I recently mentioned a guy that I knew that started a roofing business about 6 years ago. The guy is a friend of my son-in-law and I remember laughing to myself that he was going to be in for the shock of his life, since he didn’t have any experience in the trades at all. I remember looking at him with a dumbfounded look on my face and thinking….”this guy is crazy…he couldn’t have picked a worse idea!”. I also vaguely remembering that I wished him good luck, only half beliveing that he’d last a season.
Well, let me tell you, this guy did it right. He now owns a roofing showroom in a high rent district. His business runs by itself and now he has ventured into building houses.
So, what did he do different?
blue
Just because you can, doesn’t mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I’m a hackmeister…they might be right! Of course, they might be wrong too!
Replies
He probably had high energy and an interest in what he is doing. He worked on site keeping an eye on things, was competitive, treated his costumers right, worked hard to get the best supplier prices, hired good trades people, didn't blow the money he made, kept good records, started and finished on time, loved what he is doing.
He probably had high energy and an interest in what he is doing. He worked on site keeping an eye on things, was competitive, treated his costumers right, worked hard to get the best supplier prices, hired good trades people, didn't blow the money he made, kept good records, started and finished on time, loved what he is doing.
Mostly right. He never actually worked onsite, except to inspect. He did "blow" some money. Well, "blow" isn't the right word. He actually made a very bad real estate investment decision (or rather a series of them). He is now the proud owner of 100k worth of vacant property that has a 500k mortgage on it.
That incidental 400k loss won't do anything but galvanize him...
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
Blue,
Just a shot in the dark here.
1. He realized that he could hire quality roofing subcontractors capable of putting on a quality roof who have not one bit of sales ability.
2. He realized that his time was better spent selling roofs and managing the business.
3. By providng steady work and a fair rate, he built a following of fairly loyal subs who do good work and require less supervision.
4. Then he realized that he could hire quality people to be salesmen and estimators. People who have all the skills but not the drive or stomach for their own business.
5. Then he got everybody on the same sheet of music. All doing the same thing the same way.
6. He worked on his Golf Swing.
Just a shot in the dark here.
1. He realized that he could hire quality roofing subcontractors capable of putting on a quality roof who have not one bit of sales ability.
2. He realized that his time was better spent selling roofs and managing the business.
3. By providng steady work and a fair rate, he built a following of fairly loyal subs who do good work and require less supervision.
4. Then he realized that he could hire quality people to be salesmen and estimators. People who have all the skills but not the drive or stomach for their own business.
5. Then he got everybody on the same sheet of music. All doing the same thing the same way.
6. He worked on his Golf Swing
Correct on all 6 items!
You're missing only one more major item....and maybe a coupla minor items.
blue
Edit: just changed the fonts to clear up the post and reply
Just because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
Edited 2/20/2005 1:08 pm ET by blue_eyed_devil
What was his background?
"There is no such thing as ex-wives"
IC, that's a very good question. I don't know, but I think this was his first attempt at business. I'm thinking he was a trucker for UPS or something like that.
I'll find out.
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
IC, the guy had failed at several other businesss in some type of computer work. So, his background was computers.
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
I'll add:
I bet he ran it like a business from day one; i.e. He had his Quick books set up before his first job, knows his costs, paid his taxes, and took every deduction he was entitled to.
Because of his past "failures" he has learned to maximize the return to risk in his market segment.
It sounds as if he's figgered out what he's good at and is running with it. I pray we all should be so lucky.
The awful thing is that beauty is mysterious as well as terrible. God and the devil are fighting there, and the battlefield is the heart of man.- Fyodor Dostoyevski
I'll preface this by saying that I'm not a business owner. I'm a carp that has been working with my Father for the last 6 years. I check in here and JLConline every day to glean whatever kind of business info I can from you guys.Is this type of business feasible in most markets? It seems to me that the Owner/operator that has his own employee's would be able to easier beat the price of a guy who subcontracts. In a market, like roofing, it doesn't seem that you have the ability to differ in price, like with remodeling.Please, school me.
when are you guys gonna stop beating yourselves up....
it has nothing to do with PRICE.. it has everything to do with sales and satisfactionMike Smith Rhode Island : Design / Build / Repair / Restore
there's that ... plus ... I know I can often "hire" someone to do things way cheaper than I'd charge myself to do.
roofing and drywall come to mind.
Jeff Buck Construction
Artistry in Carpentry
Pgh, PA
roofing and drywall come to mind.
I couldn't take my wife out to dinner for what what the drywaller I used to use charged me for the last job he did for me.
it has nothing to do with PRICE.. it has everything to do with sales and satisfaction
Correct Mike! Actually, it's not totally correct that "it" has nothing to do with price. The "it" we are talking about is Dan's success (Dan is the roofing business man). Dan is successful because his price is HIGHER!
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
Is this type of business feasible in most markets? It seems to me that the Owner/operator that has his own employee's would be able to easier beat the price of a guy who subcontracts. In a market, like roofing, it doesn't seem that you have the ability to differ in price, like with remodeling.
Sorry XhammerandnailsX, you're sliding off the path.
