I do handyman work and once in a while I get a customer who needs a kitchen remodeled or a larger job than I can handle. How do contractors generally deal with this situation? I want to make some money if I hire a sub contractor but I don’t want to bid too high and lose the job. How much should I pay the sub? Any other advise that could be helpful?
Thanks
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Easy answer is that you get the price from the "sub", add in an appropriate amount for your risk, overhead, profit and your work, then give the price to the customer.
As an aside, make sure your insurance covers you for being a GC and get insurance certificates from your subs. Being a general contractor is a whole different world - but you probably know that. :-)
Don K.
EJG Homes Renovations - New Construction - Rentals
Exactly what is your role going to be?
Are you talking about hiring one (sub) contractor that would do the whole job (who might inturn have there own subs)? Or you talking about you managing the job and hiring different subs to do different parts with you ACTIVELY managing the job and maybe doing some of the parts?
Or maybe having some other contractors that you are familar with and "let" them bid the job and you would just get somekind of finders fee?
What would be your responsibility? Your liability?
.
A-holes. Hey every group has to have one. And I have been elected to be the one. I should make that my tagline.
I would have them do the whole job. I will look at it the first time. Then I would give the details and some pictures of the job to my sub. And how much they are going to get paid. I am looking for some kind of a percent of the total profit.
Thanks Bill,
House Doctor
With the scenario that you posted I think it would be fair for you to give them 180% of the entire budget.
The first 100% should go to them because in essence they are doing the entire job.
The extra 80% might be a little shy but without more specifics it seems like it should cover to extra hassle of showing you how to do it.
You may want to get started finding your "subs" a little early, because I think it may take a while weeding through 99% of them to actually find the guys who even stay on the phone long enough to hear "what you say they are going to get paid".
It's going to be tough at first, but once this gets rolling for you, you should just plan on raking in the money due to volume.
Don't forget us little guys when you really make it big.
If it gets too difficult, remember, you can always just tell them that you'll pay them less because you need more money - simple, business 101.
Remodeling Contractor just on the other side of the Glass City
I really doubt if that business model would ever work for very long. My customers hire me for their jobs and wouldn't appreciate my dropping out except for one or two visits to the job (kicking it off and picking up the check?)
As a one man operation, I find it better to bring in an "expert" for some of the work when/if it's more than I can do (or want to). Since I also don't want to be bothered with additional liability and workmans comp, I actually act as a broker between the customer and the expert. They bid their part and collect directly from the customer. At most, I schedule their work and explain what the job entails.
I usually add a bit of time to my job to handle the "brokering", but don't bother with markups. My payback comes when one of my experts refers me to one of their customers.
I'm with you.
I stay plenty busy with small jobs, although I do take on kitchen and bath remodels.
If the job is too big for me, I give my customer a couple of names of guys I know and trust, and step away.
For me, its too much of a headache to get in the middle between another GC, and a client. And if the OP is allowing someone else to run the job and hire subs, then, IMO,he's more of a project manager, not a GC.
Plkus I usually still get called back when the customer needs the small jobs again.
SOMETIMES IT IS BETTER TO JUST WALK AWAY FROM A JOB THAT MAY BE TOO BIG FOR HANDY GUY... IF SO YOU CAN STILL MAKE A DOLLAR BY FINDING A CONTRACTOR AND GET A REFERAL FEE IF THAT CONTRACTOR ENDS UP GETTING THE JOB.. AND NO HE WILL HANDLE ALL UNKNOWING HIDDEN HIC UPS ON THE JOB...
First, turn off the caps lock. You're yelling. <G>
I fully agree. I am a classically trained carpenter, capable of doing everything from framing, to building the furnishings for the house.
BUT, I choose to work by, and for, myself, so I can't handle the larger jobs. And I'm OK with that. I do hire subs when needed, but I'm on the job for at least part of the time they're there.
I used to have employees, but that wasn't how I wanted to work. So now I basically do finish work, and repairs. And I make enough to keep me comfortable.
For me, getting involved in subbing jobs out that I'm not involved in just doesn't feel comfortable.
Get your contractors Licence and then you can charge for your services as a GC.
Here in California its a big fine getting caught contracting with out a Licence. I don't know if the laws are the same in PA. Play it safe.
I'm in NJ, and am liscensed.
