“I’m thinking of going into contracting”
Well… here I am, almost exactly five months into my fulltime foray into contracting professionally. A lot of folks in the time I’ve been here at BT have asked about taking the plunge so I figured (with all humility) that I’d offer my perspective so far.
First, I’ll bore you, oh prospective contractor, with some background. I’m 47, have owned my own businesses since I was in my twenties with as many as 16 employees and 2.5 million in sales. I have a college education in engineering, etc etc etc. I have been making sawdust for about 20 years, and gradually took on larger and larger projects for friends and family all of whom encouraged me to think seriously about it as a profession with tales of hardship finding good GCs, riches and the American Dream. I have done quite large DIY projects including additions, sunrooms, finished basements, cabinetry, large scale electrical and plumbing. When the industry I was in imploded (commercial photography) I got my ticket, and decided to take the plunge.
Let’s first have a reality check.
So far, I haven’t experienced the TOH nirvana of cruising around in an air conditioned crew cab dualie while I visit my job sites and chat with clients on my cell phone. I’m working like a beast, not one day off in three weeks and an average of ten hours a day between the job site and paperwork. Last week we broiled with temps in the 90s and I left puddles everywhere I worked. One of the three clients I have at the moment, although very nice, is making me insane with as many as six calls a day over the most absurd minutia and I’m trying to wean her from the concept that I’m only too happy to yak with her as I stand on a ladder trying to repair the nightmare of a plaster ceiling that was exposed when I took a wall out of her condo (that she’s moving into in… 4 days). I realize that when I roughed in for the new electric I miscalculated the boxes I’d use in the plaster walls, so it’s time for my forth trip to the supply house to get the right boxes. I got an email this morning that the flooring that it took client number three a month to decide on is no longer available, so it’s back to square one. Oh yeah… I decided that my workload is just impossible for one person so I hired a fulltime guy yesterday (at 20/hr) and he’s great, except he just locked us out of the condo and the owner is out of town.
More reality… last night client number two visited the job, practically mounted my leg like a chihuahua they were so happy with the work, and added a few thousand dollars worth of things ( but asked if it would be ready in the same time). I look over the job and for the first time in a month can see order emerging from chaos and I remember how absolutely petrified I was when they stood there watching as I plunged a Sawzall into the wall of their 600K condo. Client number three (the flooring issue) has intimated that they want to talk to me about remodeling a bathroom after the current project is done, and talked about how they really need to remodel the kitchen as well. So, it ain’t all bad 😉
So far, I’ve made the following observations.
You need to stand in front of the mirror and ask yourself (in no particular order): are you good enough with people to convince them that you’re the guy to let tear up their house, and hands tens of thousands of dollars to based on little more than your promise to not let them down? And more importantly will you let them down? Can you continue to give it your very best even when there’s nothing you’d rather do than put down your hammer and go get a cold one? Can you tell the difference between gross and net profit? Can you admit when you are in over your head, and do you know who to ask for help? (Thank you Dino and Eric).
I try to turn in by 9:30 and get up by 5, I wake up a lot stiffer and sorer than I have in years, but I sleep like a baby. Do I enjoy it? Hellllllllllllll yeah, most of the time…….. so far.
OK, this is all that comes to mind right this moment, if there’s any interest I’ll be glad to keep you all posted.
PS…thank you to everyone here at BT that gave me the cajones to try it, and cared enough to give me a gentle smack upside the head when I got too big for my toolbelt and a pat on the back when I wasn’t.
PaulB
Edited 6/24/2005 8:25 pm ET by PaulB
Replies
Welcome to the brotherhood, Its all sore joints, and upset stomach from here on out. No, I wouldn't trade it for any other line of work either.
Can't I go 1 day without spilling my coffee?
You're doing better than me; I get to bed by 11;30 and I'm up at 4 AM (whether I want to be or not).
And I've been doing it for 14 years.
(But in my corporate years, it was worse!)
Sleep sucks! :-)
Edited 6/24/2005 8:44 pm ET by Notchman
Best of luck paul. Your story was a good read.
You don't have 3 jobs going at the same time?
That's a bad position to be in. They all take the same time so doing all at once doesn't net you anything other than treble headaches. And if you should ever start using the draws from one to payoff the debts of the other......................
And you with a bad flipper, I don't know how you do it.
Remodeling Contractor just outside the Glass City.
