I was wandering through the Home Depot today, and yesterday picking up some odds and ends. I got to thinking……IT IS SO MUCH EASIER doing roofing because I only have to head down one aisle. It’s always the same one and its on the end near where I park.
Then I looked way down at the other end and I realized that last year, when I was chasing remodels, I’d have to walk down EVERY FREAKIN’ AISLE looking for this and that and that and this.
Now, I usually have to run in and grab a pipe flashing or a bundle of caps.
So what does this have to do with business? I don’t know. I do know that I can actually make a business out of the roofing business but I’m nor sure I’m capable of making one out of the remodeling effort. I wish someone had pointed this out to me back in my 30’s or 40’s. I probably would have ignored them….
Replies
Ive always wondered how those stupid folks on tv flipped houses.
They dont because they never show what the shopping is like and the real jobs of running stuff down .
Jim, you're making roofing seem like a dream job! I've been meaning to ask you, how are you getting the roof labor?
We'll have a kid
Or maybe we'll rent one
He's got to be straight
We don't want a bent one
He'll drink his baby brew
From a big brass cup
Someday he may be president
If things loosen up
Roofing labor is the least of my "problems". I drive by five or six crews a day that would love to have our work.
I'm currently advertising and interviewing for an in house crew. I want to have all the work being done as fast as possible by hourly employees.
Let me rephrase that... how are you finding capable labor that doesn't screw up? I know a lot roofers, but only 3 crews that would the job right... and they stay booked.I see a lot less waste from roofers than I do from siders<G>http://www.tvwsolar.com
We'll have a kid
Or maybe we'll rent one
He's got to be straight
We don't want a bent one
He'll drink his baby brew
From a big brass cup
Someday he may be president
If things loosen up
The key to labor is the roofing crew leader. Also, before we hire the crew, we let them know exactly what we are looking for. I inspect one of their ongoing jobs before I hire.
While they are doing the job, I watch. Today, I was on a roof for an hour and a half. Watching. Everything looked good when I got there and everything looked good as they were working. I take pictures. I eyeball their lines. I measure things.
They watch me watch them. They see me counting the bundles. They see me rummaging in the dumpster. They know I'm looking at everything. I walk around the house.....sometimes five times!
Its all about supervision. When I see anything, I call the boss man ( the money man). He tells me to tell the jobsite supervisor. I tell him "No. You call him and you handle it. That's why I'm paying you the big bucks."
My fulltime job is to watch these guys put roofs down. Its nothing more complicated than that.
I'm also interested in more details about your "new" business, if you're willing to share any.
When I first came here in the spring of 98, AKA the BLUE was here. He always shares and that was one of my first enjoyments to breaktime. Some people liked boogerin with blue the best but to me that was just one episode to the movie.
Same here Tim. I've been watching the Blue Story for years, and am very curious about this chapter.
Blue stopped by my shop about three weeks ago and seemed pretty darn happy strutting in with shorts and sandals and we had a great visit. I hope he does share and I hope he stops by more.
Bruce
I do wear sandals every day. Shorts and sandals just seem right in this town. I do have a nice clean pair of Cougar Paws when I climb on the roofs. I don't really need them, but I put them on for show when the homeowners are watching. If they aren't around, I go up in my sandals.
My one requirement, of myself, is to have a pocket for my little spiral notebook.
I am considering getting my air conditioning fixed in my truck though. I'm sometimes a bit too wet to get too close to clients lol...but they always seem sympathetic when they see me coming off those roofs so sweaty. I tell them that I love it but I don't know that anyone believes me. I also never turn down a glass of water.
Every chapter has been an adventure in one sense or another. MI kicked the heck out of me and I'm thankful I escaped with whatever I could carry with me. The tools I brought here were key to forging the current business partnership with my new partner. We compliment each other in a variety of ways and both of us are aiming very high. Neither of us intend to be in the trenches doing any of the work, supervising or installing. We are strictly focused on building a business....one that we can sell.
He originally was going to set us up as a franchise test. Instead, he's moving here permantly and we will be looking to expand into other cities, states and regions after we stabilze this operation. I know for a fact that his operation would work anywhere. It would take a business minded person to embrace it though.
one that we can sell.
That sounds like a good plan. I recall when you were still framing, then pursuing real estate development, then remodeling in TX, that none of them seemed to really fit the philosophy you were espousing, although they all seemed like they could be fun in their own way.
There are a few business-minded roofers around here who seem to always be busy. They are too expensive for us (we're GC's) so we have gone to mostly doing our own roofs. Are you working only for homeowners or do you see any upside to working for GC's? Are you doing strictly asphalt roofs? Have you had to deal with callbacks or warrantees yet?
We just started working with ABC Supply here and I'm very impressed with their systems. That, and shopping for a brake this week, estimating & detailing lots of roofs lately, and hearing about your success has me thinking rosy thoughts of a new business....
Our current business model wouldn't be conducive to selling to builders or other GC's. We are looking for retail pricing. That means we have to buy the services at wholesale prices and then get our markup.
Buying services at wholesale makes sense for both us and the skilled trades. If they are on that roof all day, they don't have any energy left to deal with the things we are dealing with. Today, my actual work day started at 8 am. I didn't walk in till 9pm. Where would I find the time to pound five or tens squares if I was the tradesman on the roof? Something would have to suffer. If a tradesman wants to do business and pound nails, usually both sides of the equation suffers. There are many homeowners who want to avoid using companies like this. We've chosed to serve that demographic. We know we can't compete on price with one man band who sells and pounds....but we don't care. We'll work for the other homeowners...the ones who worry about competency when a large contract is signed.
I deal with ABC too. At this point, we are willing to deal with anyone but we are anticipating the time when they come to us. Again, that is a goal. We want them knocking on our doors offering us better prices and terms.
I did have a warranty issue. After the first rain, a suntube leaked. The installer hustled right over there and solved the problem. It was a good test. If he hadn't reacted so strongly and swiftly, I'd be using another installer right now. But, even if he flakes out in the future, we'll be able to honor our warranty. Why? Becasue we are selling retail and getting enough money to survive.....and prosper! Why? Because we ask for it! And, the roofs are being put on properly. I know that ....I was watching again today.
No one will ever give you ten percent more than you asking price right? So, if we want to get ten percent more profit, we have to ask for it. Guess what....some people say yes LOL!
As far as my failed ventures. I believe they all are part of the development of me and my skills. I've run a horrible business since 1984. I never prospered. I never built a true business, one that I could sell. I've been focused on that since I decided to stop framing (framing is NOT a business) and I've learned some very valuable lessons...ones that I am now employing. Along the way, I've also learned some good things....how to network...how to approach investors and get them to invest in us...how to look at opportunities from different points of view. Its not easy for someone like myself to transition from a hands on carpenter to a desk jockey...but it's a necessary evil if I want to have something in my coffers (for my wife) when I lay my head down for the final time. I know she'll outlast me and I'm just struggling to find that vehicle that will take me where I want to be.
I'm also in this for the fun of building something other than a nice house. I am building something....with different parts and techniques.
and don't forget the infamous milk bone contests!View Image bakersfieldremodel.com
I'm just wondering how many spotted owls he can save by doing roofing now. It would seem difficult...
Jon Blakemore RappahannockINC.com Fredericksburg, VA
I'm not saving spotted owls...but I am very keen on saving every last shingle that I can. So far, I'm failing miserably. It sickens me to see how much waste there is in shingles.
I don't mind sharing. There are some things that we are doing that are proprietory so I will have to be coy about some elements of the business.
We basically are nothing more than a professionally run roofing company. I've partnered with a Michigan refuge that finally got tired of selling roofs in MI at margins that were razor thin. When he finally decided to come here to check things out, he realized that Austin was much different than Metro Detroit...which is an economical wasteland. Things are relatively normal here.
We got an easy roller coaster lift when a hailstorm hit and that put lots of signed deals in our books. But, we also had to take our lumps to learn how to deal with both the clients and the customers. I'd venture to say that we missed at least 200k (conservative) worth of business because we didn't know how to handle the objections and properly present ourselves. The people in the hailstorm areas are very cautious and many are on their second hailstorm so they are experienced and know how to work both the insurance companies and the trades that are vying for their work.
The most important detail that I can share is that I didn't have to invent the wheel. My current partner was selling 7-10 roofs a week, at normal retail prices, back in MI. He was the fourth largest roofing company in the state. He majored in finance and accounting in college and has built and sold businesses starting at an early age. So, the foundation for success is based on his solid experience in business and specifically, the roofing business.
To be honest, I was apprehensive about committing myself to this endeavor. Roofing just isn't the glamorous business that most people would want to jump into. I envisioned myself dealing with a lowlevel type roofer and tearing my hair out. That hasn't played out like that and the guys really do a great job. I guess they know that if they dont, it will be their last job with us. We have warned them about that.
Now that I've built dozens of roofs, I've found that I enjoy it. I like the crews even though I can only talk to one or two guys on each crew because we are in the land of many Hispanics. I've never seen a white guy roofing anywhere. I like the business because it is focused. I have several major choices: shingle style/color, drip edge color and gutter color. The sales staff provide me with all that. After that, I can usually fax in my Purchase Order, send a text to the installer with the address and email the gutter installer a work order. Once my spreadsheet is tweaked, I'll be able to do all that inside ten minutes!
That sure beats the heck out of meeting with clients in stone yards agonizing over granite slabs.
Glad to here things are going well for you.
A couple of other nice thing about specializing are that one doesn't have to carry the enormous variety of tools that remodelling dictates and it is much easier to train employees.
Very true!
I carry all my tools in the door pocket of my truck LOL. I have a small hammer, tape, pouch, 1# of roofing nails and tinsnips. Someone stole my flat screwdriver and utility knife but I don't really need them LOL.
So what is your marketing strategy that allows you to get the number of leads you need?
It seems to me that a business like yours all starts with marketing.
Your policy of really checking up on the installs will give you longevity, but with out the 780 or so leads you need per year, you're dead in the water.
Jon Blakemore
RappahannockINC.com Fredericksburg, VA
Very good question Jon!
Remember, I already mentioned that some of the information is proprietory. I'm not at liberty to release any of that information. That is Don's specialty.
When is he going to join BT so we can learn at his feet?
Jon Blakemore RappahannockINC.com Fredericksburg, VA
Even if he were here, I know he wouldn't share anything like that. We've had many, many discussions about how to shield this information.
I really enjoy these threadsHearing about someone's business taking offI wanted to pass along something an old roofer told me"when you're up on the roof don't ever step back to admire your work"Seems like good advice.Again, congratulations on your business.....
Thanks Mrfixitusa.
Looking back, it's obvious that I'm most happy specializing in one form of the construction industry rather than engaging as a general contractor. I rejected the remodeling industry (as a GC) back in the 80's, then again in the 90's and again this year. I guess I'm too thickheaded to remember LOL.
After this new endeavor smooths out, I am going to refocus my efforts to pick up foreclosures and lease options though. With the amount of time I'll be spending out in different neighborhoods, it will be easy for me to find them, as well as talk to people who can lead me to the sellers and buyers. Of course, I don't plan on doing any of the rehab that you are engaging in. When I pick up something that needs work, I'll advertise it as something that the new owner can build "sweat equity" in.
I cannot comment on marketing strategy specifically, but I worked for a roofing company for a short time as an installer/crew leader and I can describe the structure of the company from my point of view.
First the "money man" incorporates, as ABC roofing.
Then the owner "money man" ran ads in newspapers, flyers, TV commercials, etc. I know the advertising was big time.
Then the owner rented an office and hired sales people who were paid strictly on commision, no risk there, with a couple of support people on salary, secretary/bookeeper.
All of the installations were performed by another corporation that is headed by a friend of the owner, DEF enterprises. This insulates the company selling the roofs from the company installing the roofs. He also has one support person/secretary on salary.
Very low overhead, They are in the back room of the rented office where the salespeople are. No tools, no trucks, no ladders, no insurance (they dont perform the installs, just paperwork) just a coupla computers & phone lines in a rented office in a strip mall somewhere, which are begging for tenants these days.
