# Going legit and still competing



## BuddySteinle (Mar 11, 2016)

How do you guys do it?!?!

My estimates are on point
My markup is calculated based on my total projected sales
My salary is part of my overhead

My job cost (labor, materials, subs) are pretty low everyone currently that works for me is being 1099. I know if I get caught I'm ****ed I know I'm not protected I live in fear every day. 

Thing is my markup is based on my overhead (22%) and business profit (10%) so for an example I take 

$800,000 in total sales 
30% of $800,000 is $240,000
So in order to find my mark up I take 
$800,000 - $240,000 = $560,000
Then $800,000 / $560,000 give me a mark up of 1.42

So if my job costs are say $10,000 I multiply 1.42 and come up with a sales price of $14,200

As Long as I hit my total projected sales for the year that markup should cover all my overhead and profit

Now I still find it very difficult a fair amount of the time to get the job even at what I know is a fair markup and my job cost I KNOW are much lower than a legitimate contractor that pays 30% more in labor because of WC, payroll tax, unemployment, overtime wages and so on 

How the hell do people do it??

I sometimes have a tough time I can't imagine my prices going up 30% in labor and still being able to compete 


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## Frank Castle (Dec 27, 2011)

There are people who buy corvettes and people who buy chevettes. I want the clients who buy corvettes. 

The corvette buyer knows what they want and what it costs. The Chevette buyers will dicker price every time. 

Bid the job, if they don't take it. Don't you take it personally. Find the next client that fits you.


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## heavy_d (Dec 4, 2012)

Who are you competing with? Where are you finding your current customers?


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## BuddySteinle (Mar 11, 2016)

I'm from Pittsburgh PA a good portion of my leads are from Home advisor. I just mean other contractors in the area. I know the people just wanting a cheapo price I'm not real interested in working with but even now at the prices I have set I hear about my price coming in to high in comparison to other bids they've received I am imagine that scenario will happen two or three times more often if I raise my prices due to my higher costs in labor. 

So I guess more specifically when I'm asking is when you know your price is quite significantly higher than 90% of your local competition due to the fact that most of them are not legit including me currently how do you still make sales?

Is it just a matter of making a higher volume of sales in order to keep your overhead lower? Or is it just a matter of blowing people away with your presentation. Do lead based services just not work with a legitimate company because of the competing prices. 




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## 480sparky (Feb 1, 2009)

Non-legit contractors are a revolving door. Here today, gone tomorrow. And sometimes home in the middle of the job.

I plan on being in business tomorrow, next week, next month, next year. 

So I'll be around to finish your job. And I'll be there for any warranty work.

Hacks just want to pay their bills that are two weeks past due. They don't care about their future. And that includes their customer's future.


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## tedanderson (May 19, 2010)

I once had a piano teacher who said, "You played the song PERFECTLY but you didn't make music."

As a contractor you have to put yourself in a position that sets you apart. Doing everything "perfectly" or the "right" way isn't going to get it. 

The other day I hired a company to resurface my uncle's hardwood floors. I got 4 estimates from companies that were highly qualified to do the work. I ended up choosing the company that I did because I liked the contractor's personality. 

Anyone can give me a decent bid but not everyone can influence me to earn my business.


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## BuddySteinle (Mar 11, 2016)

Yes I want I 100% agree that's the main selling point of a legitimate contractor which I use. Even though I'm not 100% legitimate I do plan on being legitimate and my prices aren't so low that I'm not generating a profit after my overhead is paid for. 


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## 91782 (Sep 6, 2012)

BuddySteinle said:


> Yes I want I 100% agree that's the main selling point of a legitimate contractor which I use. *Even though I'm not 100% legitimate* I do plan on being legitimate and my prices aren't so low that I'm not generating a profit after my overhead is paid for.
> 
> 
> Sent from my iPad using Tapatalk


That's like being a little bit pregnant.


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## Gatorgrizz27 (Nov 1, 2015)

Only you can determine if enough profit is being built in to your bids. The 10% profit rule makes it easy to come up with a number, but why would you install cheap laminate flooring for 1/4 the price of hardwood flooring, when it is the same amount of work, just because the material costs less? I agree with everyone else that price shouldn't be the deciding factor on hiring a contractor, but that requires that you have an established reputation and word of mouth referrals. 

If you feel you cannot raise your prices and still get the work, you have to do more jobs to earn more profit. You can either get more efficient and do jobs that used to take 3 weeks in 2 weeks, or you can hire more guys and run additional crews. Both of these require that you are able to actually get more work. Your guys aren't going to bust their butts to stay home they next week because there is nothing to do. 

I would also find a way to hire your workers as employees if you want to stay in this business and they want to work for you exclusively. Aside from the legal/insurance implications, you're basically training guys to go somewhere else or out on their own and compete against you. Give them a reason to stay with you instead.

How many guys do you currently have working for you? How many of them have been with you for more than a year? Two years? If you look at the established companies, you will find that most of their employees have worked with them for 5-10 years or more. How much better do you think a job runs when the guys doing the work have that much experience, know the way you like things done, can make the right decisions on their own without calling you 10x a day, the customers remember them, etc? Your "waste" of time and materials will dramatically be reduced, leading to more profit without working any harder or charging more.


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## BuddySteinle (Mar 11, 2016)

I disagree that I'm training them to go out on their own I am 1099 in them but they are according to the IRS actually employees. I do agree that I need to hire some of them at least as employees just because of the legal ramifications. 

To your question about laminate and hardwood. I don't bid by the square foot I bid time and materials so if the labors the same I'm still going to get the 1.4 to mark up on the labor. The markup works for me but I do think about the fact that the markup is applied to the total sales price so hypothetically speaking if the materials are Extremely expensive The markup is too high. I maybe should have a Markup for labor and a standard lower mark up for materials. 

Not a Hundred percent about that what do you guys do? 


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## tedanderson (May 19, 2010)

BuddySteinle said:


> Not a Hundred percent about that what do you guys do?


My situation is a little unique in that my prices are based on the market rate for what my services are worth. It's not too often that I base my price on what it costs me to do the work.

So as an example, if a complete home theater/entertainment system typically costs $11,000 installed, then that's what I bid. My labor, equipment, and material cost may vary but I'm always aiming for what the customer is willing and able to pay for it.


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## Warren (Feb 19, 2005)

It's hard to see the forest through the trees. My company is a bit different than yours, as I do about 70% sub contracting. Even so, I am completely legit. I didn't always run this way though. Back in 2005, I was trying to get some work through a few new builders. These guys were the real deal. I found out that in order to get their work, I would need to change my business model. I also, like you, knew that if I continued to work the same way, it was eventually gonna blow up in my face.

In 2005, I changed everything. No more subs working by the hour. They all became employees. This meant WC, unemployment, payroll, SS, the works. My comp alone was 18%. The first year was a struggle. I knew that I couldn't recover all of my increases right off the bat. Eventually, I was able to reduce the comp, increase my prices, and become profitable. 

Today, it is not even an issue. I think smart homeowners can smell legitimacy. I wish I had converted sooner actually. I know I missed some opportunities to get some really good work. I don't think I make better money now, but I know my fears are gone, headaches are fewer, and I can hold my head high.


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## SavannahReno (Aug 18, 2015)

This subject comes up fairly often and I think it is something that most of us struggle with frequently. The bottom line is that we must charge at least enough to cover all expenses and generate some profit on a majority of the work preformed. 

In the past, I have been guilty of creating an estimate and when looking it over thinking "This is way too high...I will never get this job or survive charging this". 

I had (and still have) one customer who is good for 20-40% of my gross sales every year for over ten years now. He calls and on most of the work there is no estimate required. Just do the work and send a bill with a rare call to find out what a certain charge is for. I have consistently been guilty of generating the bill and lowering it because I felt the charges were out of line and wanted to keep this key customer happy. Emotions again.

The result of all this was 7 day a week work schedule...always working and winning almost everything I bid. Thinking this way sent me into chapter 7.

After the bankruptcy, I increased my pricing but not enough as I continued to struggle. Always a victim of emotions contradicting what hard numbers were telling me. Finally, I contacted my best customer and in a long email explained why I must increase my pricing by 23%. I anticipated that he would respond negatively. He called me back and basically told me that he did not have time to read the email and to charge what I needed to. He (also a business owner) understood and it would not effect our relationship.

