I see the business folder has slowed down to a crawl, and that’s what interests me the most, so I’ll post this story and see if it provokes some dialogue.
We did a coupla of roughs for a new builder client last year. I had met him at a lien seminar and we agreed to do some “overflow” work for him because his long established framer was too busy to get him caught up.
Anyways, Frank sent him two crews….our “A” crew and our “B” crew. We got through the process okay and we were able to overcome all the “B” crews deficiencies without incident. This all happened in the spring…they were routine frames.
About a month ago, the builder calls Frank up and wants to ask him a coupla questions. He says that his regular framer has decided to hang it up, because he’s not making enough money, and wants to hire on with the builder full time as a superintendent or even maybe as a fulltime carpenter. The builder knows that Frank is friendly and honest and wants his opinion. The builder thinks the framer should be making a lot of money becasue of how much he’s be subbing for and is thinking of hiring the framer fulltime and starting a Rough Frame carpentry subcontracting business, in conjunction with his building business. So he asks Frank “Do you think this is a good idea….how much profit do you guys actually make on each job?”
At this point, as Frank tells me the story, I’m cracking up. I’m thinking of what I’d tell the builder, and none of it is nice…but young Frank, well he’s no timid soul either.
Anyways, does anyone else here think it’s odd that a builder, who has just put a guy out of business by paying him less than he needs to stay in business, is dumb enough to think he can run a profitably carpentry business in a business climate that is causing guys to drop out in record numbers?
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
Economics says that if he starts a framing buisiness then he will depress the wages framers can demand that much more, thus ensuring that he will have a very hard time paying this guy's wages and whoever else he hires to help the guy. Right?
AJH Ren
Aj, I really don't know what to make of it.
If the builder thinks he can ressurect a dead business, using his non carpentry related skills, then I suppose he should just jump in and show us how to do it!
I figure he's either going to have to improve productivity or raise revenue....so....if the carpenter couldn't improve his own productivity, how is another level of overhead going to improve the situation? The only way that I could see revenue being raised, is if HE decides to pay the crew more, which will come out of HIS pocket!
I just think the whole thing is hilarious: the builder's own pay rate puts the guy out of business, then the builder thinks he'll be able to improve that business!
I'm really confused....
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!
Thanks for the laugh, but somewheere around here is a thread about Wal-Mart doing exactly what we are talking about, but your builder there has nowhere near the gorilla economy of scale to be able to enslave the masses of rough carpenters in your area and get them to perform like monkeys for peanuts. He must have a massive ego to think he can pull this off.
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
Piffin, I read some of the Walmart thread but it got too convoluted for me to follow.
This guy doesn't really have a big ego. In fact he actually was innocently just trying to figure out if his brainstorm would work. By the time Frank got done explaining how piss-poor the rough frame business really is, the guy decided that he probably shouldn't explore the possibility anymore.
I just got a huge ironic laugh out of the story when Frank told me about it.
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!
couple things come to mind.retorical, wonder how what he paid you compared to what he paid his regular. think you're making moneymaybe the regular is a poor money manager.####-u-meing the GC does a 50% markup, when the framer charges $1, the GC charges $1.50. two sets of overhead.but think you said this is tract work, so these "overhead" things may not apply, cause the house has to be able to sell for some amount relative to everything else.
bobl Volo, non valeo
Baloney detecter
Bobl, this guy wasn't a "tract" builder. He is a "custom" builder of relatively small homes. I think his homes retailed at about 300k or so and he built them in spot lots or small subs. He is an established mom and pop type builder doing just enough to keep that one framer busy for most of the year. Our prices came in higher than the builder normally budgets, but because of his overload and desire to get the show on the road, used us anyways.
We typically are anywhere from 10 to 20% higher than our competitors on these blue collar type "custom" homes.
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 have another good story!
Frank and I hunted down three basements that were ready to go. It took a while to figure out who the builder was, but we finally found his superintentent.
Anyways, we grabbed the plans and come up with a price of 28k to rough it, labor only. Frank went in alone to offer up the bid as a negotiating tactic. We never go together, that way we can use the "I'll have to talk to my partner gambit".
The superintendent was very open after Frank mentioned that it was our Architect buddy that bought the super's Corvette last summer. This is what we learned.
The builder just put a framing contractor out of business. He had given him four houses in a row at 18K. The framer got done with three ok, but after getting a 9k draw, all his guys left him because he wasn't paying them. The framer worked alone for a coupla days after that, then just abandoned the job. The super knows that the 18k wasn't enough, but he says the builder just wont pay more because their selling price has to stay competitive. The super is frustrated because he has to deal with guys that don't know how to frame properly...they also don't understand their costs...that should be obvious!
Anyways, heres the kicker. The builder used to pay 22k for that exact same house back in 2001! Since then, all of our costs have jumped...wages, insurance, fuel, nails, crane fees, and we now have more things that need to be done to pass rough inspections: house wrap on uninsulated areas, hurricane clips on all trusses, etc.
This is the way our industry is heading. Much higher costs, more work, less pay.
The shakeout is happening here in SE Michigan. I've seen it coming....
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!