# Critique my numbers (L+M+O+P=P)



## sailfish27 (Jan 25, 2014)

Just finished doing my taxes for 2014. Only had the last 6mo's to go by in projecting numbers for 2015. I would appreciate any honest criticism or debate but want to keep it simple. I am only interested in the bottom line. My goal is to make 100k for myself and leave some for business. These numbers are pretty close to actual, extrapolated over 12/mo's

2015

Gross sales 260,000

1,800 billable hrs. @100/hr. (myself, helper) 180,000
Material @30% 80,000


Cost helper @20/hr. + burden - 50,000
Overhead @10% -25,000
Material cost -80,000

105,000
+10% Material 8,000

Bottom line 100k salary + 13k for business or profit



Overhead 25k 10%

adv, office, tel. = 8k
ins =1k
auto/gas =9k
tools =3k
lic/misc =2k
sales =2k


----------



## kiteman (Apr 18, 2012)

You get by with a grand for insurance?


----------



## VinylHanger (Jul 14, 2011)

No doubt. I just dropped 1,,100.00 for only 3 months. Just liability and rigs.


----------



## BamBamm5144 (Jul 12, 2008)

Its hard to imagine being able to run a business with those numbers. I mean my materials alone are much more than the entire gross you posted.

It really makes me think I'm doing something wrong if I could make 100k off of 260k gross sales.


----------



## sailfish27 (Jan 25, 2014)

kiteman said:


> You get by with a grand for insurance?


Just liability, somewhere around 1k. My auto ins. on 2 trucks is in with auto expense. Comp is in with burden.

For personal expenses I have health, dental, life, and an umbrella.


----------



## TxElectrician (May 21, 2008)

sailfish27 said:


> Just finished doing my taxes for 2014. Only had the last 6mo's to go by in projecting numbers for 2015. I would appreciate any honest criticism or debate but want to keep it simple. I am only interested in the bottom line. My goal is to make 100k for myself and leave some for business. These numbers are pretty close to actual, extrapolated over 12/mo's
> 
> 2015
> 
> ...


Check your math.
Helper 50,000
OH. 25,000
Matl 80,000
155,000, not 105,000

Also the auto and insurance rates seem low to me.


----------



## Spencer (Jul 6, 2005)

This is just constructive criticism so don't take it wrong.

First, IMO your $3k for tools is ridiculous. Expecting to pull $100k out of a business and only put $3k into tools and equipment is crazy unless you have already been established for some time and have tons of stuff. 

You should be able to do better on your material markup. 10% should be a bare minimum. Shoot for 30%

Last year was my fist year, I put $57k into tools and equipment alone. Granted I take a lower salary and am trying to feed my business, not starve it.

I also think you are low for insurance. I budget $4300 for health, $2100 for van, truck, trailer, and $700 for GL. 

1800 billable hours per year might be a little high with a helper but you're probably not off by much.

My biggest critique is that your salary seems way out of balance with the rest of your numbers. If it was possible to put that little into a business and take that much out everyone would be doing it. I suppose it would be possible for a while if you are established, but not sustainable to an extended period of time.


----------



## sailfish27 (Jan 25, 2014)

BamBamm5144 said:


> Its hard to imagine being able to run a business with those numbers. I mean my materials alone are much more than the entire gross you posted.
> 
> It really makes me think I'm doing something wrong if I could make 100k off of 260k gross sales.


The bulk of my work was service, (almost all labor), bath remodels with the homeowners purchasing a lot of the material; (toilets, vanities, tile etc.) and building decks which constituted the largest material expenditure.


----------



## Spencer (Jul 6, 2005)

*Critique My Numbers (L+M+O+P=P)*



TxElectrician said:


> Check your math.
> 
> Helper 50,000
> 
> ...




...


----------



## Spencer (Jul 6, 2005)

sailfish27 said:


> The bulk of my work was service, (almost all labor), bath remodels with the homeowners purchasing a lot of the material; (toilets, vanities, tile etc.) and building decks which constituted the largest material expenditure.