That was over a year ago and just this past month I increased pricing again by 8.6%. I will admit that my current pricing is generating some negative feedback from my existing and potential customers. However, I am able to work a reasonable schedule and still hit my marks. I admit, I have a long way to go, but knowing I am heading in the right direction is priceless.


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## BuddySteinle (Mar 11, 2016)

I agree I guess just getting my advertising on point my operations are set up to be productive and making sure my estimates are tight at the end of the day if I apply a fair markup based on real number of my costs than I should never second guess or worry about competing with guys that are pricing themselves out of business and homeowners that are mostly concerned with budget and price shopping than product shopping 


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## SavannahReno (Aug 18, 2015)

BuddySteinle said:


> I disagree that I'm training them to go out on their own I am 1099 in them but they are according to the IRS actually employees. I do agree that I need to hire some of them at least as employees just because of the legal ramifications.
> 
> To your question about laminate and hardwood. I don't bid by the square foot I bid time and materials so if the labors the same I'm still going to get the 1.4 to mark up on the labor. The markup works for me but I do think about the fact that the markup is applied to the total sales price so hypothetically speaking if the materials are Extremely expensive The markup is too high. *I maybe should have a Markup for labor and a standard lower mark up for materials.
> *
> ...


I have a separate markup for labor and materials and it is not set in stone. 

If a job is heavy in materials and light in labor I lower the materials markup and increase the labor and vice-versa. I have a standard labor markup, but will also increase the labor markup based on the customer (e.g. the old PITA factor). 

Hypothetically, if you have a job with $10,000 in materials and $500 in labor you will price yourself out of the ballpark with a standard markup.


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## BuddySteinle (Mar 11, 2016)

Exactly that is rarely the case for it to be that lopsided but I agree


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## river rider (Dec 31, 2012)

Sounds to me like you are exactly the guy who is screwing legit contractors by not following the laws and requirements yourself.


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## BuddySteinle (Mar 11, 2016)

Unfortunately I know I am not doing things correctly. However I'm not really screwing the legitimate contractors because they do not have the risk factor that I am putting myself through by not doing things correctly. So they get peace of mind and also are covered if **** goes sour. I might be able to land more jobs with less advertising and overhead but if something bad happens I'll be out of business and they will not


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## river rider (Dec 31, 2012)

BuddySteinle said:


> Unfortunately I know I am not doing things correctly. However I'm not really screwing the legitimate contractors because they do not have the risk factor that I am putting myself through by not doing things correctly. So they get peace of mind and also are covered if **** goes sour. I might be able to land more jobs with less advertising and overhead but if something bad happens I'll be out of business and they will not
> 
> 
> Sent from my iPad using Tapatalk


Total bullsh!t response. What a crock of self-justifying total BS.

Actually, you screw us in multiple ways.

-Unfair/illegal competition pricing. 

-Our material costs are higher because suppliers have to factor in the losses when guys like you go bankrupt and skip out on paying for credit you agreed/promised to pay.

-You don't pay your fair share of payroll and probably other taxes. Forcing even more of the burden on honest legit contractors.

-You give all contractors a bad stigma from the problems you create. 

-I could think of probably dozens of others.


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## 91782 (Sep 6, 2012)

river rider said:


> Total bullsh!t response. What a crock of self-justifying total BS.
> 
> Actually, you screw us in multiple ways.
> 
> ...


I disagree.


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## Metro M & L (Jun 3, 2009)

If it was easy everyone would do it. Thankfully it is hard and consequently only the smart will survive.


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## BuddySteinle (Mar 11, 2016)

river rider said:


> Total bullsh!t response. What a crock of self-justifying total BS.
> 
> 
> 
> ...



First off I don't feel the least bit bad about what I'm doing. I am setting myself up for potential pitfalls for MYSELF! 

The way policies and procedures are in place they basically force somebody like me to pay labor as an employee and they force the guys that work for me to be paid as an employees 

We should both have that option. Anything the government gets involved with costs a **** ton more than it should and I don't give two ****s you say that's 100% the truth

Unemployment and Workers Comp is complete bull****. The way it should be set up is that each individual person is responsible for their own savings their own healthcare and to put a nest egg away in case work slows down

What if a guy works for 12 years and doesn't go on unemployment that he paid for 12 years where the **** does that money go

Insurance companies rape you in your ass and make it damn near impossible to charge a fair rate to the consumer because people don't know how to save money get their own healthcare and handle their own business

Back in the day I think this was beneficial because employers were destroying workers and ****ing over people. that worked for them but now I feel like it's lopsided in the other direction

I don't operate on credit I save my money I have a working capital I have a net operating fund i'm not gonna go out of business and then not be able to pay anybody back

My trucks are completely paid for I have zero debt on my company

The risk I'm putting myself in is that I will have to pay a **** ton of what I have saved up back if I get in trouble

The materials price and the labor price don't get put on you they get put on the customer so that's not something that goes against you that's complete bull****

Just like the fact that because your labor is more expensive it gets put onto the customer you don't make less profit or have less overhead you just charge more point blank

Reason the government wants you to make them employees is because they're guaranteed more tax revenue and they need you have Workmen's Comp. and unemployment because they get money from it and they also get payroll taxes.

If each one of your ploy ease actually got their own insurance and save their own money and pay their own taxes the government one would have far less tax revenue. 

If you run your own business you going to figure out how much and what you can write off so you can pay the least amount of taxes as possible everyone can agree if each individual person had to do that there would be less taxes paid because the general public would be a lot smarter on how to avoid paying taxes legally.







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## vista69 (Feb 26, 2016)

This is a great thread, but I'm curious about your definition of "Going Legit"?

Do you have a PA builders License? Are your "employees" licensed to build?

My personal situation for the past couple years had me concerned about "getting caught". I was working as an employee working for a guy who still doesn't have his MI License. This year I'm paying taxes on a 1099 as a builder, with a lapsed license (illegal) 

Fortunately as of yesterday, I'm licensed again. I am, what I consider "Legit" which is a huge monkey off my back. I can go back to work for this guy without worry of "getting caught".


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## BuddySteinle (Mar 11, 2016)

I have a license and I'm incorporated as an LLC however I don't do every single thing on the up and up


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## Warren (Feb 19, 2005)

Sounds like the OP really doesn't want to be legit. You admit to having trucks paid for, money saved up, etc. Now is the time. Yeah, it will cost you some $$$$, but if you really want to do the right thing, there is no time like the present. I regret that it took me almost ten years in business to turn things around. If I would have started legit from the get go, it would have been a lot easier, and saved me a bunch of headaches.


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## griz (Nov 26, 2009)

BuddySteinle said:


> I have a license and I'm incorporated as an LLC however I don't do every single thing on the up and up
> 
> 
> Sent from my iPhone using Tapatalk


so just exactly where do you draw the line?

few bucks off the customer counter ok?

cheat on your taxes?

few extra studs or keg of nails from the yard when no one is looking?

lie on a. comp audit?

attitudes like yours are disgusting....
t


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## 480sparky (Feb 1, 2009)

BuddySteinle said:


> First off I don't feel the least bit bad about what I'm doing. I am setting myself up for potential pitfalls for MYSELF!
> 
> The way policies and procedures are in place they basically force somebody like me to pay labor as an employee and they force the guys that work for me to be paid as an employees
> 
> ...



Translation: I feel 'The Sytem' is f*$king me, so I will lower myself to its level and f*$k everyone else.


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## BuddySteinle (Mar 11, 2016)

No simplified "I know the system is ****in us so I will do what I need to do to take care of myself cause no one is looking out for me but me" 


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## Brad Gunn (Aug 18, 2015)

Hey Buddy - you started the thread asking for advice "how do you guys do it?

Along the way you got some advice from experienced guys, and you got some push back from guys who think you're hurting the trade. Now it's starting to look like you're blaming the government - yeah we all get that, but that's a different thread.

Then there's some confusion - tax law/contracting law: "the IRS says they are employees, but I 1099 them".

Of course you have money in the bank: you haven't been paying taxes. Of course they're going to take it away. 

There might be a of lot of people here who sympathize, or have the same problem, but, since this is a public forum, best advice is get legit.


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## 480sparky (Feb 1, 2009)

BuddySteinle said:


> No simplified "I know the system is ****in us so I will do what I need to do to take care of myself cause no one is looking out for me but me"
> 
> 
> Sent from my iPhone using Tapatalk


Yet: How many here ARE fully legit and _manage to take care of themselves_?

Now you sound like you're just trying to make up excuses for not being as successful as those who _are_ legit and do well.


