Ran into my buddies partner today at Lowes and they are fixing to start up on a 3 million and a six million dollar houses and are looking for a project manager for the 6 mil. house.
So i said make me an offer.
I have been on my own for the last 8 tears and I average about 50 grand a year so I would want to start in that ball park but I am afraid that might be asking a bit much.
I would also like to make some kind of bonus if I bring it in under budget and in time.
Anybody out there have something I can compare to so I can substantiate my expectations?
ANDYSZ2
I MAY DISAGREE WITH WHAT YOUR SAYING BUT I WILL DEFEND TO THE DEATH YOUR RIGHT TO SAY IT.
Remodeler/Punchout
Replies
$50K sounds low to me, real low. I wouldn't do it for any less than three times that much. Or if I did, I'd want a piece of the profit.
150,000 the mayor of Memphis barely makes that?
ANDYSZ2
I MAY DISAGREE WITH WHAT YOUR SAYING BUT I WILL DEFEND TO THE DEATH YOUR RIGHT TO SAY IT.
Remodeler/Punchout
The mayor of Memphis probably doesn't have the headaches you'll have managing a $6 million house, either.
A good PM on projects of that nature is worth his weight in gold to the builder. I don't know what the pay scale is in Memphis, but here in NJ, I'd be looking for a minimum of $100k/year plus benefits, bonuses, etc. If the builder is smart, he's netting $600k on the job after all overhead, and your salary should be in his overhead.
Bob
Andy,
I'm in the N.J market Like Bobkovacs. There are more than a few Project managers around who just manage such jobs. They usually come recommended and have the next job lined up before they finish this one.
$50,000? No way! at least double. maybe triple. I think a percentage may be the way to go. Having framed and trimmed on houses of such size, I can say, you'll earn every dime.
Only 2% is $120,000
As far as bonus for under budget - That would have to follow a discussion about whether quality or budget is going to be the prime coincern, and who did the budgetting. 6mil sounds like a lot of cushion but it could be full of un-negotiated items that will require selection. So then the customer has ibnstantly bumped the budget to seven mil....and there goes your walking around money.
after this much time, you have an investment in building your life's business, if you truly want out, this is a fine opp, but if they are trying to talk you into it at a time when you could easily bump your income to 70-80K they need to make it atractive enough to be worth throwing away your present investment.
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Very good points Piffin.
I am not so sure I want out as much as I want the oppurtunity to run a really big project without the financial risk.
The builder has been a long time friend of mine and his family is one of the most prominent in the area.
The project it self will be one of the most expensive done in this area and if I successfully ran it I think it would be a large feather in my cap.
I don't feel if I take it I would be throwing away my present investment and the details haven't begun to be discussed.
ANDYSZ2
PS I appreciate the advice.
I MAY DISAGREE WITH WHAT YOUR SAYING BUT I WILL DEFEND TO THE DEATH YOUR RIGHT TO SAY IT.
Remodeler/Punchout
Edited 3/25/2004 7:08 am ET by ANDYSZ2
If you ask for a bonus if finished well before it's time, won't they ask for a penalty if not? Is it worth the risk to you that, because of something you can't foresee, you may not even make the time?
Only 2% is $120,000
kinda answered my Q without me reaching for a calculator ...
I was wondering what 3% would add up to ...
for some reason ... 3% seems to be a number I remember hearing on a similar situation.
JeffBuck Construction Pittsburgh,PA
Artistry in Carpentry
Jeff,
180,000 smackaroos is three percent
There's a reason I prefaced it with "only". I've heard of salary plus from one to three percent.
compare to a money manager with a mutual fund or similar. The management fee can be from .5% and up. Many are about 1-1.5%.
and that is just to handle money, not materials, men, money, weather, time, etc.
and that is to do it in volume, no6t on a custom basis.
Which makes 2% look cheap to any knowledgable investor, and these people ARE investors.
