Here’s the Coles’ notes on my situation:
I’m nearing 30, and work for a custom home builder. My job is a mix of labor and supervisory duties; my boss calls me “guy on site.” I do a lot of carpentry tasks, although I often act as helper for a much more experienced carpenter we have on staff.
Much of what I do is completely unskilled, like digging and sweeping. I make about $35k per year and I don’t expect that to ever improve. It’s great to have a job in this economy, but in the long run I’m sure I can do better.
I’d probably be farther along in life, but it took me a while to find myself during my twenties. Good news is: it really worked. I’ve got a fantastic wife and feel totally content and centered as a person. I’d say I’m a personable but serious person with a great work ethic.
Lately, I’ve been obsessed with going out on my own as a remodeler. I’ve been reading JLC business articles endlessly, and I’m on my third read through _Running a Successful Construction Company_ by David Gerstel. I’ve developed a real fascination with everything to do with the business/management side of the industry.
I don’t know how to get started. Through my job, I’ve got a great education in residential construction, but my I doubt my own abilities as a craftsman. I’m handy in every aspect of home construction, but don’t have smooth, professional-level skills in anything.
Example: I’ve built plenty of walls but never framed a roof. My casing miters are maybe B+. I’m not totally confident in my door/window installation. Drywall finishing is slow but Ok. I’ll scribe/fit something to a wavy surface but I’d be really scared of a U-shaped countertop. I have a better-than-average knowledge of electrical, which is not very useful since I’m not licensed.
That being said, I’m capable of better than a lot of the hack work I see being done (sometimes on our jobs, too!). I’m adept at memorization and figures, and find it relatively easy to develop a working knowledge of, say, building codes. Call me book smart, I guess.
I don’t feel like I’ve gotten to the point in this post or asked a really specific question. Oh well. I feel really lost, like I’ve got all this unused potential but don’t know where to put my effort. If you’ve got a response to these musings: great!
Replies
Use the skills that you have mentioned to write a business plan. Have your business plan examined by someone smarter than your self...hopefully someone that has already succeeded at running a business that you hope to engage in.
If you'd like, you probably could get a lot of feedback in this site if you post the business plan.
If you don't write the business plan, you will fail. Guaranteed.
IMO your next step should be a better job with an established company. You may need more time as a lead carpenter in order to develop yourself as a jobsite manager, and you definitely need more time in the office working as a PM. You need exposure to how the sales, estimating, contracting, subcontracting, A/R, A/P, HR, and other stuff is done. You don't mention how many total years you have in, but my belief is you need at least 5 and possibly many more to develop as a real journeyman carpenter. Probably more like 10, strictly in the field. At that point you'll know a bunch about the other trades you need to manage. Then you need another 3-5 in the office in a seriously responsible role. After a few years you have several start-to-finish job cycles under your belt as PM, you've been thru several scrapes, and you've had someone else's money and wisdom to fall back on.
$35K is more than you'll make in your first years on your own. You could easily make a mistake as a rookie contractor that would cost you that much. I'd stick with the gig you have while looking for another/better one (in this economy....) and check your gut in another 5 years.
You could easily make a mistake as a rookie contractor that would cost you that much.
Read this and thought of a guy a couple years back who was asking for advice on bidding a job and then refusing all of it. He came back for abuse several times too, just couldn't admit to his faults.
He bid a job building a guest house if IRC, and the HO took him for a ride and then admitted he had taken advantage of the poster's lack of knowledge.
He also took on a partner cuz he knew he couldn't handle it alone and then was bad mouthing the partner's lack of skill/knowledge even though that was why he had partnered up.
It was pretty damn funny, wish I could pull it up with the "Advanced Search" function.
Joe H
Keep your present job. Make up a business name, get some cards printed up, start handing them out but not to any of the people who do business with the present company you work for. Try to get small jobs that you can do after work and on weekends. Start making relationships with small subcontractors that you can trust and use on your jobs. You can get practice estimating and start to develope a customer base. If you are good, people with try you on small jobs and once they see you can deliver they will turn into long term customers and pass your name on and give you larger jobs.
I think David Meiland is right.
If your position that you've got right now is dead-end, use it as a jumping off point to something else with another company. You sound tentative about your own skill set but quick to pick up new stuff. Get set up with someplace where you'll have some leadership expectations on you, maybe some estimating and project management after you've been there a while. Some place with a good reputation for quality and character.