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## BuddySteinle (Mar 11, 2016)

I agree I need to get legit. I was simply saying I don't have any debt and I'm not hurting other contractors by rackin up all types of charges and then not paying. 

My question was when I do go Legit how do u survive and still compete. A the one guy took it upon himself to try and throw a little jab and he's entitled to his opinion but I have mine as well ya know. It's just my perspective that's all. Obviously I see the risk involved personally not being legit and I am trying to get into a position where I can still make a profit and be legit that's why I was asking you what it is it helps still generate profit just better sales guys or higher volume of sales or whatever would have


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## BuddySteinle (Mar 11, 2016)

480sparky said:


> Yet: How many here ARE fully legit and _manage to take care of themselves_?
> 
> Now you sound like you're just trying to make up excuses for not being as successful as those who _are_ legit and do well.



I'm not unsuccessful just still learning. Obviously I'm trying to get my **** in order so that I can maintain and be legit.

I don't know many people maybe you guys do but I don't know many who started out 100% legit from the gate. 

Some point you became legit but for the most part most guys started out the way I'm running my business. True or false? 

The reason for that is that our situation our society is set up to where until you can sustain a business that can generate enough volume in sales it's impossible without going into debt to be legitimate or damn near from ur start 

Now there's a point where business is growing and you can now afford to be legitimate and that's about where I'm at now. Hence the questions about when u made the switch and how you did it. 




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## 480sparky (Feb 1, 2009)

BuddySteinle said:


> I'm not unsuccessful just still learning. Obviously I'm trying to get my **** in order so that I can maintain and be legit.
> 
> I don't know many people maybe you guys do but I don't know many who started out 100% legit from the gate.
> 
> ...


Fly-by-night 1-man-bands are a dime a dozen. They come and go on an hourly basis. They're like drug dealers.... lock one up and there's 15 more fighting to take their place. It's all a race to the bottom.

Start by knowing your costs, charging for them, and learning to sell yourself. Pitch quality, not cost.

How does Macy's compete with WalMart? A: They don't.


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## 91782 (Sep 6, 2012)

BuddySteinle said:


> I agree I need to get legit. I was simply saying I don't have any debt and I'm not hurting other contractors by rackin up all types of charges and then not paying.
> 
> My question was when I do go Legit how do u survive and still compete. A the one guy took it upon himself to try and throw a little jab and he's entitled to his opinion but I have mine as well ya know. It's just my perspective that's all. Obviously I see the risk involved personally not being legit and I am trying to get into a position where I can still make a profit and be legit that's why I was asking you what it is it helps still generate profit just better sales guys or higher volume of sales or whatever would have
> 
> ...


Over and over on CT you are going to find people who do use (for example) Home Advisor, and they make it work for them. I don't recall any though who solely rely on lead services.

Two things have to occur:

You need the skills to quickly separate the bottom feeders from quality customers

You have to be able to deliver and demonstrate that you deliver the best value for those better, upper echelon customers.

There ain't a pill for it - it takes time.


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## Brad Gunn (Aug 18, 2015)

BuddySteinle said:


> . A the one guy took it upon himself to try and throw a little jab and he's entitled to his opinion/QUOTE]
> 
> You talkin to me?:no:


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## Brad Gunn (Aug 18, 2015)

How do I put Buddy's (partial) quote in my response?


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## BuddySteinle (Mar 11, 2016)

No it wasn't u at all 


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## griz (Nov 26, 2009)

Brad Gunn said:


> BuddySteinle said:
> 
> 
> > . A the one guy took it upon himself to try and throw a little jab and he's entitled to his opinion/QUOTE]
> ...


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## griz (Nov 26, 2009)

Brad Gunn said:


> How do I put Buddy's (partial) quote in my response?



use the quote button and edit out what you want.


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## BuddySteinle (Mar 11, 2016)

I hear u I'm gonna do it for sure 


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## VinylHanger (Jul 14, 2011)

I had some sympathy for you until you started going down the rabbit hole.

I don't have my stuff paid for, I owe payroll, I owe money to suppliers from jobs that go sideways, I fret every time my insurance renews or my license, bond and required education is due. The reason is because that stuff costs real money. Real money guys like you don't pay. I make it because I work my ass off and still fall short at times.

Last year I had two premiums due one right after the other for 1,100 bucks each. Then I had 6-700 bucks in ccb fees and requirements. All in the matter of a couple weeks. That's a big hit for a normally one man shop. I could have money in the bank too if I just didnt do that stuff.

Why the F don't you take the money you have saved up and do what you should. If not, then don't get all bent when folks tell you you are full of it.

I used to help out a few guys I know trying to get started. They were just doing small handyman stuff. Totally legal. I would happily give them advice on pricing and job ideas.

Then eventually they call me asking about things like full house paints, or 500 feet of fence, or siding a house, which is my space. That is the point I end up realizing they have no plan to actually get legit.

I stop helping them and don't give away my hard earned knowledge any more.

I said all that to say I have no sympathy any more. I do understand you gotta do what you gotta do. However, when you start having money in the bank, it is time to do the right thing.

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## griz (Nov 26, 2009)

Maybe you also need to improve the image of your company so you have something to live up to.

let people know you are licensed, bonded, pay comp and liability and pay proper taxes on your employees.

Pro looking biz cards, yard signs, bid/billing forms, truck lettering, t-shirts/ball caps for your crew an up graded shirt for you etc etc...

all this with the right attitude, high quality work, no BS and TIME will help establish your reputation that will keep you in business.


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## SavannahReno (Aug 18, 2015)

Personally, I find these threads most interesting; not the legit or not legit debate but the business part of the discussion. I suppose because after almost 13 years in business, I still don't feel that I have a solid grip on all of it. Being able to see that I am not alone, and seeing that others do have a solid understanding gives me hope.

I am not sure that the answer is to simply find a different customer. Certainly, you would expect that a person living in a $150k home would have less disposable income than one in a $750k home. However, in my area (Savannah, Ga) people choose to live in certain homes and neighborhoods seemingly regardless of value. 

Example: A vast majority of my work comes from a certain neighborhood with homes built in the late 10's to the mid 30's. Mostly of the bungalow and four-square variety. The home values in the past 5 years have increased from the $150 range to the $220 range. I believe this is due to the type of people who move to this area. They know at the time of purchase that these homes are constantly a work in progress and renovation/restoration is a given. This neighborhood keeps me very busy even with the increases in my pricing. 

But maybe since I have been under charging for so long....:blink:

Like I wrote...interesting thread.


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## NOCOSecurity (Mar 1, 2016)

Regardless of what you do, I don't see the point in doing stuff under the table. What if one of your guys gets hurt? Now he has medical bills, lost wages, etc. I'm all for self-sustainability and taking responsibility for your self. However i'd feel horrible if one of my guys was screwed because I wasn't a legit business owner.

I work three jobs outside of my business that I am trying to grow. If I did stuff the way the op did it, sure I wouldn't have to work so much. However I owe it to myself, my family's financial security, the customer and anyone I hire to do it right.

The OP said unemployment insurance is a waste of time. I buy smoke detectors and fire extinguishers for my home. I don't expect or plan on a fire starting. Yet I take measures to ensure I am protected if it does occur. That's the point of insurance. You spend money on something and hope you never need to use it. 

It's guys like you who screw your own "employees" over. If the tax man came knocking tomorrow, would you be able to keep paying your guys? What about being abke to stay open to finish your current jobs?


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## r a s (Mar 30, 2015)

BuddySteinle said:


> I hear u I'm gonna do it for sure
> 
> 
> Sent from my iPhone using Tapatalk


With your presence on social media and the use of your last name here it would be easy for your competitors to disparage and report you. Don't give them that opportunity.

No one's perfect but you do need to take off the training wheels. Your employee(s) will thank you and you'll probably end up more successful. 

If you can't run a legal business and make money then by all means find an employer that can. You'll be better off in the long run and reduce your life stress by an order of magnitude.


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## BuddySteinle (Mar 11, 2016)

VinylHanger said:


> I had some sympathy for you until you started going down the rabbit hole.
> 
> I don't have my stuff paid for, I owe payroll, I owe money to suppliers from jobs that go sideways, I fret every time my insurance renews or my license, bond and required education is due. The reason is because that stuff costs real money. Real money guys like you don't pay. I make it because I work my ass off and still fall short at times.
> 
> ...