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Edited 3/27/2004 1:04 am ET by piffin
hi
you definetly have deplomacy , i cant help but wonder how much exsperince this guy has, not that i want to sound condesending or discourage him but it sounds to me like he has more exsperince as a super . i believe any good super can get to the pm stage however baby steps seem to be the way to go 6 mill is a big project would hate to see somone who has potential shoot themselves in the foot not to mention the work that would be passed by .PLEASE HELP ME SAY THIS IN A NICER FASHIONI AM NOT LOOKING TO INSULT ANYONE IN ANY WAY SHAPE OR FORM
You don't have to say it in a nicer fasion just be concise and constructive and I will learn from you.
My experiance runs from building my own to 8 years on my own.I have done several whole house remodels had a framing crew for a couple of years and done punchout for 3 highend builders for the last 5 years.I have to deal with new homeowners and mediate between them and the builders.
I am sure that if I get this job my 2 bosses are going to be constantly inputting and streamlining because it will be their top priority too.
ANDYSZ2
I MAY DISAGREE WITH WHAT YOUR SAYING BUT I WILL DEFEND TO THE DEATH YOUR RIGHT TO SAY IT.
Remodeler/Punchout
I thought that this job offer was not going to happen because he hadn't called me, but I got the call thursday and I am going to hear his offer this weekend. Funny thing is in the last 2 weeks the other 2 builders that I punchout for have made similar offers as their business has grown to the point that they can't handle the load by themselves.
A new problem is I have several jobs that I have committed to that I won't be able to do if I take this Job. I will probably give these to guys who work for me on occasion but I know I won't have the time to oversee their work.
I have set my goal of 60-75 g's plus % plus benifits depending on the scope of my responsibilities.
Anymore advice would be deeply appreciated!
ANDYSZ2I MAY DISAGREE WITH WHAT YOUR SAYING BUT I WILL DEFEND TO THE DEATH YOUR RIGHT TO SAY IT.
Remodeler/Punchout
Andy, you are clearly a man destined to drive around in a clean truck wearing clean clothes (possibly even khaki shorts) and new sunglasses with a cell phone glued to your ear. Forget the new sliding chopsaw, buy some new cell batteries, a headset, and a good PDA. Short hair is good too.
I can't remember what city you're in but I want to say, take the most a lead carpenter makes there (works with his tools a bit and also runs a job) and add $7-10 per hour to that. My experience in a major market is that when you get out of the field and into the office you can go up about ten bucks (maybe not immediately, but soon). Expect to work a lot harder and worry more for that money, but congratulations, you are management material. With two other shops interested in you, negotiate hard, like the guy in the Enzyte commerical.
Hard to say about those other projects... if you tell them you're withdrawing your proposals, make sure you do that after you have an offer letter. In fact, insist on a written offer based on the fact that you need to kill your chances for other work.
Thats good advice about the offer in writing and I live in Memphis.
The construction industry is booming but one of my concerns is I can't see it going on forever this makes my choice easier as the 2 other offers are from guys that build 20-30 350,000 to 500,000 houses a year. while the guy I want to work for builds 1mil to 6million dollar homes and he has built up quite a reputation with his houses being wrote up in better homes and gardens, Arch. digest etc.
ANDYSZ2I MAY DISAGREE WITH WHAT YOUR SAYING BUT I WILL DEFEND TO THE DEATH YOUR RIGHT TO SAY IT.
Remodeler/Punchout
Well here is the offer,
They want to split the company into two divisions.
One company would handle new construction.
The other would handle remodeling and probably warranty work.
I would manage the remodeling side and they would handle the new construction.
We would collaborate on bidding and takeoff's and would cover each other on vacations and such.
One partner has a construction company that employs the framing crews.
The other partner has the money and social connections.
This makes for a pretty well rounded operation but they're still not pulling in the profit I would expect out of this size operation.
My goal would be to make the remodeling side the more profitable and reduce their load.
The initial discussions entail a salary of 50,000 plus and a percentage of the profits, and benifits. I am considering using my wifes benifits and negotiating a higher salary.
What do you think would be a fair % and how should I present it?
