I want to start a discussion about business and the guys that have been in this great business for a long time and what they can teach me and others. And how it might even save someone from going under, or how things that could be learned might just help someone have a more succesfull and satisfing life in this business.
Just to start it off- and like I said I want to learn and do better. I’ve been framing for a little over 15 years right out of high school.
And one thing that has helped me in business over and over is don’t try to hord all the work . sometimes even a job that I knew I was going to be a very profitable job ,but I knew I couldn’t complete it in a timely manner so I passed it on to another framer that was some of my better competition and that got me some great jobs .
The way I’ve always looked at business is there is way more than enough work for everybody and if there isn’t then you are probably doing something wrong so fix it.
anyway I’ve got a lot to learn about business and I would like to hear some of the key things that have made a difference for you. I guess what would you say to a younger guy that is starting to roll in construction that might take a few years off the learning curve for him
Thanks- Rob Cutting
Replies
Always keep in mind there are some jobs, no matter what they may pay, that just aren't worth doing. Good luck. Griz
Make sure you pay your taxes.............ALL OF THEM!!
And ON TIME!
Eric
I Love A Hand That Meets My Own,
With A Hold That Causes Some Sensation.
[email protected]
In God we trust , all others a good check.
Rob ......Insurance, Attorney, CPA and remember your most important money making tool .....a pencil.
Rob, my advice is to avoid the 1099 trap. Heres a post gleaned from the creonline.com site:
If you think 1099ing people will get you off the hook read on...
A few years back a partner and I hired 12 people as "Independant Contractors". As things would have it, some of these individuals did not got along with my partner and become "disgruntled employees". We had one of them go the the EDD (Employment Development Dept.) in SoCal and complain.
Bottom line - We got hit with a $17,000.00 tax bill from the government because their "LAWS" supperceded our ability to call them "independant contractors".
Now am I ever going to play that game again? Certainly not on that scale. The point here is you have to watch out. That $17,000.00 tax bill woke me up. I hope this post wakes some of you up.
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!
blue --thanks for the adviceI know a lot of guys that do exactly that and don't realize that in most areas an indipendant contractor is someone who you don't tell what to do or how to do, someone who supplies there own tools and who comes and goes when they want to I know some independant contractors that don't get told what to do only because they don't speak english , and they "supply there tools a $25.00 tool pouch, and they can come and go as they please because they do the independant work after regular hours ie. papering roofs etc.thanks again - Rob keep the posts coming -good stuff!a question I would like to throw out to every one is . I always had a small framing crew usually about 2 or 3. and I'm about ready to start my framing crew back up in michigan . I moved to Michigan almost 3 years ago,I was remodeling for 2 and a half years here in michigan and couldn't take it any more. Framing is in my blood. anyway the question is I was always afraid to expand my crew , I guess mostly because of expense. So my question is what have you guys found to be the most profitable size crew and is the added pain in your neck worth it. Thanks -Rob
Edited 3/2/2005 10:58 pm ET by Rob
Don't know if I qualify as an old guy yet, but I am finishing my 14th yr in business.
The thing that helped me most was to start paying myself a regular salary. Every 1st of the month, the business writes a check to me. (Credit the advice to Linda Case). It forced me to run the business off of a budget, and to track my time and cashflow much closer.
Secondly, keep your bills paid.
When the 2 above ideas don't work together, look for the weakest point in your business, ( marketing, sales, estimating, production, accounting, people skills, etc), and then fix it.
Hint: Your weakest point will likely be the thing you hate doing.
Hope it helps.
Bowz
So my question is what have you guys found to be the most profitable size crew and is the added pain in your neck worth it.
Rob, it's impossible to offer advice about that without knowing some of your specifics.
What type of framing do you do? Customs, Commercial, Multi family, tract, spot builds, remodels?
What kind of expansion are you thinking of?
What is the makeup of your crew?
What network of builders do you now have to supply you with work?
What type of community are you in? Rural or urban?
Lots of questions..
