I posted a while ago that it was time to decide between my wife and the Army. The wife won but I had one more rodeo to attend. After waiting a week for the Airforce to find our plane, I and 107 others arrived to see that the place was swimming with Marines and GI’s. MOre than anyone knew what to do with. So, less than 20 days later, home again. Four weeks sooner than I had expected. No complaining here.
Happy to get a jump on things I started making calls the first day home. As I talked to old contacts I realized that people in the industry can be divided into three groups.
Tactical planners. These are the guys like squad leaders, platoon leaders or company commanders. They are looking at the next terrain feature. Get the next house framed fast enough to make money. Finish that three day stair rail in two days and make a few extra bucks. Get all the second floor walls up tomorrow. STuff like that.
Tactical/Startegic Planners. The guys like Battalion, Brigade and Division commanders. Not just accomplish the small tasks but also stuff like keep the crew busy all winter so I don’t have to hire new guys in the spring. Start training a new lead so I can concentrate on the business more. those kinds of things.
Strategic Planners. Corps or theater commanders and such. They worry about things like selling more stairs than shop X until they give up and you can hopefully swipe 50% of their customers. Or, Finding land for the subdivision you’re going to build the spring after next. Bidding enough jobs that will happen to keep all 100 guys in the shop busy this winter.
Now, with all the talk lately of a slowdown and someone even mentioning a depression coming, think about the people you know and where they fall. What are they predicting?
I hear two very different stories depending on who I talk to. One Tactical, and one Strategic. After someone else shares their opinion I’ll tell you what I’m hearing in my area.
Edited 10/8/2005 5:11 pm ET by robert
Replies
You make plans all you want, God laughs. That has been my take.
Spheramid Enterprises Architectural Woodworks
God laughs. That has been my take.
yeah buddy.
Robert-
A good businessman will looking at both sides of the coin. He/she will be looking at short term income, making sure it's there to pay bills, and at the same time, they have an eye on the long term to make sure that they will be part of it. My thought is that the long term is more important, recognizing that you need to eat in the meantime.
I once got into an argument with the son of another "contractor". His dad did kitchen cabinets, and he proudly told me that it made no difference how good they were (or were not) since people only buy kitchens every 20 years. The implication was that his dad wasn't going to be selling cabinets then. Now that's short term planning, and not good planning IMHO.
Do what you need to do for the long term. If you do it right, there will be plenty of people that will come to you in short order.
By the way, welcome home, and Thank You!
Don K.
Don,
I agree that anyone who is going to stay in business has to have long and short term plans.
The thing I've seen in the last week shows the difference between the guys who do, and the guys who don't look at the big picture.
All of my friends who are framers or trimmers and the like are all talking about a little slow down around Christmas and how good it will feel after the last two years. A few bought new trucks even though theirs were only one or two years old. A few have takien on debt to help grow the business in the spring.
The guys I talk to who are long term or big picture planners have a different outlook. AT least two salesmen who used to feed me work on a regular basis have said that they could make sales calls and bid jobs seven days a week 16 hours a day. They have also said that even though they know they will be getting the jobs, they don't know when as the usuall time lines have been thrown out the window. They are talking about lots of builders with files full of the info they need to get the job going but it's all on hold.
One of them services a builder who put up eight spec houses inside the commuting corridor to NYC (Near the Delaware Water Gap). They would have sold pre construction this time last year but right now all eight sit completed and unsold.
The biggest thing of note was mason friend of mine who says that the big push to get foundations in before first frost just isn't there this year.
All of the long term thinkers are urging caution until they see foundations being dug.
So now I wonder. Will it all reman on hold until someone finally stops holding their breath waitng for the other shoe to drop? And then all hell will break loose?
Or? IS the other shoe about to drop?
Either way, my path is set and I'll survive. Just might be a fun ride for a while.