Then, if that stuff works out, hit out on your own.
j
Interestingly enough, I had hoped that's how this job would be. That has not proved to be the case. Not to seem negative, but I don't believe my current job would be the place to learn project management anyway. My boss just recently reached a mediated settlement with a client in which he would receive 60% of a change order bill that ran into six figures.The client kept asking for significant rework, and we kept doing it, apparently without billing him or offering estimates for the work. But then he got a bill and we got fired, and the project closed down and negotiations started.If my next move does prove to be a different employer, I'd like to work for a smoothly-run company.
The company I work for builds homes that are $1 - $2 million plus, but I'm not sure my boss would know how to change a circular saw blade. Seriously!
You need to be aware that knowing how to build a house and running a business aren't the same thing.
The paper work of a business is the most critical part of the deal, doesn't matter whether or not you can change a blade.
Do you have any idea how many pieces of paper it takes to build a $1,000,000 house?
A smoothly run company really doesn't have much to do with how to change a blade, it's all about how much the blade cost, and making sure it's accounted for at the end.
30 years in business, took me about 10 of those years before I realized that the bean counting is as important as the work produced.
Good luck, Joe H
Gotta say if you have the urge to work for yourself, go for it.
Here's the Coles' notes on my situation:
Think it's Cliff's Notes
Edited 11/9/2009 12:47 am by JoeH
It's Coles' Notes here in Canada. ;-)
Well, you can learn a lot by working for people who do it poorly. In the year before I started in business for myself I kept a list of the things that I saw in the company I was working for that I never every wanted to be known for myself. There was a lot. I still think about that list sometimes. It really was helpful and I'd recommend that practice to you too if you're thinking about starting out. If nothing else it made me look and listen carefully to all the business practices (some unintentional) that were going on at that company. On the topic of that settlement you mentioned, I don't think there's any one skill that an independent contractor needs more than clear, honest communication with the customers, suppliers, and subs - estimates, contracts, take-offs, change-orders etc. You can work through some pretty heavy problems if everyone feels like they're in the loop as much as they need to be. Conversely, if any of those people start to feel left out in the cold it doesn't much matter how skilled I am at building, the project's going to go downhill. best wishes to you, j
NAILED IT!I was just going to say about the same thing you were to the OP.I worked with (for) another guy for a few years and in that time saw people's dreams get crushed by his lack of business acumen. He designed and built beautiful stuff, but communicated poorly, and didn't have a handle on estimating projects actual costs, so they'd end up costing 2x what he thought in the beginning.I watched it for a few years and when I finally decided it was time to up and start out on my own, I took those lessons with me the most. And that was really it when I started my business. To be honest, I had no business plan; no idea of where the future would go; not even that much knowledge about carpentry/construction I just knew that I wanted to be totally upfront and honest at all times with the clients about anything project related, especially money! And I had the confidence to say "Yes" to just about anything, and the desire to make sure that before the end of the day I really knew what I had just said "yes" about, even if I didn't at the beginning of the day. That's why I'm here still learning everything I can.And so to the OP, my opinion is "go for it". It sounds like you've got a good head on your shoulders, know your strengths, and most importantly know your weaknesses. As others have said, it's relatively easy to hire on a sub who knows exactly how to do the thing that you don't know how to do. What you need to know is how to get that sub and use them effectively and keep it all running smoothly. And then while the sub's doing his or her thing, pay attention and see what they're doing and how you can do that, or at least know what you can do better the next time to be prepared for them. You can have a great "crew" without having a single employee. That's the way I work, and for me it's the best possible scenario.Good luck!Paul
http://www.pauljohnsoncarpentry.com
<so they'd end up costing 2x what he thought in the beginning.>That's an interesting one that seems, in my limited experience, to get into some pretty loopy communication problems besides simple bad initial estimating. Customers who want a builder who builds top-notch stuff also WANT to be people who can afford that level of work. So then the builder gets to thinking he has a bit of leeway and can really stretch out and do a great feature project. And then it goes around and around. Communicate communicate communicate. j
I spent years remodeling, framing and trimming for others, Then Ran a crew, worked Union, ran a crew and went on my own in my 30s.
I needed every bit of skills i learned to make it.
Every thing i learned saved me from disaster.
I lacked Bizness skills and selling though..
They dont teach that in books, At least not Street biz survival skills.
Until you can do most all carpentry skills reasonably well, Run a crew, Know how to bid and sell i dont think you should try it.
Not knowing you , You may very well be a sharp cookie but remember theres no one to ask when your by yourself..
I always thought my trade skills would be enough, It was not, Its equal people skills, Selling, Bizness, Bookkeeping, Money management.
Most people lack one or 2 of these and fail.
Strange if one can hit 70 percent in All one can do better then anyone being a allstar in one but failing in the others
.... trade skills would be enough, It was not, Its equal people skills, Selling, Bizness, Bookkeeping, Money management.
