# NYS Wants to bankrupt me.



## kevjob (Aug 14, 2006)

"Whether you think you can or think you cant, your probably right":thumbsup:


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## VA Remodeler (Aug 8, 2007)

Dave, 

I agree, 10% would be no problem. I've done it before, but it was during booming times and also when I had 6 months worth of work ahead of me throughout the whole year. 

Back in '08 I had 6 months worth, '09 about 6 weeks worth, '10 a job here and there, '11 even a little less. Luckily I have a back up business that keeps me going pretty good. 

But when I get a call now and if I were to bid 20 to 30% more, with all the increased competition out there, and considering the higher cost of doing business today as many indicated in this thread, especially in an environment with the general public looking for a better than normal deal, and not to mention the RRP additional cost, I would most likely not get the job. That is basically my point. You just can't charge what you want, when you want and expect to get it, and as repeated, not around here anyway. ...I'm done.


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## DavidC (Feb 16, 2008)

VA, I'll respect that your done and won't chase you. I'm getting a bit tired of the circle myself.

For anyone else that's curious to try, the 10% mark is really a small test to boost your confidence. If you look around your own area I think you'll find somebody that is charging enough and getting work. Have you ever heard anyone say so and so is expensive, but they do very good work? That guy could be your mentor.

Years back when I was struggling to justify $18/hr. (might be showing my age) there was a contractor here that was getting $35. He is semi retired now and I ran into him a few weeks ago. I recounted those days to him and asked him how he was able to command top dollar all those years.

He asked me what my hourly rate was and I told him. His reply was, "then you know already. You decide how much you'll work for. We all make that decision and that's all there is to it."

Good Luck
Dave


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## moorewarner (May 29, 2009)

I have been steadily ratcheting up the prices, granted I am coming out of the basement, but up and up.

It does me no good to pursue thr trades if I can't make the life I want.

I will not sweat. all the details if at the end I am broke.

And if I can't sweat the details I'm not interested.


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## BamBamm5144 (Jul 12, 2008)

I say if you can't afford to hire an employee, you are merely doing a hobby.

I don't know about you guys, but I want a self sustaining business. I want one that after I work countless hours, get countless gray hairs and lose hours of sleep can afford me to retire. I want to check in periodically, not be involved in the day to day and collect my paycheck.

That isn't going to happen without employees.

How are you guys any different then the "low-ballers" you all complain about if paying WC is going to bankrupt you?


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## bconley (Mar 8, 2009)

> It is actually, no surprise why none of the little contractors in the area have no one on the legal payroll. I did some basic math today, and for what I would have to charge, for just the one employee, and myself, Id be out of business with in days.... not weeks, not months, days. The folks in these parts, wont pay the prices which are 'required' for us to operate. Which also explains why most the folks around here hire hacks


Have a look around your town, and ask yourself how it is all these businesses that have been around for years, that have a physical location, a fleet of company trucks, office staff, full time employees, etc. etc. do it?
Don't tell us it can't be done its being done all the time and has been forever, have you ever stopped to think that maybe, just maybe that *you are the hack*?


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## BamBamm5144 (Jul 12, 2008)

One thing I just realized is that you said your employee is going to 1099 it. Uh oh. He will still be your employee. If he gets hurt and cant pay his bills I promise he will say he was an employee and then you'll really be out of business.


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## JBM (Mar 31, 2011)

VinylHanger said:


> I just hired a guy and it costs me around 10 percent of wages for WC. I am struggling to get over having to pay a guy out of "my money". It is a different mindset. If I can get a price for him in the job I'll use him, if not, he sits, I will only use him on jobs he is priced in on.


WC doesnt come out of your pocket. It comes out of the buyers. If you pay a guy $25 an hour you dont bill him out at $25 an hour, you bill him out at 55-70. 

Technically you should be able to bill out a helper that is doing the same job as you at the same rate. If I bill myself out at $65 an hour for masonry, a mason I hire I bill out at $65 also.

People get messed up when they give themselves "whats left" at the end of the week or month instead of taking a modest salary and keeping the rest of it in the business account.

