Mike’s comment, in DP’s ” hiring the big guns” thread ,hit home with me.
He spoke about trying to stay flexible, as the general state of the business, appears to be changing, for the worst.
Personally, as a small GC. I have been trying to expand my flexibility, for about a year now. New homes, have fallen off quite a bit here already. Most of the jobs are very competitive. Price seems to be the main item. This doesn’t fit for me, as a very small custom operation. I can’t compete, with the larger, ” all of our employees are subs” guys. I carry WC, and keep all my business, above the board, financially.
Because of this, I have been starting to get back into remodeling, and do some sub work. The work is coming in fine, and at a decent price.
My problem is, getting myself out of the GC, mentality. I’m struggling, working under other peoples scheduling, and seeing things go awry, due to others project management. I can’t resist the urge to jump in and fix things. Even when they aren’t related to my scope of work. Yeah, I know. “Keep you head down, do your job, and move on.” But I still feel some responsibility, to protect and help the owners.
Question to all you subs. How do you deal with this? Or isn’t it an issue, for you. I understand , not working for someone, due to these types of things. But this is good work, at good compensation.
Also, what other issues have you experienced, in trying to stay flexible? I.e. the market only views your company as having certain abilities. You find yourself, with the skills to perform different work, but lacking the equipment. Or, you have the knowledge and tooling, but the employees don’t have the skills, due to them being specialized.
As things get tougher, and more interesting, where do you see your company fitting in, and how will you try to change, if needed?
Brudoggie
Replies
Outstanding topic Brudoggie. I look forward to reading the responses.
To be entirely honest, the thought of a major building recession scares the crap out me. Believe it or not, I've been doing my best to stock pile money and have actually cut down on my spending habits, to some degree. I get a lot of flack here for my "tool budget" or lack thereof. But I can honestly say I haven't made any purchases that haven't, in the very least, paid themselves off in either improved working conditions (which translates to increased production) or by simply cutting down on labor costs. I firmly believe that you have to spend money to make money. All within reason, of course.
I have a few thoughts on your comments about switching from GC mentality to sub mentality. I'm not a GC, but I think I can still relate. I often do sub-work directly for homeowners. Some guys think I'm nuts, but I bid accordingly and budget time accordingly. To the best of my abilities anyway. So I often see mistakes playing out right before my eyes, which is basically what I think you were talking about.
I will gently try to head-off disasters as I see them coming. But I won't step on another sub's toes either. If I see sub-par work that isn't dangerous, I keep my mouth shut. If it effects my work and I need to re-do something as a result or have to do something differently than I planned as a result, then I bill accordingly. I'm completely emotionless about my billing practices. Their lack of experience is not my problem. I welcome the change orders and I charge accordingly for them. I do not, however, deliberately let them set themselves up for a situation where I will make extra money from the job. This allows me to sleep at night. But if they've been forewarned, or fail to do their homework..... pay up sucka.
Personally, I feel completely comfortable and capable with the fact that I may someday need to take on smaller GC type jobs or handy-man work to pay the bills and stay busy. It won't be my first choice and I won't be thrilled about it, but I'm prepared to do what's necessary to stay afloat. Unfortunately my guys are not well rounded enough that I think I could carry them through a prolonged period of time under these conditions. I would and will stick with framing as long as possible, but I WILL NOT go down with the ship. My skill set was not handed to me. In fact nothing was ever handed to me. My guys are welcome to spend some time learning about other aspects of homebuilding on their own time..... that's how I learned. But instead they like Playstation and girly-bars. That's fine with me. It's their choice and not mine. Again, their lack of planning does not constitute an emergency on my part.
I'm working diligently to pay off my forklift and truck. Those are my two largest bills each month. I'd like to own those outright for obvious reasons. It'd be a royal PIA, but if I had to I could put together another framing crew when times got good again. But aquiring the tools and equipment would be daunting. So I'm trying to get myself in a position where I won't have to give those things up during a slow-down.
The good news is that we will always have our skill-sets. We can't sell them for cash when money gets tight and nobody can ever come and repo them either.