But all that's required here is to show $1,000,000 of liability insurance. It doesn't matter if you're a GC with a big crew, or a single employee, like myself. The NJ contractors liscense doesn't prove that you know anything, just that you have insurance.
so how do you feel about subbing the whole job and being good enough to TELL the "Sub-Contractor" how much they're going to get for the pleasure of working for you?
I wouldn't do the job.
If I can't be hands on in some way- doing the framing, or sheetrock , or especially the finish carpentry- I don't want the job.
That's where I'll recommend someone I know, who can handle the job.
When I took over the business from my dad, I used to have a crew. But I hate supervising people. So now I work ( mostly) solo.
Hey Shep, I'm here in Tewksbury, maybe we can work together sometime. Sounds like we're cut from the same cloth. Rich
Do you go to Huston Lumber, in Oldwick?
The Watchung branch is almost my second home LOL
My favorite, for about 20 years now. Thanks to guys like us they are still doing pretty well. Would really stink if they weren't there. I love their service. What type of work do you like to do?
I like to do trim and cabinetry, but am pretty happy doing a little of everything. I get bored if I'm doing the same thing for morethan a few days in a row.
I've got a customer in Colts Neck talking to me about a raised panel wainscote in their very large foyer. But that's after I do the tile backslash in their kitchen.
What kind of stuff do you do?
Build some new fairly high end homes, gut renovations and additions. Finish carpentry is my specialty. After coming off a couple of long jobs it seems like the big stuff is all dried up. So its really very slow right now. My" marketing" has always been recommendations and there has always been enough work with the architects I work with, but now not so much. Waiting for one alteration to start. Bidding on another small project, but the calls aren't coming like they used to. I think everyone is afraid to spend money, kinda waiting for the other shoe to drop. I don't think the RE market has reached it's low point yet. When it does I think people will start making improvements again. How's it with you, got plenty of work?
I do smaller jobs, so the downturn doesn't affect me quite so much.
I usually have about a 3 month backlog; now I'm down to about 1-1/2 to 2 months of signed work.
But I also have to finish my own home someday. So a little slow time is good.
Hey, we're going to try to have a BT lunch gathering again this year. I'll probably start a thread soon. You should try to make it.
Yeah, I'm up for that. I know doing what I do for work, you get pretty isolated, would like to meet some others.
At 62, I really don't want to bust my tail that much so I'm scaling back to just custom cabs and furniture. I'm meeting with some folks tomorrow to (hopefully) close a deal for about $10k worth of cabs.
When I first met them, they also asked about doing a major remodel of their master bathroom and I told them that I could recommend someone for that part of the job. I gave them the name and number of a guy who grew up next door and used to play with my kids. He's been a GC for 4-5 years now and has gotten pretty big. I wasn't sure if he would even be interested in such a small job, but why not.
He called me the other day as he was leaving their house and thanked me for the referral. We're looking forward to a chance to work together and he says that he may start sending me some of his cabinet work. Works for me!!! - lol
He called me the other day as he was leaving their house and thanked me for the referral. We're looking forward to a chance to work together and he says that he may start sending me some of his cabinet work.
One of the best ways I know to get business. Find your niche and find the competition you have that compliments it and gang up. http://grantlogan.net/
My mother once said to me, "Elwood" -- she always called me Elwood -- "Elwood, in this world you must be oh so smart or oh so pleasant." For years I tried smart. I recommend pleasant.
Elwood P. Dowde (James Stewart), "Harvey"
It doesn't work that way. Wanna back up and ask, "How can I become a remodeling contractor?"
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
you should pay the sub-contractor what it costs them to be in business plus a reasonable profit.
Off the soap box, the answer is what ever it costs, the trick is figuring out what that cost will be. Unless you have a real good grasp of those costs and an understanding with the trade contractors of going rates you're best bet is find the ones you can work well with, build a relationship with them and treat them fairly, ask them what it will cost and they will be able to help you.
I mostly work as a sub. Before the GC submits a price, he gets a price from me for my part and on and on for how ever many subs are necessary to do the project. Then he puts it all together, adds for what ever he's doing, OH and profit and Bob's your uncle.
http://grantlogan.net/
"How much do I pay a sub"?
As little as possible.:>)
Seriously, it sounds like you want to know how much you pay yourself after hiring a sub. Depending on the job I go 10-20% of their price.
No one has ever questioned this but if they do, its simple, if there's a problem i'll get the call, I hold the liability over the job, and I direct the guys on site.