I never asked for sympathy only experience. If you feel like Im somehow personally attacking or screwing you than I'm sorry you feel that way. 

obviously you've struggled and understand the struggle so why you would be all bent out of shape when I originally asked for the wisdom you've gained through your struggle.

If your like "**** this guy he can go find out for himself and I ant giving any information or knowledge I acquired over the years" then fine I ant mad at you 

but I work my ass off to. I work damn near 75 hours a week easy as I'm sure a lot of are or have at some point, and I'm a full time single father with no help on top of that.

I don't know why some people are taking me asking for some guidance as some personal insult.


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## BuddySteinle (Mar 11, 2016)

NOCOSecurity said:


> Regardless of what you do, I don't see the point in doing stuff under the table. What if one of your guys gets hurt? Now he has medical bills, lost wages, etc. I'm all for self-sustainability and taking responsibility for your self. However i'd feel horrible if one of my guys was screwed because I wasn't a legit business owner.
> 
> I work three jobs outside of my business that I am trying to grow. If I did stuff the way the op did it, sure I wouldn't have to work so much. However I owe it to myself, my family's financial security, the customer and anyone I hire to do it right.
> 
> ...


I think you misinterpreted what I was saying. I don't think insurance is complete bull**** and I understand the need. However why Do we as business owners have to pay a middle man to cover people that work for us?

why can't they just not get it taken out of their check and handle their own insurance. we act like employees are children that can't be trusted to save money for down time and pay their own health insurance or liability.

It would be much cheaper if everyone took care of their own business.


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## DaVinciRemodel (Oct 7, 2009)

I don’t think you’re taking the guidance being given to you. You're looking for excuses... But...

The best advice I was ever given (and I followed) was:

“If your customers won’t pay you what your worth… get new customers that will.”

You can thank me later.


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## VinylHanger (Jul 14, 2011)

I wasn't bent out of shape when you first posted. What gets me bent out of shape is when a guy says he is doing well enough to have a decent bank account, all his stuff paid off and is still running things under the table.

If you were doing things legally, would youbstill be able to have all that? What is going to happen when a guy gets hurt and can't work any more? He will be disabled and screwed because you prefered to have money in your account. How about when the taxman looks at you? They report 1099's, they get audited it comes back to you. Assuming they are paying taxes. Or you get audited? 

People have given you lots of good advice, even been pretty mellow considering the question. Personally, I am not mad at all. I just hate to see guys get hosed on either side. you can't legally write thise gjys wages off. That costs you more in the long run.

The original question was how do we compete. We scramble and claw our way up. It is hard. However, it is harder if you have a guy get hurt, or hurt a customers 5 year old kid and you don't have insurance.

Sent from my SM-G935V using Tapatalk


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## vista69 (Feb 26, 2016)

I have a question...

If the guys that work for you had their own PA License, and a registered as a Sole Proprietor,, Could you continue to pay them the same way as your favorite subcontractors or main helpers, rather than employees? 

I completely understand what your saying about the amount of taxes an Employer is required to pay per employee. I preferred to be "employed", but was just self-employed when I wasn't working for a "Legit" contractor.


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## Builders Inc. (Feb 24, 2015)

vista69 said:


> I have a question...
> 
> If the guys that work for you had their own PA License, and a registered as a Sole Proprietor,, Could you continue to pay them the same way as your favorite subcontractors or main helpers, rather than employees?
> 
> I completely understand what your saying about the amount of taxes an Employer is required to pay per employee. I preferred to be "employed", but was just self-employed when I wasn't working for a "Legit" contractor.


Working an employee and filing a 1099 would be wrong if the employee used your tools and reported to work when you told him to and drove your company vehicle and did what you wanted when you wanted and how you wanted. 

A real sub would have his own business license and tax id # and you would fill out a 1099 form for you and him to file. He would have his own truck, equipment, employees, and show up when he needed to, to complete the job the way he wanted to do it. Basically your only concern was that the job was done and done right when it came to a sub. And you agreed on a price based on sq ft or job cost, not hourly wage cost. 

He would also need his own workers comp or he would fall under yours even as a sub. He would also need his own general liability AND it would have to match the limit you had or he would be considered an uninsured sub. Lets say my concrete sub has a policy for 200k and mine is 300k then my liability insurance company would deem him as an uninsured sub and during your annual audit you would be responsible for paying the percentage of insurance based on the payments you paid him for the years work.

At-least that's how it works in Florida.


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## Big Shoe (Jun 16, 2008)

Back in the day we were all employees............taxes taken out.........gas was cheap.......1099's huh! :blink::blink::no:


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## 91782 (Sep 6, 2012)

VinylHanger said:


> I wasn't bent out of shape when you first posted. What gets me bent out of shape is when a guy says he is doing well enough to have a decent bank account, all his stuff paid off and is still running things under the table.
> 
> If you were doing things legally, would youbstill be able to have all that? What is going to happen *when a guy gets hurt* and can't work any more? He will be disabled and screwed because you prefered to have money in your account. How about when the taxman looks at you? They report 1099's, they get audited it comes back to you. Assuming they are paying taxes. Or you get audited?
> 
> ...





Builders Inc. said:


> Working an employee and filing a 1099 would be wrong if the employee used your tools and reported to work when you told him to and drove your company vehicle and did what you wanted when you wanted and how you wanted.
> 
> A real sub would have his own business license and tax id # and you would fill out a 1099 form for you and him to file. He would have his own truck, equipment, employees, and show up when he needed to, to complete the job the way he wanted to do it. Basically your only concern was that the job was done and done right when it came to a sub. And you agreed on a price based on sq ft or job cost, not hourly wage cost.
> 
> ...


Everybody doing construction work struggles to make profit.

Who makes money INSURANCE CORPORATIONS.
Who are the wealthiest corporations in USA?
INSURANCE CORPORATIONS

When you brainiac contractors wake up and take your anger out on the raping of everybody's pocket books by INSURANCE CORPORATIONS, instead of cannibalizing each other, maybe then this country can get back to generating real growth.

Because we are being bled out by INSURANCE CORPORATIONS.


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## DonBigote (Jan 14, 2016)

SmallTownGuy said:


> Everybody doing construction work struggles to make profit.
> 
> Who makes money INSURANCE CORPORATIONS.
> Who are the wealthiest corporations in USA?
> ...


Of course insurance companies are profitable or they will cease to exist.

People end up loving insurance when the chit hits the fan and it's paid for by insurance. 

What's your point? 
Are you interested in getting rid of insurance requirements for contractors?
Are you encouraging contractors to voluntarily forgo insurance protections?
Do you think contractors should move to 3rd world countries so that they can enslave pre-adolescent children to work in hazardous conditions for almost 0 pay? FREEEDUUMB!!!


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## 91782 (Sep 6, 2012)

DonBigote said:


> Of course insurance companies are profitable or they will cease to exist.
> 
> People end up loving insurance when the chit hits the fan and it's paid for by insurance.
> 
> ...


I made the point.
Somebody might get hurt:

The contractor must carry ins
The sub-contractor must carry ins
The homeowner must carry ins

All carrying insurance to indemnify against the same singular event.

Three premiums against a single event.

Want I should type slower?


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## Joasis (Mar 28, 2006)

BuddySteinle said:


> Unfortunately I know I am not doing things correctly. However I'm not really screwing the legitimate contractors because they do not have the risk factor that I am putting myself through by not doing things correctly. So they get peace of mind and also are covered if **** goes sour. I might be able to land more jobs with less advertising and overhead but if something bad happens I'll be out of business and they will not
> 
> 
> Sent from my iPad using Tapatalk


Just a little FYI......my son and I compete against guys like you every week. We lose bids that we cannot match because it comes down to legitimate contractors cannot drop prices and lose money to compete against guys who don't carry WC, or GL, and remember.....if something goes wrong for you, the feds are now starting to prosecute deliberate fraud involving workplace injuries or accidents and lack of insurance. 

Legitimate contractors that put out bids will all be in the same general ballpark. Apples to apples. You come in and take work from us by cutting a bid 25% because you are not playing by the same rules, you are indeed screwing others.


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## Joasis (Mar 28, 2006)

Any of you remember a song from the 70's.....had a line that summed this up well....

"cheat on your taxes, don't be a fool......now what was that you said about the golden rule?"......never mind the rules, just play to win.......


Here it is:


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## Joasis (Mar 28, 2006)

BuddySteinle said:


> How do you guys do it?!?!
> 
> My estimates are on point
> My markup is calculated based on my total projected sales
> ...