For now I'm hoping for the best and trying to plan for the worst. What else can you do? I'm even kicking around the idea of buying another snowplow in case this winter gets really slow. I love plowing snow, but just didn't have time anymore so I gave up my route last winter. It's a nice way to generate a little cash when things are slow. It's murder on the truck, but I think I'd do driveways this time around instead of a town road route like I had before.
In the end, I am not, and never will be, too proud to pay the bills. What I mean is I really try hard to remain teachable and humble. The thought of working for somebody else isn't terribly attractive to me, but it's certainly not beneath me. I still know how to dig holes, lump lumber, rake leaves, drag brush, push a broom, and demo a house full of horse-hair plaster and blown-in insulation. And being willing to do those sorts of things can pay the bills when framing won't.
Sorry for writing an essay on your topic. But I had the time. :)
Or you could start buying powerball tickets. That's my plan.We change the course of history,everyday people like you and me
I can't do that anymore. I actually get disappointed when I don't win. Sometimes I day dream about winning the lottery... man oh man... don't get me started. First thing I'd do is buy an excavator.............View Image
i have made it a lifetime goal to diversify starting at a very early age. it was very clear to me early in my construction career that i would have to be able to do many things well in order to feed my family. the one constant that transfers over is layout and planning skills. for me personally i enjoy thinking and the thought process of laying out and planning a job is a passion for me. i am not in the least worried about a slowdown in housing, i think it will do nothing but strengthen my position, and it has been my experience that heavy industrial usually picks up when residential slows down, and vise versa.
as for the feeling of wanting to jump in and fix an organizational problem, it is almost a compulsion with me. i have had many bad experiences because of this. many times even though you make it better you are resented for it. do not do it if you can help it. if you can't not do it be prepared for the consequences.... keep an eye open for another job.
it may be possible to approach it with the proper technique and attitude and make it a win win situation but it hasn't worked out well for me in the past. probably due to personality but, i think a little of that personality goes with anyone who can't help but try to fix the problem that is not his responsibility
I once got exactly one digit higher on every number of a Mega Millions ticket. I'd rather be way off then that close.
Diesel,
That essay, is what I was looking for.
Personally,I'm not overly concerned, as work keeps coming. Besides, I like to keep my skills fresh, in a variety of areas. Doing different phases, lets me do that. It also helps me to advise the customers, when I am the GC. I have personal experience, with alot of different techniques, and materials.
As an example : I recently finished a small cultured stone job. Then, I swithced to being the poured foundation & flat work sub, on a new home that our local high school building trades class is doing, this year. Then, to exterior millwork installation, on a commercial, historical restoration. Doing new windows, cedar shingle exterior replacement, and interior remodeling on the same project, as the carpentry sub. Then, I've got a hardwood floor install, and a hardwood staircase to do. Should be good through till spring. Lots of work to do on my own projects, if I get slow.
I know what you mean about watching the costs. My biggest expenses are the WC bill, and the payment on the dump truck. Don't owe much on that, either.
I've got enough equipment to build 2 new homes from the ground up, without moving much of any thing, All bought and paid for. I'm much more efficient, if I have everything with me. The guy's in the lumberyards hardly recognize me, because i don't have to run for stuff every day. Seem most guys here, make that a habit. Small and nimble is the course, for me.
This thread grew from the foundation job. My usual plumbing sub has the job, and did his underground, while I was putting in the basement. We shot the grades, and determined that all the plumbing could gravity out under the footing. This week, the excavator went to install the main lines, and ended up too high at the house. Above the plumbers stub out. All heck broke loose. My phone ringing, because I helped make the call, about the grade. There basically is no GC on this. The school runs the show, but they leave most of the management with the future owners. It's a fiasco.
So , I went and reshot the pipes at house and road, last night before the big meeting. There's plenty of pitch. The pipe was installed wrong. I went back to the job, this morning, to meet the owners, plumber, excavator, and teachers. Shot everything in front of them. Needless to say. The excavator, is replacing the pipe tomorrow. I'll be there ,along with the plumber, to make sure it goes right this time. This wasn't in my schedule, but the owners are a little over their heads. I've got to help. If this was my job, as GC. I usually oversee stuff like this. Instead, lots of time and money has been wasted.