Quittin' Time
Thanks for the wishes Cal. Actually, my hope is that with some full time and part time help I can keep three jobs going at a reasonable pace. We'll see... (maybe the next installment ;) ) And no, I know better than to rob Peter to pay ummm... me.
LOL... the flipper is much better thanks, although I'm still babying it, and it's telling me right now that I'm pushing it too hard.
PaulB
In many ways, I always need three jobs at once. one will be on the drawing voard/planning/permitting stages
while one is in the process of trading blood, sweat, and tears for another attaboy and some cash
and the third is looking back over punch lists and "while you were here items" from the last one
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
My hat's off to you two pauls.
As one guy I can't keep pace. While there is ongoing planning for the upcoming jobs you'll find me concentrating on one at a time. The "could ya's" are dealt with at the time for the most part. This wreaks havoc with upcoming scheduling dates but I know that once I leave it'll be a while b/4 I come back. Except for an occasional emergency for a good past customer, I spend every day at the same location until it's completed. In my feeble mind it's easier to keep the story straight.
And PB, you are available for photo questions?Remodeling Contractor just outside the Glass City.
Quittin' Time
Of course Cal... feel free to post or PM me.
alright paul, no question at this time but I'm putting that in the last few cells of my memory. Thanks.Remodeling Contractor just outside the Glass City.
Quittin' Time
Doncha know they're all emergencies?;)By nature I'm a oneatatime kinda guy, but to keep the crew busy and things rolling, i have to clone myself...Cell phone lets me be in two places at one time occasionally...
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
yes they are all emergencies, life flight some of em.
You are lucky to have good people to carry on work that you don't do. You are also the recipient of all that it carries.
One day(job) at a time just like a good drunk.Remodeling Contractor just outside the Glass City.
Quittin' Time
OK... the next lesson learned:
As I've said before (maybe I've been patting myself on the back too much), I have run good sized businesses in the past, and thought I had a good handle on my billing practices. At the moment I'm bopping between three jobs in various stages and have hired a full time helper.
The other day I was looking over charges I made at Home Despot and other vendors. Little cartoon balloon comes on "hmmmm... I charged nearly a thousand dollars woith of stuff, and I can only recall billing about 500 back to jobs". Went back to the shop and stapled envelopes to the inside of each job folder I have going. Now as soon as I get in the truck I take the receipt and stuff it in the envelope for that job, when I do a progress invoice I'll empty em out.
Next next lesson: "Did I really bill the Stuart job for those hours I spent doing X?" Made up an hours tracking sheet to put in the folder detailing essentially any activity that generates additional billable time, who, when, what etc and a check mark when it's been invoiced out.
Hope this helps somebody...
PaulB
Paul, if you're keeping your customers happy while being fair to yourself, you're doing just fine.
The rest is just positive learning experiences. Better to have forgotten to bill $500 in supplies (or in hours) rather than forgetting to finish part of the job. Next time you'll know better, and you didn't make anyone unhappy (other than maybe yourself) in the process.
jt8
In an underdeveloped country don't drink the water. In a developed country don't breathe the air --Jonathan Raban
Your post makes me glad that I rarely do T&M work. It's a real PITA to bill all those things out to clients. I buy whatever I need, use some on the job, inventory the rest, take stuff from one job to another.... whatever, it doesn't matter. With a fixed price contract you just bill people for the specified payment amount whenever you reach a specified milestone. It's so much simpler on the bookkeeping end (although you still have to enter all the receipts into your computer).
Wait until the first time someone says "did you use that entire box of nails on my job??" or "ya know, I never saw that load of 2x4s, are you sure it was for my job?" Or even worse... "are you sure you were here this morning at 8, and not 8:15?" or "do you really need to spend this time sweeping up on my nickel".
If you go to fixed price work, you can come and go as you please with no accounting for it, buy anything you want and use or not use it... skip all the accounting and reporting to the owner... eliminate your customer's potential concerns about the final cost... stop trying to justify O&P figures... and probably make more money too.
I seem to be doing a lot of what I guess would best be described as "modified T&M" David. That is to say I quote a price for the job but bill additional work at T&M, or quote labor only pending selection of materials by the vlient so I often wind up having to keep track of additional items to be tacked on when I do periodic updates.
