Starting a general carpentry company is what I want to do. Small company (me and head carp) but do it all, framing, trim,cabinets, kitchen installs, fireplaces, exteriors etc. This is still a year or two in the future but we are thinking about this seriously. We have both not been privy to contractors pricing for our own time and projects etc.
I am interested in books about pricing/estimating/business/running company/etc etc.. what are your favorite books on these subjects? Amazon links if possible?
Thanks, and happy holidays.
(hopefully this time of year finds you working inside)
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There is a publishing house called Taunton Press you might want to look into. They even publish a magazine about carpentry.
Taunton House you say? I believe I have heard of this alleged publishing house.. located at the intersection of Pointless Reply and Waste of my time in the city of useless terrible jokes? I will definetly look into this magazine about carpentry. To be honest I haven't found much luck with their books as they are merely a collection of articles (I have stair building and finish carpentry) I don't mean to knock the contributers or editors because this is their goal and they accomplish it well, just hasn't helped me very much. Thanks to everyone for their shared experiences.
-clinkard.
I'm entering my 3rd year in business and just started reading " Run your business so it doesn't run you' By Linda Francis. This book is real helpful with the business side of things. It will help you to understand you financial numbers.
books about pricing/estimating/business/running company/etc etc.. what are your favorite books on these subjects?
1 Hometech estimating manuals (I use their Remodeling book for everything, skip the home building book)
2 the E-myth Revisited by Michael Greber (how to build systems so your company can run smoothly while you work on making it better)
3 How to win friends and influence people by Dale Carnegie Classic text on people skills needed to run a team)
4 don't worry make money, (great "toilet tank book" read a chapter a day and then start over)
5 Built to last By Jim Collins (kinda dry but very useful)
Zorba the greek, Kazantzakis
encounters with the arch druid, McFee
kids are worth it, Colorosso
tipping point, Gladwell
------------------
"You cannot work hard enough to make up for a sloppy estimate."
" How to win friends and influence people by Dale Carnegie Classic text on people skills needed to run a team) "
ShelterNerd,
I just got done listening to that one(audio book), it's been around for a long time. But would top the list of book's to read(or listen to).
northeastvt
" How to win friends and influence people by Dale Carnegie Classic text on people skills needed to run a team) "It's actually written into our business plan that we give every new employee a copy of that book. "part of our "Kinder and Gentler job site"I buy them used from amazon and keep a few around. (along with Dan Holohan's radiant heating book and the E-myth revisited and Kids Are Worth It for new parents.)M------------------
"You cannot work hard enough to make up for a sloppy estimate."
"Flow" and "Finding Flow" both by Csiksentmihalyi. Invaluable. Ever wonder why "holistic" doesn't start with "w"?
ShelterNerd,
"Kinder and Gentler" Careful, words like that might come back to haunt you ;)
Northeastvt
It doesn't mean we don't still hold peoples feet to the fire on productivity and get rid of the dead weight, just a ban on mean spirited practical jokes and name calling and an emphasis on teamwork.------------------
"You cannot work hard enough to make up for a sloppy estimate."
Not an answer to your question, but I was wondering, is it really a good idea to specialize in everything?
There was a thread here about a year ago about doing it all. I'm not sure it really pays off.
You've listed a very broad array of work, finish carpentry to brick work?! Thats alot of specialty tools to stock and move around.
Smart move...planning ahead that far in advance.
Read, read, and read. One hour per night. That will give you 730 hours of reading before you launch, in addition to whatever time you put in preparing for the business launch.
Get a book about business plans, then followup on what you need to know to fill it out correct. Carpenters follow blueprints to build sucessfully. Business execs follow their business plan to succeed in business.
Wanna learn about pricing? Draw a simple house plan and start putting it out for bids. Talk to every contractor you run into and ask them how much, what they include and ask for suggestions to make the plan better or more economical or most cost efficient or better value.