Further, DEF enterprises subcontracts all of its installations to roofing crews. They require that all of their subcontractors have insurance and the relationship is very much one job at a time. If the installers do a bad job they won't get any more installations.
The one thing I noticed that was missing from the company I worked for and the one that Jim describes that is in his is lack of supervision and quality of installs. Nobody ever watched us work, when new installer crews were hired they were lined out by an installer crew leader that had been there for a few months, its not rocket science.
Again the company I worked for had quality/callback issues, but like Jim describes in his post all were sold at retail so there was plenty of money to go back and make things right.
As I said I didn't stay long but I figured it out pretty quick and the reason I didn't stay was that they squeezed both sides against the middle, They got as much as they could from the homeowners and paid as little as they could to the installers. The owner and his buddy got the lions share, with the sales people making a huge chunk. There was incredible turnover of the installation crews, but there was always a steady stream of new hires ready to give it a shot. The only way to make good money as an installer was to employ "cheap" help.
If they would have paid the install crews and support people top wages and stressed quality and customer service and built a good reputation, instead of trying to squeeze every nickel out of both sides while doing al little as possible themselves it would have been a tough business model to compete with.
Imagine if you had the best install crews, and they had a vested interest in doing the best job they could because what they paid to get the job (the collective cost of the strip mall office, support people, and advertising) was less than what it would cost them to do it themselves.
Of course that won't happen because thats not how business is structured in this country, the people that perform the work are on the bottom rungs, the guy that rents the strip mall office in his corporate name and his buddy who fronts the dummy corporation and the salespeople make all the money, thats why they have to get illegal immigrants from poor countries to do the work, with one relatively new legal immigrant who speaks the language to get insurance in his name and pays all the taxes under his social security number and pays the illegal help cash.
It is tough to compete with that business model.
Very concise/clarifying post inD47 for the uninitiated (me), thanks.J(and I know this isn't jim's business model, but enlightening nonetheless.)
And of course, we know that not all/most roofing companies operate this way....it was just interesting to get a glimpse of the inner workings of those that do.
interesting post - predatory business tactics, the name of the money gameView Image bakersfieldremodel.com
Predatory?
The guys at the "bottom rung" are driving around in rigs that have a lot more worth than mine.
Was I "bottom rung" and preyed on when I was framing the big customs for the builders because I charged them less than they charged their retail customers for my services?
You guys really do seem to have something against setting up business models that will return you a retirement.
You guys really do seem to have something against setting up business models that will return you a retirement
I like you Blue, always have. But you can XX XXXX XXXX XXXX in eggnog.
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edited to self-censor, and to add: Sorry about that. What I meant to say is, I don't think I said anything about retirement...did I?
View Image bakersfieldremodel.com
Edited 8/23/2009 4:54 am by Huck
This is almost exactly how the drywall trade is run in my area.
Owner has several vacation homes.
Workers live about six to a rented house trailer and ride to work together. They are paid per sq. ft. They also own the call backs if they want to keep working.
Honestly, I believe if one of them got hurt on the job, he would just disappear.
Sad but true
dug
Doug - I believe you and inD have summed up a lot of what is wrong with our industry today.View Image bakersfieldremodel.com
Is it wrong with the industry, or wrong with the country?
I call it "Wal-Martification." I'm entitled to immediate gratification, I can always justify it to myself as 'A great deal.' Dam the consequences. Dam waiting until I can really afford it. Dam anyone who questions it, I'm smarter than they are...
Edited 8/22/2009 3:47 pm ET by dustinf
Is it wrong with the industry, or wrong with the country?
What do you think? The industry, the country, society, the human race, the universe, etc. Cast the net as wide as you want. It still boils down to what is wrong with our industry today. The craftsman is on the bottom rung. The person performing the labor needed to create the product is nothing more than a commodity, a resource to be exploited.View Image bakersfieldremodel.com
To play devil's advocate (not that I disagree with all aspects of what you're saying), we could all go back to an agrarian economy. Everyone makes their own food, and the crops go bad because of a bad drought, hunger will be prevalent.
Isn't our current society is much better than that? Sure, there are some who have more and some who have less, but for the most part, we are all better off than the agrarian example.
If you have a roofer who's willing to work for X, should you pay him more? I'm not saying that it's right for all the builders in an area to get together and determine (collude) to squeeze the roofers so they all go down 33% in their rates, but if the market works out this way, isn't that how it naturally should be?
Sure, we could give every laborer 20% more, and every apprentice 20% more, and every journeyman 20% more, but wouldn't that eventually just mean that the cost of everything will escalate by 20%?
Like I said, I don't like the way things are. But I also am not sure that some of the changes that, at first, seem to appear to be needed and fair are not in fact unnecessary, unfair, and deleterious.
Jon Blakemore RappahannockINC.com Fredericksburg, VA
"Isn't our current society is much better than that? Sure, there are some who have more and some who have less, but for the most part, we are all better off than the agrarian example."
It was the development of agriculture that provided the model for profit driven businesses. Farming was the original prototype for modern capitalism: dependant on surpluses, expansionistic and nomadic. If we has just walked around the plains with pointed sticks like the good hunter-gatherers we were none of this would have happened.
I agree. When we started to cultivate crops we stopped natural selection in it's tracks. That's the exact point in time we started to think we could out smart nature.Think of when we first domesticated animals. We made a conscious effort to manipulate another species habits, out of sheer laziness. What does that tell you about human nature?Both very profitable since there advent.
Edited 8/23/2009 8:53 am ET by dustinf
To play devil's advocate (not that I disagree with all aspects of what you're saying), we could all go back to an agrarian economy. Everyone makes their own food, and the crops go bad because of a bad drought, hunger will be prevalent.
No hunger in today's world, thank goodness and walmart for that! Agrarian society = Bad. Underpaid illegal immigrant labor = Good.
Isn't our current society is much better than that? Sure, there are some who have more and some who have less, but for the most part, we are all better off than the agrarian example.
You say so, so it must be true. Like LG says, Life is good.
If you have a roofer who's willing to work for X, should you pay him more?
No, of course not. In fact, if victims of any form of abuse are willing to let themselves be victimized, why should anyone object? Might makes right, and all is well in the world.
I'm not saying that it's right for all the builders in an area to get together and determine (collude) to squeeze the roofers so they all go down 33% in their rates, but if the market works out this way, isn't that how it naturally should be?
Naturally!
Sure, we could give every laborer 20% more, and every apprentice 20% more, and every journeyman 20% more, but wouldn't that eventually just mean that the cost of everything will escalate by 20%?
Ah, well, there you have it. If you can memorize that, you'll have it in a nutshell!
Like I said, I don't like the way things are. But I also am not sure that some of the changes that, at first, seem to appear to be needed and fair are not in fact unnecessary, unfair, and deleterious.
Absolutely! Treat skilled workers with respect? Recognize they deserve the same level of economic remuneration as salespersons or any other skilled endeavor? No way! Not necessary! Unfair! Deleterious!
View Image bakersfieldremodel.com
Edited 8/23/2009 4:59 am by Huck
/I'm not saying that it's right for all the builders in an area to get together and determine (collude) to squeeze the roofers so they all go down 33% in their rates, but if the market works out this way, isn't that how it naturally should be?/i think you have a very poor understanding of the concept of "natural".
The builders don't have to get together to "collude". The subs themselves, do a pretty good job of cutting each other's prices to the point of bankruptcy. They routinely price themselves at the point of "barely making it". This sets up a standard for all builders and gcs to set their wholesale prices by. They then all sell at retail, which uses this "naturally low" wholesale starting point.
If all the sub "colluded" and raised their prices 25%, all the retailers would have to use that as their starting point. All prices would rise as a result, which isn't necessarily bad.
This is much like the age old question "which came first, the chicken or the egg?".
I've been here in Austin for a couple years now and I haven' had anyone "collude" with me. I think thats a figment of someone's imagination.
I've been here in Austin for a couple years now and I haven' had anyone "collude" with me. I think thats a figment of someone's imagination.
So true. But not entirely without historical precedent.
Here in the San Joaquin Valley it has been established that a number of wealthy farmers were 'coerced' into setting unreasonably low labor wages during the Great Depression. But even then, if the workers had refused to take it, it wouldn't have been possible to implement. Its kinda like gambling - there's always someone who thinks they're gonna beat the odds. And with enough takers, there's nothing left for the rest to 'hold out' for.
I'm sure there are plenty of other examples.
Proving your point, when I moved here 20 yrs. ago, the framers on my tract were working for $1.10 a sq. ft. I about had an anurism when I heard that. I asked one framer how they planned to stay in business at that price. He looked at me funny, said his plan was to pay his help in cash, make a few bucks, and get out. Like that made perfect sense.View Image bakersfieldremodel.com
I've been following this thread from the beginning, lot of interesting points, opposing views, etc.
Reading the last two or three posts, of farms fixing wages during the depression, workers that routinely work for lower wages than is reasonable to expect, etc. etc.
Remember these points the next time you (or someone you're talking to) is bashing unions. It's why they exist.
I don't always agree with all they do, but I'm glad they exist for the members, and for the advances they've made in labor practices that affect non-union tradesmen as well....
Bing
If all the sub "colluded" and raised their prices 25%, all the retailers would have to use that as their starting point. All prices would rise as a result, which isn't necessarily bad.
When we moved to Florida in the late 70's...framers were getting .55 per sq ft.
My father worked hard to come up with a system where his crews produced quality finished frames every time without question. To the point where he became sought after by more than one builder.....................then he pushed his prices steadily up...............and builders paid because they knew that they would make up the little extra in the lack of mistakes and call backs.
And pretty soon $1.10 or more was the going rate for a lot of framers............
Then Texas and Oklahoma crashed and the area was flooded with crews who bid THEMSELVES down to .50 a sq ft.
"i think you have a very poor understanding of the concept of "natural"."
So are you saying you would prefer to have a governing body set minimum prices? Is that any more "natural"?
Jon Blakemore RappahannockINC.com Fredericksburg, VA
My flag went up immediately. Just like yours .
You pretty much summed up every business I ever subcontracted to for my entire career LOL.
And, what again is wrong with that business model?
Buy low, sell high...try to make enough money to stay in business. Is there really something wrong with that? Do all tradesmen have to work 100 hour weeks and still go bankrupt? Are all construction companies required to structure their business in a losing proposition, so they will be like all the rest?
"Imagine if you had the best install crews, and they had a vested interest in doing the best job they could because what they paid to get the job (the collective cost of the strip mall office, support people, and advertising) was less than what it would cost them to do it themselves.
Of course that won't happen because thats not how business is structured in this country, the people that perform the work are on the bottom rungs,"
What are you trying to say there?
I think I said what I was trying to say, I don't have much respect for that business model.
Something is wrong when you have to set up two corporations to contract roofing to private homeowners.
It ought to be illegal to sell someone a roof and then hire someone else to install it, at the very least it should be required to disclose the business practice, certainly making a conscious effort to hide that from the customer is unethical in the least and I think should be criminal.
When I took a job as a subcontractor for the roofing company I described I didn't stay very long because what I received for payment and the materials costs were less than half of what ABC roofing sold the roof for. The pitch of $10,000 a month to get me to work for them was only true if I hired illegals and paid low cash wages to the undocumented help and paid all the tax and FICA under my social security number.
The particular company I described encouraged the installers to get "handyman" insurance because it was cheaper than roofers insurance, thats why it was ABC roofing that sold the roofs but DEF "enterprises" that paid for the installations, so you could show your insurance company when you got audited that you weren't a roofer, you just did painting and repairs for DEF enterprises as a subcontractor. It was all very slimey.
Not all construction companies operate that way, but from the response I got here when I posted it sounds like we have all seen them.
Slimy, dishonest business tactics suck.
