A close aquaintance of mine recently fired his lead carpenter becuase his remodeling outfil wasn’t turning a profit. It’s a small company with the owner, the guy that got fired, and two laborers/carpenters. The owner was providing money, and working on generating leads/business, while the fired lead was in charge of estimating and running the jobs. Also, the lead owned most, if not all of the tools. The owner doesn’t know any technical construction, but has some good ideas how to grow the business (by implementing systems) once it is ready to be expanded. I’ve done some sub work for them, but was always amazed that the owner never even attempted to help with any of the actual “work”, even if the job was behind. I also noticed that the lead was attempting to remove himself from the actual construction as well. Isn’t that insane? In my opinion, when you’re that small you have to keep working in the field, at least when the job starts to get behind. Too top heavy to have so many “managers” and no one actually building anything! So, that’s the general background.
Last week, the owner tells me that he’s firing the lead, and would like to talk with me about helping him learn how to run the technical side of the company. I’m sure he’d love for me to jump in and run the deal, but I haven’t got enough time to even run my own company let alone another guy’s. Besides, that guy is DEAD WEIGHT—what does he contribute? No tools, can’t bid, etc.) I was drunk when he called, but I told him I would show him the steps I go through to bid, and show him how to use Xactimate. (He also doesn’t use Quickbooks or any other job costing software—-No wonder they were losing money—how can you know how you’re doing if you’re not keeping track while you’re doing the job!!! They would assess whether they made a profit or loss, AFTER the job ended. A large company might be able to do that, but not a small 4 man company!!)
So my question is: Should I bill him for my time showing him how I run my company? As a consultant? And for how much? I bill $75/hr. for construction, but I’m actually creating competition by teaching this guy. Not to mention, I got my head cracked learning how to succeed in this market—why should he get a free ride? Now, he has offered me equity in his company, but how much?
BTW, he was pissed because his last lead wasn’t willing to work more than 50 hrs. per/wk. On top of that, he was only paying the guy a flat salary of $1000/per two weeks! Granted, he lived rent free in an apartment, but this guy was using his personal tools, running the crews for $500/wk!! That’s $10/per hr.! I pay my grunt labor that much!!!
Any thoughts appreciated. Ask any pertinent questions for quick reply!!
Edited 6/18/2007 11:24 pm ET by Cooper
Replies
Guys like him are what's wrong with our profession.
Huck said it first. I just agreed with him.
Send him here. BT's Business folder.
Tell him to keep clicking "next 50" at the bottom and to come talk to you after he's read the last 4 years worth.
SamT
Praise the Corporation, for the Corporations' highest concern is the well being of the public.
At first I was thinking maybe you are too had on him. I mean, most of the guys who actually do the work never seem to think that the ones at the top actually DO anything.
But you mentioned he provides the "systems" and the money.
Actually, the customers provide the money if he is using the right systems, and if he doesn't even use quickbooks or scheduling stuff, what "systems" are you talking about.
I know - his technique for screwing a lead carpenter and getting him to not only do the work of running the show, but of doing the estinmates and customer contacts also.
He really is dead weight. The only reason he wants you is to talk you into being his pony ride in the parade.
Giddyahp!
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The one aspect he could possibly contribute is for his "investors" (rich brother) to buy properties that can be either improved and rented or sold. This guy is a real estate agent, which is handy, and really want to own lots of property, regardless of the headache. (I personally would rather flip them and be done, but he's in for the long haul.) As long as I'm getting a decent wage for my labor, I'm happy. Then I wouldn't have to deal with the headache of the investor/owner. As long as our relationship is good, and I produce a good product on time, maybe that would suit me? I've recently been lucky to have worked with two clients I truly liked, but that doesn't happen all the time or consistently. If he'd pay me well and on time, and I could just work in peace instead of having to explain every little thing that I do, I might find that I enjoy being a "sub" (even though really I'd be doing the entire job!).
So, my dilemma isn't too bad. One bid that I show him isn't going to teach him how to bid, especially if he hasn't been in the field to know what the "sleepers" are or how long a certain aspect of a job entails. He won't know the difference between hanging drywall in a brand new building, or in an old, unsquare/unlevel/unsquare house. He won't know any of the headaches that are guaranteed to appear somewhere along the way. The only way to truly learn that stuff is to get dirty and get out there!
The systems I mentioned that he had are regarding organizing a bigger company. Having several crews monitored by a supervisor, accounting subbed out to a CPA, unprofitable trades (e.g. concrete sawing, roofing, painting, etc.) subbed out too, and scheduling for the future. I'd love to think that I could somehow get three crews going at once, but the guys who could run those crews could go start their own companies, so why would they want to work for me? Those who can, do. Those who can't, are disgruntled, alcoholic, carpenters who can't be consistently counted on. At least that's been my experience. I'd thought about offering the fired lead a job running a crew for $16 an hr. to start, and more if he made money, but don't know if that steps on my aquaintances toes, let alone whether a fired lead is really worth hiring!
Anyway, I hope this post doesn't confuse the issues even worse. If this guys brother really has a lot of cash to invest, I would love to run a large commercial project that paid very well.