After you figure out that plan, draw another and do it all again.
Bob's next test date: 12/10/07
blue--------- i think that's pretty bad advice---immoral even.
unless he actually INTENDS to build those houses----- he is stealling his bidders time.
JMHO,
stephen
I can see where you would have an issue with it but there are valid reasons for doing it.First, he will NEVER be able to determine if he can build that house until he gets it priced out. Second, he will never develop relationships with tradesmen from the GC's perspective till he starts talking to them and showing them a house he has drawn.To develop the proper relationship, he would need to disclose his exact intentions. If he came to me and asked how much it would cost to frame his house while being honest about his intentions, I'd gladly give it a quick looksee and tell him what I thought the price would be. I would spend maybe 30 seconds thinking about it becuase I don't expect him to be drawing the Taj Mahal on his first try! Most of the mechanical trades would be able to give him their summary in a very easy straight forward manner such as "$750 per fixture, $150 per blah, blah blah...". Each contractor would have the same type of spiel. Some contractors will hem and haw and make a bid deal out of it. He could rule those contractors out of his "easy going" group of contractors and only re-contact them when he gets a little more serious about building something. If you did new work or remodels for GC's , you'd be willing to spend a few amicable moments with a young aspiring GC simply because if you are like me, you admire people that have ambition and are actually taking intelligent steps to act on it. This process will teach the novice a lot more than any book. They will run into all kinds of people and get lots of conflicting advice. In the end, he will be ten times more prepared to actually go into the GC business than if he doesn't go through this process. One last benefit: he might actually put together an entire budget for his house and find investors that will spec it, or find a buyer that wants him to build it! The key to keeping this honest is to be honest with everyone that he asks to bid the work. Bob's next test date: 12/10/07
i see what you are saying blue---
but to me-------it looks a lot like what happens when somebody sees an old house they are interested in
so they call me up--and want me to trot over and give them a" free" estimate on what it would cost to replace the roof--if they ever actually even buy the house.
wanna guess how many of those have EVER resulted in a sale for old stevo??---yep, that's right NADA!
compared to somebody who has lived in the house for 10-15 years--and intends to spend the next 30 years in the house-----NOW there is real potential for old Stevo( I bat just over .500 on those people.
you are right-my perspective is limmited on this---but i just don't see much upside on bidding for things that aren't going to be built
vs. writing proposals for things that are DEFINITELY going to be done( it's just a matter of by who they will be done0
stephen
"ou are right-my perspective is limmited on this---but i just don't see much upside on bidding for things that aren't going to be built"I might have said the same thing if I hadn't landed here in Austin like a duck out of water. It's like starting out fresh just like this young poster is. I found out that once I produced a set of plans and started talking to people a floodgate of information and networking appeared. In hindsight: I should have hand drawn the finest house I could have imagined when I graduated from Carpenter school, then went about my business finding someone to bid it, build it and buy it. I'd probably be wealthy now instead of broke! It's never too late, nor ever too early.I would spend a few minutes with a beginner like this and treat it like a networking opportunity. If I'm the only kind and gentle subcontractor that he meets, it will pay dividends when he actually launches his business. Its kind of like fishing: I don't expect to catch a whopper every time I go fishing but I know I'll never catch anything unless I go. Bob's next test date: 12/10/07
Running the company:
http://www.amazon.com/Small-Time-Operator-10th-Business/dp/0917510283/ref=pd_bbs_sr_2?ie=UTF8&s=books&qid=1197984246&sr=8-2
If your books aren't in order, you will have your pants off before you know it.
There are three keystones to a successful business:
1. A quality product or service that people want to buy
2. Management
3. Capital
IMO, all of these are equally important whether you're a two man contractor or GE.