I was the same way last year. Around 80% of total revenue was labor. That is the first thing to change this year. No more HO buying materials.


----------



## sailfish27 (Jan 25, 2014)

txelectrician said:


> check your math.
> Helper 50,000
> oh. 25,000
> matl 80,000
> ...


260-50-25-80=105


----------



## EthanB (Sep 28, 2011)

So you have $130k + your personal wages for jobs costs, $25k + your owner's salary for overhead and 13k or 5% profit?

That's about my gross sales and very close to direct job costs. I don't know exactly what your product is, mine is interior remodels(bath, basement, etc.) and decks. I'm focusing very hard on making decks the bulk of my gross. I don't make $100k but I'm also building up equipment and trying to leave money in the biz.

If you were paying a lead to run the jobs on-site then you'd be out at least $54k which would leave you with $38k for all the other stuff you do for the business. $100k sounds like a crazy number when you throw it out there but if you figure out what you're paying yourself for each of the 4-5 jobs you do, it starts to make a little more sense.


----------



## TxElectrician (May 21, 2008)

Reread your post. If you are counting 1800 hrs each, basically 3600 hours at 50 per hour, I think that is hard to do. I do about half service and half projects and budget 5 billable hours per day, per man for 50 weeks.


----------



## sailfish27 (Jan 25, 2014)

Spencer said:


> This is just constructive criticism so don't take it wrong.
> 
> First, IMO your $3k for tools is ridiculous. Expecting to pull $100k out of a business and only put $3k into tools and equipment is crazy unless you have already been established for some time and have tons of stuff.
> 
> ...


No offense at all! I want feed back. I think my tool budget is ok. Even though this is my fist year in contracting for (HO's) I have been contracting my whole life (my own property's, flips, rentals) so I own every tool imaginable. I have 2 trucks bought a new one last year and a new trailer along with racks, ladders etc. My only big purchase in 15' is a chipping gun and maybe a concrete mixer for decks.

As far as not putting enough money into the business I don't really want to grow it by much. I have no aspirations to be more than myself and a helper or two. Last year I had a little more work than I could handle a couple times, so I subbed it out to a friend.


----------



## sailfish27 (Jan 25, 2014)

EthanB said:


> So you have $130k + your personal wages for jobs costs, $25k + your owner's salary for overhead and 13k or 5% profit?
> 
> That's about my gross sales and very close to direct job costs. I don't know exactly what your product is, mine is interior remodels(bath, basement, etc.) and decks. I'm focusing very hard on making decks the bulk of my gross. I don't make $100k but I'm also building up equipment and trying to leave money in the biz.
> 
> If you were paying a lead to run the jobs on-site then you'd be out at least $54k which would leave you with $38k for all the other stuff you do for the business. $100k sounds like a crazy number when you throw it out there but if you figure out what you're paying yourself for each of the 4-5 jobs you do, it starts to make a little more sense.


Ethan, having followed many of your posts, I think our jobs are very much the same. Most profitable jobs are handyman work, lasting couple days doing punch lists. Did a lot of decks which I really enjoyed and bathrooms which I'm pretty efficient at. I am designing a basement now, will be my first.


----------



## sailfish27 (Jan 25, 2014)

TxElectrician said:


> Reread your post. If you are counting 1800 hrs each, basically 3600 hours at 50 per hour, I think that is hard to do. I do about half service and half projects and budget 5 billable hours per day, per man for 50 weeks.


You may be right, 1800 is my goal per man. I have only the last 6mo's of the year to go by, but it wasn't hard doing 40 billable hours a week per man provided I did another 10 hrs per week in sales and administration. 

1800 hrs. is only 5 days at 46 weeks. I can't remember the last day I only worked 5 hrs.


----------



## KAP (Feb 19, 2011)

Sailfish... didn't see where you accounted for WC, your personal tax liability, admin, accountant, and when you have times when you don't have business (this has to be accounted for in your numbers so it wouldn't be $100/hour)...