View Image bakersfieldremodel.com
As your story unravels, we see more of the abuses and fraud that *can* come from capitalism.I think it's fine that the installers were only paid a portion of the total cost of the roof (they agreed to it after all), but lying about the insurance requirements is dishonest, unethical, and fraudulent. At least, I would guess it's fraud.
Jon Blakemore RappahannockINC.com Fredericksburg, VA
Interestingly enough most of the installers were fine with what they got paid for the roof, until they found out what ABC roofing charged the customers for it.
When ABC Roofing got more than 50% of the cost of a roof for providing marketing and sales none of the installers were happy.
What the installers were paid and the cost of all materials were less than 50%!
That company could only keep employees as long as they could keep secrets, which is why the secrets bother me.
The only semi long term installers were the ones who would exploit undocumented workers, my guess is that the money was to good to say no for those guys.
If everybody knows upfront what the numbers are and agree to it then fine, its the secrets, or withholding of information on purpose to profit, that I find distasteful.
I understand that many general contractors don't divulge all of the numbers to the customers, but I am not talking about general contractors.
Interestingly enough another post described food and a grocery stores markup. The people that make the most in that business are the labor brokers. The guy that the farmer hires to pick his crop that in turn hires all the migrants who do the actual labor makes more money than either the farmer who grew the food and owns the land or the grocery store that marks up and sells the produce.
"If everybody knows upfront what the numbers are and agree to it then fine, its the secrets, or withholding of information on purpose to profit, that I find distasteful."
Again, I haven't read any responses past your thread (I'm catching up on this thread as I have time throughout the day) but I wanted to touch on what you just said.
I have no more problem with Blue withholding information from his subs than I have with a retail client who comes to us for a project not telling me them how much money they want to spend.
I just signed a contract for a $24k garage yesterday. I do know that the other bid was ~$32k, but I do not know how close the scope of work was for both bids, so it may not be as big of a difference as it seems. Could I have bid $27k and gotten the job? Maybe, maybe not. Does it matter to me? Sure, I would like to make more money, but the client presented me with the opportunity to submit a bid, I submitted at a price I felt we could work with, and he accepted. Everyone walks away happy.
I see no difference between the relationship of me and the client and Blue and his subs. You mention that the installers were only disappointed AFTER they learned how much the roofs were being sold for. That's ridiculous! A couple of years ago, I sold a reroof to a friend for around $6k. Because of a mistake in my measurements, the actual cost to our company was MORE than what I sold the job for. Oops. Should our roofer charge me less because I didn't make any money on it? Absolutely not, and I would submit there is no difference between my example and yours.
Jon Blakemore RappahannockINC.com Fredericksburg, VA
It's ludicrous when subs or employees get upset when they figure out the retail pricing. Nothing changes other than they seem to think everyone but themselves are getting filthy stinking rich. Of course, we all know that it doesn't happen just like that.
So, do they go out and start pricing themselves at retail? No...because they don't know how to get it! It does take some organization and skill....tools that they don't possess.
Interestingly enough most of the installers were fine with what they got paid for the roof, until they found out what ABC roofing charged the customers for it.
When ABC Roofing got more than 50% of the cost of a roof for providing marketing and sales none of the installers were happy.
What the installers were paid and the cost of all materials were less than 50%!>>>>>>>>>>>>>>>>>>>>>>>>>>
How was that the installers business to know? Didn't they agree to the terms before? If they did, you nad the rest should have not problem with it. Do you know that a roofer's WC ins is over 50% in my state? I would hope they had makered it up enough. What % of gross is acceptable to you?
You are coming off as a person that doesn't want a xonst. co to make a substantial profit. When I was in business my labor was marked up 100%. Material the same, not to mention a profit margin on top of that. Guess what? I had one person put me out of business, with a 2500 square order. How it was done is a long story, and I tell you this, I don't think any profit is excessive.
After reading that it made me think "big boxes installations"
a wise man once said
you will make more money doing 12 things 4000 times than you will doing 4000 things 12 times
WOW!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
BITTER, PARTY OF..............................OH, TEN OR SO??????????????????????????????
Jim has spent enough time in the trenches that I seriously doubt that his business model is predicated on ripping off the sub.
Also, having been on both sides of the table..................I wonder how many of you grasp the level of responsibility involved in being the Contractor?
REGARDLESS of how you set it up or how airtight you think your operation is? Who do you think gets sued first when a roof leaks or a sub's employee falls off the roof?
Who usually gets stuck with the call backs?
ALmost all of the stair rails I ever installed were subcontract. One of the largest shops around basically screwed every installer. SO many left that soon enough they couldn't install anymore because noone would work for them.
But in roofing, and framing and drywall? There is always someone who WILL work for peanuts.
Yes, I detest the guys who go in and lock up a big job and then dictate to the subs what they will make on the job.
But I also know it wouldn't happen without SUBS willing to work for that.
Now, the quality of the work is Jim's problem. It's his responsibility to ensure that it is done properly.
The price of the work is the SUBS problem. If Jim isn't paying him enough, then it's up to him to either renegotiate or walk...............................................ah, there lies the rub. Once word gets out that Jim pays ok and on time? He'll be tripping over Subs who WANT to work for him.
We all know them.................talented guys who have no business/sales skills or no initiative to learn them.....................and they are all waiting around for someone to go out and sell a job for them.
My father warned me where this business was going 20 years ago. It took me until 10 years ago to see the light.
He was right..........tradesmen, their own worst enemy.
Here I am thinking we were talking about 47's old employer and it was all about blues' company...you should be ashamed jim.;-)
We all know them.................talented guys who have no business/sales skills or no initiative to learn them.....................and they are all waiting around for someone to go out and sell a job for them.
Essentially, that's what the business is. I seek the best crew(s) that I can find and hope they will work for a rate that I can markup.
If the best won't do it for a rate that I can't markup, I can't use them. They have to sell themselves at whatever rates they can get. They are my competition.
What are my tools when I'm bidding against them? I know they are 30% cheaper than me so I have to have skilled sales people with their entire quiver filled with quality arrows. It's not easy to overcome a 30% gap. Or is it?
Imagine you are a homeowner and you are seeking three or four bids. Three companies come out and the sales rep offers the roof at 10,000. Three of the proposals are properly worded and the exact terms and prices are explained in a clear and concise fashion. The deposit might be very low or non-existant. The fourth proposal is from Joe the roofer. He doesn't have a business card and his offer is verbal. Yes, it's only for $7k and yes, he will need half down to pay for the materials. Oh, one more thing; Joe cancelled the first appointment, without calling, and came late to the makeup appointment.
Some homeowners will still take Joe because they are gamblers. Most wouldn't though. Our service is selling service and providing ease of mind while a major renovation is occurring on the roof.
I don't disagree with you blue-- on the other hand I also know that there is a segment of people happy to pay me $14,000 for that same roof AND wait untill next year for me to get to it AND pay me a 50% deposit up front Joe, you, and I -are fishing in 3 seperate ponds
stephen
I've fished in a pond VERY MUCH like yours for a while.
It's a pond surrounded by houses with Volvos and Jeep Grand Wagoneers in the driveways as opposed to Lexi (Lexus'???????????????, Don't care either way....if you scraped the Bulova off my watch and painted Rolex on it I wouldn't have paid $3K for it..............sure wouldn't dump $45K on a Toyota).
It's a place where neat, clean professional, respectable and being the local True Craftsman is worth an extra $4K a job.
Very few people have the right bait for those ponds and even fewer can even find that pond.
The thing that got me going in this thread that you started about why you love the roofing business is that you evaded the best question in the thread when jon posted a question about the actual nuts and bolts of the business, the marketing.
So to recap, you start a thread about why you love the business and when asked you won't tell. That is secret proprietary information.
I understand, if that information got out, we would all realize how truly easy it is and we would all be your competition.
The company I described in my post was way over 30% on their markup, of course they did have commercials on TV along with every other kind of advertising you can think of. They were greedy cutthroat slimy business people who would take advantage of everybody they possibly could as much as they possibly could.
The first clue was the secrets!
Actually, you are mis-characterizing the event. I didn't evade the question: I refused to answer it with a rational explanation.
Business is business. It's nothing personal. I'm just honoring the wishes of a business partner; one who has gone through this before. Essentially, I am not at liberty to discuss certain elements of an ongoing business operation.
I mischaracterized the event?
I am not the one that started a thread in the business section, about why I love the roofing business, that refused to answer a question about it.
I have no doubt your business will be very successful, you are doing everything right to make lots of money.
I think Jim did answer the question of why he loves the roofing business. I asked him to explain some aspects in more detail, but deleted something I was going to say--that if he wasn't comfortable answering any of the questions, don't worry about it. He's been extrememely generous with real-life information, ideas, and experiences and if there is something he doesn't want to share--well, he's presented tons of useful stuff anyway. So what if he doesn't want to explain his marketing plan in detail.
I'm very curious about this anger towards the perceived predatory nature of Jim's business model. As design/build GC's with our own crews, we have to attempt to be experts in every aspect of building. That's a tough way to make a living. All of our carpenters have excellent skills, but none of them have the skills to make it on their own right now. The company provides the means to let them do what they do best.
Same thing with the trades we subcontract. We get the jobs, manage the client and the cashflow. They tell us how much it will cost and get it done, preferably with little client contact. Are we predatory because we mark their services up to cover all the things that go wrong, including sometimes not getting paid or getting paid very late?
It's great that Stephen, Huck, and Walter do the work themselves. Jim used to, and I used to. If the love or ability to do the physical work is gone, does that mean that you shouldn't do any of the other things that go into building a business?
Mike, you are exactly right.
There are three major basic elements to every business, in my opinion:
1) production
2) sales and marketing
3) Administration
There are exception but very few tradesmen, who wear tools, are capable of balancing the time and effort it takes to do all of these things. Also, many tradesmen are resistant to hiring out their sales and marketing. The two basic reasons given? "Nobody can sell me better than I" and "I don't have enough money in the job to pay a salesperson. "
Also, it's interesting to see how many tradesmen will accuse someone trying to employ basic business (common) sense of "ripping the customer off". The tradesmen themselves have no firm grasp of how to set their own pricing and when they see a price that includes the real costs for sales and marketing and administration, they instinctively resort to calling it "greed" or "scam". In reality, it's really just hard numbers that need to be accounted for.
Also, it's interesting to see how many tradesmen will accuse someone trying to employ basic business (common) sense of "ripping the customer off". The tradesmen themselves have no firm grasp of how to set their own pricing and when they see a price that includes the real costs for sales and marketing and administration, they instinctively resort to calling it "greed" or "scam". In reality, it's really just hard numbers that need to be accounted for.
Yeah, its pretty sad when it comes from within our own ranks. This is a battle I fight every day. View Image bakersfieldremodel.com
I know you fight it every day. I did.
Haz knows that the battle really isn't a battle up there on the roof. I've found that out too, now that I've been in the roofing trenches. Homeowners really don't want their roof opened up to just anyone. We are selling roofs but the main component is trust. They need to trust the guy that is putting the proposal in front of them.
That element isn't so critical in general carpentry. The homeowner can mentally figure "if this guy ruins the first interior door that he works on, I'll fire him with no really significant damage done to my house." That thought process doesn't run through a guys head when he's thinking about a thunderstorm and he's got his shingles torn off and they are in a dumpster.
>I'm very curious about this anger towards the perceived predatory nature of Jim's business model. As design/build GC's with our own crews, we have to attempt to be experts in every aspect of building. That's a tough way to make a living. All of our carpenters have excellent skills, but none of them have the skills to make it on their own right now. The company provides the means to let them do what they do best.
I clearly stated in several posts that I was describing a particularly greedy and slimey contractor that I had the misfortune of doing business with for a short time. I think that most of us have had the opportunity to come across contractors like that in our careers.
This particular contractor was in the least clearly unethical and probably engaged in illegal business practices. I would guess that less than 20% of their customers would do business with them if they knew the truth about the company before they signed the contract.
I guess thats where the "anger" comes in, although that was your word, I don't think I posted anything in anger, I was just being descriptive. I think that if you are less than upfront and honest with your customers that may be described as "predatory", although I don't think I used that term, you are the one describing my posts that way.