You might want to check out our online Guide to Business:
http://www.taunton.com/finehomebuilding/collections/guide-to-business.aspx
MerlinThat's a great resource, I've bookmarked it. I was just feeling the sting of the price increase on the FHB online subscription and this resource put it in perspective. Are there a number of collections like that? Very sweet. I recently read John Abrams book "the company we keep" and it's nice to see his article about owners manuals. M------------------
"You cannot work hard enough to make up for a sloppy estimate."That's a great resource
shelternerd,
picked up a copy of"the company we keep'--been meaning to read it for a year or so.
Really excellent book.
i think the author identified 8 core areas.
If i grade myself----- I earn an "F" in one area( I am simply just never ever gonna implement that practice-ever)---and I think a B or better in the other 7 areas.
the author is just a bit to "warm and fuzzy" for my taste-------but over all the ideas he presents--are really excellent business----for small businesses like most of the people here on breaktime have.
Really someone implementing most of the authors points--has automatically positioned and marketed their company very well.
it's an excellent book suggestion.
stephen
So which area did you get an F in? I agree that approaching employee stock ownership from an ideological/moral perspective is counter productive. I do think there is a business case in support of employees having "a stake in the outcome" as Jack Stack puts it in "the game of business" but I've been holding the equity close while sharing profit distributions with my crew in my own modified way since leaving an employee owned carpentry cooperative back in the 80's (that is still in business). New books on my list in addition to "The Great Game of Business" and A Stake in the Outcome" is "Small Giants" by Bo Burlingham, who has done a lot of work with Jack Stack. I'll be teaching a seminar at the next National Green Building Conference on applying Sustainable Business concepts to a company in the green building industry so I'm soaking up all the opinions I can right now. (Prospectus attached, comments welcome...)I'm also in the middle of writing a ten year plan that transfers ownership of my company to my three key employees over the next five to ten years and having bailed on one tedious and ill conceived employee owned business and one "co-op" of independent contractors who attempted to join together on projects while staying independent (wrong!) I am hopeful that there actually is a correct way to do this out there, or at least some inspiration and lessons to make it work with a very small business such as I operate. So let me know about the practice you simply won't implement ever and your reasons for that. All the bestMichael------------------
"You cannot work hard enough to make up for a sloppy estimate."
shelternerd,
I flunk "cultivating workplace democracy"
mine is a seasonal business, usually have few if any employees--and I don't expect an employee one year-to return as an employee the next year. I DO develope long term relationships with subcontractors-some going back over 10 years. I expect a laborer to become an installer-or leave. I expect an installer to become a foreman--or leave. i expect the foreman to develope business skills-and then leave. the roofing business is a bad business to be an employee in---but an excellent opportunity for young men who want to own their own businesses some day--so i put zero effort into encouraging people to become career employees---and I encourage our workers to think in terms of owning THEIR OWN business some day.
I score well on "challenging the gospel of growth'
score VERY well on "balancing multiple bottom lines"
I am totally commited to " the business of place"-- most of my work comes within a 12 block radius-for 20 years
I do ok in the "celebrating the spirit of craft"
well in"people conservation"-within what we have to work with
very well with community entreprneurism
and pretty well with "cathedral builders"--not so much my company as the cathedral-but rather the neighborhood which i serve-- I am more a cathedral maintainer, LOL
BUT- i have no intention of building an employee owned business--rather--- I am more interested in helping former employees or subcontractors start or develope THEIR own businesses.
Best wishes,
stephen
StevenThanks for your thoughtful answer. So here's my follow up question. How do you see the end of your company? Do you just decide to wind it up some year? slowly taper back to running fewer and fewer jobs per year as retirement age approaches? Michael------------------
"You cannot work hard enough to make up for a sloppy estimate."
From my own experience and from many other's experience (based on what I've read here over the years), the single most important thing you need to know is...
How long it takes for you to do a given job.
Which can also be the most difficult thing to know if you haven't been paying attention.
Starting now, you should keep records of how long it takes each of you to do the jobs you do. Note the job, the special circumstances (2nd floor, had to park far away, couldn't work at a given time, etc.), and how long it takes (how many man hours).