Sorry, for the rant. Just showing a bit of what I've been up against.
Keep it coming !!
Brudoggie
It's been mentioned that if and when new housing construction slows down, there's a possibility of taking on remodeling or even laying off some employees. This concerns me as my area of the trade is remodel. As new construction was booming along, I saw an abundance of money available for alteration and repair. Now that the housing market has slowed down I've seen a tightening of the remodeling purse strings as well.
With some homebuilders or their employees entering the remodeling arena the competition will tighten. Over the years I have survived various downturns on reputation. I hope that this will now be the same scenario. Still, there's an overall trimming of the homowners budgets. Instead of a whole kitchen gut, I'm seeing new appliances and countertops, maybe some lighting changes. More small jobs instead of the cream of the larger remodel.
With time between the larger projects widening, I have had the opportunity to concentrate on catching up on the small ones "when you get time". The customers are happy I now can get to them and on occasion are pretty darn surprised when I ask if tomorrow would be alright.
I've always tried to be varied in the services I offer which during these times I think will help. If I had concentrated only on Kitchens and Baths which I really enjoy, I would be really seeing a slide. At 57 I've seen a few ups and downs...............A great place for Information, Comraderie, and a sucker punch.
Remodeling Contractor just outside the Glass City.
Quittin' Time
the town we work in wasn't always a big budget job town.... in the '60's everything was patch and paint... we never reroofed.. we patched.. we never resided , we patched
old victoian moldings were torn off and replaced with flat trim
that mentality continued here until the mid-80's.... patch, paint, replace in kind.... and the new houses were carpenter's squares, capes & raised rances
when recession hits again ( not if , but when ) it will be more of the same.. with one exception.. a lot of the crap houses built in the last 20 years are going to need major repairs just to keep from rotting away.
if you cross train yourself and your guys so they can frame, side, install flooring, replace windows, roof, sheetrock, plaster, do kitchens & baths.. there will always be work....
the only problem is thre will be too many people chasing it...
when that starts, you don't want to get into competitive bid work... the only thing you can do in those times in competitive bidding is to lose money or steal your customers blind.... the stealing blind bit doesn't work very well... word gets out and you don't get any more work..
the competitve bidding doesn't work... there is always someone who will do it cheaper...no matter how far you are willing to cur your price
the only thing that works for me is getting the jobs at a fair price and trying to hold onto as much of it as you can... if it's a two year slump... that could be 4 six-month remodels....
if it's a 6 year slump.... some of the low -bidders will be gone after the first two years
if i don't have a reliable sub for a specialty trade then we try to keep it in-house
so , we do lot's of funny things.. like roofing , insulating, siding , gutters, small foundations... anything that takes longer to line up a sub than to just do it in-house is a candidate for our type of work
our bread & butter is major remodels and additions... and we keep the design work in-house too
this has been an unusual year for us because we built a new house..
in a typical year we would do a couple 2 floor addtions, patch some foundations , build a patio... build a couple decks, remodel a kitchen, do a couple baths.... fix a lot of leaks... fix a lot of leaks.. fix a lot of leaks
hang some gutters, finish a basement.... build a garage, reside a house..
when they call , we do it, as long as they want to pay ......
Dieselpig... did bring up one thing.... debt... if you are servicing too much debt, you won't be able to do it in a recession.... if it's hard now, it will be impossible in a recession...
you can still run a business, but it's a lot harder if you have no working capital, are servicing too much debt, and you don't have enough skills to take what ever work comes your way...