You're talking about being a general contractor. Some are good and some are not so good. Ask yourself what you will bring to the party. What do you think your time and service is worth? Usually, 15 to 20% is a ballpark number. BUT, and it's a big butt! The guy that mentioned insurance ain't joking. Don't forget the lien waivers from any of the subs. If you don't know about this stuff you should learn, I assume you already know the G.C. stufff, or why would you charge anybody anything.
Good luck, it can be done it ain't rocket science. Don't let some of these blow-hards scare you off. But know exactly what you are getting into.
See ya, Go Pack!!!!
who's being a blow-hard?
guy walks in, appears to have very little idea of what's he's doing, admitts the job is over his head, thinks he can TELL the supposed sub-contractor, who will be doing all the work, what he is going to pay him, and wants to know a fair price for this service?
What service is that, to me it sounds like all he is going to do is find someone to do the work, basically do the home-owners job for them in selecting a real contractor.
What makes you assume he knows jack about being a general? In his first message he says he is a handy man, and I'm not discounting that, but it's not the same business model nor the same the same knowledge base as being a general.
I still have no idea what he's really asking.
Jeff Buck Construction
Artistry In Carpentry
Pittsburgh Pa
I'm startin' to think it's someone from Cook's Talk pulling our collective leg.
Payback would be a b!tch - if we weren't the better men.
;)Remodeling Contractor just on the other side of the Glass City
It's simple Jeff. He wants to know how to make money off a job without doing any of the work.He needs the password for that secret
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
It was a simple question and all I need is a simple answer. I really didn't think it was an off the wall question. I will write the question in crayon next time so some of you will be able to understand the question.
Apparently, not everyone understands the question (myself included) wether or not you think it was simple.
Why not try to clarify the question for those that you perceive to be particular obtuse instead of using sarcasm?
And, by the way, I've been in a position to hire subs, but I haven't been in a position to decide how much they make. They dictate their rates to me. I pass it along to the customer either directly or with a markup if I'm adding value or taking responsibility.
You are wrong.
It is not a simple question.
What you are asking is so bass akwards to anything that has been done in the contracting setup from day one, whether it be new construction or remodeling, or handyman, that you have a collective group of experts at all of the aforementioned trades trying to figure what hole of Cooks Talk you crawled out of.
Actually what you are trying to accomplish with your lead in and attitude seems about one step away from forced servitude.
Hey, If as a handyboy, you can get people to bow at your feet, and accept your dictate, you may want to start your own religion instead of playing around with this contracting thing. It pays a whole lot better.
Which major auto manufacturer did you get a buyout ( or laid off ) from? What is your primary union - UAW? - just a guess. Maybe teamsters?
Get your crayon out and throw me back a responce to my questions - I ( as with most people here) would love nothing more than to help you out. Just give us something to go on.
You may want to post your inquiries to a guy called "Frenchy" - I'm bettin you guys will hit it off.
In the end he won't help you out at all with anything that is useful but he seems to be coming from the same planet as you. Maybe you guys are related to the same cousin/sister.
Just think of it as an "out of this real world " reunion.
Best of luck - and lookig forward to your "crayon scan" of questions. Happy New Year.
I'll be lookin' each and every mornin' so don't be a stranger - Get back to me real soon. - Whew.Remodeling Contractor just on the other side of the Glass City
I couldn't get my crayon to work. But I will break the question down for you to a third grade level. 1. I do handyman work (meaning I do small jobs usually by myself)2. and once in a while I get a customer who needs a kitchen remodeled or a larger job than I can handle. (usually takes a larger crew of workers to get the job done faster so the customer doesn't get impatient. ***Remember from number 1 that I have just myself. 1X1=1)3. How do contractors generally deal with this situation? (I admit with this question that I don't know. So I am asking for advise)4. I want to make some money if I hire a sub contractor (Is that ok to do?)5. but I don't want to bid too high and lose the job. (Now where I live, there is no law for contractors to hire subs. And it is done all the time around here. Let me try to paint a picture for you.Lets say for example that Mr. Contractor was hired by Mr. Homeowner to paint the living room, replace the outside hand railing on the deck, and to seal the driveway. Now he (Mr. Homeowner) likes your work (Mr. Contractor) and trust you (Mr. Contractor again). Now he (Mr. Homeowner) wants to deal with you (Mr. Contractor)(because he trust you, Mr. Contractor) and he (Mr. Homeowner) wants an estimate on replacing the concrete sidewalk. He (Mr. Homeowner) knows you (Mr. Contractor) don't do sidewalks but he (Mr. Homeowner) trust that you (Mr. Contractor) can find a good concrete contractor at a reasonable price to do the work. Now, lets go to question at number 6.)6. How much should I (Mr. Contractor) pay the sub? (Looking for a percent % here. So I can make some money. So the sub can make some money. So Mr. Homeowner don't think I (Mr. Contractor) am raping him. 50% for me and 50% for the sub. Or 70% for the sub and 30% for me, etc.)7. Any other advise that could be helpful? (This question is here because with a lot of contractors on this forum with lots of years of experience, maybe someone has some good advise for me and for others on this forum. I thank the intelligent contractors who already answered my question and could understand the question.)