They have over a million dollars worth of remodeling scheduled and close to ten million scheduled in the new construction arena.They have hit the turning point in their operation where they need a full time bookkeeper/office personnel and they hired a young guy who has been doing estimating for over a year and has setup an estimating program that they're incorporating gradually.
This is a large step for me and I really want to make this a win win situation for all of us.
ANDYSZ2I MAY DISAGREE WITH WHAT YOUR SAYING BUT I WILL DEFEND TO THE DEATH YOUR RIGHT TO SAY IT.
Remodeler/Punchout
$50K.... $25 per hour... in my opinion that's a carpenter's wage and unless they're showing you a range in which you could rise to $60K-plus then it's too low. If they're not pulling in the profit that you think they should, something may be amiss and you may find the stress of working within a financially-troubled company to be huge. My most recent employer was flush, he bid high and got jobs, and we did not worry about money while doing them. My employer before that was profitable but not flush and we scraped the bottom a couple times while I was there (I will take full credit for that... I will spend every dollar you have satisfying your customer)... anyway... the office was full of money tension at times. Can you get a sense of which situation this is?
Only bank on your wife's bennies if they are rock solid. Is she a tenured professor?!
Well, I'm not sure what the payscale is in Memphis but I know on the east coast the salary is in the low range. On the plus side if you are looking to transition into management I would advise taking it, you can satisfy your itch to do hands on work via small side jobs or at your own home. I would make sure they are perfectly clear on whether it is a management job or a working carpenter job supervising the remodels, if they expect you to work in the field absolutely do not go on salary because you know you'll always be the 2nd option to complete projects and always having to work extra hours to keep things going. If you are just handling the paperwork, ordering, and scheduling you can keep a check on the number of hours you work a bit better as suppliers, estimators, city officials all work a relatively standard schedule and won't be able to be contacted after hours..meaning you reach the end of what can get done in a day by the time a certain hour rolls around.
-Ray
I agree with Piffin and Bob. You are low-balling yourself. On a project that big they need an experienced and knowledgable person. If you have those two and you can compliment that with hands-on experience, you are worth a premium salary. Keep the terms simple - Salary, Medical, expenses (car, milage etc.). No budget constraints. That's the Company's problem. When the project proceeds smoothly, scheduling accounts for the integration of trades and work is properly done, you will have done your job well and a YEARLY bonus should reflect that. You are not the boss' partner. Keep your role and responsibility clear.
Don't accept anything less than $100K/year.
Keep in mind - you will be closing up your business. Don't, even for a minute, think you'll be able to take on side jobs on weekends. You will have a period after the project ends, where you won't be working. Basically, because you won't have been in the loop for over a year. It will take some time for people to learn your back in biz and stop using whomever they replaced you with to come back to you. This all has a cost and therefore has to be concidered and valued oin your salary figure.
Good luck,
F.
Thanks for the reply
Very valid points and a big insight about getting back up and runnning after the project is over.
When I first contemplated this move I thought it was going to be a big step up and now after a couple of replies it is more like a big leap across.
ANDYSZ2I MAY DISAGREE WITH WHAT YOUR SAYING BUT I WILL DEFEND TO THE DEATH YOUR RIGHT TO SAY IT.
Remodeler/Punchout
A feather in your cap, maybe, but you have to decide if you'd like the work. Since you said you're on your own now, I assume you deal with clients, money, contracts, subs, change orders, arguments about scope of work, owners who don't like it once it's built, foremen who do it their way, subs who ask for more money once they start, carpenters who disappear on benders, materials that get stolen from jobsites, inspectors who won't approve work to code, vendors that send broken items repeatedly, lead carpenters who quit and take the best #2 man with them, late payments from owners, subs who want to use their contract instead of yours, owners who say the builder sold them something aside from what's on the plans (verbally), etc. etc. If your annual now is $50K you've been doing smaller jobs, so take the above and multiply it by $6M.
PMs get paid to solve problems, all day, every day, and are expected to be available 24/7 for whatever--owner calls at 9 pm with a major complaint, apprentice calls at 3 AM from jail, alarm company calls at 5 am because the job alarm went off, you name it. Since you'd be joining a company you'd be coming in on top of a crew that's already there and will probably resent you. The lead will think they should have given him your job.