That's if you really want to draw $100K out of the business which I applaud... :thumbsup:

Don't forget to get your accountant to give you the expected tax liabiltity based on your setup for $100K...


----------



## Mr Knucklehead (May 31, 2014)

the only number I punched into my spread sheet was the helper's salary. @20 bucks and hour x 1800 hours it came out to approx 64k.

According to my numbers you are definitely covering his salary, withholdings and other misc costs of having an employee and possibly squeezing a small profit, but I think you need to look closely at what you're making on the helpers time because you may be leaving money on the table.

Besides the base salary these are other line items I have for each employee. 

Maybe this will help you analyze your costs.


Fed Tax / State Tax / FICA OASDI / FICA HI / Wrks Comp / SS-MC Match / NYS Dis /Sick Health / Vac-Personal / Tool-Safety Equip / Mark Up


----------



## TxElectrician (May 21, 2008)

sailfish27 said:


> You may be right, 1800 is my goal per man. I have only the last 6mo's of the year to go by, but it wasn't hard doing 40 billable hours a week per man provided I did another 10 hrs per week in sales and administration.
> 
> 1800 hrs. is only 5 days at 46 weeks. I can't remember the last day I only worked 5 hrs.


We work an 8 hour day. Report to the shop and the clock starts, same returning. We also have many days we may do 3-5 calls a day so lots of travel time that is not billable. 

I have service call fees and an hourly rate that allows for unbillable time, but historically we average 5-51/2 hours a day. This also takes into account the time required for keeping the shop and trucks in order.


----------



## KAP (Feb 19, 2011)

Mr Knucklehead said:


> the only number I punched into my spread sheet was the helper's salary. @20 bucks and hour x 1800 hours it came out to approx 64k.


:blink: 

$20 an hour x 1800 hours would be $36K... unloaded... there's not another $28K in loaded costs...


----------



## EthanB (Sep 28, 2011)

TxElectrician said:


> We work an 8 hour day. Report to the shop and the clock starts, same returning. We also have many days we may do 3-5 calls a day so lots of travel time that is not billable.
> 
> I have service call fees and an hourly rate that allows for unbillable time, but historically we average 5-51/2 hours a day. This also takes into account the time required for keeping the shop and trucks in order.


It doesn't sound like he's doing comparable job sizes to you. If he's running around my usual job size, which he thinks he is, then 1800 is doable. I shoot for 9-5 on-site five days a week which ends up being about 36 hours per week, as a job cost, for a helper or laborer. That's a light week and we can still hit 1800. I can't hit that because I try to fit in most of my other duties during that time too. I figure on 1500 of project related work for myself.

My hours are not traditional, I know, it's the main reason I work for myself. I like to be with the family in the morning and in the evening and I don't work weekends unless it's a real emergency.


----------



## Mr Knucklehead (May 31, 2014)

KAP said:


> :blink:
> 
> $20 an hour x 1800 hours would be $36K... unloaded... there's not another $28K in loaded costs...




WC costs and SS/MC match is 25% of the 36k alone. That's 9k right there. 

Plus many other costs (direct and indirectly for having an employee) that add up, but the biggest one is marking up the labor to make a profit. 28K on top of the 36K is not really that much when you start to draw away the costs. Profit will always vary because employee performance and productivity is never consistent due to non-billable hours, bad day etc..


----------



## KAP (Feb 19, 2011)

Mr Knucklehead said:


> WC costs and SS/MC match is 25% of the 36k alone. That's 9k right there.
> 
> Plus many other costs (direct and indirectly for having an employee) that add up, but the biggest one is marking up the labor to make a profit. 28K on top of the 36K is not really that much when you start to draw away the costs. Profit will always vary because employee performance and productivity is never consistent due to non-billable hours, bad day etc..


Yeah, unless I am missing something, that $28K is high... why don't you post your spreadsheet data that gave you that figure of $64K... I'd be interestd...