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 would be framing mostly $130,000 to $200,000 houses
median prices in this area is probably $140-$160,000.I've always stayed away from the bigger customs due to crew size mostlythere is a lot of work here, If you are willing to work through the snow there is plenty of work year around.(And I am.)southbend Indiana is 25 minutes from me which is where I will be working mostly . Notre Dame brings a lot of money into this area and work.And as far as work I have lined up that is minimal. I am currently working for a framing sub right now and am in the process of bidding 3 housesMy boss right now is fair and pays me well . But after being self employed for most of the last ten years It is calling me back and enjoy being self employed and the money is better, But I am asking the question about crew size and general advice not because I didn't make money before, but because If I get back in it I want to do it well.my boss right now runs about 12-15 guys year around he has 2 crews running all the time and sometimes 4 . it appears that he does very well . He has 2 equal partners . and then I am next in line and run a crew about half the time. While it seems to work for him untill I do go out on my own again. It could be counter productive to talk business with him . So your advice is appreciated. It seemed for me 2 helpers where good , I guess what I am asking is with having a pretty good Idea that there is steady work . I want to know if profitability for you or someone else in there experience goes up or down on a house with more help. And at what point did you need to add a lead man . It seems to me it is rare to find good help that can help guide the "knuckleheads" that seem to come through the crews on a steady stream . I also know quality is harder to maintain as you get bigger.So I'd like to know what has worked for someone else. I also know that your situation might not work for me, but I'd like to put it all together and learn something from it. Thanks-Rob
rob.. go big or go small..
big is you and three guys.... and you organize your company so you are the extra hand.... you can do two crews of two.. or one crew of four.... or you can sell and organize while the crew of three, builds
or ..if times get slow you can downsize.. but you will never have a business if you have to be there...
that's big...and it can grow to any size you want
small is you
or you and a partner
or you and all subs
me.. i feel that it is not a business if the only way it works is if you are there..Mike Smith Rhode Island : Design / Build / Repair / Restore
Rob, you must be in St Joseph then....
Don't get carried away trying to grow your crew too fast. Mike is right, get the crew humming till it will function without you.
160k houses are usually one week roughs with four guys. If you can't get them done that fast, when you expand, they will take longer. I'd be looking to increase profits on that size house by eliminating guys and streamlining the framing operation. I'd be thinking in terms of three guys max...two framers and one apprentice. My hopes for the apprentice would be that he would be able to replace the framer and the framer replace me.
It doesn't work that way however. In the trades, once you walk, the replacement cuts you out. The carpentry business is a hard one to expand and I give all the guys credit that have grown larger than one crew, but rarely do guys stay in the subcontracting business if they get that large. It's usually too risky for the amount of exposure.
Stay fast and lean, expand slowly, if at all possible. Don't let builders coerce you into putting more guys onsite than you want....you'll only be wasting precious dollars.
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!
Guess I'll add my 2¢ worth with one suggestion.
I use a VPS - Variable Price Structure and see no reason why your shouldn't.
I've given this example before. Say I get a job to repair a damaged ceiling from a leak. I charge my regular rate to replace the drywall patch and tape it, but charge nearly double - or more- of my rate when it comes to texturing the finish to blend with the surrounding texture so when painted, the patch cannot be located, and especially if it's a popcorn ceiling.
In your business, why charge the same rate for cutting rafters in a multi-roof building as the same rate as for just building walls or nailing up sheathing or sub flooring? Like blending in the above texture, cutting compound rafter cuts takes a lot more "expertise" that framing up walls.
It's also the same reason why my cardiologist charges about $175 for a visit in his office, but $4000 each for two stints he installed in an artery.
Expertise, talent, special experience, accepting responsibility for a difficult application, or whatever you want to call it. It's also the same reason why a diamond cutter charges one hell of a lot more to cut a large flawless stone than one with flaws.
Think about it.
Sonny, good to see you posting in the business section again! You obviously have found a more entertaining business site to hang out in. I'd like to find another business site to tune into because it gets kinda slow in this folder quite often. Any suggestions?
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!
Hi Blue,Well, there's a decent amount of action on the JLC forums, and they've got three or four different forums for business and separate forums for different trades, computers, etc., although I don't post much there anymore either.In the last several weeks since I've weaned myself off these forums, I've increased my income by about 11%. Spending more time in my businesses, restarted my quarterly newsletter, and thinking of changing it to bimonthly due to the great reception from it, and doing more research on stocks, since I play the market.I've also been working on what I guess are called "white papers" or "e-papers" - essays about branding, marketing, selling, etc. It seems over the years I often make the same comments every 6-12 months when newbies join the forums so this way I'l hae my comments on file. Guess I'll also see if any of out trade magazines are interested in publishing any of them in upcoming issues.I enjoy the camaraderie on the forums, but I'm having a ball, and with no arguments. In what takes up my extra business time now, no one cares if your a conservative, liberal, Dem. or Rep. and I don't care either. Let's just say that I'm enjoying people and relationships more, and to me that's the key to happiness. Today I'm cleaning and reorganizing my office. Went to Office Max yesterday and bought a desktop for my daughter and almost dropped dead when I saw that the Microsoft Office for Business was $450. WOW! It came with Microsoft Works but she uses Office at work and wanted to burn work on a CD, bring it home to work on it and mainly uses Excel and Word, so I plunked down the estra $477 with tax. So $1280 later with a 3 year service contract ($130) , she's set for a whileNo wonder Bill Gates is a Bi$$ionaireAnyway, check out the JLC forums:http://forums.jlconline.com/forums/
Sonny, I know what you mean about weaning yourself off...the weather is starting to break and I know for a fact that I'll be way too busy to hang around...