8. Thanks (Self explained)9. I love this forum. (I maybe changing my mind. I may go to Bob Villa's forum for my next question.)Hope you and others can now understand the question. %%% percent %%%. Asking for a percent.[J-Hole)
The problem here is that you are assuming that you decide what the sub gets paid.
In the scenario that you posted ( which I have no problem with), what you would do is prepare a scope of the project. Then solicit bids from concrete contractors- evaluate their ability to do the job, their ability of quality, ability of service, and a whole bunch of other factors.
When you had someone willing to do the project that Mr HO wanted done, That you were willing to work with (on the terms of the contractor, which would be included in his proposal, and scope of work) - then -.
Then You would go to Mr. HO and let him know that you can take care of his concrete project. And submit a quote to him for a turn key project that included you taking care of his interests.
When he says ok because you are such a great guy that he loves to deal with, you whip out your contract with him, and have him sign his money away to a guy who is now resposible for his concrete - even though if anything goes wrong you are self admittedly unable to take care of the problems that will arise.
You would then accept the proposal of the concrete guy( who at this point would be your "sub" ) Meet the requirements of your side of his contract with you. Let him meet his side of his contract with you.
The "service" that you are offering to Mr HO is what you get paid for. That's up to you. If it blows the bid then so be it. You can set your contracting fee at 0% or 1000% . It's pretty much up to you. You should probably go into it with a better understanding than you have, but it's your business and life to run anyway you want.
See the problem here is you don't set the price for what someone else will work for. That's just too close to slavery. If you called me a told me that you bid a concrete job for $1000 and I needed to go do it for $500 - I would tell you to pack it in your a$$.
If you called me to come look at a concrete job and let you know what it would cost - I would still tell you to pack it in your a$$. But, the point being that you would actually find a real concrete company to come out, look at the project and give you a cost. Then you have to decide what your "handling" of this situation is worth, add it on to the concrete guys number and tell Mr HO what the total cost will be for you to take care of it.
You should spend a little time in the business section, do some searching, you will find a ton of useful information on undestanding how to run a successful contracting business.
The Bob Villa thing is also a good source - as long as you are trying to become a television schill.
The best tip is for you to go over a ask the guys at Journal of Light Construction. I don't have a link that I can get right now because I am responding to you, But go ahead and Google it. Those guys know alot more about this construction thing than we do here.
Sorry if this isn't helpful. You may want to go to second grade level.
Alright, I feel sorry for you - It really depends how your business is set up. Some guys charge as little as subs+10% others charge as much as subs+50%. You really need to check out the business section here. Don't just look at the new posts. Do a search. You really need to put in some read time on this subject.
Remodeling Contractor just on the other side of the Glass City
I tell some of my subs what I am going to pay. The rest I know what they are going to charge.
While I agree that this guy doesn't know what he is getting into and his question makes no sense even when written in crayon. I disagree that you can't dictate price to some extent. I know what my volume is and how valuable of a customer I am to my subs. I want to pay them enough to keep in business and keep my costs where they need to be to be competitive. In shopping for new or backup subs I have received some ridiculous bids. I am upfront and tell them where their bid should be.
Generally if I am hiring labor crews such as framing, roofing, etc. I tell them what I will pay for the job and the quality expectations they need to meet. There's never a problem, they either take it or leave it. I know my price is fair because it is determined by knowing their costs and including a reasonable profit and I have no problem getting crews to do quality work. Some sub crews outright ask what I pay. That's usually frame, roof and siding though. By sq. ft or square rate. Bottom line is; its your business and you can run it how you like. But to think that you have no say or leverage in what you pay out to subs in nonsense.
redeyed
how do you know your trades costs? and what is a fair profit?
to you? or for them?
not being a smartass
but there is no way you know your trades costs. Just for fun.....what % of gross sales is my fuel bill?
within 1%
now your price may be fair since the trades and you have struck a bargain. and with the slowdown in new construction you may be able to dictate price.
for now.