----------



## EthanB (Sep 28, 2011)

My actual cost of a $20 per hour employee is almost exactly $30 which would be $54,000. I could shave a little bit off that by managing my own payroll so I doubt he's off by much at $50k.


----------



## KAP (Feb 19, 2011)

EthanB said:


> My actual cost of a $20 per hour employee is almost exactly $30 which would be $54,000. I could shave a little bit off that by managing my own payroll so I doubt he's off by much at $50k.


He's at $64K, $10K more than your $54K... Seems high, but I'd be interested in how he calculated it in his spreadsheet to arrive at that number...

.


----------



## EthanB (Sep 28, 2011)

KAP said:


> He's at $64K, $10K more than your $54K... Seems high, but I'd be interested in how he calculated it in his spreadsheet to arrive at that number...
> 
> .


Sorry, I was talking about the OP's figure.


----------



## mastersroofing (Apr 16, 2014)

1800 billable hours seems really high especially when you plan to do no marketing to generate the business. That puts you close to 90% of the time on the job and leaves you 10% to do accounting, payroll, marketing, etc. Of course you can work 80 hours a week but still generating business at this volume seems like a stretch to me. Hope it works!

Chuck
Masters Roofing Edmonds


----------



## Mr Knucklehead (May 31, 2014)

KAP said:


> He's at $64K, $10K more than your $54K... Seems high, but I'd be interested in how he calculated it in his spreadsheet to arrive at that number...
> 
> .


I probably (no doubt) have a higher markup on labor plus I'm covering other costs associated with employees.


----------



## ohiohomedoctor (Dec 26, 2010)

Let your accountants weed through this bs. I stay 100% focused on what I do best, grow my business.


----------



## KAP (Feb 19, 2011)

Mr Knucklehead said:


> I probably (no doubt) have a higher markup on labor plus I'm covering other costs associated with employees.


OK... I'd still be interested in the numbers you used to calculate it... do you mind posting them?...


----------



## Spencer (Jul 6, 2005)

ohiohomedoctor said:


> Let your accountants weed through this bs. I stay 100% focused on what I do best, grow my business.


Thats the worst advice I've ever heard you give by far. Speechless. :blink:


----------



## Mr Knucklehead (May 31, 2014)

KAP said:


> :blink:
> 
> $20 an hour x 1800 hours would be $36K... unloaded... there's not another $28K in loaded costs...




post 18 has a list of line items plus depending on the project/employee there are expenses and incentives that I'll kick in. 


I believe the biggest difference between what companies charge is what they make on top of their employees labor. That's the money maker in my opinion. I sell labor, that's my business.


----------



## ohiohomedoctor (Dec 26, 2010)

Spencer said:


> Thats the worst advice I've ever heard you give by far. Speechless. :blink:


I seriously doubt that.. :laughing:

Honestly though, even though I have a pretty firm understanding of my numbers, have read the books, and studied business in college, I recommend empowering trusted specialists in all things business. 

This week for example; we broke ground on a 2000 sqft gas station addition, started a basement finish, are finishing 2 baths in one house, have a subway kiosk fit up about half finished, started a complex 203k reno, and have guys punching out a kitchen. This is all while Im in negotiations for the two largest contracts I have ever attempted which are full time jobs in themselves.

If I spent much of any effort managing numbers and entering data into qbs, I would essentially be a full time accountant not a contractor. I manage people not numbers.

Find people you trust, empower them to do what they do, then find other people you trust to weed through their work periodically to verify your best interests are being met and make suggestions for improvements to the process. This provides the illusion that you are deeply interested in their work and keeps in known that no mistakes will be tolerated.

If I would have taken this approach when I started I would be years ahead of where I am at now since I "wasted" immeasurable amounts of efforts trying to work outside my comfort zone and be all things to every angle of my business.


----------



## Spencer (Jul 6, 2005)

ohiohomedoctor said:


> I seriously doubt that.. :laughing:
> 
> Honestly though, even though I have a pretty firm understanding of my numbers, have read the books, and studied business in college, I recommend empowering trusted specialists in all things business.
> 
> ...