When you take "whats left" it always feels like it comes out of your pocket. A business entity needs to turn a profit also, it also has overhead and expenses. 

Separating personal and business monies and leaving some in the till is a must for people to realize the business is responsible for making money as well as paying its own bills. 

So what im trying to say is price increases are just that, adjust your estimates appropriately, it doesnt have to come out of your pocket.


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## smalpierre (Jan 19, 2011)

BamBamm5144 said:


> My WC is 20k this year for 5 guys.
> 
> Small businesses aren't meant to succeed, sometimes I believe that.


Here it's 40% of payroll for roofers. That's why we use subs - and require that they carry their own. A cert for a sub is $750 / year. It doesn't cover anybody, but it's required so the homeowner isn't liable ...

Ridiculous money grab really.


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## DavidC (Feb 16, 2008)

BamBamm5144 said:


> One thing I just realized is that you said your employee is going to 1099 it. Uh oh. He will still be your employee. If he gets hurt and cant pay his bills I promise he will say he was an employee and then you'll really be out of business.


Another consideration is a slow down in work that requires you to "lay off" your 1099. If he doesn't find work somewhere he'll probably file a claim for unemployment.

My bet would be that he gets a bi-weekly check and his "GC" gets a certified letter.

Good Luck
Dave


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## Jaws (Dec 20, 2010)

BamBamm5144 said:


> I say if you can't afford to hire an employee, you are merely doing a hobby.
> 
> I don't know about you guys, but I want a self sustaining business. I want one that after I work countless hours, get countless gray hairs and lose hours of sleep can afford me to retire. I want to check in periodically, not be involved in the day to day and collect my paycheck.
> 
> ...


 Not to be a dick, but I think SOME of that statement is a bit narrow minded. My cabinet man and tile setter both work alone, have been in business for more than 20 years. Both superior craftsman. Cabinet man probably makes twice as much money as I do. It is not a hobby for them, it is their life. 

I know more than a few one man show builders, good and bad. I know two who have successful businesses and have turned down work when they were busy so that they could have personal attention and quality control. Its about WHAT they build, not how much. 

Also, while the local economy for good contractors is still good, I keep an eye on neighboring community's. I'm involved with my state builders association, and more than a few superior builders have closed down shop in smaller community's. As I've said before, you live in a heavily populated urban area with a large customer base. Its a bit snobbish imo to look down your nose at a guy who lives in a small or medium size community or rural area that is not economically sound at the moment. Google search means little or nothing here. Ever think about farm towns that are heavily affected by a drought? Doubt much is getting spent in those towns on construction.


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## BamBamm5144 (Jul 12, 2008)

jawtrs said:


> Not to be a dick, but I think SOME of that statement is a bit narrow minded. My cabinet man and tile setter both work alone, have been in business for more than 20 years. Both superior craftsman. Cabinet man probably makes twice as much money as I do. It is not a hobby for them, it is their life.
> 
> I know more than a few one man show builders, good and bad. I know two who have successful businesses and have turned down work when they were busy so that they could have personal attention and quality control. Its about WHAT they build, not how much.
> 
> Also, while the local economy for good contractors is still good, I keep an eye on neighboring community's. I'm involved with my state builders association, and more than a few superior builders have closed down shop in smaller community's. As I've said before, you live in a heavily populated urban area with a large customer base. Its a bit snobbish imo to look down your nose at a guy who lives in a small or medium size community or rural area that is not economically sound at the moment. Google search means little or nothing here. Ever think about farm towns that are heavily affected by a drought? Doubt much is getting spent in those towns on construction.


Do they have benefits? Retirement plan? They aren't going to work forever correct?