I know what their costs are on my projects. I know what their overheads are. It's not rocket science.
You can always dictate price in any market if you know your volume and your price is fair. How could I give you your fuel budget, I don't even know what you do? Also that wouldn't be a consideration. If I can hire a crew and manage it at a profit for a particular project than my sub better be able to or I will find someone else that can (or hire more men to to the work in house). There isn't much overhead in a framing crew. There just isn't that much to consider. I simply look at what my costs would be and expect a sub to come in close to what I could do it for at a profit. What is most important to me when budgeting for subs is that I am paying them enough to keep them happy and in business. Then that is balanced by what my competition is charging for similar work of similar quality. After you've been in this business for a while there is little need to call out every sub for every job and get several estimates. I never call out my subs during estimating unless it is something I don't have a firm grasp of the work and associated cost with each specialty. That isn't very often. I'm not trying to sound smug, it's just experience and exactly what the OP is lacking.For example. If I need a 24x24 4" driveway poured I know exactly what it is going to cost to have it placed and finished. I don't need to call out my pour and finish sub to tell me again. It's going to cost a certain amount for a certain quality job. I decide what the profit I will pay for each sub. If it's too high I get someone else. If it's too low I am wary of quality or sustainability of their business model. Understanding the business of your subs is essential to being a successful GC.
I'm with you on this one redeyefly. Scary huh? I don't understand why the tone has been so hostile to this poster. He came in and presented himself as a guy out there doing some simple handyman work, where he is actually a small time General Contractor and he's looking to figure out how to take the ne xt step.Who in here hasn't been in his shoes? I was there but I wasn't smart enough to ask anyone the right questions. He is. Some in here think he doesn't have the right to do this which I can't understand. Following that logic, NO GENERAL CONTRACTOR COULD EVER TAKE ON A JOB.The OP is attempting to provide further services for his clients and I applaud that decision. That's how businesses grow. My advice to OP is this. Do a business plan and understand why it makes sense to add on whatever percentage makes sense. A guy can get rich working as a general contractor and only adding 15% and a guy can go broke adding 100% so there is a wide variety of approaches.I'd also quit worrying about "raping" a client. Your price is your price and when you do a search and read up on the idea of markup you'll learn a ton here. You actually are doing your clients a dis-service if you don't charge enough to stay in business and honor you warranty.If you're going to use subs, you better learn how not to let them get ahead of you. If they abscond, you'll need to use "their" money to find someone else to finish the job.Figuring your markup will be easy. Finding qualified subs will be your biggest chore. You are allowed to set a "take it or leave it" budget but you might not get anyone to bid your work. Bob's next test date: 12/10/07
" Finding qualified subs will be your biggest chore. You are allowed to set a "take it or leave it" budget but you might not get anyone to bid your work. "
How big of a favor are you doing to your customer at that point?
If I come in to a project - it better be run right.
I just don't see anything good coming out of this.
I have not poo poo'ed the OP's desire to try to step up - I just don't see it happenning. Way too of base.
He hasn't posted back yet either though, so either TV boy Bob has him thinking it's a no brainer, and he's off and running - or he went over to JLC and he's hanging from a bridge somewhere.
Woulda' been better off here either way. Oh well.Remodeling Contractor just on the other side of the Glass City
" Finding qualified subs will be your biggest chore. You are allowed to set a "take it or leave it" budget but you might not get anyone to bid your work. "{How big of a favor are you doing to your customer at that point?}I'm just making the point that his budget might be too low to yield any results. Lets say a client asks for a new kitchen that has 40' of cabinets and counters and wants all new appliances, tops and flooring and sets a budget of 10k. The OP can solicit all the bids that he wants and will get no one. On the other hand, if the client says he has a 200k budget, and the OP decides that he wants a 100% markup, he can solicit bids and forewarn the subcontractors that they need to work within a 100k budget and to use materials that will allow that.I don't think the idea of budgets is anything that strange and many GC's will not start the design phase without one from the client. You've taken the posture that if I mentioned to you that I had a budget, you wouldn't consider working with me if I was a GC. That's a hardline approach and I think the pendulum swings both ways. I'm a GC that won't work with guys that have hardline attitudes. I'd prefer to work with guys that are willing to openly discuss the entire project which ALWAYS starts with some form of a budget. It's a big time saver to understand what level of services and products the client and GC expect. Bob's next test date: 12/10/07
I accept that. I entertain every opportunity - to some degree.