The owner/operator that has his "own" employee's won't be able to "easier beat the price of a guy who subcontracts". Anyone with employees knows that employee production tends to sag when the comfort level creeps in.
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
Okay, I've given everyone enough time to try to guess the rest of the major components of why Dan succeeded in the roofing business, I'll fill in the blanks.
First, and probably most important, you have to understand that Dan went into the business with the sole intent of building a true roofing business. He went in as the business man, not the roofer! He never saw himself as one of the roofing mechanics, only as the business owner.
When you compare his entry into the roofing business, with that of a skilled tradesman, you can easily see how/why Dan has a much higher chance of building a successful business. He's not hampered with the burden/knowledge/ego of being a skilled trademan. The business man analyzes every aspect of the product, materials, costs, etc. He then structures a business plan that delivers the return on the investment that he seeks. His entire marketing and selling strategy is based on real numbers. He delegates all the tasks to skilled people in his company. He doesn't try to wear every hat.
Now, think of how the skilled tradesman thinks. He doesn't think it's necessary to hire a competent salesman...after all, why throw away 15% of every job to a guy that doesn't lay shingles...right? He doesn't budget a fixed portion of EVERY job for marketing....after all, if he budgets 5% of every job for marketing, wouldn't he have to raise his prices 5%? He doesn't let anyone do anything in his business.....after all, is the reason that he went into business is so he can control things?
If you look into how each different groups (businessmen vs tradesmen) thinks, you can easily see that the tradesman has a significant disadvantage and I would always bet that a businessman, who never intends to get a callous, will have a much higher chance of success.
More in the next post...
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
To sum up my last post: A lot of you guys that are skilled tradesmen think the construction business is about construction (I'm guilty of falling into that group). The businessmen think the construction business is about business.
Can you see the subtle (or not so subtle) difference?
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
Excellent topic Blue with a valuable perspective. I just did a quick search through the site to see if you has mentioned them in the past and didn't find anything so I have got to ask have you ever read any of Michael Gerber's books?
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The E-Myth Revisited: Why Most Small Businesses Don't Work and What to Do About It
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The E-Myth Contractor: Why Most Contractors' Businesses Don't Work and What to Do About It
Or his latest book which just came out about a month ago
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E-Myth Mastery : The Seven Essential Disciplines for Building a World Class Company
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ParadigmProjects.com | Paradigm-360.com | Mac4Construction.com
Great thread, blue. This is what I come here for. On a related note, maybe 15 years ago I was driving to Florida late at night, and listening to Bruce Williams on the radio. He had a talk show, giving financial advice. A woman called in who knitted sweaters that she sold for $25 each, and wondered how she could sell more sweaters. Bruce Williams established that she sold high-quality, hand-knitted sweaters, and advised her to raise her price to $75. He even said he'd order the first sweater from her at that price.He went on to tell her that you could lay two sweaters side by side, exactly alike, with one priced for $25, and the other for $75, and there will be some who'll grab the cheaper sweater, but there are those people who would always go for the more expensive one. They'll figure it must be better if it costs more. Those are the people she should be selling her sweaters to, Bruce Williams said. Those are also the people some of us should be selling our work to. "I know not how I may seem to others, but to myself
I am but a small child wandering upon the vast shores of knowledge,
every now and then finding a small bright pebble to content myself with."
....Plato...427-347 BC
Allen in Santa Cruz
Moondance, that concept makes sense to me.
Even though we have concentrated a lot of our effort in the new work production framing arena in the past few years, with it's "fixed" pricing structure, we still command higher prices than most of our fellow cutthroats. It's a necessary thing that we do, then try to live up to some higher standards. It sets us apart from the guys that will accept anything. When you stand your ground and tell them you won't work under their price structure, pay structure, etc. they respect you more and it causes them to prefer your services. Sometimes it's simply out of their hands, but I always feel good walking out without committing to their ridiculously low prices.
I'm looking into some bangers for a big national firm tomorrow. We're either going to do some very hard customs or some very easy bangers this season. The easy banger setup suits our other plans better. It's important to know where your heading and set your prices right to get there. We need the flexibility to NOT have to be there every day...the bangers will afford us that luxury.
Everything has a price.
blue
Just because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
Getting back to Dan, the roofing man...
One of the big things that Dan does regarding his roofing business is educating himself! And what do you think Dan fills his mind with? If you said roofing stuff, you might be partially right. I happen to know that he has been pounding away absorbing all the business and motivation stuff that he can get his hands on.
Compare that to me, when I first started business 25 years ago. I didn't read one sales and marketing book. I didn't read one managing people book. I didn't read one real estate book. I didn't read one motivational/inspirational book. Is it any wonder that I'm still struggling to make my first million today?
I didn't discover the value of financial education till I read the Kyosaki book called The Cashflow Quadrant. That book opened my eyes to my impending financial doom. I made a zillion mistakes in my first 20 some years, but I'm smart enough to know that I'm dumb now! Ironically, I've been criticized in the last week for reading and quoting some of the books that I read, but I don't care....I'm smart enough to know that I still don't know enough about the precise market and position that I want in my target market. I'm getting a lot closer, but I don't want to repeat the first mistakes that I already made in my last few ventures.