PaulB
If finish selections are not made by the time the job starts, it's a lot harder to work efficiently... lots of what-ifs that keep you from just finishing stuff. I try hard to get people to pick stuff out before I start working. I give them a chart showing everything that needs to be selected, along with slots for the manufacturer, model #, name, color, finish, size, etc. etc. Fill that in completely, initial it, and I'll start on your job... OH, and I'll finish pricing it out too.
I noted the part about "initial it" with interest. Just did siding job for a friend of 25 years. I went with her to my supplier to look at and pick roof and siding. I explained that colors on their samples were indoors (4x4 foot samples) and might look some different in the outside. When she picked 'em, I wrote down the names and colors and for kicks said, "Here, sign your name." Put the siding up on three walls of the house and don't you know she says,"Is this the one that I picked? It doesn't look right." Went out to the truck, got the book with her signature;out to the siding box and tore off a label. I showed both of them to her and she didn't really know what to say. Saved my butt.
If it's in their handwriting they don't have to initial it. If they print it out, they have to initial it. If I somehow incorporate it into a change order that they sign, no initials needed on the form. I am fond of writing no-cost, no-schedule-change change orders that identify materials that the owners choose during the work, or things that they agree to. The more formal you are, the more serious they are.
I have tried a couple of times to do the total package, Sheetrock, electric, plumbing, etc...I would have done very well except for the fact that I suck at everything but framing, and trim....Odd combination though I have to admit. All the other contractors I work for call my crew the termites. If it aint wood we don't bite. Oh well,..Good luck with it. Here is a nice little pic that I hope to retain some respect with.
hey ... that pic ain't no good ...
it's all crooked and warped ...
round almost!
Jeff Buck Construction
Artistry In Carpentry
Pittsburgh Pa
Wow... seriously impressive Carl. In my own defense I think I am tempted to do my own elec, plumbing etc because I am really pretty good at it, within the limits of what I know (and I hope smart enough to know those limits). But I'm also working towards Jeff's approach of sticking to the carpentry.
Jeff's approach sounds good as long as there's something else out there to make you more money, Not so's you are sitting home drinking beer and scratching yourself (and making no money).
Example: Buddy of mine got a roof/siding job. Strip off at least two layers, resheath where needed and reroof. Lots of gables, dormers, breaks. Weird roof. He comes sauntering up, says he can get a demo crew in for a day to do the whole rip. Out of pocket to him figuring dumpsters etc., for a days work - around $600-800. I asked him flat out, "When that job's done, what do you have lined up?" I heard a bunch of silence. So, he wants to give out $700 plus or minus, so he can be a big contractor, then sit home and watch tv. That makes no sense to me. Keep the extra work for yourself.
On the other hand, if you're like Jeff, (or Diesel or Piffen) and have other work lined up, then go to it, let somebody else do it and collect your percentage.
Don
agreed.
Gotta have the balance. Last winter I was flat outta work .. and was just about to agree to start doing complete as low as ya get bath demo's and installs in the worst part of the ghetto ... just to have the cash flow.
remember how I said I don't touch plumbing and/or electric ... this was that .. and then some ... in a "licensed required" area ... although I'd have been purely an underpaid sub ... I was ready and will to dive in. Even told my wife ... I'm gonna hate myself ... but I'll be working.
Met with that guy on fri ... already had an apointment for the following Sat ...
decided either that lady on Sat was buying and buying "now" .. or I saw selling my soul to the devil ... kid's gotta eat, right?
anyways ... happy ending ... she bought and was more than willing to start immediately. Still ... if U can keep busy AND make some money off the subs ... all the better. But never say never ...
Last week one of the best carps I know just finished up painting miles of fencing after painting a house. His work was slow ... a painter buddy of his was over booked .... so suddenly he's a painter! He hates to paint ... but he also hates to starve his kids and live in cardboard boxes ... and the best part ... when's that phone ring? when U already have work. He's back to being over booked again ... and his helper has all the overtime painting work he can handle.
Jeff Buck Construction
Artistry In Carpentry
Pittsburgh Pa
Paul, you just started and have three jobs going. Business is rolling in. You could be sitting on your hands wondering if anyone is going to call you. Congratulations.
I'm just one guy and I only have one job in the 'production' stage at one time. No way I can move around efficiently. That would not change unless there were three of us. Piffin's description of three active jobs is accurate also... always at least one confirmed job in the estimating/permitting stage and maybe one to close out punch items on, but hopefully that third one is just done when you leave.
Are you making any money?
Thank you David, but I'm a long way from thinking congrats are in order.