Interesting that Jim goes on to describe that what he is selling is "trust" to the homeowners, and yet I wonder how much is volunteered to the potential customers about who is actually installing the roof? Do you not see that a less than ethical businessperson than our dearly beloved good buddy Jim who we've known online for all this time may take advantage of that situation for monetary gain?
You are absolutely right that Jim is by no means obligated to discuss his business practices with us here, despite the fact that the title of the thread he started ends with a question mark which I interpreted was an invitation for us to ask him questions.
I think as a peer mod you would be among the first to tell him that maybe he shouldn't ask others to ask him questions if he doesn't want to answer them.
I think as a peer mod you would be among the first to tell him that maybe he shouldn't ask others to ask him questions if he doesn't want to answer the
You're a real work of art.
Is this the way you act everytime you don't get your way? Go crying to Moddy to make him share his toys?
Do you believe in Freedom of Speech? Do you understand Confidentiality? Or honoring your partners' wishes?
Pagh!
SamTA Pragmatic Classical Liberal, aka Libertarian.
I'm always right! Except when I'm not.
Why thank you, I may have a chance at that professional salesperson/marketer career after all!
Since you Are so adamant about sharing information, I thought I'ld take a look at your profile.
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Bwahahaha. LMFAO. It figures!SamTA Pragmatic Classical Liberal, aka Libertarian.
I'm always right! Except when I'm not.
I really fail to see the argument here;
GC's hire subs all the time, what's the difference? As a gc, I don't carry comp...All my subs have it. I sell the job, chase material, and if a sub flakes out, I'm responsible for getting someone to finish it at the price I quote.
Surely you're not suggesting that every business keep everything in house, done only by direct employees of that business?
If it's ok to hire 10 subs, it's ok to hire one....I framed, self employed, for a long time. I still get calls on occasion for a frame, and when I do, I bid it with a mark-up, and sub it to a guy that I trust to do the job in a manner that represents me and my standards. In return, he gives me a better price than he gives a homeowner calling off the street, because I give him multiple jobs, not the one-off that the homeowner would give him. Am I a rip-off artist? I don't think so.
It seems to me that you are a combination of bent because he won't tell you info that you want to hear, and you don't like anyone making a mark-up on your work.....which is pretty unrealistic. Any company that a person works for is making a mark-up on the work of individuals. If you don't like it, be a one-man band like Haz, and go that route, more power to ya!
Bing
I will wait a year or two or five and then see how much Jim loves the roofing business.
Every apprentice I ever worked with loved carpentry and contracting when they were a rookie.
Not many make it....
They can't get your Goat if you don't tell them where it is hidden.
I will wait a year or two or five and then see how much Jim loves the roofing business.Every apprentice I ever worked with loved carpentry and contracting when they were a rookie.Not many make it....
Good poat, John
Dave
I will wait a year or two or five and then see how much Jim loves the roofing business.
Doesn't really matter to me. He's learning as he goes, and since he shares with us, we're learning as he goes. What works for him isn't going to work for everyone else, anyway. One size doesn't fit all. But there are always principles, ideas, insights, that we benefit from. Heck, if he found something yesterday that helps him get out of bed today and feel motivated to do something productive with his life, that's an accomplishment in itself. A year or two or five from now he may not be alive, or I may not.
I'm just glad there are people like him who are willing to expose themselves to the naysayers and snipes, in order to lay their thoughts out in the open. Its sure a lot easier to criticize, question, cross-examine, etc, than it is to come here and put your business plans in front of the public eye. I applaud him for that.
And don't get me wrong - I learn from the naysayers, too. Its all good, for the most part, but the o.p. has to have thick skin and a lot of patience, otherwise it becomes a snipe fest. Blue has always been good at that, and I learn from him in that regard also.
View Image bakersfieldremodel.com
Edited 8/23/2009 10:31 pm by Huck
Blue has always been good at that, and I learn from him in that regard also.
They are my amusement and I appreciate their efforts.
No argument, my complaint is against rip off artists, and trying to compete with the rip off artists marketing machine.
again as i said in all the posts the problem is with secrecy and misrepresentation.
if it is common knowledge what you do then no prob.
Good thread, JimThanks for sharing your enthusiasm for your new venture. For me, it's always seemed like you were shining a flashlight on a tradesman's path and saying-hey over here.. try this...there might be a better way...One thing that has rubbed off on me is that it is hard for a one man band to wear all the hats well...and I've become increasingly more aware of that.Now as I ramp up my marketing, will I hire a salesperson? Maybe-but the thought is there, planted a long time ago by another thread of yours.And one of the things that I've gleamed from this thread- the power of marketing, sales and trust...in any venture.A contractor who is doing very well these days once told me:
you don't have to be the best;just the best at marketing...There is some truth to that especially if you are one of the best.BTW, I found 4 of Peter Conti books on amazon and will be ordering them later today.silver
It's true, we can't wear all the hats and expect them to fit. Nor can we wear them all well at the same time, even if they are a perfect fit.
For instance, I think there is some misconception about how many hats I'm wearing. I'm not the salesperson in this operation. I will do overflow and am quite comfortable sitting in front of potential customers but that is the exception rather than the rule. My only job is to produce after they are sold. I've taken on a few smaller tasks within the administrator's domain though but nothing significant.
The truth is: I wouldnt have the energy to sell and produce. Yes, I am setting up systems to quickly generate purchase orders and faxes and work orders but in reality, things don't go that smoothly. I've had many days when I leave the office in the morning and don't return till night and none of that time is spent with any tools in my hand. Where does the time go? How can I still not be caught up?
When I think of how I used to try to sell, produce and keep the office going, I realize that it was far too much for me and I was always falling short in one area or the other.
"When I think of how I used to try to sell, produce and keep the office going, I realize that it was far too much for me and I was always falling short in one area or the other."I've become very aware of this challenge...as I try to figure out a way to make my operation more efficient.Your thing is roofing. Mine is becoming kitchens...Now I could:
partner with a well experienced and well respected designermarket and sell a creative and seamless kitchen transformation experience to boomers renoing their kitchensbe the general contractor for the kitchen
hire/subcontract to 1 or 2 crews supervise the crews and solve all the problemsdeliver a superior kitchen, on time, within budget and well doneand concentrate only on marketing, selling and supervisingnow where would I get an idea like that?That's what I love about Breaktime!cheers,silver
Silver,
Abe books.com.....$1.00 ea for several titlesPete
"Abe books.com.....$1.00 ea for several titles"Thanks gotcha, I'll check it out...some of the Conti books were .01 + 3.99 shipping on amazonsilver
Does he have any new ones out dealing with the subprime meltdown?
I'll double check-but I think his newest is 2007-on commercial real estate.Which book had the sales info in it?thanks,silver
Clarification please. IN the vein of disclosure, how far should we go? Should we reveal our cost, our taxes, our profit? OUr business model? Why there are 2 or more corporations involved?"this dog may be old but he ain't cold. And he still knows how to bury a bone."
Lattimore
http://www.rehmodeling.com
I mischaracterized the event?
Yes, you mischaracterized the event. You said I evaded a question when in fact, I did not. I answered the question directly by saying that I cannot devulge that information.
I am not the one that started a thread in the business section, about why I love the roofing business, that refused to answer a question about it.
I AM the one that started the thread and refused to answer a question.
What's the point?
I have no doubt your business will be very successful, you are doing everything right to make lots of money.
That remains to be seen. There isn't enough information yet.
Right, you answered the question, right, I am wrong, my bad. I understand now.
You didn't evade the question, you answered it directly by refusing to divulge the information.
Thank you for correcting my mischaracterization.
C'mon Blue, give him the info he needs to steal your business, if he doesn't care about your obligations, why should you?SamTA Pragmatic Classical Liberal, aka Libertarian.
I'm always right! Except when I'm not.
Actually I don't want to steal his business, I am just trying to guess at what it was he didn't want to tell us, and that is the marketing question.
Clearly there are professional marketers, and companies that specialize in the selling of goods and services to others.
I described a company that I knew of that was very good at marketing, they were pros at marketing and selling and made a ton of money, I saw the owners house, he had money.
It could have been any business, it just happened to be roofing. I didn't really like working as a roofer, I prefer other crafts. I know I don't want to be a professional salesman, or own a marketing company so he has nothing to fear from me.
I described a company that I knew of that was very good at marketing, they were pros at marketing and selling and made a ton of money, I saw the owners house, he had money.>>>>>>>>>>>>>>>>>>>>>>>..
Or more likely had very good credit. You really don't know how well he was doing, unless you were his tax accountant.
Oh..one more thing: I disagree about it being easy.
I started out in the roofing business. its true that with a couple hundred dollars worth of tools and a truck will quickly put food on your table. when i started I went partners with my brother who was already getting regular sub work
I quickly realized the subcontract work was a dead-end. so we put a couple of adds in the paper and bought some yard signs, printed up flyers and door-hangers. we went on a mass marketing campaign. going out and selling the work was more lucrative than actually doing it, so we did it all.
two different philosophys went on a collision course. I wanted to make it by pushing the best quality product with the best available help and my bro was hell bent on hiring the dregs that could not get out of bed 4 days a week
my brother figured if he needed a 5 guy crew you hire 10 idiots because half of the crew wont show up every day. 25 years later he still does the same thing.
my brother figured if he needed a 5 guy crew you hire 10 idiots because half of the crew wont show up every day. 25 years later he still does the same thing.
Ouch! That sounds like a hard route to travel.
In my carpentry subcontractor business, I tried all the different routes. I rejected the idea of hiring the lowest class carpenter and hoping he'd show up. It didn't fit my personality. I still have that same personality. I don't want to work with the lowest class of roofer either.
You are also right about the sub work. I don't know that the risk would equal the reward even if you found a way to do large volume in that segment of the business.
I dont run my business that way and although I hire roofing subs now and then I'm sorry to report it is not my brother
and to be honest, you only need one maybe two guys on a crew of 5 to know what they are doing. there is a lot of menial labor involved in roofing
I know full well the peace that comes along with working alone, putting that last cap on, but the mundane part of cleaning the asphalt gravel and nails out of the lawn will wear you down
That "mischaracterization" should be announced in the title of the thread, "why I love the roofing business, but refuse to answer the "hard" questions".
That is the the same announcement that should occur for roofing salesman to make when they meet prospective customers, "all of our roof installs will be subcontracted out to roofing crews we will be able to make a profit on the markup on".
Whether it is an outright lie, or a lie of ommision is a matter of semantics in my opinion.
I learned a long time ago that to be successful in business you had to be able to keep secrets. Even if all that means is that you don't reveal your true sales numbers, because that will motivate your coworkers to work harder and they will take some of your sales.
My only problem with any of this is the secrets. I can even understand not volunteering information but refusing to answer is in my mind deceptive.
That "mischaracterization" should be announced in the title of the thread, "why I love the roofing business, but refuse to answer the "hard" questions".
That is the the same announcement that should occur for roofing salesman to make when they meet prospective customers, "all of our roof installs will be subcontracted out to roofing crews we will be able to make a profit on the markup on".
Whether it is an outright lie, or a lie of ommision is a matter of semantics in my opinion.
Now that we've moved past the semantics issue (evading vs refusing to answer) I see this can actually move into a productive discussion.
I'm getting the sense that you find the practice of using subcontractors as something that is detrimental to the homeowner.
Okay, just for kicks and giggles, lets apply your same theory to other businesses. Should a builder tell each of their buyers" all of our ___________ installs will be subcontracted out to crews we will be able to make a profit on the markup on" or perhaps, maybe, they should just refuse to markup, sell at cost, and then only build one house before realizing that they are stupid and can't eat and are out of business?
The essence of the question is this: why are you so against someone marking up a subcontractor and selling their services for a profit? I let the builders that I know sell my services for me for several decades. I was quite happy with the arrangement and the buyers of those houses got excellent carpentry for the money they paid.