Mike Smith Rhode Island : Design / Build / Repair / Restore
Seems like your operation is geared towards one stop shopping in the sense that the customer sees the same guys from framing to insulation to tiling. Pretty cool. This is what I have strived for but it is difficult to find people who are that multi-talented and/ or want to learn so many trades. More power to you if you find them and have the skills yourself to teach.The question I have is regarding WC and liability ins. For WC do you log each individual's hours and document that they were roofing today and therefore are covered at a particular rate which is different than tomorrow when they will be tiling?And liability insurance. How do you and your agent figure that? Must be one heck of a policy! My ins. co won't cover me with random job ocurances. You're either a roofer or a tile guy. You can be both if you pay for both, full rate or always at the higher rate. Something like that. (It's late.)This has been a big $$$ stumbling block for me.Frankie
Experiment with the placing of the ingredients on the plate. Try the mozzarella on the left, the tomato in the middle, the avocado on the right. Have fun. Then decide it goes tomato, mozzarella, avocado. Anything else looks stupid.
Richard E. Grant as Simon Marchmont - Posh Nosh
no... we don't log different trades with the Ins. co..
we are covered for all of those risks.. just so long as we do not concentrate in one risk trade
IE: if the trade is incidental to the remodel.. we do it.. i would think it's pretty traditional .. this specialization is what is not traditional...
you know.. when i started, every GC in town did it all.... the only thing they subbed was excavation , elec. & plumbing.... everything else was in-house
we have an annual review with our agent.. and his company is a large agency specializing in Construction ( yeah , i know.. "specializing " )
as far as i know.. the only exclusions are lead & mildewMike Smith Rhode Island : Design / Build / Repair / Restore
Very interesting. Here in NYC, my agent tries his best to identify me as a specialized trade. If I do mostly painting, I get covered as a painter (cheap). As soon as I tell him I am a finish carpenter - boom! New rate. Installing and/ or refinishing wood floors, different rate. Then I mention we are going to do some tile - well that's a horse of a different color. When I am audited every year I get a call from him asking what I did [most ;) ] this year. He doesn't ask anything else. Office visit is just to look at the books.Maybe you are already rated at one of the highest rates so you are covered. I am branching out and trying to get more wood frame construction projects - outside of the city. More along the lines of your work. Slowly but surely I am getting informed.
WC is getting me the most nervous because you don't know if you're screwed until after the fact.Thank you for the reply,Frankie
Experiment with the placing of the ingredients on the plate. Try the mozzarella on the left, the tomato in the middle, the avocado on the right. Have fun. Then decide it goes tomato, mozzarella, avocado. Anything else looks stupid.
Richard E. Grant as Simon Marchmont - Posh Nosh
I think your post and position are totally acurate. We do small jobs, handyman work, bath and kitchen remodels. Things are slower hear and unemployment up a full point. We are busy as ever and just added another truck and guy.
Recently we ran an ad for help and had 2 competitors apply. The difference? We are multiskilled and can do a number of things well. And we do small work. I believe you can be a specialist as long as the market is good. When things dry up it is time to be able to do what you need to do to survive and we have tried to position ourselves in that mode from the start.
Also the point of low debt and overhead is a big one. Times get lean you need to be able to survive on as little as possible. DanT
Great topic and one that we all should think about.
We started out in a recession and did anything that would pay (and some things that didn't). We can always do it again.
One advantage that we have is that we can solve problems. Given an unusual situation that most people would run away from, we try to find a solution that will save the customer money, not because we are the cheapest but because we can think of a better way. This is a combination of experience and flexibility that can never be duplicated by someone who is trying to give a low bid. They will try to do what they know quicker and cheaper than anyone else. The only way to compete with them is to know more. A reputation for this will carry you through any downturn.
I feel like you all are reading my mind. I've worked for the past ten yeras as a sub doing finish carpentry and kitchen installs as well as doing the occasional remodel job or addition. I have seen as a sub many things that I wouldn't let happen on my own job. I'm far from perfect but I like to try to get it right. It makes me feel good at night. My remodel customers are often repeats (many times over) so I know I'm doing right by these people. When I see something not up to what I think it should be on a job I am subbing, I usually say to the GC something like " I noticed such and such was out of plumb or there is no insulation here, etc." Then I wait to see if he asks me to fix it or if he sends someone in to remedy. sometimes nothing happens. At least I've pointed it out in a way that makes me apear as a team player looking out for the final product. I try really hard not to bash other subs. we are all just making a living. If the workmanship is poor with another sub I usually don't bring it up. I think anyone with the willingness to look can see when something looks like crap. No one needs to point it out to them. If it's acceptable to them then the price must be right for it to be there. Profits are the bottom line for a successful GC.