Then, after reading all the books (which you should do) and after getting a firm grip on what your costs are, you will know how much to bid for a given job. If you know how long it takes, then you know how much overhead it has to cover, plus wages, plus materials (and don't forget to add in profit...but the books will tell you that).
Track your hours.
Rich Beckman
Oh, and it's the same old story
Ever since the world began
Everybody got the runs for glory
Nobody stop and scrutinize the plan
Nobody stop and scrutinize the plan
Nobody stop and scrutinize the plan
Paul Simon, 1973
I don't know that I agree. It all depends upon his chosen business, which he will figure out once he completes his business plan.I met a guy that was a drywall contractor. He claimed he was doing pretty good. He made .05 per sq ft of board installed and finished and he never picked up anything more than his tape measure and pad of paper. A roofing contractor I know made a great business from scratch without ever laying a roof himself. Again, he made his money marking up the labors of others. Roofs are an easy item to price per square. Time is not an issue. So, knowing your times is important in some business plans but not others. Bob's next test date: 12/10/07
blue---- in the roofing business--you are right---it's pretty easy to come up with per square pricing
but it is NOT good business long term
and if you are subbing OUT work by the square-eventually you find you are in effect--trying to profit from the installers lack of business sense.
example-- i have subbed plenty of roofs out to a specific crew.--on a walker-they may tear-off and replace 25 sq. in a single day
on a non walker---it may take them 2 days to do a 11 square roof. even charging me $20 more per square---the 11 sq. non walker---is NOT a money maker for the sub crew.
and in new construction-the guys get locked into a per sq. price----and it leads to shortcuts which are not good workmanship--and certainley not good business.
did a repair last month for an old customer.- i had roofed his previous house--12 years ago--did some repairs on his dads house about the same time--also the dads neighbors' house.
2 years after i had roofed the previous house-he sold it and had a new house built in a "golf course community"--- i was not invoilved in that project---untill last month.
roof had leaked in one spot off and on for 10 years---when I opened up the valley-----------icegaurd had been installed--starting at the TOP of the valley---but ending about 5 ft. from the foot of the valley.
i took digital pictures for the homeowner with the homeowners camera-----homeowner wasn't suprised--said out of all the trades--he was only happy with the bricklayers( their work didn't look so hot to me either)
of course--the builder is out of business-------homeowner told me--out of the 4 builders originally approved to work in that allotment-NONE are still in business.
BTW---huge house---$300,000 neighborhood
INHO- I think Rich is right-- if you are the one actually doing the work--------- knowing your time---is critical.---operating that way--you KNOW if you get the project--you will make money------------per square pricing--no such assurance-at least in roofing!!!!!
Now--if you are subbing OUT the work----per sq. pricing is great-short term----but it will eventually bite you in the rear quality wisw---- and personally I am more than a little uncomfortable with it ethically as well--because basically the shrewd are preying on the installer farther down the food chain-----and the consumer is not educated to the probable long term quality problems.
just my 2 cents.