Should the auto dealer inform every customer that some elements of the car were produced by subcontractors and they were making a profit on it?
The question of how the business relates to their workforce is really only a matter for the IRS. There is nothing dirty or wrong about using subcontractors vs employess. It's a techincal distinction made by the IRS and has nothing to do with the quality of the intstallation.
So, as a salesman, I'm not going to discuss the matter unless a customer brings it up and has issues with it. My answer is really simple "there are no people in Austin that are willing to work as employees to install roofs at rates that you and I can afford. The best roofers recgonize that they can remain independent and not enter into an hourly employee relationship. If I want to use the best roofers in Austin, I am forced to deal with them on their terms. Ssince I am very concerned about installing quality roofs, aal of our roofs are done by one of two crews and we are constantly searching and seeking the best of the best."
My only problem with any of this is the secrets. I can even understand not volunteering information but refusing to answer is in my mind deceptive.
HUH?!!! You are kidding right? You think just because you ask detailed questions, everyone should answer them?
The whole point of this "why I love..." thing is to say that I'm happy not walking up and down fifteen aisles everyday in a home store trying to fit together someones bathroom or kitchen. I only have to walk down one aisle and I'm often done grabbing the goods in fifteen seconds or less LOL!
Again all I did was describe a business model I had come in contact with to shed some light on the marketing side of a roofing business.
I have no problem with anyone making a profit, in fact on government projects a contractor will have to outline in the tons of paperwork required exactly how he will make a profit. The government requires that you make a profit, its how contractors stay in business.
I think it should be law for a contractor to disclose in writing that subcontractors will used to perform installations when a contractor is only contracting for one service, specifically reroofing a homeowners roof.
I think most homeowners don't know that at least 30% of the cost of their new roof is going simply to marketing and sales and the associated overhead costs of that business which is entirely seperate from the individual subcontractor that will perform all of the work.
That is my point, you shouldn't be able to walk up just one aisle in home depot and grab the goods and be gone in 15 seconds, you shouldn't be able do what you describe and call yourself a contractor, you should have a legal obligation to call your company exactly what it is, a business that sells roofing services to the homeowner in the form of a contract, and then sells the contract to a roofing contractor, a sort of middleman that everyone in this country would be better off without because they don't really contribute anything, they just raise costs for us all.
I wonder if there is a way we can securitize these contracts, maybe bundle them up with other contracts, and then sell them on wall street? Hey maybe then we can pay ourselves millions of dollars per year as CEO's instead of just the fast talking salesmen we are and really retire in style with a golden parachute. Its the American way.
I think most homeowners don't know that at least 30% of the cost of their new roof is going simply to marketing and sales and the associated overhead costs of that business which is entirely seperate from the individual subcontractor that will perform all of the work.
I don't see the logic here. What percentage of your movie ticket goes to make Hollywood actors spoiled millionaires? What percentage of your pizza price goes to television commercials on prime time sports channels to help make professional athletes spoiled millionaires? What percentage of your grocery bill goes into advertising? How many grocery stores disclose: "We do not grow these foods. We do not process them. They are grown by subcontract farmers hiring low-paid immigrant workers, and processed by factory workers whom we don't even personally know" ??
I don't like the business model you aptly described in your initial entry to this thread, but I think you're painting the culprit with too broad a brush.
If a contractor promises a job for $x dollars, and delivers what he promised, where is the deception? Like the rest of our society, it is not general practise to disclose our numbers, where all the money goes. The average homeowner has never owned a contracting business, and wouldn't begin to understand the numbers even if we did tell them.View Image bakersfieldremodel.com
You make several interesting points, I am plainly describing rip off companies.
I do not know if Jim's company is a rip off company. From what I know of Jim from his posts here I doubt that it is a rip off, but from what I also know of Jim from his posts here roofing is not his love, it is his business. He is a smart businessman and will do his best to set up a win win and make a profit from it.
I think that business model I aptly described that neither of us like should be illegal. I dont think subcontracting is good, unless you are a general contractor and you are subbing to specialty contractors.
I think like Jim says it is important to have trust in the people that are tearing your roof off, and in saying that how much trust would you have when you learn for the first time that the people who worked on your roof were not employees of the company you signed a contract with but subcontractors.
How much trust would you have if you realized that before the contract? Jim says the company he is part of is selling trust but I wonder how many of the customers are told subcontractors are installing the roof?
If customers don't know in advance that subcontractors are doing the work, and they are trusting the prompt, polite, affable salesperson that they met with to be representative of the people that will be up on their roof when in fact the people up on the roof are part of an entirely different company, well I wouldn't trust them.
I do hear now some companies will advertise that the work won't be subcontracted, I think some consumers are beginning to wise up to the business model of selling a roof and hiring someone else to install it.
I don't mean to paint "contractors" with that broad brush, as in a general contractor hiring a plumber or electrician or even a roofer, just specialty contractors that aren't really contractors but sales and marketing and labor brokering corporations passing themselves off as contractors
If customers don't know in advance that subcontractors are doing the work, and they are trusting the prompt, polite, affable salesperson that they met with to be representative of the people that will be up on their roof when in fact the people up on the roof are part of an entirely different company, well I wouldn't trust them.
I see your point(s). But if that same sales guy is up on the roof, checking it out as it goes on, well, I think your trust level would go up significantly.
I'm a general contractor, so I don't see hiring sub's as wrong. That said, I wouldn't hire a sub who then turned around and subbed out the work. But Jim doesn't bid to generals, he bids to homeowners. View Image bakersfieldremodel.com
Thats my point exactly, you wouldn't hire a sub and let him turn around and sub to someone else.
It would be like hiring an employee who hired someone else to show up for him.
And you are absolutely right that trust level would go up if the salesperson was up there supervising.
I still have a problem with homeowners under the impression that the company they hired is performing the work and not knowing about the different corporations (1 for selling and marketing and 1 for installing) and the fact that a different contractor actually performs the work. He may be selling trust but that is not what they are getting.
It is at the very least deceptive by omission, and if that is what is good business in our country next thing you know our property values will go down.
Let me give everyone some food for thought.
First I have no problem with Blue's business model and heres why,
Awhile back my area was hit by a bad hail storm. Literally 7 out of 10 houses got roof and siding damage, windows busted out, etc...
We are general contractors that don't do our own roofing, unless its a metal roof.
While going out and bidding some of this work the homeowners were showing me the insurance estimates and some of the bids they got from roofers.MANY of these homeowners were going to make as much money off of the roofing as the roofers were. Do you guys understand this.... the insurance co. was alloting say 11,000 for a complete roof and the h.o. got two quotes for say 5700.00 and 5850.00 labor and materials complete tearoff and clean up.
In this area, there are guys that will roof a house for 29.00 a square labor all day long. And do a good job at it. Most h.o. don't even know what workers comp is and don't give a sh-t if these guys got it or not.
Now, I ask you, if you are a contractor or roofer, whether you sale roofs or nail roofs does'nt really matter.....Who would you rather be bidding against.
Carry on Blue, May you prosper
dug
That's why I charge for insurance bids. They want a "licensed contractor" to submit the bid to the ins. co. Once the check is in their hand, they want the cheapest guy they can find, "gitterdone construction" working out of a beat up old van, no license, etc. I never get the jobs. Now I charge for my time preparing the bid, $50/hr. The bid cost can be deducted from my bid price if they hire me. Only one person has ever taken me up on it, and they did not hire me. The rest say thanks but no thanks. We want you to give us your time, energy, knowledge, expertise, etc., but don't want to give you a nickel in return.View Image bakersfieldremodel.com
dug-- I spent a good part of 2007 and 2008 cleaning up after a hailstorm here. my experience with the financial end of it is--- that the insurance setttlements were largely the REVERSE of what you described---- generally the settlement wasn't enough to cover the cost of an established local roofer---in fact the settlement was at a rate I was exceeding 10-12 years ago Storm chasers sweep into town--slamm out the roofs with who knows what for labor---and are gone in a few moinths---leaving the homeowners holding the bag for warranty claimsStephen
"The thing that got me going in this thread that you started about why you love the roofing business is that you evaded the best question in the thread when jon posted a question about the actual nuts and bolts of the business, the marketing."
I haven't read past your post yet, but I must say that we have a different take on Blue's response.
He may have a great thing going, he may be full of it and completely fabricating this whole chapter in his life. I don't know and I don't care. What I do care is that I can learn something from everyone, and I can potentially learn a lot from what Blue is doing.
Business's like his are out there and some are very profitable. True, some have unsavory business practices, but I think that most successful companies are successful because they do things, as a rule, that unsuccessful companies refuse to do. Stephen Hazlett is another example although, as he himself said, he is in a completely different pond than Blue. I want to watch how they work their pond and get some tricks and pointers.
Should Blue tell everything? Absolutely not. He owes nothing to anyone here and it's his business what he tells and does not tell. I went fishing, he didn't bite, and we'll move on. I'll still keeps my eyes open, though, because someday he may get hungry and nibble a little on some bait...
Jon Blakemore RappahannockINC.com Fredericksburg, VA
I think most of ya'll know that if I was at liberty to discuss it, I would. I've never been afraid to share numbers and I pretty much think I've shared as much as anyone, maybe more than anyone.
You are right, Stephen and I are fishing in different ponds. That doesn't mean I am not thinking of tossing a pole in Stephen's pond though. I just haven't run into the right installer....yet. I'm looking.
If Stephen were local and agreed to give up the percentage of his pie that he attributes to marketing and sales, maybe we could come to an agreement. It's highly unlikely, but possible. I wouldn't mind selling his style of installation. I'm not opposed to meeting the needs of customers who have different agendas. For instance, I already can offer hand pounded roofs if that is important to them.
It seems like you always have some new great idea to make money. But we never really hear any more about it, and then you are talking about the next big thing.
Have all your other ventures failed or do you just get bored quickly? And why always with a partner, aren't you ready to go it alone for once? I'm just curious.Legal Disclaimer: The preceeding comments are for entertainment purposes only and are in no way to be construed as professional advice. The reader of these comments agrees to hold harmless the poster, EJCinc, from any and all claims that EJCinc offered professional advice, ideas, or comments to the reader that may or may not have resulted in the damage, injury, or death to the readers property or person.
Yes, all the ventures failed. Or, when I sold out, I really wasn't interested in it anymore for various reasons.
The biggest factor has been the economy. As it has changed, it has forced me to change. I suppose I could have ignored the market conditions and bankrupted myself (that happened to a lot of people I know that didn't change).
The market conditions have changed considerably since I've arrived in TX. We've swung from a sellers market to a buyers market. Should I still be thinking about doing 500k flips when the 500k properties are sitting on the market for a year before they sell?
I guess you could say that I'm rolling with the punches.
As far as the partnership question. I was involved in general contracting/remodeling for the last year and a half without a partner. I didn't particularly see much difference: I get up, do a job and go to bed at night. It's the same routine I'm doing now. This particular partnership is something I was angling for for some time. It's come to fruition and I'm hoping it will last for many moons.
blue--- why would someone like me give up that percentage? you and I both know-- that's where the money is. you have to have it--- to give it up there is ZERO benefit to me giving it up.
stephen
I can't explain why someone like you would give up the percentage associated with marketing and sales. I'm not sure anyone would. I am sure that if you did, I'd be willing to do the marketing and sales and admin for the appropriate slice of that pie.
There are tradesmen out there that probably should have someone doing all that for them. I myself could have benefitted greatly in my younger days if someone was selling and marketing for me. I was charging so low, they easily could have marked me up 75% and I would have been busier, making more money, and they could have had their share too.
It's called synergy.
