Been doing various home repairs/improvements for myself for last 15 years. Havn’t been employed for awhile, thinking about starting own buisness, GC/Renovation contractor. Target market is residential but have ability/experience to handle light commercial (TI & shell buildouts). Sub relationships are good at this time (i.e. try to pay w/i 30).
Insurance, labor, mgt. costs, etc. equate to appx. 45-55/hr. including overhead, profit, etc. based on current calcs. Margins increased based on self perform some work. Greater ATL area.
Just curious to hear from some of you out there. % of work you self perform, contract out, insurance costs for your area.
Taking baby steps at first.
Best Regards,
NAW
Replies
I don't know atlanta, and can only assume that kind of wage is proper. I am a sole prop. that subs electrical, plumbing, larger drywall jobs and painting. Most of my work is home remodel, with some light commercial.
Here's how I maintain a neverfail relationship with the sub trades I use. I pay at time of invoice, or sooner if they are not quick to bill. Their book keepers hate me. I am always ready for them and they show up on time. I will pay them as all my suppliers b/4 I pay myself. There is never a time the job sits idle except for a rare act of god. No excuses are given by them and come pay time, none given by me. You will find that your reputation and business will prosper as a result. 30 day pay is nothing special.
I also require prompt and orderly payment from the customer. When done, complete payment is requested and usually given. The jobs come from previous client referral. Prequalifying is done before I even look at the job. Running the business this way has not forced me to cover more than a minimal amount of bills and then, only for a short time. No need for an equity loan or robbing the next jobs down payment. I certainly don't make much, but then again I don't owe anything either. (ok jerrald, tell me how dumb I am at this business thing, ha ha..........I know I am, but it just seems so right!)
Start out right and stay outta trouble. Have seen alot of guys go under with a formal business plan.
Remodeling Contractor just outside the Glass City.
Quittin' Time
Cal ...Just here to say we're on the same page.
No debt ... no loans.
very little overhead.
Slow and steady wins the race.
I still remember Vince Carbones story about the guy working to dig his way out of "expanding" at PeteFest ...
On a dime I could turn and go back to employee ... and that's gonna be my biz formula for ever ... lean.... pay as ya go.
JeffBuck Construction Pittsburgh,PA
Artistry in Carpentry
Calvin:
What exactly do you mean by "Prequalifying"?
Gary, my past customers funnel me my future work. After working for them once, we usually become pretty familiar with each other. They know my qualities so they can in good conscience recommend me to they friends without the fear of embarrassment. Conversely, they wouldn't recommend any goof balls call me. They prequalify the potential customer for me. Of course there's a chance they don't quite know their referral but then it's up to me to set the parameters within which we will work. Where I might cut a repeat customer some slack with down pmt, the new ones don't get the benefit of doubt. Likewise, repeat customers will get on the schedule a bit quicker than the new one. You have to understand, I'm one small guy, doing maybe 150-175 thousand gross business. Managing an operation this size isn't too damn difficult. Still, you have to keep everything straight or you can quickly fall prey to the perils of business.
Jeff and dan. Remember that nothing ventured, nothing gained. I don't take chances and don't speculate. My chance for easy money is pretty slim. I get what I earn, usually not much more. This in turn means I'll retire when they lower the box into the ground.Remodeling Contractor just outside the Glass City.
Quittin' Time
Calvin,
We operate the same way. My response to adding an employee was to keep more money in the bank. We pay all debt the same way, immediately. And people want to do business with us. Subs want to work with us. We don' t over book. Just forces you to short cut in my opinion. Nice to hear its not just us. DanT
Good sub relationships means having the job ready for them when they show up - and paying much sooner than thirty days. I have a couple who may not invoice me for three months but most others want paid within ten days. Stretch it to thirty and they are not likely to be interested in the next job.
Excellence is its own reward!