Assuming I keep these jobs moving along at a sufficient pace to have good cash flow I should be making OK money. Despite all the very good advice I've gained here and from friends in the trades I'm the first to admit I've made virtually all the rookie mistakes. I've recalculated my rates twice in five months and I'm probably still not charging enough. I'm relatively inexperienced so things that you can do in an hour may well take me five. I'm not as organized as a seasoned pro. But I think I'm a fast learner, so I'm hopefully I'll get ahead of the learning curve quickly enough to survive the trial by fire ;)
On the plus side, I'm used to having to keep track of many aspects of multiple jobs at once and being able to change gears quickly. I also think (in all humility) that I'm very good at picking and cultivating a particular market, so I'm cautiously optimistic that I'll earn those congratulations in the future ;)
PaulB
here's something that may help ...
when I started not to long ago ... I also did as much plumbing and electrical as I could. hey ... I know how to do it .. and know when to stop ... so why not, right?
Well ... I finally got smart ... and legal ... and now ... aside from an emergency mechanical problem to keep the job moving ... or setting up a temp kitchen ...
I don't do mechanicals.
I'm a carpenter .. not a licenses electrician .. or plumber ... or hvac guy ... or .. or ...
I realized .. I was doing the work .. to save the customers "some money" ...
well ... now ... if they can't afford or don't want to "pay a professional" ... what am I doing there anyways?
and ... now instead of underbilling those trades and wasting time doing them myself ... I simply get their price ... and add on my 20%. How's that for logic ... I make money for knowing who to call and end up making time because a true professional is there speeding thru that portion of the job.
Plus ... less liability ... and ... 100% legal now.
It's hurt in some ways ... when I talk to K and B places .. they always ask ... You'll handle the plumbing and electric, right? And I say ... yes I will. I'll call in my plumber and electrician and include it all in my bid. I lose alot of small kitchens and baths ... but I also lose alot of headaches and weed out people that don't want to pay a fair price.
Think about it. Even if I was legally allowed to do my own mehcanicals ... I still wouldn't go back.
Jeff
Buck Construction
Artistry In Carpentry
Pittsburgh Pa
Good point Jeff, and one I think about more and more as I get busier. How do you handle bidding when you sub out those parts? Do you already have a handle on cost or do you call them in to bid out their parts each time?
PaulB
little of both ...
but I like to call them out to look in person as much as possible.
They like that too.
I will do a "phone walk thru" to get a quick number ... then add about 25% to what they "estimated" ... a also don't even think about holding anyone to that guess and I let the customers know the real number may very well change to the higher after the subs see things in person .. as they are the pro's ... and they'll see the problems right off the bat that I missed.
Jeff Buck Construction
Artistry In Carpentry
Pittsburgh Pa
Sounds a lot what I've been thinking of Jeff, thanks for the nudge. Heyyyy... who told you I've been doing all the trades myself? Just don't let The Oracle know, he'll be cross.
Heyyyy... who told you I've been doing all the trades myself?
reading betwix the lines. Like I said ... I was there before ... then ...
I got smart!
found out I make more money having a real pro do it.
That was enough for my ego!
Jeff Buck Construction
Artistry In Carpentry
Pittsburgh Pa
Send out the roofing to a good roofer.
Trust me, I am not yet a GOOD roofer,,and coming in late in life to the "finer" aspects of thetrade...focus on that.
IF ya GC a house, and the siders or carps build a bad plane ( archy's LOVE THEM)...I'll be there..eventually to fix it...
I am of the new breed, if it aint' copper..it aint a roof.
If you caint watch yer own butt..hire someone who can.
Foundations and roofs go together..a relationship....everything else, is just everything else...dont gamble. Spheramid Enterprises Architectural Woodworks
The OLYMPICS ARE HERE, THE OLYMPICS ARE HERE!!
( oh, not London KY..Shucks, I really thought PAris Ky had a chance too)
I'll also remember your suggestions Jeff. The company I currently work for has me doing most of our bathroom/kitchen jobs start to finish, every trade (unless we do it legit). I will, when I go on my own, stick to the carpentry, tile, etc. and get the other pros to do the plumbing, electric work.
Some great info there Paul. Looking to go on my own in the next year and I'll take your suggestions to heart.
I hear ya paul I am 47 also and I find it's quit hard to just sit up in bed to get up at 4pm every morning. To be in this business you need nerves of steel and 3 inch skin.