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## DavidC (Feb 16, 2008)

jawtrs said:


> Not to be a dick, but I think SOME of that statement is a bit narrow minded. My cabinet man and tile setter both work alone, have been in business for more than 20 years. Both superior craftsman. Cabinet man probably makes twice as much money as I do. It is not a hobby for them, it is their life.
> 
> I know more than a few one man show builders, good and bad. I know two who have successful businesses and have turned down work when they were busy so that they could have personal attention and quality control. Its about WHAT they build, not how much.
> 
> Also, while the local economy for good contractors is still good, I keep an eye on neighboring community's. I'm involved with my state builders association, and more than a few superior builders have closed down shop in smaller community's. As I've said before, you live in a heavily populated urban area with a large customer base. Its a bit snobbish imo to look down your nose at a guy who lives in a small or medium size community or rural area that is not economically sound at the moment. Google search means little or nothing here. Ever think about farm towns that are heavily affected by a drought? Doubt much is getting spent in those towns on construction.


Nothing against one man shows, and many of them are very successful. But the point of this thread is the guys that figure they need help and think they have to do it illegally in order to afford it. Fact is that if they cannot afford legal employees then they are not charging enough already, probably are in the lower end with their current pricing and need to raise it to compete. It's most likely that the successful one man shows are charging enough to hire if they chose to.

As far as the small town goes, our hub city boasts a population of about 35,000 and is surrounded by smaller towns and farms. We have seen the paper industry die and way too many farms go idle or revert to raising hay for the mushroom growers. Until recently we have been traditionally behind the curve economically and this is the environment that I developed my business in.

I'm a small contractor in a small market and I am able to charge enough so that none of my employees work without coverage. There are plenty around me charging less and wondering how it is that I can afford the coverage. I don't buy the small business rural town excuse. Again, I did find out that the biggest obstacle I had to overcome was my own opinion.

Good Luck
Dave


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## JBM (Mar 31, 2011)

DavidC said:


> I did find out that the biggest obstacle I had to overcome was my own opinion.
> 
> Good Luck
> Dave


Absolutely true. If people say no one will pay those prices, then yup, no one will-for you.


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## Stephen H (Feb 18, 2011)

BamBamm5144 said:


> Do they have benefits? Retirement plan? They aren't going to work forever correct?


 Bam Bam- you are a young guy and you are enjoying some well deserved business success------ but you should at least consider that there are things you don't know yet AND things you don't know that you don't know.

You are an intelligent guy-with your particular views------ but YOUR definition of a business(or a hobby!)- doesn't have to be everyones' definition.
I am entirely confident that if you keep your eyes open and look around you- you are going to find all sorts of highly successfull one man businesses-and what will shock you is that many of them will be actually earning more than you are running 2 crews.

If your goal is to retire at some point- you should know that your particular view of what a "business" is may actually prevent you from successfully reaching that goal
look up in a phone book or a Haines criss cross directory from 20-30 years ago- how many roofing businesses from then are still around now?-very,very few. It's not impossible, mind you- but it is statistically improbable that a small tradesman will build a business that becomes a 2nd generation thing or a seperate entity surviving it's founder.- as a source of retirement equity-- not worth the effort.

but as a source of a revenue stream that can be re-invested in seperate categories- it's phenomenal. The gentleman who mentioned his friend the cabinet maker working solo and earning twice what he earns is a case in point. That cabinet maker may well be investing an annual amount that would truly shock you.

Over 30 years ago I met a family that I am still close with today.- The father was in painting and wall papering--- very very small operation--- but high end work, and Phil worked constantly. He ALSO built several twinplexes and tri-plexes early in his career- and when those were paid off he essentially retired-while still a very young man. He also raised 8 or 9 kids and sent them ALL to private schools. ( oh, yes-and every year or so he would put them all in a winnebago and spend a month or so out West in Yellowstone etc.)
I could go on and on with more and more examples- but the point is ALL of the people I know in these types of businesses accumulated very nice NET worths via investments they made OUTSIDE of their main line of work. I don't personally know a single tradesman that did it via equity in their own business.
I would strongly reccomend that you get hold of 2 books
1) The Millionare Next Door by Thomas Stanley and William Danko
2) The Jewish Phenomenom by Steven Silbiger
Best wishes,
stephen


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## Stephen H (Feb 18, 2011)

David C,
yoyu have written some excellent stuff here- thanks!
I discovered much the same things 15 years or so ago and they are lessons I wish I had learned 25 years ago instead.