If you don't mind, I'd like to be included on your newsletter list. My email is valid here on this site.
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!
OK, you're on it. It's not anything fancy, just a single page. since I do a lot of work for condo associations I try to use it as validation that I'm a very knowledgable person about servicing them, so one side is gearded to condo needs/problems, adn the other side for condo and house owners.It sounds egoist, but when I hear a condo baord member say: "Boy. You really know your stuff." that twlls me I can tweak my labor rate or markup a little more for that particular association, and get it. The same for for private customers. One more example of usieng a VPS. It works.I use a Mac, so I'll convert both sides to pdf files and email them to you.I save trade magazine articles, down load tech sheets from product manufactures, and other pertinent infor from variouos web sites. I then either crate hard copy manilla folders for the printed pages or articles, and computer files by category also for the downloaded info. Then I just organize the newsletter and include some of that info in it. In future newsletters I intend to include some pertinent web site urls that will serve to further validate that I"m on top of their needs and desires.You might want to consider doing the same. Maybe takes me a couple of hours to do the layout & info to use, then I print it on my color copier (about $300), stick them back in and copy the other side. Print the envelops and stamp them and they're off. Maybe a half day's work, but well worth it considering what I get from their use. In fact, son Tom is going to start one as well. For some of the condo associations, I just drip off acouple of dozen for each association to their respective property manager, and they in turn put them up on the condo's bulletin board. For other associations, I give the stack to the on site manager and s/he posts them on their board.Funny, I wanted to just work by myself and only work about 20 hours or so each week, but I keep getting more jobs, and larger one's again. Since my work is my hobby, (no boating, golfing or fishing) I figured screw it, and hired a full time guy - another contractor who recently moved here from Reading , PA, and as things get busier, I'll hire another one. I figure as long as it's fun and I can continue to increase my rates every couple of months, why not. When it stops being fun again, I'll substantially raise my rates in one jump to reduce sales, and lay off one of the guys and shrink again.
Thanks Sonny. I'm interested in that newletter precisely because I'm tinkering with the idea to create one for our business.
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!
Well, email me:[email protected]
btw ... talked with that "other contractor"
Loving life again. said only mistake was not packing up sooner.
he parked the truck as I caught him right at lunchtime ...
as we're talking ... he's interrupted by someone looking for a new kitchen.
streets must be paved with gold.
Jeff Buck Construction
Artistry in Carpentry
Pgh, PA
Well, whenever you get the itch, now you've got "two" guys where you can stay while checking out our area. And you're right about it being paved in gold, but only if you treat them like gold.BTW, just started giving out my new newsletter and within the last week I got three now jobs, and with no bidding. Just how much and when can you start?In the newsletter I mentioned about having fabricated a "U" shaped aluminium "cap" as I cal lit, for the bottom of metal doors that are rusting at the bottom. Looks like a kick plate on both sides. One of the jobs was for me to install them on 36 condo garage service doors. Cost me about $4 each and I charge $15 each plus $30 each for labor installation - about 15 minutes and to caulk their perimeter. I have a local shop bend them on their brake at 9 ft. long and then I trim them to the needed size at the site.so for those of you who do not currently hoffer a newsletter, I strongly suggest one.It does keep your name in front of those reading it, but IMO, more importantly, if it's content is the right type, you are then "percieved" as an industry expert, and suddenly price as a factor goes further down the list of priorities.
more importantly, if it's content is the right type, you are then "percieved" as an industry expert, and suddenly price as a factor goes further down the list of priorities.
I agree Sonny.
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!
Take a long term look at growth. I've seen several people who lose by failing to expand enough to capture all of the availabble business. Thus they open themselves up to additional competition.. On the other hand if the added business is of a short nature you might be in a better position to let others take up the slack.