But if you think you know so much that you'll reteach me what I already know, you better come here and show me. I sure as hell not playin' your game to tell me how it'll work for your budget.
I'll buy a lot and build a house,or buy a house, redo, and sell or rent, or go fishing with IMERC. It'll be a cold day in Hell when you tell me what I work for.
And it aint about the money.Remodeling Contractor just on the other side of the Glass City
"It'll be a cold day in Hell when you tell me what I work for."You don't have to worry about me telling you how much you'll work for. I've been involved in contracting for more than 3 decades and I've never once witnessed forced servitude. Every single transaction to date has been a negotiated process. You seem to have a very hard edge about this process which seems to me to be an over reaction. I've negotiated a lot of agreements on both sides of the equation and when I was faced with budgets that I knew I couldn't meet, I simply didn't bother to go through the motions and bid it. I was usually very thankful that I didn't waste any time. I always walked away happy, not angry. Bob's next test date: 12/10/07
"If I come in to a project - it better be run right.I just don't see anything good coming out of this."One of the very fist messages I asked him what his role would be in all of this. And again in my last message.What kind of responsibilities and what kind of liabilities will he have in these projects and what will he do to control them.Never saw anykind of meaningful response to those questions.PS, so far his has not posted a message over at BV..
.
A-holes. Hey every group has to have one. And I have been elected to be the one. I should make that my tagline.
Scrapr= debris clean up and haul off for recycling
I guess we are coming from different ends of the carrot. If a GC told me he was paying me $X for a job he would see my tail lights. It is not the price but the sense that the GC can tell me what my costs are. The sense that we are not in this together. A team. A win-win proposition.
In my business there are several competitors. Like everything. And there is a general price structure in place. Magically the bottom end of the price structure goes out of business every couple years.
So if you happen to get 3 quotes from the bottom pricers and then see mine......
you are going to yelp
Ok, I'll help you. Remodel. Full load of wood. 2 hours to load. 20 yds. Bill $225.
How much is fuel?
How much is wood dump costs? This year? Last year it was.........$X????
Direct job costs.
no different than a plumber or sparky.
I don't think a GC can tell within 5% what a subs job costs are. And 5% is a bunch.
Now you've got a history with your trades and know what they historically have charged you. Per SF or cubic yd or whatever.
But that is YOUR costs.
A GC may not be able to tell what your costs are, but he knows what his own are and he may also know what level of expenses he's willing to pay on yours. If you decide that your wages should be high enough to own a corporate jet, and the GC is only going to work with blue collar subs, then your costs will be too high. I think you are overreacting to the idea that the GC may have a budget. Most competent GCs will have an adequate budget and they don't have time to spend with the prima donnas of the trades...which are everywhere. I'm in the process of hiring new subs in a new area. The first bid I got from a foundation contractor was 28k. We eventually did the entire thing in house for about 4k total which was below our budet. If we had broadcast a budget of 7k, we would have saved the hour with Mr I-see-a-sucker. Bob's next test date: 12/10/07
I have no idea who you are or what you do, because there is no profile information.
I can only guess that you are doing some kind of new construction, at which point, I cannot dissagree. When I was building new homes I had a pretty good Idea what things "were going for" and I didn't bend over for what some off the wall dude threw at me. And it was figured into my overall budget what I was willing to spend on line items - if nothing else to keep me in check. You have obviously figured these things out over a period of time, and so far are still in some sort of business - (or are a fourteen year old girl with a crush on me.)
Another point which may be pertenant is that when I started or do start any kind of a project, I am more than capable of completing that project. Whether it be by myself, with helpers, family, subs, or whatever it may take. I do not sit around and figure out how to hope someone else can do what I hope they can. I have a deep understanding of all the phases of my projects - including what my subs will perform. I actually have a better understanding, on my jobs, of what they will do than they do.
I think that it doesn't take a real strech in understanding that we are dealing with a different animal here.Remodeling Contractor just on the other side of the Glass City
No I think we are dealing with the same animal. 80% of my portfolio is high end custom remodels. Design-Build. I know what a good rate is to wire a particular kitchen I just designed. I'm always designing to a budget and as a design build organization I need to know and be accurate about expected costs. And If I want to do business legally I need to hire out subs to do specialties that we are not licensed for. I think the OP needs to get his feet wet somehow. Either by diving in and doing a tremendous amount of homework. Or, better yet, get a job at a successful construction company and find out what you don't know you don't know with a steady paycheck.