We'll see if that actually happens.....
So my question is: Should I bill him for my time showing him how I run my company? As a consultant?Now that I see more of your full situation, I would suggest that the above is the wrong question.IMHO, the right answer is; Teach him to be a contractor.A Contractor is a company that writes and garuntees contracts to build something. A company first needs a businessman before it can do anything. A business man needs Systems and personel to run those systems so he can orchestrated his company.As the company grows, any of its' personel can be replaced by a subcontractor or service provider. When a one man company is being birthed, that one person must run all of the business systems themselves.A contracting business must by definition have a system of tradesmen to perform the work. Any tradesman can be replaced by a subcontractor. The only person who can not be replaced is the businessman/owner. The Tradesman System must have a leader and each sub group/contractor must also have a leader. The Tradesman System is a production type system.If I were in your shoes, I would think about offering a three year Joint Venture Partnership. But only if he was willing to personally handle all business office systems. That is, is he willing to set up and run the accounting systems, payroll, sales, purchasing, learn how to effectively use an estimating system. You could run the complete production system and, for now, the estimating system. For three years, you would be running a long term, highly profitable series of projects. The benefit to your aquaintance would be that in three years, he would be a successful paper contractor.SamT
Praise the Corporation, for the Corporations' highest concern is the well being of the public.
"I would think about offering a three year Joint Venture Partnership."I was thinking that at first, but the more I read about the guy and the more I let things gel in my mind, he is a shyster. I do not get in the same harness with that type person, but further, I askmyself "Why in the world would I want to teah skills and methods to somebody who has shown he is likely to be the kind of peson who will use that information against me?"
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A contractor is a company?The Supreme Court of Mississippi decided a license tax applied only to plumbing contractors and not journeymen plumbers and stated "The law looks on both of these occupations with favor, not with disfavor." To me, that indicates that contractor is an occupation. Wilby v. State, 93 Miss. 767, 47 So. 465.The Court of Civil Appeals of Texas stated "In the nature of things, we think a corporation could not engage in the occupation either of a master plumber or of a journeyman plumber. ... It could not engage in the plumber's trade, either as a master plumber or journeyman plumber, any more than a corporation, as such, could practice law or any of the learned professions." To me, that indicates that plumbing contractor (master plumber) is an occupation. Trewitt v. City of Dallas, 242 S.W. 1073.
Hi, 5150,They let you out again? Did you get elected to the AZ supreme Court yet?SamT
coop ... this guy is toast.. head for the exits !
how can you show him how to bid ?
that assumes you can develop a production rate .. what is his production rate going to be ? pretty close to zero
his old produiction rate was based on the experience of his lead carp
now it's a non- field working owner and two directionless carps/laborers
he should beg his old lead to come back
OR... he should build a business based on 100% subs.. but i don't think that will work for him either
tell him ... Thanks, but no thanks
Mike Smith Rhode Island : Design / Build / Repair / Restore
Right! OP is looking for a job as navigator on a sinking boat
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
"most of the guys who actually do the work never seem to think that the ones at the top actually DO anything."hmmmmmmmmmm......maybe we're right!!!:)Blodgett knows the score....
.
."First thing I would do is shoot the carpenter"
If he wasnt happy with a $10/hour job superintendant, he is gonna love you to pieces.
Literally.
Henry Ford invented the gas pedal for situations like this. You need to hit it.
Talk to the ex-lead and get his side of the story.
Cooper ,
What does the "rent free apt." rent for at market value. You need to add that to the leads wages to figure what he was really being paid. Plus find out if it was being called income for tax purposes. If it wasn't then it is not only added income , it is tax free income so add another say 20% to it.
Your acquaintance pays the other help how much ?
You acquaintance will burn through you in a heart beat IMO.
He is a wheeler dealer, not a contractor. Those types will just use and use and use in my experience. Doesn't matter who , as long as the victim stays there they will use them.
Bill him your hourly rate, to be paid at the end of each session.
This guy was losing money paying his lead 10 bucks per hour and he's going to make money paying you 75????. LOL
Ozlander
Another facet of this is if his business dies you and the other contractors in your area are better off by a contract or two a year. Potentially of course. Because he isn't in around to under bid you.
I'd tell him good luck then beg off.
Best to you and yours, Chris.
Building as thou art paranoid never harmed anyone.
He expects 50 hours or more per week. (He thinks you're a slave)
He doesn't know anything about the technical aspect or any interest (as shown by not getting involved when extra hands could make a difference). Now he's interested in learning how to bid?
He want's to compete against your business.
Easy answer for me, charge him $10,000/hr.
You're asking for trouble. This guy will never leave you alone once you get involved. He'll pay you your initial fee then the phone calls will start happening to you and you won't get paid for those. Mark my words. All the years it took you to learn through your mistakes is priceless...he wants a free/cheap ride is my guess. Set a hefty bill to teach him...not hourly but rather daily if you do get sucked in. My guess is if you do get sucked in it will keep sucking....better learn to embrace the suck...lol.