When I was young someone doing the business would have been a smart thing for me . My strength has always been turning out the work. Geter done as Huck says . Its not dealing with customers or arguing with contractors . I havent done well at that . I realized it was a fault. I examined the clear fault and decided to go away from it . I quit dealing for customers . Now Im completely away from it . I was really bad at it come to think about it . I was bad at retuning phone calls and making appointments . I didnt follow up. I made about every mistake business wise there is in this business. I always worked my way through it but struggled at times. I think I was cocky because I could turn and burn on the work and didnt see the road ahead. I made the statement one time that if they needed the work done yesterday they called me . If they wanted to work with a gentle soul that was easy to deal with they called anyone else . I was special at doing the work that was supposed to be done by a regualar sub. I charged for every thing , didnt give away freebes , and gave no contractor discounts . I wasnt sleeping in any of their deer camps . I didnt go to the bar with them or the country club. I wouldnt even talk to them after the tail gate dropped. I was only on the job for one thing.
Now if someone could have kept constant work to fit me in front we could have both made a killing . I was for ever more fast . If I had had an agent then it could have been a god send.
It wasnt till the later years I found all the work I could do in commercal with out "dealing" with people and their pet peeves they load up on. I didnt want to talk to a woman about her colors . That was always a bad idea. I didnt have time to explain any thing. I didnt want to either . I only wanted to turn off work.
Many of you are saying you make money off the profits of the business. The 10 to 20 percent on top thing I guess. I made great money off the work. I ran crews very well. If a contractor would have set me up with enough work with out screwing with the money we would have both been happy. As soon as the contractor realized I was flying under the radar with speed he wanted some more of the money. Every time they had to screw with the money. They couldnt help themselves. Ive heard stories where the top salesperson makes too much money and upsets the whole place even though it was agreed he would get a certain commision and he did it . Greed is the only answer.
Tim
blue,
for it to be synergy--we would have to BOTH benefit. but the arrangement you propose----hoses me and benefits you look at it from my perspective----you aren't really offering me ANYTHING---other than a pay cut---- because I am already much better at marketing and selling MY services than you are going to be able to accomplish---so where is the benefit to me? Now----somebody ELSE might well benefit from you selling their services-----but then they wouldn't be ME--would they? My suggestion to that person would be--that they could benifit even MORE----by cutting out the middleman(YOU)--and simply learn how to do what I do--IE:
take a bath
shave
don't have any tattoos
return phone calls promptly
make precise appointments-and keep them
tell people exactly how you are going to solve their problems--and then do exactly what you say you are going to do!
understand the finacial ramifications of the difference between nailing on shingles @ $30/sq.---VS selling a roof at $500plus/sq.
look at what the competition is doing---and since the competition in the roofing business are almost always morons--- do the opposite
learn what an index fund is
learn what dollar cost averaging is
learn about portfolio diversification
learn a little stock market history, historical returns and WHEN those returns are generated!
it ain't rocket science
stephen
Im enjoying the thread. Informative .
I just wanted to add from the corner is you dont do that much work and dont want to. You want a high price for just the work you "an do"correct? You couldnt demand a lot of work just by your self ?
Diiferent than me I know . It took a LOT of work for me . Diiferent trade mebbe cause .
Tim,
to a point-- the LESS I work--the more I make I make LESS having employees--and I work more working solo--- I can be home by 1:00-2:00 more often than not--and make more money---- than with a crew having a crew-----makes me a commodity----but working solo means I can profitably solve problems that crews can't solve
the money IS NOT in nailing on shingles-- the money is in solving problems
stephen
In a way thats what I did. But it still required a big job. Big job means Im married to it till its done . Contractors want the job back,you have to keep one in the dry.
This is gonna take a while .
My experience other than being fast did the work for me . I jury rigged a banjo to a small texture pump and ran airless hose to it . It was worth big money to do fire taping 20 feet in the air . On a 10 ft ceiling the roof will be from 18 to 22. Everything going through the walls have to go through fire taping . I made more on that then I did the store under 10 ft . I never saw anyone else do it . I ran a bazooka off stilts jury rigged to the pump. I never stopped running tape . Takes a big strong man to handle a bazookA on stilts and enough mule to keep it going and I could do that .
Heres the comparison as it worked out.
A 1200 sg ft house holds about 8 to 10 rolls [250 ft rolls] was a days work by myself including a two car garage . I taped that deal every day working residential. Wasnt a hard day at all but it killed a day going and doing it kind of job.
On a strip mall with 80 ft walls I was running 20 rolls [500ft rolls] in 12 hrs by my self . Jury rigging the bazooka , the banjo, and being a hoss of a man allowed me to pull that off along with being fast.
The price per ft was the same except I didnt have to buy the material on the commercial job so I guess it was a little better money. I didnt run over 500 a week in materials so its not that much a differerence .
I hired one labor if I was behind to mix and tote mud but that was all he did .
Part of that techniuqe is experience and brains along with ability. I often wondered why those guys do all that walking when they run tools . I rigged the float boxes to the pump as well. I could run four 80 ft walls with out leaving the walls. That cut out 2/3s of lost time walking and keeping up with the mud . 200 ft of airless line just follwed me around room to room just as if I were spraying paint . Thats how I pulled big jobs off by myself but it took big jobs and they are a lot of work.
I too made more money by not having employees or any over head.
Thats pretty much how Ive set up doing repos . Ive got a system.
Edited 8/24/2009 3:51 pm by Mooney
Edited 8/24/2009 3:54 pm by Mooney
look at what the competition is doing---and since the competition in the roofing business are almost always morons--- do the opposite
Thank you for expressing that so eloquently. That sums up my business model in one sentence.http://www.quittintime.com/ View Image
It may come as no surprise that we are banking on that same theory?!
It's no surprise. I've noticed that the two "storm chasers" that decided to stick around here after the others left seem to be following me around.http://www.quittintime.com/ View Image
Stpehen, you are kinda missing the point if you though that post was entirely aimed at you. The post was talking about someone like you. Not every "you" is disciplined enough to do all the things it takes to get retail mone.
When I was in my twentys and thirtys, I could have benefitted greatly by someone selling me. Moody has just stated the same thing.
The point is that there are excellent tradesmen out there selling themselves short every day. They are letting their services go directly to the retail buyers at wholesale prices. They also are burning themselves out, trying to figure out how to financially survive because they aren't getting a full year in. Instead, they are working more hours, for less pay than they would if they connected with someone that knew how to wrangle retail pay and keep them busy for the entire year.
I don't know how many hours you devote to sales and marketing beyond your 1000 hour workyear but I do know this: when I was selling retail and working in the field, I was killing myself.
blue---- the 1000 hours includes sales,marketing,overhead. for example--in 2006--roof 621.75 hours, carpentry 132.75 hours, OH 318.5 hours
2007 roof 776 hours, carpentry 107.5 hours, overhead 345.25 hours I recorded the hours for 2008------ but I have never tallied them because they would likely SKEW my averages. Hail storm in june 2007 impacted my business for 2008--- basically in 2008 I made my nut for the year by july 2--and largely took the rest of the year off----and a lot of 2007 hours--were crammed into 2 months immediately following a hail storm.
In my opinion- if someone is going to have a decent life as a tradesman--- they better learn the business end of things----or they are not really a tradesman--- but more like hired labor. doing as you propose-means the "tradesman" continues to keep himself uneducated in business matters and he continues to to not reap the economic benefits of his one efforts.
gotta run,
stephen
In my opinion- if someone is going to have a decent life as a tradesman--- they better learn the business end of things----or they are not really a tradesman--- but more like hired labor.
doing as you propose-means the "tradesman" continues to keep himself uneducated in business matters and he continues to to not reap the economic benefits of his one efforts.
Who could argue with that logic?
Lets look at the reality though of how many tradesmen actually educate themselves in matters of business, marketing, sales, continuing education etc. So, if we can agree that maybe 2% of the tradesmen put in the extra effort at learning, like you have, then the other 98% might benefit from partnering with someone with better business skills.
Every partnership, whether formal or informal, does not have to be a "I win, U lose" proposition. Properly structured, a business relationship produces a "win, win" combination. In your case, since you've decided that you only want to work part time, and you are willing to split that part time into part time segments that properly cover the sales, marketing and office work, you probably couldn't structure a "win, win" relationship with anyone. No idea fits all situations.
Stephen,
This seems to be a similar issue to your dismay at being able to pass on what you've learned to someone else. I bet Jim would jump at the chance to educate someone who really showed interest. Most people, as you've found, simply don't have that drive. They are better off doing what they're good at and letting someone else handle the business end.
"Better off" is probably not the right term. But if they aren't going to learn business skills on their own, aren't they better off seeing first-hand how to handle business situations? Talking about the average roofer here, not a disciplined, self-aware individual such as yourself.
On the other hand, if the roofer really needs that much help, maybe he should be an employee and not a sub.
Mike,
that is it in a nutshell---
i think they would be better off working for someone like Mike Smith as an employee---- than entering into a " sub " situation. I don't think we can see a guy hitting himself in the face with a framing hammer----and tell him he would be better of hitting himself with a 16 oz. finish hammer---and then sell him a 16 oz. hammer for $30 and call it "synergy"--------- much better that we show him how NOT to hit himself with the hammer in the first place. I don't wanna engage in any phony self deprecating humor--- but really, I am as dumb as a box of rocks. I don't think there is a trade that is more of a "commodity"--than residential roofing. I really can't wrap my head around the idea that the average "tradesman " doesn't have the time to wear all the hats necissary to charge professional rates--- my yearly hours disprove THAT---- specialize and price your self right--- and you have plenty of time to wear those hats----it ain't rocket science and if we make the real world observation that your average carpenter---is WAY smarter than your average roofer----well shouldn't the carpenter be able to implement this even easier? the ability to take a pencil and a piece of paper and make a list---and then accomplish the things on that list---and it all falls into place. taunton should really dig up those threads from 8-10-12 years ago where Sonny Lycos spelled out basically step by step how to do this.
It ain't rocket science--just take the time to slow down and really LOOK at what is going on--SEE where the money comes from and where it doesn't---and adjust accordingly got to run- my labradors wanna walk
stephen
What would be the adavantage in working for Mike?
the advantage in working for mike--would be that you would get a fair days pay for a fair days work, benefits, workers comp. coverage, and get to work on interesting projects VS.--- getting hosed in an exploitive "sub." situation, dodging the workers comp. People and deluding yourself that you are running a business by nailing on shingles @ $30/Sq. the sad truth is---- If I had been able to get a job back in the early 80's working with somebody like mike-- I would never have gone into business myself--- life would have been safer---- but then I would still be living in the house i bought back then for 32K, my kids would have gone to inadequate local public schools, i wouldn't have been able to send my wife to college---- OR my sons to college ---and so forth
but i might have been happier---who knows? but if i am gonna go into business---- I am obligated to make it pay.
stephen
I disagree with ya but thats ok to.
Should a pro football player be his own agent ? They are off 9 months a year .
I know what Ive seen. They arent like you. But Ive been where they are.
Ive known a 19 year old brick layer that could put 3,000 in the wall per day . He had been getting paid an hourly wage so he went into business for himself and failed. He was getting screwed hourly but could not run a business. Mostly he couldnt get enough work to put in 3,000 brick per day.
I hired an 18 yr old that could tape with a banjo what I taped in a house with a bazooka . So I sent him ahead to tape houses . He didnt think the hourly wage was fair and looking at it his way it wasnt . But I didnt have a house every day for him to tape at that time . He quit me and went into business for himself and failed. Several years later after working in a factory surviving he went to work with his fatherinlaw and started laying bricks . That took a few years and now hes got his own business but its really his fatherinlaws customers as he retired.
Those two kids had the best raw speed of any I ever worked with on any job. Nether today are successsful 15 years later . Either one could have earned a boat load of money on piece work. But there was no one that wanted to share the profits with them and they had no one to share job profits with to keep them hooked up.
For one thing my guy didnt show up all the time so I wouldnt schedule work for him like that . I didnt want to tell a contractor I would do a house and the kid not show up. Had he showed up every day I would have been happy to schedule the work. So I guess that was his main downfall.
You dont know what you would have done with different experience or more in an area. Thats an impossible call. Because I dont think you would still be working for Mike . Id say you would have more experience in different feilds by now but thats a guess.