I meant he's a different animal. Something we don't do.
I agree with your post. Read, spend time getting paid to learn, educate himself, whatever - HE is not going to set the construction/remod/service industry on it's edge just because he sees it different.
Didn't mean that you and I saw it different, meant that he saw it different.
You are still profile challenged. Figure that out and I'll think that you may not be a 14 Y.O. with a knack for constuction venacular. ;)
I appreciate his desire to move forward, I don't necessarily him telling people who have done it that they are third graders. Most people here will be mo0re than willing to show him what he wants to know, if he drops the edge.
When I was 19 Y.O. I was in the same boat. And I didn't have this place much less the internet in general.
But I've read alot of stuff here over the years, and trust me some people just don't get it.
I quit trying to push rope when the .1 +20 %+3/10 discussion happened last year.Remodeling Contractor just on the other side of the Glass City
understood.I'll work on the profile.
"6. How much should I (Mr. Contractor) pay the sub? (Looking for a percent % here. So I can make some money. So the sub can make some money. So Mr. Homeowner don't think I (Mr. Contractor) am raping him. 50% for me and 50% for the sub. Or 70% for the sub and 30% for me, etc.)"It does not have anything to do with what "percentage" you pay the sub.The sub is going to want, say $10 sq ft to break out the old, haul it off, prepaire the base, set the forms, pay for the contrete and place and finish it.If you bid the job at $10 sq ft you will be paying him 100%.If you bid it based on $8/sq ft. You willbe paying him 125% of what you get.And how much effort are you going to have into this job?And how much risk? And realize that you might have to pay to have the job done again if it goes bad.And how much effort are you going to put into the job to control your risk? For example are just going to call him and tell him to replace the walk at 123 Main St? Or are you going to show him the job, work up specs for the concrete, inspect the base before the pour, and be there when they finish it?The way that you are asking the question is that "I bid $400 to paint a room, what percentage should I spend on the paint"..
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A-holes. Hey every group has to have one. And I have been elected to be the one. I should make that my tagline.
Short answer-
when I bid jobs that require subcontractors, I get a price from them, then add 15-20% on top of that.
So you pay the sub what he asks for, and get your percentage on top of that.
"I couldn't get my crayon to work. But I will break the question down for you to a third grade level.
1. I do handyman work (meaning I do small jobs usually by myself)
2. and once in a while I get a customer who needs a kitchen remodeled or a larger job than I can handle. (usually takes a larger crew of workers to get the job done faster so the customer doesn't get impatient. ***Remember from number 1 that I have just myself. 1X1=1) "
now there in lies the rub.
me ... I'm a one man band.
and ... as luck would have it ... I thrive in doing kitchen remodels.
Now usually ... I'm quite forth coming with the info around these parts ...
but since I lost my crayons ... uh ... not so much ...
anyways ... if your personal skils are anywhere close to your on-line skills ...
you won't be able to line up the right subs to get the job done.
kinda explains why you are asking the Q'd as opposed to already calling the subs already.
anyhoo ... Good Hunting!
maybe Bob Vila knows my painter?
Dave ... best in Pittsburgh.
lotsa times my customers point out that he's nice ... not like me.
Jeff Buck Construction
Artistry In Carpentry
Pittsburgh Pa
I'll start by saying I'm not an expert -- just an 8 to 5 manufacturing engineer, but it sounds to me like you're looking for more of a temporary partner rather than a traditional subcontractor. Partners share profits and risk. Kinda like when I was a kid, and a friend & I would do chores for a neighbor, then split whatever he gave us.
I've seen several people on this board talk about having that kind of arrangement (though usually more long-term, not just single job). Most of them seem to have changed their minds after a while, as someone usually felt they were contributing more (skills, equipment, time, etc.) than they were getting compensated for.
Might work for you if you can find others with complementary skills who like that arrangement, but based on the reaction here (which may or may not be reflective of the attitudes in your area), it seems unlikely.
Don
I may go to Bob Villa's forum for my next question
That's not a half bad idea, bet you get really good answers there...
The first problem you're having is you are not a contractor, you might want to play dress up and pretend you are, but you're not. You're a handyman with no experience in contracting, and it shows.