I've done a lot of PM and it's a great job for me but it is a major headache, and all your tools will sit in your garage getting dull while you do it.
You couldn't have said it more succinctly
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Thanks for the reply,
Very enlightening you are.
I think the reality is that I will be a cross between a manager and supervisor.
The builder will probably be dealing with the owner more than me but I will probably handle scheduling and subs of which most work exclusively for this builder.
I imagine my other responsibilities will include supplies, safety,security and decision making on job site.
I am beginning to think my position is likely to be more supervisor than P.M. and pay will probably be along that scale instead of project manager.
I had invisioned a role where I would have my tools on site and help the subs as needed, interpret the plans when neccassary and be a gopher as needed.
Please keep up the feed back as it is very helpful at putting a perspective on what questions to ask and what roles I need to define.
ANDYSZ2
I MAY DISAGREE WITH WHAT YOUR SAYING BUT I WILL DEFEND TO THE DEATH YOUR RIGHT TO SAY IT.
Remodeler/Punchout
andy... don't forget.. we tend to think of houses getting built with wood and masonry...but they mostly get built with paper..
someone is going to process $6 million dollars worth of paper.. that is one four drawer file cabinet just for that houseMike Smith Rhode Island : Design / Build / Repair / Restore
"I had invisioned a role where I would have my tools on site and help the subs as needed, interpret the plans when neccassary and be a gopher as needed."
Been there done that. Regardless of being a SS or PM DON'T bring ANY of your own tools. You will be seen as a Jack_ss of All Trades. Your job is to keep the Project moving forward by trouble shooting, scheduling and a lot of phone time. Yes, you may not be breaking a sweat all day as you are accustom to, but if you get involved with the hands-ons, you will be distracted from your primary responsibilities and ultimatley have a poor showing.
SSs and PMs are hired for their brains and not for their hands - primarily. However the best Archs, GCs, SSs and PMs can all use their hands but in order to maximize their effectiveness, must limit their activities to choreographing the project rather than actually doing the dance.
Similarly, all the best tradespeople are thinkers too. You can't become the best without integrating the mind and the hands. That's just the way it is.
As for the gopher comment - value your time. Again, just because you are idle doesn't mean you should do everything else. Instead find out WHERE to get whatever and then delegate someone else to get it.
You will naturally gravitate to or wish you were physically participating in doing the physical because that is where you are comfortable, can predict the next step or phase and it's fun. You enjoy it. But then you will be doing 2 jobs (tradesperson and SS/ PM) yet only collecting one salary/ wage. This is not (shouldn't be) what you're hired for. It is a recipe for disaster.
F.
Edited 3/26/2004 8:08 am ET by Frankie
Good points,
Are there any good books on this type of position or classes you would recommend?
I am also wondering if there are any good referances on organizing and scheduling a large project.I have been thinking that there will have to be alot more overlapping of subs so that project progresses more fluidly.
Also I think I'll have to setup sceduling chart onsite with a large enough scope that subs can communicate with each other as well as me.
ANDYSZ2I MAY DISAGREE WITH WHAT YOUR SAYING BUT I WILL DEFEND TO THE DEATH YOUR RIGHT TO SAY IT.
Remodeler/Punchout
You will also want to make sure that you are not put in a position where to do the job right means exceeding a budget that you don't have control of- like for instance, the gofer, if you can't hire one due to budgetary constraints.
If I were you I would ask for a lot of money, at least $150,000. If they don't want to pay for good management then they are not going to want to pay for good anyone else either, and you will be expected to make up the difference.
John
as usual excellent feedback from all
I can't help but sense you are intrigued by these prospects and I think I have it right in that the builder is a friend and he & his family have enjoyed success in the community ( and the community values their activities / contributions? ).