Thanks. I see where you're coming from. That makes a lot of sense.


----------



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

sailfish27 said:


> Just finished doing my taxes for 2014. Only had the last 6mo's to go by in projecting numbers for 2015. I would appreciate any honest criticism or debate but want to keep it simple. I am only interested in the bottom line. My goal is to make 100k for myself and leave some for business. These numbers are pretty close to actual, extrapolated over 12/mo's
> 
> 2015
> 
> ...


So you have a rough budget. Looks reasonable to me. The next question is 1. the most profitable project you do. 2. how many of those do you need. 3. how are you going to get them?


----------



## BamBamm5144 (Jul 12, 2008)

ohiohomedoctor said:


> Let your accountants weed through this bs. I stay 100% focused on what I do best, grow my business.


Agree. 

I think a lot of guys on this forum spend a lot of time worrying about this stuff.


----------



## Spencer (Jul 6, 2005)

BamBamm5144 said:


> Agree.
> 
> I think a lot of guys on this forum spend a lot of time worrying about this stuff.


You can't grow a business without "this stuff." My only hope of growing a business is that I get my numbers right and am profitable. 

I don't understand where you are coming from. I get what Ohiohomedoc said about delegating to skilled people but I don't understand how you can expect to have a profitable business and not spend time thinking about pricing. Otherwise you are just "growing" an unprofitable business or spinning your wheels.

Does an accountant understand my trade well enough that they will tell me what I need to charge? 

By "worrying about this stuff" I assume you're talking about spending time thinking about numbers. What exactly is wrong with that? Maybe in your industry it works to look at the competitions pricing, set yours wherever, and then just go at it trying to maximize volume but for most of us that doesn't work. 

Feel free to explain, I'm not following.


----------



## KAP (Feb 19, 2011)

Mr Knucklehead said:


> post 18 has a list of line items plus depending on the project/employee there are expenses and incentives that I'll kick in.
> 
> 
> I believe the biggest difference between what companies charge is what they make on top of their employees labor. That's the money maker in my opinion. I sell labor, that's my business.


OK, now I'm lost... I thought you said in that post that based on his $20/hours x 1800 = $64K and that this "possibly squeezed out a small profit"...

Is there a reason why you don't want to post what you input into the spreadsheet? I really am interested in how you came up with that number...

.


----------



## BamBamm5144 (Jul 12, 2008)

Spencer said:


> You can't grow a business without "this stuff." My only hope of growing a business is that I get my numbers right and am profitable.
> 
> I don't understand where you are coming from. I get what Ohiohomedoc said about delegating to skilled people but I don't understand how you can expect to have a profitable business and not spend time thinking about pricing. Otherwise you are just "growing" an unprofitable business or spinning your wheels.
> 
> ...


I'm talking about how much time is spent discussing it on this site.


----------



## FrankSmith (Feb 21, 2013)

BamBamm5144 said:


> I'm talking about how much time is spent discussing it on this site.


Math is the number one skill needed to be a contractor. Maybe that is why it comes up a lot. There are lots of skilled guys who can't make a business work because they don't give all of this enough thought.


----------



## Spencer (Jul 6, 2005)

Stephen, 

I am modeling my first years in business similar to how this article talks about initial growth.

http://www.remodeling.hw.net/business/leadership/to-build-a-business-that-lasts-think-like-a-redwood_o


----------



## hdavis (Feb 14, 2012)

sailfish27 said:


> I get the need for a business to make a profit but I think it's more pertinent for either a business that wants to grow a lot or a big business. I am neither. So what difference does it make if I take 100k from it and leave 13 rather than taking 80 and leaving 33k in profit.


It's a simple discipline. If you take salary, you can spend it any way you want - I'm assuming it's gone at the end of the year. On the business side, there are ups and downs, so you have to have a chunk of money earmarked to tide it through bad times if you still want to take your salary.