I went out this morning and met with a customer I did some slate work for this spring. In the spring I recommended a plasterer who did a nice project for him-and this morning I recommended a brick and stone guy to him to do a nice project for him in the spring----------

also this morning ,as I sat on his couch- he told me to PLEASE schedule 2 additional slate projects for him in the spring--- effectively accepting the proposal which was STILL IN MY HAND and long before he ever saw the attached numbers. I firmly believe that you can go into EVERY market and find contractors saying" you don't understand--people here won't pay those rates"- and yet in every market you will find other contractors successfully charging those "impossible" rates.
Very best wishes,
stephen


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## BamBamm5144 (Jul 12, 2008)

Well Stephen, if you can't afford WC on one employee, you're no different than the guy who I lost a 9 square siding job to at $3100. Did I mention the siding was Mastic Structure?

I am sure there are guys who have done well on their own but is it really a business if it does not create any jobs? What is the definition of business?

Regarding money, you're right. I don't make a lot. I make enough to pay all my bills so that my wife only has to work part time and our newborn child can have nice things. The rest goes back to the company and pays down debt.

Today the company ran 6 leads. I took two of them. The rest my sales guy did and I stayed home with my daughter. Sounds better to me then swinging a hammer just to get by and not making enough to be different than the people I come on here to complain about.


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## Tom Struble (Mar 2, 2007)

i think your all a bunch of hacks


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## Warren (Feb 19, 2005)

I would like to chime in now. It has a lot to do with the type of business you run. Bam does production roofing, pretty hard for a one man show to pull that off. I specialize in custom residential framing. I don't see a lot of one man shows in this either. Back in 2005, I bit the bullet and went completely legit. Cost me $40,000 in WC alone. It also brought with it the ability to get much better work. During this downtime, things have slowed to a crawl. I barely break even on the few jobs we still get. I refuse to run my business any other way. If things continue, I will just go to work for a respectable company rather than conduct a half baked business. I know some one man shows who do pretty well. Many of them do have WC. I just can't see me being a one man show. I like working with people, usually.


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## BamBamm5144 (Jul 12, 2008)

Warren said:


> I would like to chime in now. It has a lot to do with the type of business you run. Bam does production roofing, pretty hard for a one man show to pull that off. I specialize in custom residential framing. I don't see a lot of one man shows in this either. Back in 2005, I bit the bullet and went completely legit. Cost me $40,000 in WC alone. It also brought with it the ability to get much better work. During this downtime, things have slowed to a crawl. I barely break even on the few jobs we still get. I refuse to run my business any other way. If things continue, I will just go to work for a respectable company rather than conduct a half baked business. I know some one man shows who do pretty well. Many of them do have WC. I just can't see me being a one man show. I like working with people, usually.


Thumbs up. Sometimes I forget that we all have different trades. I still believe that if it will bankrupt you to pay WC on one employee, (that youve already employed) you need to change things.

Warren, I know of a few guys who have closed their business and went to work somewhere else. Most don't like it.


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## Jaws (Dec 20, 2010)

I gave this thread a lot of thought today. Its still not mandatory here. I know few contractors who do have it.

Davidc, I realize that doesn't make sense but I wasn't arguing for the guys not to have it or justifying it. Just stating I think its a bit uppity to say " when I hear someone's not working or doing a lot of business, I have to wonder why. " I usually take it with a grain of salt depending on who's saying it. I haven't been in business for a long time but I realize someone being successful early on doesn't mean they will end up a success. Point being, it is certainly an employers duty to his/her employees and clients to be a legit company on the up and up. 

Bam, one of the builders is 42 and a multi millionaire, the other is almost 60 and seems to be doing well. The cabinet man is 45, he owns three rental units outright and owes on two. He will retire fine I'm sure. The tile man is not to well off at all, is 50 something and will probably work untilled he dies. But he loves his work and lives with his choices. My point was success has nothing to do with money or employees. We are a medium sized constriction company for these parts. Not rich and don't have brand new king ranch trucks or yachts. Then again we only grow as fast as we can by paying cash. I don't owe a single dime to anyone in this world except on my house, which will be payed for in 8 years. All of our trucks, equipment, trailers, are paid for. I doubt ill ever be rich, but I won't owe **** to anyone either. I just wouldn't call him a low balling hack because he doesn't have employees or can't take half a day off to play with his kid.