Back to the original. 

Let me give you a little insight to my business model. 

I no longer do cost plus contracting outside of commercial, and I never, never never think about "profit". Profit happens if you take care of the dollars in your business. My grand father used to say, take care of the pennies and dollars will take care of themselves. 

I build 3 or 4 homes, sometimes a few more, sometimes less, a year, and I do commercial concrete. I run an estimate, project a budget, and get the bids. Then I look at the expenses to do the project, that I am directly involved in. I take a percentage of the estimate and add it back as a "fixed fee" for my managing, or GC'ing, if you prefer, the project. This takes care of profit, insurance, direct expenses, cost of my life, taxes, the works. 

Now my way will not work for everyone, my son and I only use legitimate sub contractors, and we run the projects, make the bids, and manage all aspects of the job sites....but we are covered legally with WC, GL, and we insure everyone that we work with is on the same train. No illegals, verified by audit all insurance. :thumbsup:


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## BuddySteinle (Mar 11, 2016)

I see so your situation all the everyone involved in doing the construction is a fixed price subcontractor. So isn't that the same thing as you taking your job cost (all ur subs) and adding a multiplier for profit and overhead?


Sent from my iPad using Tapatalk


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## Joasis (Mar 28, 2006)

BuddySteinle said:


> I see so your situation all the everyone involved in doing the construction is a fixed price subcontractor. So isn't that the same thing as you taking your job cost (all ur subs) and adding a multiplier for profit and overhead?
> 
> 
> Sent from my iPad using Tapatalk



Ok, you asked. 

Lets say I do a take off to build a new home. 

I come up with a budget that without a GC fee, or cost plus factor, the real cost of building the home is $400,000. (just using a number for the sake of numbers) 

Now, this is the true cost....I am not marking up materials, or marking up subs, or quoting numbers and then having to beat anyone down to make my numbers work.....so on the $400,000, I then add for the sake of this discussion, $40,000 and that is my fee, with say $30,000 paid in equal draws over the project time, and the balance at the completion of the job. If the job takes 6 months, I obviously making $5,000 a month, and have 10k to look forward to when the punch list is done. In return, my client has my subs, my experience, my management, and my insurance covering his build, plus I keep a file of everyone on my jobs and their insurance coverage, plus a weekly expense file with receipts and the client writes the checks directly. If I write the checks and provide the lien releases, add another fee. 

Make sense? Every sub is legal, insured, and plays by the rules, and my coverage is an added blanket. I am also a member of the National Association of Home Builders, Oklahoma HBA, Association of General Contractors of Oklahoma, and hold a Certified Builder certificate. 

As a new client said to me last week when we shook hands on his project, he vetted me before he met me and that meant a lot to him. 

*It takes time to be "legitimate" or have these credentials.....but take the time to do it right. Be real. The dollars will take care of themselves if you can do the work. *

BTW, I know you will ask, what about the others? My subs bid according to what the market allows, and we all know the going rates, roughly, for plumbers, and drywallers, ....painters and electricians. It is also my job to insure that my subs make their bids, and in return, I won't hire low ballers ever. EVER. My subs know I am fair, and don't shop them...in return there will be no gouging. The contracts take care of change orders.


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## TNTRenovate (Aug 19, 2010)

Man up and go legit. I can't tell you how to do it or how to be successful at it. You can't mooch off of my experience and take a short cut to success. You have to find your own way.

If you are too scared and don't have the balls to do it, get out of my industry and go find a desk job.

Nothing I will tell you will translate to your situation. You are just going to have to do what we all did and take some risks.


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## BuddySteinle (Mar 11, 2016)

Ok I see. But those aren't no where near real numbers I assume? $5000 a month for profit and overhead? 


Sent from my iPhone using Tapatalk


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## Joasis (Mar 28, 2006)

BuddySteinle said:


> Ok I see. But those aren't no where near real numbers I assume? $5000 a month for profit and overhead?
> 
> 
> Sent from my iPhone using Tapatalk


Ok, I was using a generic number. 

First, quit considering profit. I know many will say I am outside my mind, but profit for me is not the first consideration. 

I do not "sell" materials. I have no inventory. 

I own a lot of equipment we use, and when it is on a job site, it makes money. It is part of the bid. It makes more then it costs to keep and maintain it. I take depreciation to reduce my tax burden as well. My work truck is the same. Trailers, tool trailers, shoring, bracing, even the portable toilets I now own have a place in the equation. 

And I run multiple jobs. Plus, I keep the ability and tools that if I absolutely have to, I can crew up jobs again. I have an EIN and keep WC in place to directly hire if I have to. I can downsize over night to my son and I alone and we can put the tool belts on and work as well. 

Get the idea? Profit and overhead are not part of many small businesses except in theory.


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## Jaws (Dec 20, 2010)

Joasis said:


> Ok, I was using a generic number.
> 
> First, quit considering profit. I know many will say I am outside my mind, but profit for me is not the first consideration.
> 
> ...


I guess im missing what your saying, Jay. How is overhead not a real part of a business? The costs are there whether they are considered or not. 

If profit is not a consideration, why not get a job? What is the consideration if not making money after the business bills are paid?


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## 91782 (Sep 6, 2012)

Think he's saying that he looks at the equipment and work produced as part of one giant machine that produces a "margin", and profit is secondary to keeping the big machine running at full capacity.


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## Jaws (Dec 20, 2010)

SmallTownGuy said:


> Think he's saying that he looks at the equipment and work produced as part of one giant machine that produces a "margin", and profit is secondary to keeping the big machine running at full capacity.


Ah. Same here. First goal is to keep it moving for sure.

Like Jay was saying in a previous post i always have a plan to cut overhead and down size and put the tools on full time in a major slow time. But the first option is to network my ass off and bring in more work.


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## DonBigote (Jan 14, 2016)

SmallTownGuy said:


> I made the point.
> Somebody might get hurt:
> 
> The contractor must carry ins
> ...


I'd bet you hunt-and-peck. Anyway, how slowly you type is irrelevant just like the rest of the misinformation you're spilling.

Each party must carry separate insurance because of culpability. Which party pays depends on who is at fault.

Quick glance at your post history shows a lot of experience, but clearly this is beyond your understanding. No sense in misleading others.
Some of us learn something new everyday...


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## Joasis (Mar 28, 2006)

Because John, it is the way I do it. I make a profit, or obviously, I would not be in business. But IO do not obsess over it as some do. I don't consider it to be a part of how I price a job because it isn't "real" to me in any way that makes a difference. We either are making money or we are not...because, in our world, there are jobs that make wages, there are home runs, and a lot of base hits. 

I specialize in ICF as you know. I have a price to do ICF's for you, or other builders, or as part of my own builds, and I guess you could say I do have profit and markup, but I don't price it like that, or look for a percentage. I add the numbers, come up with an inclusive price, and it goes in the budget, just like my plumber's bid, or the sparky. If I need a telehandler on the job for say 3 months, I have a budget line for this. My lifts are all owned and paid for, so they are making me money. But I am not about to sit here and get wound up saying I need to allow for tires, oil, ,maintenance, fuel, etc.,etc. I have done this long enough to know what it costs me to own these machines. 

Think about it like this: We have had dozens of discussions on business, and how we get to the numbers we use. Well...if you are bidding, and you don't get jobs because others are not computing as you do, is it because you are placing profit and overhead in your number and others are not? 

How do you price your time? As I sit here looking at plans and calculating numbers for a few jobs, I multi task....on here, you tube, and listen to music. When I go to lunch, there isn't a clock on the wall I watch. I don't work 8 hours a day...some days I am out for 12, some days I never leave home. But we must have an income stream that pays the bills and leaves some....or if times get tough, pay the bills. 

The numbers I use, or rather, the income I need to make is arbitrary to each and every day, week, month, or even year, and it depends. Simple.


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## BuddySteinle (Mar 11, 2016)

*Going Legit And Still Competing*

I hear you. Sounds like you got a nice set up and you're doing well For yourself however 

Profit is a financial benefit that is realized when the amount of revenue gained from a business activity exceeds the expenses, costs and taxes needed to sustain the activity. Any profit that is gained goes to the business's owners, who may or may not decide to spend it on the business.

That's the definition of profit in reference to the business. so I understand you don't think of it in those terms but that's what it is you Know what I mean? 