The second problem is your idea that you can price a job and then tell the sub-contractor how much they are going to make on it for the pleasure of working with you. It doesn't work that way.
Read between the lines, Sir. You make my point exactly. Howevr, with a less subtle approach.
Still, as always, GO PACK
subtlety is not one of my preferred approaches ;)
why not? the power of suggestion can be much more persuasive than, blunt, in your face action. I sure wish George B would have learned that with his foreign policies. Oh well, gone are the days when..........
have a great day
Most here don't play that way.
Cag's right on it.
" I sure wish George B would have learned that with his foreign policies "
Wrong place to play.
Have a day.Remodeling Contractor just on the other side of the Glass City
Yeah Cag, why not? Whats up with the in your face thing. You never see the rest of us doing that stuff. We are kind, gentle, warm, fuzzy etc. etc. Why be such a .........well you know. DanT
I see the guys are starting to gang up on you. I better help you out a bit.
you said: "I want to make some money if I hire a sub contractor but I don't want to bid too high and lose the job. "
Your first problem is that you think you already have the job.
Your next problem is that you are afraid of losing it.
The good thing is that you decided that you want to make money and are smart enough to ask how to do that. My hats off to you.
We are working on a 30% markup basis. That means if a sub needs 15k to do the work, we will be charging 19,500.
What do we do to deserve that 4.5K? We ask for it in the form of a proposal.
It is our lead, our reputation and our warranty. If the sub absconds, we have to spring into action and finish the job...no excuses. That might mean bringing in a new sub to finish the work and taking a loss.
There are a lot of risks and the reward is actually very small. That 4.5K pays our phone bills, fax bills, internet accounts, insurances, fuel, tools, marketing costs, advertising bills, cpa, lawyers, doctor bills, trade mags, education, travel, etc, etc, etc.
30% is not really enough but the market is so tough in construction that it strikes the balance between volume and profit.
How do I know 30% isn't enough? Because I don't have any big corporations clamoring to take me over. That tells me that they make more. Walmart marks up their stock more and they are cheap and known for being slave traders. What does that make us?
The other way you can make few bucks if you don't want to be involved is to take a set fee from your referral. We give and take small sums ($100 or so) all the time for jobs that aren't worth getting involved in. Our subs like this.
For the record, I will gladly pay you or anyone $100 for every lead we close. It's simple economics....we lose nothing if we don't get the job but gain a profitable job if we do. Everyone can use an extra hundred or two every week.
Thank you Jim. This is the kind of answer I am looking for. I used subs here and there over the years for smaller jobs and I almost duplicated what the other handyman service was doing. He was paying them 40% of the profit. So I payed my subs 50% of the profit. I didn't take them long to say they were not getting paid enough and they moved on. I just want to be fair and still make a profit. Thanks again Jim.
Hands off contractors should plan on making 10-15% profit and material mark up.
Otherwise you'll have a revolving door of subs that can money elsewhere.
Woods favorite carpenter
It might be a simple question but now I'm confused a bit.
You paid the subs 50% of the profit.
Was that all? or did you give them their bid price plus 50% of your profit?
A Great Place for Information, Comraderie, and a Sucker Punch.
Remodeling Contractor just outside the Glass City.
http://www.quittintime.com/
Your "profit" seems to be different than what I call "profit".If you want to be fair, be fair to yourself first. Bob's next test date: 12/10/07
I think the whole problem here is just a matter of semantics. The way you are asking the Q...
I hire subs to do most all my work. This is the way it works. I have a job to build a house. I figure out what the costs will be - a budget. The budget has a few types of items in it, but mainly 1) hard costs like land, permits, etc 2) labor (subcontractors), some of which may include materials that the sub supplies, 3)materials (that the subs don't supply) and 4) overhead like loan interest, insurance, my paycheck, etc. The subcontractor (labor) costs are based on bids unless I have some good (and recent) historical costs to go on.
Then we put markup on top of that. Might be anywhere between 10 and 25%.
As far as how much do I pay my subs? - I pay them what they say their portion of the job is worth. If I think they are too expensive I get some comparative bids, and get another sub if the price/value of product delivered by present sub doesn't seem to add up.
So.... I don't get a sub to come in and tell him this job pays x$. Rather, I ask him how much he can do the job for, and it if it seems reasonable and I feel it is in sync with the quality I think he will deliver and the quality the job requires, I get him to do the job.
thank you matt
you summed it up very well
sorry if I took this discussion off course