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## BamBamm5144 (Jul 12, 2008)

jawtrs said:


> I gave this thread a lot of thought today. It is somewhat absurd to argue against something I do myself. We have workers comp, growing up my dad did not. Its still not mandatory here. I know few contractors who do have it. Besides the right reasons, we have it because of the selfish reasons mostly . Its cheap enough if you think about the consequences.
> 
> Davidc, I realize that doesn't make sense but I wasn't arguing for the guys not to have it or justifying it. Just stating I think its a bit uppity to say " when I hear someone's not working or doing a lot of business, I have to wonder why. " I usually take it with a grain of salt depending on who's saying it. I haven't been in business for a long time but I realize someone being successful early on doesn't mean they will end up a success. Point being, it is certainly an employers duty to his/her employees and clients to be a legit company on the up and up.
> 
> Bam, one of the builders is 42 and a multi millionaire, the other is almost 60 and seems to be doing well. The cabinet man is 45, he owns three rental units outright and owes on two. He will retire fine I'm sure. The tile man is not to well off at all, is 50 something and will probably work untilled he dies. But he loves his work and lives with his choices. My point was success has nothing to do with money or employees. We are a medium sized constriction company for these parts. Not rich and don't have brand new king ranch trucks or yachts. Then again we only grow as fast as we can by paying cash. I don't owe a single dime to anyone int this world except on my house, which will be payed for in 8 years. All of our trucks, equipment, trailers, shop and 2/3 finished office are paid for. As is the land they sit on. I doubt ill ever be rich, but I won't owe **** to anyone either. Not to mention I will probably work until I die regardless of my holdings. Its a family tradition I think. Grandpa is in his mid seventies, certainly set financially, works 6 days a week building houses. Still loves it. Would probably still frame them still if he could. His cousin is seventie and works because he has to. He lives with his choices. I just wouldn't call him a low balling hack because he doesn't have employees or can't take half a day off to play with his kid.


I'm only referring to the OP. If paying comp, which is required by law for where he lives, puts him out of business in DAYS, there are obviously bigger issues at hand.

I also lost a roof bid today for a 31 sq job. The winning bidder is doing it for $5700.00 - he doesn't pay comp. If he did pay comp, he would be out of business. All it means is he isn't charging enough.


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## Jaws (Dec 20, 2010)

I can certainly relate to that. It is infuriating to lose a Job to a **** ball who uses illegals, doesn't have licensed trades and doesn't have GL. Or permits.

But a new truck


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## myankevich (Feb 28, 2010)

BamBam,

Are you serious; that you have a guy in your area that is going to a 31sq. roof for $5,700? I did some quick numbers and my material & dumpster would be around $4,300. Unreal!!! I'd like to see how that job turns out...


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## Stephen H (Feb 18, 2011)

BamBamm5144 said:


> Well Stephen, if you can't afford WC on one employee, you're no different than the guy who I lost a 9 square siding job to at $3100. Did I mention the siding was Mastic Structure?
> 
> I am sure there are guys who have done well on their own but is it really a business if it does not create any jobs? What is the definition of business?
> 
> ...


 Bam Bamm,
both of my employees are covered by workers comp, have medical insurance, recieve holiday pay and earn significant bonuses twice a year.

BTw- you have never heard me complain about WC costs, or express the slightest worry about MY ability to retire.
I DID work plenty of years primarily alone-and I was able to provide for my family, put my wife through college and my 2 sons through private schools INCLUDING college and invest enough towards the future that at age 49 I am semi retired and have been for a couple years now.
only reason I really work now- is that I am physically able, have no real problem attracting business and I see an opportunity to help my sons raise THEIR eventual families and for THEM to retire before age 40.
I am not made of money- but I think I really did the best that could be done with what i had to work with-and i did it mostly working aloneand roofing.

Best wishes,
stephen


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## BamBamm5144 (Jul 12, 2008)

Stephen, once again I was never referring to you. I'm talking about the original poster.


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