My kneejerk reaction is you become the sheriff / gatekeeper which is a role defined in its context - your town high crime or everything breezily copacetic
your friend has 5 field employees who are gung ho and perhaps think about the puzzle they have to solve tomorrow - there is a history of good relations w/ subcontractors and they look forward to working w/ this company etc..
you feel comfortable w/ the bldg site and a neighbor is not subject to having his view "stolen"
right there w/ the sheriff question to me would be what is the design matrix? who designed it? much client input? good relations amongst design group? clients good at making decisions? the less gray area and more defined black and white the plan the more fixed ( rather than elusive ) the six million dollar project is
architect or designer or client problem solvers - proactive - history w/ builder?
I hope these issues are more on the favorable side and I hope it's a go for you ** compensation your call but this is the beginning of a long commitment w/ a substantial increase due to my commendable track record ( albeit one house ) 2 days paid vacation earned per month for duration of housebldg collected end of each November whether there is scenario for vacation or not - transport allowance, health ins., disability ( esp. if you maintain it now ) Ciao John
Andy
On 6 Mil, the builder should be planning to clear about 15% AFTER overheads, if all goes well (i.e. no hic-ups no dramas) he may even clear 20%. Making it happen without hic-ups or dramas would be your job. I've seen published PM rates as high as 7.5% of actual cost.
As another poster said, you need to figure on this being your ONLY job for the duration and then say a year or so to get your own business back up and running. If you're currently making $50k pa, getting $120k to $150k pa would seem reasonable to me. Figure more if you will be paying wages to a gopher and/or book keeper and prep the family that there may be no vacation time until the project is finished.
I have been thinking that there will have to be a lot more overlapping of subs so that project progresses more fluidly.
This is only part of it. At times you'll need to think months in advance. For example, to get a sub to bid on fixing the Italian marble in the bathroom, you'll need to have the marble or a reliable sample on site so he can see it. Also you'll likely have to figure out what size slab to order so that the customer will end up with flawless 8ft x 4ft marble "tiles". It's likely that the framer will also need to see the marble "tile" before he fully appreciates the load to be carried by his walls.
All said, although being a PM is a real challenge and can involve a lot of late nights, bringing a project in under time and budget is right up there, and possibly better than the other.
Ian
I fully agree about the PM keeping his tools off the site. A pm's tools are a telephone, answering machine, cell phone, Fax machine, PC, printer, and a checkbook.
When I manage a quarter to half million dollar project, I am lucky to be able to wear a tool belt two or thereee hours a day.
I worked for another contractor once who told me that any time he put on his tool belt, he was losing money because he was not doing HIS JOB correctly.
so I can't imagine managing a six mil job belted up. Driving a nail is a distraction from communicating and planning.
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
Exactly! If the PM is doing a tradesperson's job, they are not doing their own job properly and will loose the ability/ foundation to maintain the authority for valued project assessment.
Good point in defining the PM's tools of the trade. They/ we sometimes forget that just because we can't swing it, attach it to a compressor or roll it, it's not a tool. Au contrare mon frere!
And you're right on regarding how the ramifications are increased as the $ goes up. This is not for kids, amateurs or tourists!
One last point to Andyszs - concider the motivation of the Hirer. Yeah, yeah, yeah, he is a friend who loves your work, knowledge and experience, but does he think that since you are only making $50K now you will be willing to take the same $ for "just" managing? I ask because I have been solicited to do this twice. Just about identical circumstances. First time the guy totally low-balled me. Was willing to offer me $70K to handle 2-3 high profile, high dollar jobs. At the time, I was willing to do it for $120K. I had sub'd for him before. He liked my work and I ALWAYS gave him a great price (big mistake). I had set the precident and he wanted to keep the same arrangement. I didn't take the postion and he has not called since. His loss.
The second time was last year. I took a job PM'ing for someone else's big bucks project. Price was great. I loved the work, the Client and the site. It could not have worked out better..........until it was done and I had to rehang my own shingle. It took 5 months to find decent new work. Lots of BS small jobs, which only led to more small jobs. Archs and desg'rs had developed new relations and it took major effort to reweave myself into the renovation network.
F.