Lets just say that one of the boys I mentioned could average 3 sq an hour day in and day out complete with loading and clean up. Thats 90 an hour lets say as you priced it . Does he need to work for 15 an hour for Mike , go into business for himself , or be managed which means sub to a sub? Lets say the work was exellent because both of these boys work was just that.
There are a lot of skilled people who's best chance at making money is to stay in the field. I was that type of tradesman. I didn't give a hoot about learning about business and all I wanted to do was be out there producing. I pounded so hard that I didn't have an ounce of energy left, after a 7 hr day, to do anything other than flop.
At some point, I found myself selfemployed. I was charging $22 per hour. Any halfwit business guy could have sold me and my crew at $35 per hour and I would have been happy and he would have been happy and together we both would have prospered.
With cashflowing like that, the business would have capitalized itself and allowed me to do things like: buy 100k cranes to make my job easier. Or, buy/rent skytraks. Buy nails in bulk and save 20%.
I wouldn't have minded if the business partner sold my services at retail prices. That would have meant that I was working for homeowners direct. Because of my nature, I refused all homeowner requests. How much money did I throw away? If my services were selling wholesale at 35, I (a business minded partner) could have easily sold them for 60 to retail customers.
When we are young, we don't know what we don't know. When we are old, we are too old to do the things that we did when we were young. Somewhere, the two should meet. In a sense, that's what happens when a GC "partners" with a sub and sells their services at retail prices to a buyer. We are doing that now in roofing and both of us are happy. The guys I'm subbing too aren't slouches. They could climb down off the roof and do what we are doing but instead, they recognize that they won't need too if we throw them enough work.
several problems with your premise--- one of which is that nobody averages 3 sq. hour day in and day out complete with loading and cleanup.
stephen
"several problems with your premise--- one of which is that nobody averages 3 sq. hour day in and day out complete with loading and cleanup."
I have to respect that and I cant proove you wrong . Just to remind you that its what they told me . I couldnt keep up with comercial work by my self . There was no way I could do that . Apparently you dont know any thing about rolls of tape in a day. If you did you probably thought I was exaggerating . I wasnt .
I think you are right though. Ive heard about three sqs an hour on an easy roof but they werent stocking . That was in the three tab days as well.
If he averaged 2 which I know can be done its still 60 bucks an hour worth of production. 2 guys is 120 an hour of gross production as I call it . They can both have a labor boy when they will make about 15 an hour here and the help will make 10. I could hire the best off any crew for 20 bucks an hour.
Its about the same deal painting or drywalling .
My point is theres plenty of money running work. The problem is setting up enough work.
I know a roofer doesnt do the exact same thing every day and a taper does except how high the work area is .
Why arent you running a crew again?
The reason I ask is when I was doing apartments I had four to five guys , I didnt work unless I wanted to . I was there open to close but I didnt have to work. Dad always said it took 5 men to make you a living . Another way of doing it . 5 painters or 5 drywallers or 5 tapers. Ive had all three at once . But I didnt make as much money and had to handle a bunch more with a lot more meetings.
I dont see you wanting to work by your self .
Edited 8/26/2009 6:50 pm by Mooney
mooney-- i prefer to work by myself-- because then I don't have to spend my day in the company of roofers---who are unpleasant people in the best of circumstances I don't like to associate with people who can't show up on time-- I don't like to spend the first 15 minutes of my work day listening to who got drunk last night, or who had an argument with their shack-up, or why they were late, or why they want Friday off and can they have an advanceBTW?
Let's say I want to Earn $x in a given year-- i can do that working less than 1000 and working solo with no personel hassles why WOULD I have a crew---what's the benefit?---- basically I will just have to sell a lot more jobs to keep them busy, listen to them whine and complain, spend more hours baby sitting them---and in the end-- make less money--so who benefits?- certainley not me. the only concievable reason--would be for more money---and i don't want or need more money-----and having the crew makes me LESS money----so why go in that direction?If you are in roofing for long---- you see that on a crew of 4 or 5--only 1 or 2 have to any real skill- the rest are fairly unskilled raw labor-- a casual glance at that arrangement shows an opportunity---specializing in those few things that the guys with some skill---still messed up! your mythical young guy who THINKS he can do 3 square an hour,day in and day out including loading and clean up and thinks he is making money at $30/sq.--- needs to sit down with a pencil and paper and THINK things through--- He needs to do 150 square a week or more----week in and week out--not going to happen but with a pencil and some paper--and some thought-- he can make more doing 20 or 30 square in a WEEK---than he thinks he is making doing 150 sq.---and he can make more doing a roof repair---and be done for the day by lunch time----- than he THINKS he is making busting his hump trying to lay 25-30 square a day. I can't argue with a mindset that thinks that prosperity lays in doing more and more work--for less and less money---- when experience tells me that prosperity lays in doing BETTER and BETTER work---for more money--and generating continuous referalls which you do--- by seeking out the HARD things- the problems--and solving them profitably. Invariably-- those problems were caused----- by somebody who thought it was good business to slam out as many square a day as his rapidly depleting body would allow at $30/sq.---- I gaurantee you that the $30/square guy totally effed up the chimney flashing etc. you have done well for yourself buying and selling houses--------- I bet you do well-- by sitting down with a pencil and paper and knowing WHICH houses are a good opportunity for you- NOT by buying every house that is "for sale" gotta run,
stephen
and he can make more doing a roof repair---
Come to think of it, I've never had someone question my price on roof repairs. It's just, "when can you get to it?"
But, it takes someone with experience to make repairs because the problem was often created by bad practice to begin with.copper p0rn
"But, it takes someone with experience to make repairs because the problem was often created by bad practice to begin with."
You know thats a big deal right there. Not on you doing roof repairs .
A person does a flip lets say and is trying to do every thing . Just look at the way it was done before if you dont know . KInda like cheating off someone else on test day.
Tim
mooney--- the best employee I ever had---- was a kid named Branden---- family friend-- he worked with me most of last year.--- very high IQ-- but not right for college--tried it several times with BAAAAD results---- I offered him a job last year--- he agreed to take it but he told me up front he had no intention of doing this more than a year---- kid was great----- he is smarter than me---- but he has some dyslexia issues etc.---- he would come to work-- i would tell him what we were gonna do that day and what to do---- bingo- he would do it---after the initial morning talk--- I doubt we said 15 words the whole day------- nothing needed to be said--- he could see what needed doing--and did it.------- he went in the navy this spring and is doing well-- the navy apparently thinks he is a genius compared to what they usually get, I guess--- but he is doing great both of my sons have been great to work with----again-- both are smarter than me and after the initial morning chat about what we are doing--- no words are necissary-- they see what needs doing--and they do it. but- my experience---- people like those 3 kids---are hard to find---experienced roofers----- expect you to drag the work out of them---won't do anything-- unless you make 'em do it---- they will do it-- but you gotta make em do it-- their whole thing is to get through the day doing the least possible--- those 3 kids?-- in their own ways-- they tried to do the BEST possible I really miss Branden---- quite a few customers thought he was my actual son.
stephen
Grant-- when I went into the roofing business--- I had virtually no background in it. I was working as a chrome plater-- and needed a roof on my house.- I bought a book about roofing, read it-- and then roofed my house.----- then i roofed a neighbors garage---and then for the next 5-6 years-- mostly did roof repairs------ those 6 years or so---were the education---- 6 years of patiently taking leaky roofs apart--- and seeing what mistakes other people had made( the slam it out for $30/sq. guys!) by the time i got to the point that i could reasonably sell complete roof replacements--- i had learned what NOT to do--- from fixing other peoples mistakes---and since i had no background in roofing-- I wasn't hogtied with malarkey about what I could charge or how much was "market rate" or "this is the way I have always done it" stephen
I actually feel the same way you do right now .
Might be a little venting here of my own.
When you have an 18 wheeler of drywall to finish or in most cases on a commercial job more then you need some indians and mules. Now the problem is getting them to understand and keeping it stupid . A nail spotter takes the skill set away from the user other than slight adjustments of simply turning the handle . One guy needs to do that job all day long . So with the other jobs on the job. By doing things that way I made money off help and staying on top of them.
You can take a simple method to not showing up . Its called the Walmart advantage. YOu call them when you need them to come in. Let them find work eleswhere if they can. Theres always people taking their place asking you for a job. You have a list of 12 people and call 3. If one doesnt show you start calling . When you get the roof stripped and loaded send them home . YOU dont have to feel like you have to feed their family. You were just helping them out while they were looking for work which is what they are always doing anyway.
Im not doing that anymore . I cant really find help now with all the differnent things I do that will benifit me . I can use one person of any age or sex. I can use my 15 yr old boy as well as anyone . Ive worked our house keeper several times . I cant hire anyone that has skill to do everyting . If I hire skill set then its in one area. I dont have any thing for them to do the rest of the time and cant pay what they are worth not knowing what to do. I dont need to argue with anyone on how IM going to do a job which is what I get with experience. Meanwhile Im paying them to argue and Im listening losing money. Even the talking is a hinderance to me . I want to do the talking about what I want. The house keeper doesnt talk or argue. The boy needs duct tape on his mouth but he knows all the tools and where they are. <G> I really dont mind his mouth but hes the only one . He needs to work with Jeff Buck.
So I feel like you do now . Your right that if you arent padding your wallet with help you dont need them.
I think that post pretty much sums up "Why do I love the roofing business?"
General remodeling is a very tough nut to crack, precisely because of the many varied skillsets required. It seems like every time I get back into it, I'm always trying to fit a square peg into a round hole....and....everyone wants 50% more pay than they are worth.
I really don't know anyone thriving in that industry even after 30 years in the construction field.
As you know Ive done several different things in my working life .
This to me is one of the hardest challenges Ive faced. Im still studying it . Every little job needs a plan. You dont gotta plan you dont make money. I dont know why no one talks about it . Its very hard business. Ive tried everything I can think about at least twice. It reminds me of a pro offense and a pro defense matched.
What goes on one job doesnt go on another one .
The right play has to be dialed up when you see the job. Its expensive to be wrong .
Not only do you need to do everyting on the job but the trailer must carry it to get it done.
Lists have to be exact and complete . You cant be talkin about who beat who on the cell phone . If your runnin 75 per hour labor and miss a pop up drain assembly it can cost you 75 bucks plus the part. Goes on and on that way.
Used to you just filled up the dumpster . Not that way any more . You couldnt have told me 15 years ago this would be a problem. It is today.
Costs are so high you cant afford to make mistakes .
Its a hard business to profit .
It ain't rocket science
Maybe it really is rocket science. I think the numbers prove that out. If it was as simple as you are saying it is, there would be substantially more people following your program.
blue--- it ain't rocket science--- my numbers illustrate THAT. Remember Sonny?--- remember people here couldn't believe he could charge $90/hour for " small jobs professionally executed"? how many hours a year do you NEED to work- with minimal overhead while billing $90/hour?
it aint rocket science--- it's mostly returning phone calls, showing up for scheduled appointments etc. in this very thread-- I think people have admidted- they were not good at returning phone calls etc.--- how tough can it be?
a few years ago---- a helper and myself sided a house( we had previously roofed the house a year earlier--- and roofed her previous house 2 years before thatso the house we were siding?----- city had a noise ordinance- no work before 8:00 AM---we arrived every day at 7:55---worked till noon-- took 45 minutes to leave to pee at a gas station and eat a sandwhich--came back and worked untill4:30----and then left each day. we did that every work day untill the house was finished---at the end----the customer told us she was AMAZED at our work ethic--AMAZED?---amazed at simply showing up and doing what we were paid to do? It ain't rocket science----it's just doing a few simple things that folks should be doing anyway.Stephen
EDIT:- BTW- I have met any number of people who do pretty much what I do in a variety of fields--a painter/wall paper hanger, a brick layer, a landscaper, 2 different technical writers--and those are just the ones i know of-- I am sure I have met others--- but didn't know what they were about I promise you--it aint rocket science
Edited 8/26/2009 6:55 am ET by Hazlett
how many hours a year do you NEED to work- with minimal overhead while billing $90/hour?