Robert - I've said this here before in other threads, so forgive me if it sounds repetitious. My observation on Long Island is that there has been a real slowdown. Last year this time, there were trucks parked up and down the street doing work nearby. This year, not so much. There was one decent sized dormer done nearby and a small dining room bumpout, but most of what I see is actually driveways being done with asphalt and cobblestone edging. Far cry from doubling the size of the house. I have a crew that I'm close to, and I notice that they haven't had the work they used to either. They are doing lots more of the lower priced in and out stuff- siding, roofing, windows. And from what I hear, they are not getting paid well at all to do it.
If you listen to the economic news, that slowdown makes sense. House prices are high, but slowing or dropping so people are not taking out more equity. Interest rates are up some, making borrowing harder and likely hurting some that borrowed at adjustable rates that are going up. Gas prices and winter fuel too, are way higher than last year. We just had a few nasty hurricanes. People are starting to feel nervous.
There might be a shakeout yet. Like you said, it could be an interesting ride. (And just think, you gave up a nice steady paycheck with benefits, for this...LOL)
Don
Whadya gettin cold feet??
Don K. hit it pretty well. I'd say Sphere may have as well too!
Cautious optimism.
Things may have slowed down here a bit, but overall, or compared to the past it's rocking big time.
There was a study out of Yale or Harvard not to long ago on the housing and remodeling market.
You should try to find it.
Stop thinking so much!! Get yourself set up and get to work. You can try to line up work for the next 10 years but if the economy tanks, it tanks and we are all gonna tank with it, some more and some less.
Now get to work damnit!
Eric
It's Never Too Late To Become
What You Might Have Been
[email protected]
http://forums.taunton.com/tp-breaktime/messages?msg=59058.1
In June, I posted a thread addressing what I saw as a slowdown. There were a lot of responses (the thread went to 75 posts), and memory tells me they were split about 50-50. But that right there was a indication that things were slowing down, as for the past two years or so, anybody with a hammer and a pick-up truck was working and booked out months in advance.
Something is gonna happen, and we are feeling the first cold breaths on our necks, gentlemen and ladies.
Outfits which have made a consistent practice of long-term planning will weather whatever that something is better than those who have spent the last boom cycle running from one high-profit quickie to the next. I can only hope my personal situation will be resolved quickly enough to allow me to execute the 'kicker' on the long-term plan I've had in place for the last 15 years, and I hope it happens before the bottom drops out. I'm guessing we've got about 12-18 months before it starts to hurt....
Dinosaur
A day may come when the courage of men fails,when we forsake our friends and break all bonds of fellowship...
But it is not this day.
Dino,
I remember that thread. Most of all I'm just surprised at the outlook of two groups of people who allegedly talk on a regular basis.
For example, The guy who took over my best account when I left. He is telling me how booked up he is and how he'll never have to sit home and how he doesn't need to look for work because it will be fed to him by shop X until he dies or retires.
The salesman from shop X has a rather different view. HE told me with no hesitation " I could use an installer right now and work him 2 jobs a day, seven days a week. But that would last until about January. Then, if some of the stuff I've been bidding since May doesn't start to materialize, I won't have a damn thing for anybody to do."
The Salesman from shop X also tells me he is running around bidding like crazy on jobs he knows he'll get. But all of those jobs are in a holding pattern waiting to see what's next.
At the very least, if everyone regains there confidence and decides to deal with gas prices as they are, the break in the planning, land improvement, building and selling cycle will provide at least six nice slow months.
One of the truisms of economics is that market fluctuations are 90% 'software' and 10% 'hardware'. In other words, most fluctuations in the market economy are caused by what people think is going to happen. If people think there's a boom going on and they can't fail because of that, they will risk capital on projects. OTOH, if people are afraid there's going to be a downturn in the economy, they will start husbanding their resources and in so doing create the very downturn they were afraid of.
This phenomenon is one of the arguments against a fiat (government-created), free-floating dollar, as opposed to a market dollar, one whose value is permanently linked to a commodity such as gold or silver.
The arguments against a market dollar usually come from the government, in that a market-dollar system prevents the gov't from simply printing it's way out of trouble....
Dinosaur
A day may come when the courage of men fails,when we forsake our friends and break all bonds of fellowship...
But it is not this day.