. It is funny; when I first started up they made it very difficult in the beginning but as soon as they start seeing tens of thousands, then hundreds of thousands, they all of a sudden want to know you and feel they can interfere with your business by pretending to be a helping hand. Everything they offer you is for them, not you. Arguably, terms from every money lender will suit them more than it will suit you, but banks are just greedy. They do as they wish with your money, dictate to you how much they will guarantee, offer poor interest and as soon as something goes wrong on your part, you will be nailed. Yet we all need money to survive that runs through banks.

It was a very challenging time for everyone. The guys who worked for us were experiencing change. They went from job security in a well established company to a start up growing company which was running around like a headless chicken. Sometimes it’s the small things in operations that are taken for granted like not having phone parking set up working in London. It can completely mess up your morning trying to organise it, but we pulled through every challenge one way or the other.

How was home life starting a business?

Home wasn’t great either. I was working crazy hours, then getting home and working on the borrowed laptop. My partner at the time wasn’t very supportive at all. I won’t go into much detail but the relationship went sour very quickly. We didn’t last long after being together for almost four years. I believe everything happens for a reason! I enjoyed being single for some time, then later went on to meet my future wife and mother of my kids. It all turned out for the best and I wouldn’t be who I am today without my wife.

After trading for 6 months, we were awarded our first major maintenance contract with a large client. That was no easy task! It took a lot of running around and proving what we were worth. It even cost in the beginning because we had to neglect a couple of jobs to attend emergency call outs and attend site surveys at a couple of hours notice. The risk paid off! Once we started our first major contract, although hard work, it was all uphill. Our name was on the map. We could afford to rent an office in Sutton, Surrey, were paid regularly and we soon became a professional business.

Redundancy? Probably one of the best things that happened to me!

Want to find out more about my career progression? Click here.

Written by Dan Jackson AKA Dans the Engineer originally in Kent on 20th June 2018 and re-published

P.S. I appreciate my situation may differ from many other people. Being made redundant can be awful and very unsettling. I believe in continuity of personal development, always learning and aiming to become the best at your job. That way, in the event you are made redundant, you provide yourself with better chances and choices than those who do not. Don’t ever be scared of change, embrace it!

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