Dan also made lots of mistakes, but he finally put it all together...and now he's set his sites a lot higher.
So, this is my advice to everyone of you in here that isn't sure that you are on the right track to make your millions, or billions. Read, attend seminars, read, listen, read, ask questions, read, network, read and don't be afraid to discuss what you learn. You might take some flak too for "quoting the gurus", but you won't worry, that stuff will roll off you back. Why? Becuase somewhere you'll read that someone is always trying to tear you down.
A wise man at a very expensive seminar once told me "If you want to become a well known speaker like me.....an expert in your field like me.....making a lot of money on the seminar speaker like me, it's well within your grasp. All you have to do is one small simple little thing each day. Every one can do it, but few will, even though they know the benefits." Puzzled, I was hanging on every word. He paused and I panicked...I felt that he was going to keep the million dollar secret to himself, but to my relief he continued; "All you have to do to become an expert in your chosen field is read about that specific topic every day that you live for one hour more than what your job requires!"
At first, in my mind, I screamed "That's it? You're telling me to read about my chosen area of expertise for one hour per day, after work....you're kidding right?" Then I calmed down and thought about it. How many hours s of learning did I pass up in my first ten years? How many hours did I skip in my next ten years. Think about it....even if I'm a slow learner, how much material could I absorb and study in 50 years? It might take me 50 years to be good enough to be on the speaker tour, but that income would make a pretty good retirement wouldn't it? And...don't you think you'd put a lot of good information to profitable use over the years?
Before you pooh pooh the reading idea, think about how much more you'll know about business, marketing, selling, managing, profiting, etc in ten years if you commit to reading about it for only one hour per day. What do you spend your time reading now? Do you really want to be an expert comic book man or Maxim yapper?
Dan has made that reading committment, or very close to it. If you want your roofing business to succeed, go get ten books and read every one of them...then go get ten more...and ten more...and ten more.....
I'm very close to opening up one or two different businesses. I'll do everything right this time...just like Dan. I can't say I figured it all myself...I'm just masterminding with "gurus" this time.
blue Just because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
Thanks for those book suggestion Jerrald. Amazingly, you've mentioned them before, but since I felt that I was heading away from construction contracting, I shamefully never read them.
I'll pick them up tomorrow...I know I'll be driving by a bookstore.
I still don't want to be in the construction business though...
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
The E-Myth and E-Myth Mastery aren't about construction at all. They are about the mindset of the small business owner. The only one that is about "construction business" per se is The E-Myth Contractor and its not really about construction as it is about the way contractors need to think about business. I bring them up because the lessons you are talking about here dovetail almost perfectly into what Michael Gerber writes and teaches about.
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ParadigmProjects.com | Paradigm-360.com | Mac4Construction.com
Edited 2/22/2005 12:19 am ET by Jerrald Hayes
Thanks again Jerrald. They are on my short list.
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
Jerrald, I ordered this one, I believe through a link on your website. Should be here any day. I've written down the list you've posted, and added some that others have mentioned. I plan to read all of them before I hang my shingle out again. I appreciate you and the others who are sharing what you've learned with your fellow craftsmen. Almost any of us can tell you how to frame a hip roof, so that kind of knowledge is in abundance here. Running a business like a business, tho...you can't learn at the sawhorses. What y'all are doing is invaluable to a bunch of guys who don't have anywhere else to learn this stuff.
Allen in Santa Cruz
I agree Moondance. If this forum would have been available to me when I was young and ambititous at age 30, I'd be rolling in business dough right now.
I didn't know, what I didn't know. Still don't, but am trying.
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
I`m a skilled tradesman type who wears all the hats. I work seven months a year and right now I`m building my own house in Brazil . I think I`m doing allright.
I do read though.
well, mccarty... tell us more... you seem to have a lot of good things going
Mike Smith Rhode Island : Design / Build / Repair / Restore
Sorry it took me so long to get back to you. This Brazilian foundation crew left out a column and I had to hash it out with them.
Anyways,I was responding to the idea that construction is a business and only a business. It is for some people and good for them. I hope they make a million if that is what they are after. But I really enjoy construction. I enjoy pounding nails, I enjoy meeting the prospective clients, I sort of enjoy estimating and I enjoy the feeling a job run smoothly.
When Blue said that the businessman has a higher chance of success, yes he will probably make more money but I would never want that kind of business. I used to work the fishing boats in the Bristol Bay in Alaska in the 80`s where we would work enormous hours for two and a half months and then take off and do whatever you wanted. I apply that to construction. I work hard but get away from it and when I return I can`t wait to swing a hammer. So success is very subjective.
By the way you mentioned that I have some good things going but right now I`m living with my mother in law while I build this house.
I bet he ran it like a business from day one; i.e. He had his Quick books set up before his first job, knows his costs, paid his taxes, and took every deduction he was entitled to.
He did in fact run it like a business from day one. His previous business failures played a part too.
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!