stephen
"Now--if you are subbing OUT the work----per sq. pricing is great-short term----but it will eventually bite you in the rear quality wisw---- and personally I am more than a little uncomfortable with it ethically as well--because basically the shrewd are preying on the installer farther down the food chain-----and the consumer is not educated to the probable long term quality problems."Whoa! "...the shrewd are preying on the installer..."?!!!You went too far now. We use a roofing sub back in MI. He is anal about his roofs. His prices are competitive. He works on every job, every day and doesn't let his guys cheat on anything. Frank told me that he once saw one of his guys put three nails in a shingle and he made him lift every shingle on the house to verify that he hadn't forgotten any someplace else. We pay the guy the same as he charges anyone. I have talked about another guy that made a lot of money in the roofing business. One of his first chores was to find competent roofing crews. He interviewed lots of them. They were not used if they couldn't talk right, didn't look right, weren't clean, didn't have decent trucks etc. And the scrutiny didn't end there. He had a crew working in a high end neighborhood. On the first day, he showed up mid morning and noticed that the keys on the shingle lines weren't perfect. He told the contractor to rip every shingle off and start over if he wanted to get paid for the job. He also warned him that if he ever did it again, they would never get another contract. It was harsh, but it demonstrated how he expected the jobs to be done. He also landed a lot of extra work in the neighborhood. The old retired guys in the neighborhood all wanted to know why the roof was redone and when they found out they all decided that this was a contractor they liked and could trust. The point is that it's not "preying" to mark up a subcontractor and there are subs out there that are as conscientious as you. The key to making a good business out of it is in forging a respectful relationship between the sub and general that makes it a win-win for all which is easier said than done. Some of the difficulties are the untrusting attitudes of independent tradesmen such as yourself. Their skepticism prevents them from exploring the benefits of networking and allowing another to profit off of them. A lot of good tradesmen would benefit from healty business arrangement with others that might make small markup on them. When you think about it, most tradesmen sell their services at wholesale prices to retail customers. It's no big surprise that the independent guys never really grow and flourish into sustainable business operations. No industry could survive using the tactics that us independent tradesmen use. Bob's next test date: 12/10/07
blue,
since i have been subcontracting roofing OUT each year for about 15 years now---and i don't do much more that dabble in anything else
you are gonna have to trust that I have had the time to think this out quite clearly.
now-- if i can sell roofs at $400-$500 a square---and a qualified sub will do a labor only deal for $140/square---- you will have to credit me with some shrewdness
and if the sub is HAPPY doing 11 square for $160/sq. over 2 days on one job---and HAPPY doing 25sq. at $140) /sq. in one day at the next job---is he being taken advantage of
I am forced to conclude YES.--wether he is happy or not--doesn't enter into it--- i am taking advantage of the fact that he doesn't know HIS numbers as well as I know HIS numbers, LOL.
So--it's a bit of an ethical dilemma for me
HE feels it's a win/win deal--and who am I to argue-----he does at least 4 times the number of roofs I do each year
but I still don't like the implications. BTW--HE sets his price- i don't dictate it-HE names his price and i pay it.
your reasoning seems to imply that just because someone is happy with the arrangement that they aren't being taken advantage of
i assure you this is not true---- people can be happy--and ignorant of the reality of the situation
I think every sub I hav ever used was happy-IS happy with the arrangement
but I assure you-- I took advantage of the fact they lacked book smarts, lacked credit, had too many visible tatoos to sell properly, owed too much on their equipment, aren't able to estimate properly and in general-just aren't aware of how much people are actually HAPPY to pay for quality work.
on the plus side-a lot of them hit their early 30's-kids start school, they wanna buy a house---and they wise up.
stephen
I think you are being too harsh on yourself for conceiving of a way to make money on someone else labor. I have been a subcontractor all my career and I WELCOME any General that wants to use me and make money off me. Indeed, we are doing that right now as we offer our skills and services to investors in our current flip arrangement. They stand to make substantially more money than us and we are doing all the work. The small subcontractor looks at someone like you, who might sell twenty roofs a year as a blessing, even if you make triple what they do. They are in the business of laying shingles and they don't care how the contract gets laid at their feet, they only care that they get paid promptly and fairly if they hold up their end of the bargain. The sub that worrys too much about your money will end up with a shortage of his own, unless he doesn't mind working 24/7. You, as the general contractor are providing the sub with several valuable benefits. #1: he gets to keep his workforce working steadier. 2) he doesn't have to sell you on every job. He sells you once. You try him and if it works out, you use him again...sometimes for many years in a row. 3) You provide income that is desperately needed. I've raised a family while being "taken advantage" of by builders who might make twice as much on me as I do. I'm not naive, I just chose to sell to the wholesale market rather than the retail market. Its a win win situation for me because I had better things to do rather than chase down work after work. I managed to coach my kids throuhg high school and watched every one of their college games. I couldn't have done that if I worked on the job framing, then had to hustle up the framing jobs too. I relied on the builders to sell at the retail level and I provided a high quality subcontractor service for them. I continue to offer that today. I'm somewhat surprised that you think there is something less than honorable about working with subs. If they are charging too low, it's okay for you to pay more. I just don't see this as taking advantage of anyone. It's a two way street. Done right, it's a win, win, win scenario. Bob's next test date: 12/10/07
blue- i was thinking about this yesterday
thinking how you and I--and others------ have been talking with each other--for closing in on 10 years now-- can ya believe it.