So true.
Thought about going into building houses when OP's age (1977). My day job paid 'a bit' better than $35K then (acct for infaltion), esp with fringe bennies. Could do anything technical or physical then.
I did a frank assessment of my skills and decided that the bookeeping part would likely land me in hot water (or jail) due to the IRS, and would have been too stubborn to pay somebody else to do it (still am<G>). Also realized that once I needed to start adding employees if all went well, no skills there either that I cared to learn. The selling part was also a non-competency assessment.
Well I can tell you the biggest builder by far in the city where I live was started by a young man in his early twenties with no building experience at all, and money that he borrowed. He simply jumped in, and fully committed himself to the task of building a company. He started by building one spec home, and every time he could... he multiplied the number he built. It's many years later now.. but they build about 50-100 homes per year. They also build strip malls, small office buildings, retirement homes ... all of which they own and lease out. They are a very wealthy family now, and it all began with a commitment to the task at hand... and it did not require even as much knowledge as you already have. You don't need to be a craftsman on every (or any) aspect of the actual building job.
There is no single right way to achieve what you want, but it won't happen without a committment to the dream. When you act like the kind of person that makes their dreams happen, and can make the decisions required, you will also end up being treated like that kind of person. None of the folks here will know if you are ready to jump in. This is for you to determine, and fear will be a normal part of that process.
I wish you the best.
You don't really have to know everything about every trade. The trick is knowing what you don't know and how to find the folks who know more than you in the areas where you're a bit weak.
The other thing you should realize is that your main job is to manage the job and the people (subs or employees) actually doing the work.
That's exactly why my mind has been brewing about this. The company I work for builds homes that are $1 - $2 million plus, but I'm not sure my boss would know how to change a circular saw blade. Seriously! He's only knows about how the various trades interact in the construction process.
You need to be careful about sizing people up like that, deciding that you know what they know, and why you know at least as much as they do and can therefore succeed. One GC I know has been at it quite a while, has good people skills, not a very good builder, but has family money and has been able to rescue himself from his own shortcomings a few times. If he didn't have backup he'd be sunk. There are a lot of people in this business operating for reasons that aren't easily seen.
Good point. By the way, I'm persuaded by your argument to prepare and plan. I'm a preparer. I'm a planner. My main fear is never getting around to it, and just dreaming endlessly. This evening, mulling it over, I'm coming to see that there's a good argument for finding a better job at the moment. My present job has been very educational, but mainly as an observer. I've picked as many brains as possible on every aspect of building.I don't know if I can take my professional development that much farther in my current position, though. I spent a whole day last week hauling pails of demolished plaster to the dumpster.
Over the years there have been many, many guys here talking about wanting to go out on their own. What they often get told is that they have to be good businessmen - Not good carpenters. Sounds like you're way ahead of the curve on the business end. There are other things, like sales. That doesn't seem to come naturally to most guys. Can ya do that?If you don't know how to frame a roof you can hire help for that. My thought having read through much of the thread is that if you don't do it you'll always wonder if you should have.BTW - Stick around BT. Read a lot and ask questions. The depth of knowledge and experience here is amazing.
My thought having read through much of the thread is that if you don't do it you'll always wonder if you should have.
Have actually had the opposite thought -- GLAD I did not start own business. (esp re-reading my previous thread contribution)
Probably would have had lots more money now( but so what?) and maybe a coronary?
About the time I thought of starting a homebuilding business (I had acreage available and paid for, decent savings, etc.) the assignments I got at day job got more interesting. Now being a 'senior weeinie', pretty much can pick to support whatever project I prefer. Would need to be a multi-billionaire to be able to do some of the projects independently that now able to contribute to.
Both brother and son have their own businesses (non-construction) and are successful, but they both had 4-5 years starting where it was rough.
Yeah. . . ultimately, I'd say that it's the business end of things that interests me more than actual carpentry. Reading this thread has me reflecting on just how much knowledge a self-employed tradesman needs in *completely different fields.* And you're only as good as the weakest link. Sales. Legal. Accounting. Estimating. Production. Like Bobby said: get a B in each and pass. Get an F in one and - well - you're F'ed.I can see why a lot of people feel they need a partner, just to add another brain to the mix. That's something I wouldn't consider for a heartbeat. If there's room for multiple salaries in the equation: hire someone!Another book I'm reading points out that a new remodeling business should aim to be in the top 5% in terms of profitability, because 95% of remodelers go out of business. So much to think about.
because 95% of remodelers go out of business.
Now you see what being competitive on your price gets you. Get your prices up!
but, first see Geralds spreadsheet on costing your overhead
I can see why a lot of people feel they need a partner, just to add another brain to the mix
Last thing you need is a partner.