I'm not a successful GC. I am happy with my work however. I hope someday I will have a long waiting list based on that approach.
"it aint the work I mind,
It's the feeling of falling further behind."
Bozini Latini
Off topic: Where in NE Wisconsin are you? Seems you were working near the Michigan border a year or two ago, or am I remembering someone else. Just wondering if you are in the Minocqua, Tomahawk, Phillips, Prentice area, because my wife took a job up there. Original plan was to have me move up there also, but after talking to a few builders and a supplier it seems that area is in the toilet worse than down here.
On topic: When I subbed cabinet installs, I tried to head off problems that would affect me before they happened. usually it involved phone calls to plumbers and electricians. Yeah I gave my time away I guess, (probably a few minutes in the morning and night) but it kept my portion of the project rolling.
Another thing was to figure out who the "final authority" was on any project, and become someone they trusted. For instance I once got a call from a cabinet salesman for an install. We met at the house along with the interior designer, and the owners. So I started as a sub to the cabinet shop, who was a sub to the designer. but the wife was clearly "the final authority".
By keeping the wife informed of what I was doing, and suggesting a workable schedule, I became the trustworthy element of the project. Yes, you need to be careful to not overstep your boundaries with regard to the chain of decision makers, but keeping the authority figure in your corner is a good thing.
Sometimes you do have to just put down your head and do your job. I was helping a flooring company put 2 layers of 1/4" underlayment down in a bank that was being converted to a restaurant. (an owner/builder project). Owner/builder was all stressed out about being so far behind schedule. Didn't want to ruin his day further by telling him his 1 in 8 ADA ramp was not going to pass, (which it didn't). Or that the plumber was going to shid bricks when he found out the dishwasher piping and venting had to be drilled through the 16" thick concrete vault walls.
Bowz
Bowz,
I'm about an hour east of that area,and a little north. Basically, Iron Mountain, Mi. area. That's the biggest town close by. I don't know about the conditions, in the Tomahawk area, but Eagle River is supposed to be doing well. If you are looking to do cabinet installs,I know of a really high end supplier over there. They do work all over the state. Top notch outfit. Very picky to work for, I would imagine. If you're interested, e-mail me, and I'll fill you in on more. To all: Fortunately, I've got over 20 yrs of experience, in a variety of construction. The only work I usually sub out is, electrical, plumbing, and HVAC. Only because, I don't hold those licenses. I've been at times, the electrical apprentice, plumbers helper, and used to do furnace installs, for a former employer, who had a mechanical license.
I often sub paint and stain too. Because, I'm not fond of the work. Lately, I've been doing a lot of that too, because really good subs are tough to find.
All of my work is from referral, and a lot of repeat customers. I have a decent reputation, for quality work, and as being a problem solver. I'm used to being booked out at least 12-18 month ahead. At one point I was over 2 years out. That was kind of daunting, so I worked hard to close everything out. And downsized. Now I'm maintaining about a 6 month backlog. Just tough getting comfortable, being that close. Yeah, I know, "cry me a river". I'm in an adjustment phase, that coincides, with the slow down. Fortunately, I backed off early. I don't have a crew to worry about feeding, and my overhead is pretty lean. From what I've read so far. The consensus is that those who are well established, in customer service, and quality, and are versatile, are feeling the most secure. As far as a lot of new construction folks, drifting into remodeling. I think a few will try, but if they don't already have the experience, not many will be a big threat. At least, to those of you seasoned pro's.Keep it coming, this is really interesting to me.
I may be out for a few days, so don't think I'm ignoring you, if the reply is to me. Thanks!! Brudoggie