gotta admidt-- i have learned a lot from you over the years about employees mindset--some i have had the opportunity to put into action---- more i will have the oportunity to put into action in March
but---it comes down to perspective
I remember-that you have spent years wholesaling your services( and unbelievably to me---driving 2 hours round trip each day--to wholesale your services- :>) )
and in the same time frame i have been retailing my services--primarily within a 12 block radius of my home
given those facts-- i think it unlikely that we are gonna have the same perspective on a lot of things--this might be one of them.
i agree---- ability to get prices per square ft.---or in my case per square---can be a real moneymaker- for me
and-the opportunity to provide those services---per square-may be appreciated by some folks at various stages of their career
but i think most folks-----work to get OUT of that end of the deal---YOU are an excellent example of someone who sees that RETAILING your services-is a better deal.
what i wanted to really point out---is that when you are BUYING services per square----there is a real BIG downside--that you have to pay attention to.
when something gets lost-it is almost certainley gonna be quality.
not to belabor the obvious--but
keep in mind my 12 block radius. i live on a corner-this year i roofed my house-and my east neighbor-and the house immediately east of him. in the spring i will roof my south neighbor---and the house across the street--and i have several times worked on the house next door to that one---and over the years i have worked on the house 2 doors east of that one---and 3 doors east of THAT one-and so on.
so-unlike the new construction market---where a per sq. price is relatively safe based on a 1 year typical homebuilders warranty
i am in a long haul situation-i will probably use the wrong terminolgy---but there is an implied warranty here---that goes on forever, LOL. these are the people i see every day-we cut each others grass when people go on vacation, we employ each others sons, our children attend the same schools, I encounter my customers EVERY time I buy gas-or go to the store-or walk to the library
so--buying services for me-per square--is not the best way to maintain the quality that I MUST maintain.
just a different viewpoint
best wishes to you in texas-------- how ya dealing with that accent??
LOL,
stephen
Stephen, I don't believe it's been ten years....OR HAS IT??!!!!Anyways, we both are talking about two distinctly different retail forms of business. You are thinking about the small mom and pop store and I have the bigger retail center mentality. When I landed in Texas, I felt like a fish out of water. In many ways, I still do. I know what the illegals feel like now.One thing in my favor is that there are a lot of people pouring into this town from all over the country. Native Austinites might become the minority in a very short time LOL! Texans have their own way of doing business too. I've rarely met anyone that can't "do it all". They put in foundations, frame, shingle, drywall, trim, paint, stucco and they'll nanny for you too if you have a kid that needs lookin' after. The pricing is all over the spectrum. We had a foundation guy give us a 28k quote for work we did in house for 4k. A second foundation guy started his bidding at 12k. The next day he came back at 10k. In that same conversation he came down to 7.5k. The next day, when he called to see if he was getting the work Frank told him "we have a bid for 2k....if you can do it for that, we'll use you.". He offered to do it for $2,750. We said no and hired three guys hourly. We are idiots but we aren't Texas sized idiots. Bob's next test date: 12/10/07
Not a book, but I recommend a subscription to The Journal of Light Construction. It is a good complement to Fine Homebuilding. JLC has an article on business and on legal issues in every issue.