Sent from my iPhone using Tapatalk


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## 91782 (Sep 6, 2012)

DonBigote said:


> I'd bet you hunt-and-peck. Anyway, how slowly you type is irrelevant just like the rest of the misinformation you're spilling.
> 
> Each party must carry separate insurance because of culpability. Which party pays depends on who is at fault.
> 
> ...


You could start learning now, that's be nice.

You might practice some integrity and show where I am misleading, before lobbing accusations.

I posited a premise - that is not misleading. It is simple premise - the potential for one injury - yet 3 parties must carry a policy.


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## Jaws (Dec 20, 2010)

Joasis said:


> Because John, it is the way I do it. I make a profit, or obviously, I would not be in business. But IO do not obsess over it as some do. I don't consider it to be a part of how I price a job because it isn't "real" to me in any way that makes a difference. We either are making money or we are not...because, in our world, there are jobs that make wages, there are home runs, and a lot of base hits.
> 
> I specialize in ICF as you know. I have a price to do ICF's for you, or other builders, or as part of my own builds, and I guess you could say I do have profit and markup, but I don't price it like that, or look for a percentage. I add the numbers, come up with an inclusive price, and it goes in the budget, just like my plumber's bid, or the sparky. If I need a telehandler on the job for say 3 months, I have a budget line for this. My lifts are all owned and paid for, so they are making me money. But I am not about to sit here and get wound up saying I need to allow for tires, oil, ,maintenance, fuel, etc.,etc. I have done this long enough to know what it costs me to own these machines.
> 
> ...


Different strokes, but you have been at it a long time longer than me so it obviously works well for you. My dad is a lot the same in his way of thinking, so i get where you are coming from. Personally i think in terms of making overhead fit into what i can sell as a mark up. "Profit" isnt a clear term either as I still dump a lot ( most ) of whats left back into the company for operating capital, shop, equipment, maintinance, ect... But i still like to track that number to see if we were profitable. It allows me to think annually on how much we need to sell at a minimum. Its always a moving target though. 

Defintely on the same page with treading water, base hits and home runs. Home runs only make up for the strike outs if you let them.


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## BuddySteinle (Mar 11, 2016)

TNTSERVICES said:


> Man up and go legit. I can't tell you how to do it or how to be successful at it. You can't mooch off of my experience and take a short cut to success. You have to find your own way.
> 
> If you are too scared and don't have the balls to do it, get out of my industry and go find a desk job.
> 
> Nothing I will tell you will translate to your situation. You are just going to have to do what we all did and take some risks.



I don't give a **** about your experience buddy if you don't want to have any information about what you do and how you did it then just don't post it and get out of this threat and it's not your industry it's the industry we all belong to it. 

Also don't be a hypocrite I'm sure didn't have Workers Comp insurance when you were only one and two guys. Plus I'm sure you take cash jobs don't claim the income to pay taxes on. Let's be real. 

At least I'm tellin the truth 


Sent from my iPhone using Tapatalk


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## Joasis (Mar 28, 2006)

BuddySteinle said:


> Profit is a financial benefit that is realized when the amount of revenue gained from a business activity exceeds the expenses, costs and taxes needed to sustain the activity. Any profit that is gained goes to the business's owners, who may or may not decide to spend it on the business.
> 
> That's the definition of profit in reference to the business. so I understand you don't think of it in those terms but that's what it is you Know what I mean?
> 
> ...


Again, you missed my point. Obsessing over the definition of profit doesn't change a thing for small contractors. 

Lets look at it a different way. If you run a lumber yard, then you absolutely have to consider profit. If you had no profit, then you would sell at the cost plus overhead. While you could pay your salary out of "overhead", there would be no real reason to ever open the door. 

Contracting, in general, or being a tradesman isn't a retail environment. It ain't a store, you are not selling snow cones, you are providing a service with a lot of variables, and the bottom line is the determination of whether you will make it or you will not. The "profit" you desperately seek to label as "yours" will vanish in a heartbeat with one bad bid...may take the profit from many jobs to cover the loss of a job that goes south on you. Unexpected expenses or weather can eat up your "profit" unless you learn to live without eating. See where I am going with this?


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## Jaws (Dec 20, 2010)

BuddySteinle said:


> I don't give a **** about your experience buddy if you don't want to have any information about what you do and how you did it then just don't post it and get out of this threat and it's not your industry it's the industry we all belong to it.
> 
> Also don't be a hypocrite I'm sure didn't have Workers Comp insurance when you were only one and two guys. Plus I'm sure you take cash jobs don't claim the income to pay taxes on. Let's be real.
> 
> ...


Go back and read some of TNTs posts. He hasnt had employees long, and he built his business legally, not over night. I bet his hands are covered under WC.

Dont assume others take short cuts because you do. I dont claim to be perfect or a saint or whatever, but i have always had my guys on payroll, and have always had insurance ect.... and we paid ourselves a low wage to get the funds built up to be able to take on more. 

You come here asking advice and then say you dont give a **** about the experience of the people advising you, and call them liars when you have no reason to think that other than your own practices. Classy. Real classy.


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## BuddySteinle (Mar 11, 2016)

Jaws said:


> Go back and read some of TNTs posts. He hasnt had employees long, and he built his business legally, not over night. I bet his hands are covered under WC.
> 
> Dont assume others take short cuts because you do. I dont claim to be perfect or a saint or whatever, but i have always had my guys on payroll, and have always had insurance ect.... and we paid ourselves a low wage to get the funds built up to be able to take on more.
> 
> You come here asking advice and then say you dont give a **** about the experience of the people advising you, and call them liars when you have no reason to think that other than your own practices. Classy. Real classy.


yea I came here seeking experience not to be bashed. he offered no experience just wanted to talk **** so I'm gonna then respond thats what happens. the people who want to just run their mouth can't pretend they are offering up experience and say I'm just not listening.


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## BamBamm5144 (Jul 12, 2008)

BuddySteinle said:


> I don't give a **** about your experience buddy if you don't want to have any information about what you do and how you did it then just don't post it and get out of this threat and it's not your industry it's the industry we all belong to it.
> 
> Also don't be a hypocrite I'm sure didn't have Workers Comp insurance when you were only one and two guys. Plus I'm sure you take cash jobs don't claim the income to pay taxes on. Let's be real.
> 
> ...


Because you take short cuts, doesn't mean others do.

I was fully legitimate on day one. There is a major fine per day for not having workers comp insurance that will shut you down before you start.

I, like others, took a risk. That meant spending money in savings accounts and in my case, spending money I didn't have yet on credit cards. All payments whether cash, check or financing go into the same Bank account. That's called morals and ethics.

I deal with multiple homeowners a week who choose another contractor doing jobs at barely above my cost. It's gotten to the point that I'm researching what can be done to form a group in the region to combat this.


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## Jaws (Dec 20, 2010)

BuddySteinle said:


> yea I came here seeking experience not to be bashed. he offered no experience just wanted to talk **** so I'm gonna then respond thats what happens. the people who want to just run their mouth can't pretend they are offering up experience and say I'm just not listening.


You came to a site for pro contractors and proffesed to hacking it up. You were treated pretty kindly and offered a lot guidance. Then you turn the corner and give a hundred reasons you cant do it legally even though you have a bank roll, and then act surprised when your legal competition starts getting edgy you are defending pocketing thousands a month in overhead they are pay? 

Did i miss anything? 

Many of us have made a lot business changes for the better due to this site, i know i have. But its not always gonna be sitting around holding hands and singing kumbuya and saying its ok to hack it up. Pretty much never. Like i said its a site for pros. 

Do your self a favor, try and forget your biased opinion based on your own experience, and try to really listen to the advice from proven legal contractors on here with an open mind with a plan to make a plan to get legal and legit. I mean that sincerely, and i hope you come out on the otherside with a legal company you can be proud of and not have that stewing fear of the consequesnces for not being legal you have now. Having an open mind can make an unbelievable difference when trying to learn.


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## TNTRenovate (Aug 19, 2010)

BuddySteinle said:


> I don't give a **** about your experience buddy if you don't want to have any information about what you do and how you did it then just don't post it and get out of this threat and it's not your industry it's the industry we all belong to it.
> 
> Also don't be a hypocrite I'm sure didn't have Workers Comp insurance when you were only one and two guys. Plus I'm sure you take cash jobs don't claim the income to pay taxes on. Let's be real.
> 
> ...





BuddySteinle said:


> yea I came here seeking experience not to be bashed. he offered no experience just wanted to talk **** so I'm gonna then respond thats what happens. the people who want to just run their mouth can't pretend they are offering up experience and say I'm just not listening.