In terms of big company vs small company, the biggest dollar volume company serving a particular segment has the lowest likelihood of going broke, everything else being kept the same. That's the whole idea behind niche marketing - serve a market that bigger companies don't serve. That makes you one of the bigger fish in a small pond vs one of the smaller fish in a big pond. The bigger fish situation has a better chance of survival.


----------



## hdavis (Feb 14, 2012)

Spencer said:


> Stephen,
> 
> I am modeling my first years in business similar to how this article talks about initial growth.
> 
> http://www.remodeling.hw.net/business/leadership/to-build-a-business-that-lasts-think-like-a-redwood_o


I think I mentioned it before, but rapid growth (gross sales) can get you in trouble. Running out of operating capital, added burden of managing growth, business process scalability... As a rule of thumb, the troubles frequently start @25% growth rate, or whatever percent your free cash flow is - which ever is lower. Margins are what put money in your pocket, so your focusing on growing margins while growing your business is a good approach IMO.


----------



## sailfish27 (Jan 25, 2014)

hdavis said:


> It's a simple discipline. If you take salary, you can spend it any way you want - I'm assuming it's gone at the end of the year. On the business side, there are ups and downs, so you have to have a chunk of money earmarked to tide it through bad times if you still want to take your salary.
> 
> In terms of big company vs small company, the biggest dollar volume company serving a particular segment has the lowest likelihood of going broke, everything else being kept the same. That's the whole idea behind niche marketing - serve a market that bigger companies don't serve. That makes you one of the bigger fish in a small pond vs one of the smaller fish in a big pond. The bigger fish situation has a better chance of survival.



I have to respectfully disagree. It's just as easy to have the same discipline, whether or not the money is in your business account or your personal account. I would make the argument that the money is safer in a savings account of some kind. No one is going to stop you from spending it if that's your prerogative no matter what you call it of where you put it. IMHO


----------



## sailfish27 (Jan 25, 2014)

Stephen H said:


> Actually,
> 
> I think Matts advice was Spectacularly horrible.--- atrocious.
> 
> ...


Curious Stephen, what do you average in those 8 months (billable hours)? I think we have a much different business model. You are probably much higher in your margins, judging by some of the work you have posted . I know you are a high end specialty company.


----------



## EricBrancard (Jun 8, 2012)

Spencer said:


> You beat me to reply. Thanks for shedding some balanced light on the subject as always.
> 
> Regarding tools, you should try being a remodeler. It takes a lot to do the work, takes even more to grow and setup for employees.
> 
> ...


I know there is certain equipment that I have no desire to own because renting it or subbing it out will serve better in the long run. Growing up in this business, I remember some of the big guys that were around when I was a young kid who aren't around anymore because they could not shed overhead fast enough when the market changed. 

Some of the more expensive equipment my dad had over the years, after running the numbers, he found out wasn't ever worth owning. He would have been better off renting or subbing it out. Having a bunch of tools and equipment is great, just make sure that it actually makes sense for YOU to have them.


----------



## Spencer (Jul 6, 2005)

EricBrancard said:


> I know there is certain equipment that I have no desire to own because renting it or subbing it out will serve better in the long run. Growing up in this business, I remember some of the big guys that were around when I was a young kid who aren't around anymore because they could not shed overhead fast enough when the market changed.
> 
> 
> 
> Some of the more expensive equipment my dad had over the years, after running the numbers, he found out wasn't ever worth owning. He would have been better off renting or subbing it out. Having a bunch of tools and equipment is great, just make sure that it actually makes sense for YOU to have them.



I openly admit it's a weakness for me because I love tools and equipment. It's actually what I enjoy most about this business. I appreciate the advice.


----------



## ohiohomedoctor (Dec 26, 2010)

ohiohomedoctor said:


> And hire guys with more tools than you..


:whistling


----------



## Spencer (Jul 6, 2005)

ohiohomedoctor said:


> :whistling


Does that mean I have job security? LOL :thumbup:


----------



## ohiohomedoctor (Dec 26, 2010)

Id hire you right now. $22/hr, 401k match, overtime after 40, gas card, petty cash for lunch, make your own schedule, one journey level hand, and profit sharing (~8-10k/year).