If you prosper, you'll have offers of money, your brains and my money is the way it goes.
Means you work you butt of and the guy with the money profits, you don't need that one either.
Joe H
I'm young and I run my own small-time show. This thread has some eye-openers for me as well as some ideas I've pondered as well.
One thing that has kept me going when it was rough was worrying only about things that I could control. Other contractors you know will get the jobs you bid on, will seem to be doing better than you, etc. etc.
If you let things like that get to you, you'll lose sight of your own plan. Trouble will follow.
My mentor told me that its better to work for nothing than to stay at home, because at least you'll be learning and getting yourself out there.
Well, chances are that if you go out on your own, there will still be days that you're carrying buckets of demolished plaster to the dumpster <G>.
I don't know if anyone else has covered this yet, but-
When you first start, you are probably going to be working long days. You may "only" spend 8 or so hours on the job, but then you also have to spend time at home doing estimates, bills, ordering materials, arranging for subs, etc.
Make sure your family is OK with the amount of time you're going to have to put in to get your business going.
For me, there's nothing like being your own boss. Running a business isn't easy, but it beats taking orders from someone else.
I wouldn't expect a builder that is building 1-2 million dollar homes to have a saw in his hand.
Oh, of course not. What I was getting at is that he has zero carpentry skills.
One guy you should get familiar with is Michael Stone. His position includes the idea that you are probably already a good enough carpenter by a certain point (not very far in, IMO) and what you need to continue developing is business skill.
http://www.markupandprofit.com/
I agree. I would suggest to the OP to read 15 or 20 books on the business side of contracting after he reads the classic The Richest Man In Babylon.
"He only knows about how the various trades interact in the construction process."That's far more valuable than knowing how to change a saw blade. - lolAlthough the boss needs to strap on his bags sometimes, his real jobs are:- making sure that this job is running smoothly
- making sure that the last job ended well (bills paid both ways and customer is satisfied)
- making sure that there's another job in the pipeline.Often, these three jobs keep the boss busy on Sunday afternoon while that saw blade changer is vegging out watching football. - lol
IMO David is right on, I was in your shoes not too many years ago, I was chomping at the bit to go out on my own because I felt like I had to do it all right then!!
I was a skilled carpenter but that was it, I had no business sense but I could build anything. I just got married, had my first child and started a business with a partner. BAD IDEA.
My work was great and things were going swimmingly, on the construction side, I left the business side to my partner. To make a long story short, that was 8 years ago and I just recently got out of debt. I am now senior project manager for a GC and I now do all the estimating and continuation sheets, scheduling and coordination. I make around 55k and I couldn't be happier I now have three kids, still have my house and my wife, sorry for the long post but I guess what I am saying is self employment can feed your ego but not always your wallet.
Autod1dact:
Let's say you go out on your own. Your father-in-law says you're nuts but you disregard his advice anyway. In a few months or years you fall flat on your face.
Will your wife still love you? Will you still have friends? Of course. Will you get another job? Sure.
What you will not have is the constant ache of "I should have taken my shot when I had the chance." You've got no choice, really. You don't want to be seventy years old and have this problem. Do it now, sink or swim.
Work on your business, not in it. -E Myth
Kowboy
Edited 11/8/2009 10:28 pm ET by Kowboy
Yowzers, you really are a cowboy!I read the E-myth Contractor, too, a couple times. Good stuff.
All good advice here. Boss, David, & facto are dead on. Just start very small and be conservative. Even if it's just you and you're doing a screen door repair, or installing a few windows for someone. Start to get your name out there and network yourself with other trades. When a bigger job comes up like a bathroom or a kitchen, do your utmost to impress. Start small and let it grow. Hire good subs. Eventually get a full time helper.
Always have a system both in the building and the business.
Now is not a great time to build. Repair & renovation is what is going on. But...it's up to you.
Remember, you make more money pushing a pencil than you do swinging a hammer.
Things I wish I had done when i started:
NO partnerships..
hire a book keeper sooner..I hate paper work so guess what dosent get done if I have to do it?
Incorporate
Build up a financial cushion
Learn to network outside of the industry.........that's where work = money comes from
slow to hire fast to fire......deadwood is not only a drag on sustainability but also harbors disease. get rid of them/it
learn to say no........it cost less to sit at home than to go to work & lose money
trust your gut..........see above...my #### must be on with Velcro for all the times i didn't trust my instincts and had it handed back to me
an accountant, a real CPA
A very good insurance agent who knows the business. Not all of them do.