I didn't bash you. I told you to man up and go legit. There is nothing that I can tell you that you don't already know. It's costly to do things right. I didn't call you a hack or degrade you on how you have run your business, just a little tough love. Like I said, if you can't handle the truth, then you don't belong in this (my) industry.

Also, a hypocrite is someone who believes something and then does something contrary to that belief. It is not practice what you preach. What you are describing is inconsistency, but even then you are dead wrong.

The state of IL does not require a license for a GC, therefore no insurance is "required" to be in business. With that said I have always had at least a mil in liability and have had a WC for nearly 2 years. I got the WC policy to get a job that required me to have one. I exempted myself therefore was paying for a piece of paper with no coverage to get the job. I kept it like that until I hire my first employee last April. I then opened it up to cover us both, just smart to cover myself as well.

You can verify this by calling my insurance company "Country Financial" and ask for Rob Samuels - 630-226-5617.

I have paid guys over the years on a 1099, but they have always been legit subs. They may have not had a corp or llc, but they always had a tax ID, liability and WC. And if they don't, guess who gets to cover them? Yep, that's right, me. So I make sure to check they are current every few months and require them to submit a new cert every Jan.

It hasn't been easy. I have had some months that I only took a pay check or two and was paying most of my help more than myself. I have had expenses come up that I never thought about. Is that what you are looking for? If so, I still can't help you. I don't think that any of us can.

You need to figure out what your costs are, what your overhead is and what you want or need it to be and how much profit you want to make. You need to understand the difference between markup and margins. You need to understand your target market and how to land that market. You need to pay your dues and stop taking short cuts. You are putting you and your clients in jeopardy. If you or your crew gets hurt at their home, their HO policy has to cover it. I guarantee you that you don't want that rep.

So again, man up and go legit. Stop taking short cuts. If you can't handle that, then find a desk job that all you need to do is show up.

BTW, if you have purchased anything that was not a necessity, or gone on vacations since you have been in business, you have had the money to go legit, you just didn't want to make the sacrifices necessary to do it.

Oh, and I have never taken cash as a payment and not reported it to the IRS. I don't need to go to jail and pay fines over a few hundred in taxes. It's just not worth it. And that is exactly what I tell any client who asks.


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## TNTRenovate (Aug 19, 2010)

Jaws said:


> You came to a site for pro contractors and proffesed to hacking it up. You were treated pretty kindly and offered a lot guidance. Then you turn the corner and give a hundred reasons you cant do it legally even though you have a bank roll, and then act surprised when your legal competition starts getting edgy you are defending pocketing thousands a month in overhead they are pay?
> 
> Did i miss anything?
> 
> ...


I seriously applaud him for fessing up to taking short cuts and not being legit. That's why I didn't full gun it on my post. I still am not letting him really have it. It takes a lot of guts to say I am not doing this right, how can I go about getting there.


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## griz (Nov 26, 2009)

he's been given a lot of information and advice.

he seems somewhat reluctant to listen and perhaps seeking approval for his unethical ways.

its getting old.

i hear there is a lively discussion going on on the lido deck....:whistling


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## DaVinciRemodel (Oct 7, 2009)

SmallTownGuy said:


> Who would he go to work for?
> 
> Manistee sits right on the Lake Michigan shoreline, it's a short drive from Traverse City, one of the wealthiest areas in our state.


So there are no other means of employment there? Seems like a conflict between your first two sentences.



SmallTownGuy said:


> The reality is, the gap between haves and have nots is rapid when it's not tourist season.


Now I understand… It must be someone else’s fault.



SmallTownGuy said:


> The tourist industry has been the last to recover since the 2009 recession. The many dollars that auto plant workers used to spend annually to go "up north" to hunt, snowmobile, ski, or just hang out at the local watering hole ain't NEVER coming back.
> 
> I find it interesting to observe those wise ones squawking about "legal this", "moral that", when they have no idea how local economies vary from what their own reality is.
> 
> ...


I don’t need your sermon about the region or its economy – I’m originally from the Midwest (Gary, IN if you’re into comparing misery indexes). I got out. If it’s that bad, get out before you have to make moral decisions on how you’re going to make the house payment.

There was nothing “wild” about my statement (actually a question). I simply asked how far is he willing to go.


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## TNTRenovate (Aug 19, 2010)

I am not worried about anything. Just giving my opinion. If you don't like it, there is an ignore list.

Again, what's my own? Where are these borders which dictate what I can and cannot concern myself with?

I claim no moral high ground or superiority, just stating a fact. No excuse to break the law when you have options. There is no justification to do the wrong thing.


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## 91782 (Sep 6, 2012)

DaVinciRemodel said:


> So there are no other means of employment there? Seems like a conflict between your first two sentences.
> 
> 
> 
> ...


There's no "misery". On the contrary, what is an accepted way of life here, you are implying that the good people in some areas are just one step away from committing robbery - your words - not mine.

The OP was stating a fact in his life, and immediately the moral high and mighty crowd pounces.

When you, Rob and others get off your high horse get down on the ground and see how economies really work in some areas maybe - but I'm not holding my breath.

Just worry about your own, and never miss an opportunity to point out how "above it all" you are, and we'll do just fine here.

Really, no help is needed, we've got it covered.


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## TNTRenovate (Aug 19, 2010)

SmallTownGuy said:


> There's no "misery". On the contrary, what is an accepted way of life here, you are implying that the good people in some areas are just one step away from committing robbery - your words - not mine.
> 
> The OP was stating a fact in his life, and immediately the moral high and mighty crowd pounces.
> 
> ...



Sounds like you guys need a lot of help if the only way to make a living on the shore of Lake Michigan is by breaking the law.


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## 91782 (Sep 6, 2012)

TNTSERVICES said:


> I am not worried about anything. Just giving my opinion. If you don't like it, there is an ignore list.
> 
> Again, what's my own? Where are these borders which dictate what I can and cannot concern myself with?
> 
> I claim no moral high ground or superiority, just stating a fact. No excuse to break the law when you have options. There is no justification to do the wrong thing.


I've been here long enough to know about the "ignore" button. And so do you.

"Your own" You "seem" to know something about your state - you clearly know nothing about mine.

One more time - how it works in this state has been this way for generations it's a fact - you can preach right and wrong - and it's not going to change that.

Our whole Lake Michigan shoreline - entirely dependent on the hoity toitys from Illinois and Wisconsin.

They effectively determine the standard of living for that region.


So go ahead and preach - wo't change a thing.
Well, I guess you get to pretend to be a snob.


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## 91782 (Sep 6, 2012)

TNTSERVICES said:


> Sounds like you guys need a lot of help if the only way to make a living on the shore of Lake Michigan is by breaking the law.


Sounds like we're just fine, and you need to "finer".

Sounds like you have no clue how deep the 2009 recession affected the state, nor how long it will take to recover - but we will.

Sounds like you haven't grasped how one state going from having 400,000 middle income jobs in a single industry and reduced to 60,000 jobs in just over 2 decades can affect the long-term economics.

There is nothing genetic that I am aware of that makes the people here more inclined to be "illegal", than in any other state. As the economy improves, so will the "legality" of everyone.


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## TNTRenovate (Aug 19, 2010)

SmallTownGuy said:


> I've been here long enough to know about the "ignore" button. And so do you.
> 
> "Your own" You "seem" to know something about your state - you clearly know nothing about mine.
> 
> ...


I am not the one whining about what others are saying. If you don't like it, ignore me, but calling me names and insulting me and my opinion isn't going to shut me up.

BTW, Doing something wrong for a long time doesn't make it right.

Not having insurance when you work on someone's home is never excusable. I don't care where you are working. You have no business in this business if you can't do it right, period.

Call me a snob or insult me by saying I am on my moral high horse, but this name calling is childish and only serves to make you feel like the morally superior one. You can say you understand the struggle and place your loving arms around the poor innocent worker bees oppressed by the big bad rich tourists, but it doesn't change the fact that you guys have choices in Michigan and none of them include breaking the law or placing your clients at risk.


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## TNTRenovate (Aug 19, 2010)

SmallTownGuy said:


> Sounds like we're just fine, and you need to "finer".
> 
> Sounds like you have no clue how deep the 2009 recession affected the state, nor how long it will take to recover - but we will.
> 
> ...