I'd only need about 10,000. If I could double, triple or quadruple that, I'd be okay too.
So, since it isn't rocket science, how do you explain your obvious advantage over most of your competition? Are you agreeing, or disagreeing that 95% (or more) of the tradesmen in the remodeling arena are failing to live up to your minimal standards? If so, are you agreeing that they might benefit from an alliance that handled the other elements of their business?
blue,
post #123550.108 gave a brief summary of why my "competitors" are at a disadvantage look at the list-------see any "rocket science "there? roofers ,in general simply REFUSE to do BASIC things that are largely taken for granted in almost any other industry. really--- how tough is it to return a phone call--schedule an appointment--and KEEP the appointment? I can't even begin to tell you how many timnes I show up---give a written proposal----and people gush" how soon can you do it?- we called 9 guys and you are the only one who showed up!" And this is in a Rust Belt City in the 2009 economy! i am finishing a job tommorrow---- fairly extensive tile roof repairs and installing about 160 ft. of half round gutter.--- working about 8:00 -untill 1:30- tommorrow will be day 10 guy drives by my job today-- i am getting something from my truck so I see the whole thing-- he drives by in an older car with a {"tall boy" between his knees--and waves at me like we are old friends----next thing i know he has parked his car and is asking for a jobTatoo on his NECK---and I have already seen him DRINKING and Driving THAT ,Blue---- is our "competition"-- If I can't beat a moron like that while only working 1000 hours a year--- i might as well blow my few brains out right now and i certainley am not going to sub work out to him--- in effect turning my good name over to a miscreant like THAT! Very average day today--- worked from 8:00 untill 1:20---- home and loaded for tommorrow by 2:00-------- 2 messages on my answering machine--- one for an estimate for a porch floor repair- and one for a roof replacement------- over a 50% closing ratio----so statistically one of those jobs is already mine--- i already know that--- but the 2 prospects don't--- but I assure you--- both will be priced at MY price--- neither job involves rocket science. let's ay a guy has the skill to install crown molding?-- i can't wrap my head around why he can't also take a bathm return a phone call , set an appointment---and sell the project---- it aint rocket science!
gotta run---dogs need walked,
stephen
let's ay a guy has the skill to install crown molding?-- i can't wrap my head around why he can't also take a bathm return a phone call , set an appointment---and sell the project---- it aint rocket science!
Neither is rocket science but both are two separate and distinct jobs. Many guys, that like to install crown moulding, don't like to sell. In fact, many are really bad at selling themselves. They underprice themselves and won't/don't know how to talk about quality and service. Many will consistently do jobs for half the price that they should be charging. They don't understand the difference between wholesale and retail customers. They give wholesale prices to everyone.
They also underestimate their actual times and time spent servicing that job. They never factor in a number for sales commission....because they are selling it themselves.
I think it's pretty easy to see that most tradesmen don't do what it takes to stay in a retail business even if it's just a matter of getting to those appointments and charging properly. With that thought in mind, I'm convinced that a young, hustling entrepreneur, who is willing to take charge of the field installations, would be significantly better off if he partnered with someone that was willing to handle the marketing, sales and administrative duties of his trade. I'm 99.99% sure that over 30 years, these young guns would make a lot more money by climbing in business with someone focused on making money.
We can agree to disagree but I really don't understand why you are having such a hard time wrapping your arms around the idea that some tradesmen make lousy businessmen.....you get many jobs because the competition isn't even making their appointments. That in itself is proof.
Thers a lot of things people dont get . You dont have to look far either. Right here is close enough. Its not the dredges of the roof industry. Its all around us right here. People talk a good talk here but they dont follow up.
It isnt impossible for anyone to work 9 months and take off winters. Ive done it . Not many know what 7/12s are in 100 degree heat or its distinct adavantage .
Not many people know about working away from home 7 days per week for a long period of time on their own choice.
What about working 7 days a week for years and living off nearly nothing to save retirement .
Or learn business after learning a trade or graduate college before learning a trade. Depends on how the boat came down the creek.
Thats why we have jobs isnt it ? Because we do things people dont care to learn.
Theres all kinda of tradesman out there that need an agent . They need a lot more too.
This is a world that loses wars on purpose and the biggest percentage of men dont get to raise their kids. I was listening to a state sports show the other day and they were interviewing Tubby. He told us that 76 percent of his kids hes had didnt have a father figgure at home . He has the records in his office . These kids are the elite for athletes chosen around the country. They represent 2 percent of all high school athletes. Its been 8 years since my county has turned out an athlete to play D1 sports. He quit the team. You might say well what does that have to do with it ? Im saying the elite athletes only have 24 percent of their dads at home and I would think that an athlete would need dad at home . Makes me wonder what the percentage of high school seniors have a dad at home .
Brings up how many men do you know that allow plenty of time for family and are the bread winner? Thats tough to do. Not many can. Those that do should be appluaded . So with that question Ive wondered how many dads only work 36 hrs per week as thats the time a child is in school. Its not impossible but its plaenty tough.
What do men look for in wimmin they choose for their wife and mother for their kids ? Or did they get that far ?
How many of us had a step parent in the home ?
List goes on. Yea Id say as a society we need help.
There's a lot of truth, and a lot of wisdom in that post. While I detest the business model inD47 described, Blue's operation is obviously more in line with utilizing the existing situation, as you describe it, in what I would call a legitimate way. He's paying his subs as much as he can while still getting a markup, and delivering as quality a product as he can, even supervising the jobs himself to keep it that way.
I abhor the situation that exists, but recognize that tradesmen have helped to make it the mess it is. I am constantly underbid by tradesmen with no idea of the cost of staying in business. Which is why the failure rate for contractors here is so incredibly high. Meanwhile, the public still has no idea why one bid is higher than another, so they attribute it to "greed" or "rip-offs". Not that those don't exist, but they aren't always the reason for a higher bid price.
There's a lot I love about the remodeling business, and a few things I hate. Lowball bidders who aren't licensed, or bonded, or insured, who don't incorporate all the costs of creating a quality product, or operating a legitimate business, into their bid prices, are one of the things I hate! View Image bakersfieldremodel.com
The thread is really getting ahead of my reading but I could pass up this point .
"here's a lot I love about the remodeling business, and a few things I hate. Lowball bidders who aren't licensed, or bonded, or insured, who don't incorporate all the costs of creating a quality product, or operating a legitimate business, into their bid prices, are one of the things I hate! "
Ive also read other outstanding points that could be subjects.
You have a right to hate it . Thats what makes this profession any thing you want it to be as DanT once said of the real estate business. When I went commecial I had a business plan that under cut my competion. Im gonna trip up and share this plan. <G> You can believe it or not . I dont make practice of saying it now or then. This is a true story .
Years ago you heard about framers that could drive 16s all day in one lick and framers that were faster than them usinging two licks . Every framming crew discussed it .
Then as years went by the discussion about nailers , staplers , hand nailing , being better , faster in roofing and frammng. Finish work was always a no brainer .
Im one of those guys they talked about when the discussions came up. Who is the fastest in town? Who is the best? Two different subjects isnt it ? A whore is good to who pays her. So turn on quality or speed? Cant have both or can we? To a certain amount we can. I applied technology to the minute manager in every thing I did . Often its more in the mind than it is pure speed. Ya gotta know when though. Gotta b on top of the game . In athletics they talk about changing gears. They talk about it to in poker.
Working for someone like MS you mentioned earliar I would need the quality to be there and speed down the stretch to be constant to make any money off him . Thats a decent living but with out volume . For one hes marking my work up and I know it . Hes requiring I incur costs like I was making top money like insurance . Hes not even providing that and Im not making enough profit on spotty work. Yet he still gets all the subs he wants . Either I compete with that or choose not to.
I left the residential feild as I had said before but I didnt say how I did things. I found the work in commercial to be shoddy over all. Most were employees of the big man in an office . They had over head as subs . Every sub I met answered to a guy in the office as the main sub. They had full time secretaries. They had bidders full time and supers that didnt work that met with foremens.
With out making the story longer than it really is , I didnt have overhead and had to match my self to them. I bid the small jobs residential guys didnt know that was comming to town. They didnt know the GCs , company , who to talk to until it was ready, etc. Commercial jobs are bid months in advance so a local sub has no chance since he didnt know it was gonna happen. Bids were accepted months ago by the time he hears about it . That took care of them. I was in the bidding room with the big guyswith overhead. I created the mismatch by bidding a Chili`s or a small strip mall where they get three stores ready at once or jost one store. An office in a building or a sub building to a big set. Many times I worked alone . Supers told me to get some help because I would not be able to keep up. I heard that the whole time . I was always on schedule. I would simply reply that . On one of the last jobs they split the contract. An argument had happened in the bidding room. Who was the fastest? It was time to settle it . I was matched to 4 mexicans on another building. When the first room was hung I was there . I stayed there 7/12s and used up to date equipment the mexicans didnt have on their job. They missed three days during the whole job and I never gave up the lead . In the end I got the full amount of the check and the mexicans got a paycheck.
Tim
Here is why I love the roofing business---- but I have to admidt--- it's often a love/hate affair----often on the same project----------
#1------ It's easy to get started in the roofing business.----single man with a pick up track,a ladder and a couple hundred dollars worth of tools?- Bingo--you can get started in the roofing business.
SERIOUSLY-- I LOVE that about the roofing business--- easy entry-----very few businesses are as easy to get started in.
#2-- the physical nature of the work
personally--- I try to limmit my volume of work in order to limmit the wear and tear--- but I really enjoy the physicality of it.As a bonus--- you don't meet to many sissies in the roofing business
#3----it can be dangerous-- I LOVE that aspect---because the danger is largely--but not entirely within MY controll and I get to decide whaT IS ACCEPTABLE TO ME PERSONALLY
I once got a very strange look from a FHB editor when I explained to him that if roofing was safe--- I wouldn't be interested in it
#4 I love that the roofing business can be just about anything you want to make it
you can do beautifull copper roofs like Grant-----you can work with the timeless artistry of slate like Walter, you can hustle and employ dozens of men on multiple crews--------- or you can happily stay small and spend the majority of your working career within a 12 block radius of your own home like I did.
#5 Every house needs a roof at one point or another----and there is a customer for EVERYBODY-- here is the catch.-YOU have to go find the customer
My customers would never be interested in an operation like Blues----- and I doubt very much that Blues customers would be interested in MY operation---that I think is as it should be
It's been interesting to note---- that many of the attributes of a small operation like mine--- blues' business patter attempts to portray negatively( but my customers eagerly pay a premium for those very "negatives")
and---many of Blues business model attributes?--- frequently I show them to be a negative in discusions with my customers!-- I love that!-- let the customer decide
#6 I love that the physicality and riskyness of roofing---can make it fairly lucrative----- working mostly alone I manage to work about 1000 hours a year AND put my wife through college,send my sons to private schools, by a nice house and save and invest towards my retirement--- I love those things-- that's what I put a value on.
#7 I love that I never really have any competition. True-- I don't get every job---but I don't WANT every job--just the ones that are a good option for ME---- my "competition"?-- well your average roofer has poor business skills,little follow through,no organizational skills,dubious honesty, can't return phonecalls, is dirty etc. Are they REALLY competion?
#8-- I love that the workers can all earn a fair days pay----for a fair days work. It is very clear cut situation----but WHAT they do with their pay---is THEIR AFFAIR. Most won't make the effort to accumulate the couple hundred dollars of tools and the truck they need---OR make the contacts and develope their own customer base------and so will never have more than a fair days pay for a fair days work
but whose fault is THAT? Frankly--that's one of the reasons I prefer to work alone--- it's very disheartening to see people who shoot themselves in the foot time and again--rather than apply themselves to developing very real OBVIOUS opportunities.
#9-- what I love most about the roofing business is that by the end of September or so----in a State with 11% unemployment I will have essentially" made my nut" and can again devote myself fairly full time to playing with my dogs, lifting weights, bicycling,reading, cooking, attending live theater and so forth
Best wishes all,
stephen