A construction/business attorney. Look for one that is real good at beating contractors out of their money. He/she is who you want on your side writing your contract template to protect you from them.
take time for yourself
get a separate phone #
this is what I can think of off the top of my head. Also talk to your wife. Although it is not what ultimately killed my marriage it certainly didn't help any. Keep your family first and remember its only money. You can make more. your kids are only that age, that important experience, kids once."this dog may be old but he ain't cold. And he still knows how to bury a bone."
Lattimore
http://www.rehmodeling.com
That is some excellent advice Robrehm. I think a thoroughly thought out, and written, business plan would cover many of them.
plenty of people have made good on the business side of the trade. it is good to have some skill sets so you can provide direction
I think next time you need to frame a roof you get yer butt up there and take charge. read up on areas where you are weak. make a habit out of knocking time off tedious tasks and focus on quality
cheap prices will get you work if you advertise enough. good quality will keep you busy and your clients will advertise for you. your choice.
Well, Idon't have much to add to the fantastic advice you have already gotten here, but I would like to emphasize a few points that others have already touched on.
First, if you clear 35k of personal income your first year in business for yourself, I would consider your business plan a smashing miraculous, success. I have never really worked for anyone but myself, started my first business when I was 15, but the one thing I have learned from my own experiance and from watching others is that your plan should include not making much real income for the first 5 years of your new companies existance. Now of course, you might get lucky, or you might be one of the guys who is genuinely, truly just "made" to be an entrepeneur.
But when you sit down to talk with your wife, when you look over your current financial picture, the one fact you have got to understand almost to the exclusion of all other financial facts is: Success is not making any "real" money for the first 5 years. IF your wife and your banker are on board with that then you are good to go. The great thing is once a business is up and running well, then you do make a significant amount of money, far more than you could ever make doing the same work for somebody else.
Second,if you do take the leap, no matter what happens in your business during the day always park it with the truck when you quit at the end of the day. Obviously, don't hide anything from your wife, but self-employment brings with it a special brand of worry and anxiety and you will do yourself a tremendous favour if you set ridgid mental and emotional boundaries for yourself when it comes to the day-to-day of running your own show. Your wife and kids will thank you for it and it is probably the hardest part of being self employed.
Oh, and what somebody else said "work ON your business, not IN it."
Naive but refreshing !
Ok,
Lets start with what jumps out right away...........
You're unhappy with your current siutuation. That alone is not good enough reason to jump out on your own.
Lots and lots of people jump out on their own due to job dissatisfaction. So many of them fail in a very short period of time......................so many that a guy wrote a book about it (The E-Myth, Read it if you haven't......along with "Who Moved my Cheese" and "The Automatic Millionaire" as well as a book by that scary tv chic Suze Ormand about why your affraid of money. Forget the name. I don't reccomend "Rich Dad/Poor dad" because the guys a fraud.............but you may still learn from his book).
Even worse than failure? are the guys who work like dogs for years to barely support their families.
How to avoid that?
Well, let's start with the job. You're unhappy and your also obviously interested in your work. Go look for a job with a company that will appreciate your motivation.
You'll find it. Be honest with them about what it is you want out of a job......................to become well rounded and broaden your experience.
Learn and take notes!!!!!!!!!!!!! Historical data is very important. How long does it take you to hang a door? How long will it take you to hang and case ten?
If you get a job hanging and casing ten doors? How will you know how to price it? $45 a door because that's what the other guy is charging?
That brings us to another point....................KNOW YOUR TRUE COSTS.
A business is a business..............if the BUSINESS needs a truck and a cell phone? Then the BUSINESS pays for it. Not you, the BUSINESS.
Recently I helped a friend figure a set of outdoor stairs. When we finished we talked about true costs. He and I used to be business partners and he's been on his own since I sold him my half in 2002. When we talked about "True Costs" he was in shock to see the real number.
You can't know what to charge until you know what your time costs. By the way.............if you work a 40 hr week? You'll be lucky if 30-35 of them are directly billable. That's som,e complicated math you may need to work on. Business costs are every month regardless of if you bill 140 hours or 14 hours.
Be honest with yourself. What is it you need out of life? DO you want to be a big time contractor? Do you want to be a one man band artisan type?
What is the minimum level of living you and/or the other persons in your life can accept and for how long?
My first year in business I made well more than double $35K.........BUT....i was lucky enough to have landed a very good contract that lasted all year. My second year in business reality set in and I still made more than $35K...............but I worked a whole lot more than 40 hours for it.
The first few years may be tough. Make sure yopu can go 6 months without a paycheck..............and then live on less than $35K for another year or so.
EVERYONE should be out on their own at some point in life. B ut if you want to succeed? Make your plan carefully. Don;t just jump because you hate one job.