No, it sounds like you guys are justifying breaking the law. Sounds like you guys don't know how to run a state. Sounds like you guys need a lot of help. You keep saying you are doing just fine and then out of another mouth say it's so terrible people are forced to break the law and put their clients at risk to make a buck. Which is it?

Detroit has had plenty of time to rebound. There several auto manufacturing plants built in the US since the Detroit crash. Like I said, sounds like you guys need a lot of help.


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## 91782 (Sep 6, 2012)

TNTSERVICES said:


> I am not the one whining about what others are saying. If you don't like it, ignore me, but calling me names and insulting me and my opinion isn't going to shut me up.
> ...


Oh but you are whining. You are whining about how others live, in a state you seem to have no knowledge of.

And I'm stating that -can't deal with it - tough.

There's been plenty said from the "wise ones" - several pages in fact - now I'm stating what I know.

It's not an argument - it's a statement of what is real.


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## Jaws (Dec 20, 2010)

No moral high ground here, John. Im not perfect by any means, dont pretend to be, i have changed things i was doing because that was how i came up, many because of this site . I will admit when im wrong. 

Illegal 1099 is a pet peeve of mine, lots of guys here do it with their hands, pisses me off for a number of reasons. 

While illegal 1099 is not anywhere near as bad as robbery, one i shake my head at, one i would be apt to drill you with a firearm if one was handy for, it is illegal. 

I meant what i said earlier about doing it for his own good. He might be a great guy. Eventually, sooner than later, the IRS will go after guys for doing it. He has a nest egg, no reason not to get legal. Paying back overtime and taxes and penaltys will suck big time. 

I live in a place where it is not illegal to not have insurance, GL, WC, BR ect... but still manage to make those happen. So its hard for me to feel bad for anyone anywhere for having the dough and not doing it right. But like they say, I havent walked in yalls shoes.


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## 91782 (Sep 6, 2012)

TNTSERVICES said:


> No, it sounds like you guys are justifying breaking the law. Sounds like you guys don't know how to run a state. Sounds like you guys need a lot of help. You keep saying you are doing just fine and then out of another mouth say it's so terrible people are forced to break the law and put their clients at risk to make a buck. Which is it?
> 
> Detroit has had plenty of time to rebound. There several auto manufacturing plants built in the US since the Detroit crash. Like I said, sounds like you guys need a lot of help.


Yeah, you are in fact ignorant of any facts.

How many new jobs has Detroit generated? Do you know?

The plants that once required 2000 people to make a car - how many people do they require today? 20? 200? Do you know?

Those Wolverine boots and Carhardt work clothes the construction guys liek - how many are still made in Michigan, do you know?

Those magnificent Sea Ray and Chris Craft boats - how many are still made in Michigan, do you know?

Tanks - how many now?

Cruise missiles - how many?

Whirlpool, Maytag, et al - how many of those appliances are still made here?

Steel - of those things made of that I listed - how much tonnage do we still produce?

The fact of the matter is, this state never has been a one product economy: it has however taken some of the deepest hits nationwide.

As it improves people will rise to your expectations.


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## TNTRenovate (Aug 19, 2010)

SmallTownGuy said:


> Oh but you are whining. You are whining about how others live, in a state you seem to have no knowledge of.
> 
> And I'm stating that -can't deal with it - tough.
> 
> ...


Not whining at all. Look up the word. I am just stating facts. I am not worried about as you claim. I am not dealing with it. Just stating facts. If you can't handle them, then that's on you, not me.

I KNOW that there is NO reason to break the law or put your clients at risk. NONE! No matter what state you live in. No matter the economical climate. None. There is NOTHING that keeps them where they are at. Where there is a will there is a way. They are just to lazy or complacent to do what is right. Plain and simple.

If you can't handle the truth, no matter the source, you are the one with the problem, not me.


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## WarnerConstInc. (Jan 30, 2008)

I like Petoskey, a lot.


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## 91782 (Sep 6, 2012)

Jaws said:


> No moral high ground here, John. Im not perfect by any means, dont pretend to be, i have changed things i was doing because that was how i came up, many because of this site . I will admit when im wrong.
> 
> Illegal 1099 is a pet peeve of mine, lots of guys here do it with their hands, pisses me off for a number of reasons.
> 
> ...


We are talking about one person here, who claims to be in that position. And that is the only one I've ever heard make that claim - which floors me.

Damned right, it pisses me off too, when someone is making the financials and CHOOSES to sidestep legal obligations.

The very worst offenders are - the national builders. That's right, I run a one state operation for years, 100 percent aboveboard, and competed head to head with an outfit (right from your state as a matter of fact) that year over year ducked around WC and ins via 1099s and illegals. And it's not just one. Look around - it's going on in your state and I would expect - every other one.

Just would like folks to understand the difference between world-class scofflaws, and those who have to make hard decisions every day.


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## 91782 (Sep 6, 2012)

TNTSERVICES said:


> Not whining at all. Look up the word. I am just stating facts. I am not worried about as you claim. I am not dealing with it. Just stating facts. If you can't handle them, then that's on you, not me.
> 
> I KNOW that there is NO reason to break the law or put your clients at risk. NONE! No matter what state you live in. No matter the economical climate. None. There is NOTHING that keeps them where they are at. Where there is a will there is a way. They are just to lazy or complacent to do what is right. Plain and simple.
> 
> If you can't handle the truth, no matter the source, you are the one with the problem, not me.


I have no problem with "the truth".

You said what you said, now I'm having my say.


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## TNTRenovate (Aug 19, 2010)

SmallTownGuy said:


> Yeah, you are in fact ignorant of any facts.
> 
> How many new jobs has Detroit generated? Do you know?
> 
> ...


It's not my expectations, it's YOUR laws. That's the funny thing. I am not asking you to live up to Illinois law, just your own.

It's also you who are at risk. Do you hire illegal workers? Do you have guys with no insurance work on your home or your properties. Or is it okay in your mind for them to do it to others just not yourself?

From all of the crap that you guys lose, it really does sound like you could use some help. The way you have been doing things for decades doesn't seem to be working. Maybe it's time you stopped beating the same drum and get some outside help. :laughing:


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## TNTRenovate (Aug 19, 2010)

SmallTownGuy said:


> We are talking about one person here, who claims to be in that position. And that is the only one I've ever heard make that claim - which floors me.
> 
> Damned right, it pisses me off too, when someone is making the financials and CHOOSES to sidestep legal obligations.
> 
> ...


So now it's big bad corporations? It's terrible when they break the law, but not when others do.

I also find it funny how easy you were on Jaws. Funny you didn't mention his high horse and started singing a different tune.


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## 91782 (Sep 6, 2012)

TNTSERVICES said:


> So now it's big bad corporations? It's terrible when they break the law, but not when others do.
> 
> I also find it funny how easy you were on Jaws. Funny you didn't mention his high horse and started singing a different tune.


Same tune. You choose to only hear what you want to hear.

Jaws has always considered each persons statement as a whole. He didn't mince words - but he also acknowledged what i said.

I assert something as fact, and you infer that I wish it to be that way.

I assert that people are still in tough times in many parts of this state, and you declare they are lazy.

This could be why you win little battles, but always lose the wars.


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## river rider (Dec 31, 2012)

SmallTownGuy said:


> Who would he go to work for?
> 
> Manistee sits right on the Lake Michigan shoreline, it's a short drive from Traverse City, one of the wealthiest areas in our state.
> 
> ...


I wholeheartedly agree with the last sentence of this post. And, I tend to adamantly defend individuals, and that ideal when those circumstances arise. Several times it has directly cost me money, and twice made me lose really sweet projects. 

At the same time being of limited means is no justification to break the law, or rules, or excuse for bad character. 

However, It is completely reasonable and fair to evaluate people by what they say and their actions, which is the situation with the OP. 

Personally, I took davinci's statement as rhetorical question, and not an accusation or character assassination. I can't speak for him, but that's how I read it.


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## 91782 (Sep 6, 2012)

TNTSERVICES said:


> From all of the crap that you guys lose, it really does sound like you could use some help. The way you have been doing things for decades doesn't seem to be working. Maybe it's time you stopped beating the same drum and get some outside help. :laughing:


"lost"

We don't have Chicago - how's "hope and change" doing for ya'll?

And just curious, how many governors do ya'll have/had in prison?:whistling

We'll do just fine. Just keep sending those rich folks over from Chicago and Wisconsin - and tell them everytime they hire an unlicensed, uninsured contractor here, they are breaking your standards.


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