"What people will notice and remember is the broad brush of how how we act.We can aspire to reach our high ideals, or we can slide down the slippery slope towards the despicable." rjw
http://www.john-lennon.com/imagine-neilyoung.ra
http://WWW.CLIFFORDRENOVATIONS.COM
i would polietly say to him,i'm in bussiness and really not looking to create more competition for my self. i have recondsidered showing you MY SYSTEM and opening the door of losing bussiness down the road. walmart is not going to help target by showing them how to do it.
now if he thinks you are the cats meow, you would sell him your bussiness for 750k [or whatever you think it's worth x2] and would be his employee. to look at your books it takes a 20,000 non refundable good faith deposit.
i knew a guy that would be interested in a bussiness,study the books for 2 weeks,say no thanks and then go start one with info he had got from the guy. did this over and over .
or you could take the others advice: and get the hail away from him as fast as you can. otherwise like one said get use to that sucking sound as he pulls you down with him. larry
hand me the chainsaw, i need to trim the casing just a hair.
One word Trade Secret, well OK, two words. Like you said, you've worked hard for what's in your head. Why give it away?
Edited 6/20/2007 6:40 pm ET by byhammerandhand
Thanks to all for your advice. I'm thinking that this guy would be better just buying properties for me to remodel, and then he either hyour "spolds them to rent, or sells them. I don't think he'd be able to pick up the nuances of running a remodeling company. It's trial by fire, and often painful to find your "spot" in the industry. He doesn't seem to have the love of the trade to really pay his dues. thanks to all for the insights! I was thinking that same thing, but it helps to have my remodeling brothers concur!!
LOL..... he's offering you "equity in his business"....... ROAR! How enticing.
You got that right, diesel. Just how much is a percentage of NOTHING?Beat it to fit / Paint it to match
Tell him he's in the wrong niche; he'd do better opening a "payday loan" office.
Then drop a bill on him for 4 hours minimum (at your $75 rate) payable at 20% net 30.
Edited 7/1/2007 11:53 am by Notchman
guys like him are the first ones to fold up shop when work slows down. dont get yourself involved financially in his affairs.
the word "quality" or "workmanship" never get used in the same sentence with those guys. there are too many of his kind around now, let him sink
... and that was the best advice yet Maverick.View Image
Run
This is a no win proposition, Rich brothers are not much of an asset.
Much better to stick with what you're doing and keep doing it better.
------------------
"You cannot work hard enough to make up for a sloppy estimate."
"Rich brothers are not much of an asset."especially considering how some of them got rich - by standing on top of the other guy.
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
that's a prttey liberal statement for you Paul;).
.
Fixing a hole in the ocean
Trying to make a dove-tail joint-yeah
LOL, Yea, surprised me !"Poor is not the person who has too little, but the person who craves more."...Seneca
Hnuh? What does political philosophy have to do with human nature?
Or economics...Oh yeah,
EVERYTHING!;)
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
Do U have room to grow?
Me ... I'd say one way it'll work.
He finds the work ... I do it.
as a sub. Same as working with a designer ... except better ... as there's no idgit designer involved!
He finds the work ... U price it ... turn key ... expect to run the job as if it was your own ... expect nothing from him ... then U bid it ... tell him the price ...
and if he can sell it at your price plus what ever percent he has to add to it ...
great.
more money for everyone.
and I'd even suggest his mark up for him.
Store front ... receptionist ... himself.
1.6 as the multiplier for starters ... see how that works.
knowing his situation ... I'd set the pay schedule very tight ... with a big portion up front. I'd not work one day outta my own pocket and all materials would be paid in full by him up front. If he's got the deep pockets it's time to dig. Let him owe himself.
I always say "there's gotta be a way to make this work" ...
I'll try what ever looks to put more money in my pocket.
sometimes it works ... sometimes it don't. The key is to make the terms as favorable to yourself as possible ... and stick your financial neck out as little as possible.
What's the worst that can happen ... he says no and U definitely don't lose money on the deal ...
Is the guy the worlds best salesman? If so ... this could work.
Jeff
Buck Construction
Artistry In Carpentry
Pittsburgh Pa
Let me get this straight, the owner a novice to the construction side of the contracting business and now your telling us that, in addition, the owner doesn't know the technical side either? Sounds to me like your taking on someone with no skills or background and building a contracting business for him to run, for hourly wage. Software (estimating) can cost upward of $10 to $15 K alone not to mention learning how to use it and then no experience to boot. If you do this "partnership" for anything less then $200 and hour to start and 50% or the first five years profits, your a fool.
And then he's going to be in competition with you later on...forget about it. Tell him to pound sand!
Wait, I've got an idea. Tell him you'll show him the technical side of construction from the ground up and you'll provide "on the job" guidance to boot. Have him start with you as a laborer and then teach him all the tricks of the trade from the ground up. Now here's where the "deal" comes in, tell him you'll do it for only $20 and hour starting at 7:30 AM to 4:30 PM Monday through Friday every week. He pays you with cashier's check every Friday afternoon at quitting time. You've done this only one other time in your life and that was for a dear close friend who died before you were able to give him one of your kidneys. Make out the documents(contract) and be sure to have him sign them in duplicate.