----------



## ohiohomedoctor (Dec 26, 2010)

Seriously who would want to be self employed? I ask every capable person I can find... lol

Max your 401k match out each year, put a little aside each week into a life insurance fund, Ill take care of all the stress for you. Be home for dinner every night..


----------



## Spencer (Jul 6, 2005)

ohiohomedoctor said:


> Id hire you right now. $22/hr, 401k match, overtime after 40, gas card, petty cash for lunch, make your own schedule, one journey level hand, and profit sharing (~8-10k/year).


If you had been near me and offered me those benefits a few years ago I would have been the best employee you ever had. :thumbup:

Keep offering good benefits and you are gonna have an all star team. :thumbup:


----------



## BamBamm5144 (Jul 12, 2008)

You can't grow your business without employees. You can't get employees without marketing your company. With that said I would just throw out there that now that your numbers are figured out, need to figure out how to get more jobs.


----------



## hdavis (Feb 14, 2012)

sailfish27 said:


> I have to respectfully disagree. It's just as easy to have the same discipline, whether or not the money is in your business account or your personal account. I would make the argument that the money is safer in a savings account of some kind. No one is going to stop you from spending it if that's your prerogative no matter what you call it of where you put it. IMHO


I don't disagree. The problem is not everyone is disciplined. If you want to make full use of an LLC, you'll keep the assets down as far as practical, so you own everything personally and most of the cash is in your personal account. 

If you're really aggressive, you have a GF that owns all the assets, but those guys usually are opening and shutting down LLCs regularly and have unhappy customers.


----------



## EricBrancard (Jun 8, 2012)

ohiohomedoctor said:


> Id hire you right now. $22/hr, 401k match, overtime after 40, gas card, petty cash for lunch, make your own schedule, one journey level hand, and profit sharing (~8-10k/year).


$25/hr and when can I start? :laughing:


----------



## overanalyze (Dec 28, 2010)

ohiohomedoctor said:


> Id hire you right now. $22/hr, 401k match, overtime after 40, gas card, petty cash for lunch, make your own schedule, one journey level hand, and profit sharing (~8-10k/year).


Lol...when do I start? Definitely sounds like you treat you guys right Matt!


----------



## Spencer (Jul 6, 2005)

BamBamm5144 said:


> You can't grow your business without employees. You can't get employees without marketing your company. With that said I would just throw out there that now that your numbers are figured out, need to figure out how to get more jobs.



The biggest problem for me is i can't have employees without the equipment they need to get the jobs done. That's one of the main things I'm working on amongst other things.


----------



## BamBamm5144 (Jul 12, 2008)

Spencer said:


> The biggest problem for me is i can't have employees without the equipment they need to get the jobs done. That's one of the main things I'm working on amongst other things.


Yep its the horse or the carriage argument. Which one comes first?


----------



## Spencer (Jul 6, 2005)

BamBamm5144 said:


> Yep its the horse or the carriage argument. Which one comes first?



I think it works both ways but for my business model having most of the tools first works best and is much less stressful.


----------



## ohiohomedoctor (Dec 26, 2010)

Hire people with tools. I prefer married guys with families who have been self employed.


----------



## EricBrancard (Jun 8, 2012)

ohiohomedoctor said:


> Hire people with tools. I prefer married guys with families who have been self employed.


Because we know what the other side is like. Smart.


----------



## ohiohomedoctor (Dec 26, 2010)

Its always greener on the other side, unless you have been there.


----------



## BamBamm5144 (Jul 12, 2008)

ohiohomedoctor said:


> Its always greener on the other side, unless you have been there.


The other side isn't greener, it's just dirt.

Right now all my guys are either married, have kids or have a mortgage. At least one of the three. That way you know they need to work.


----------



## Stephen H (Feb 18, 2011)

sailfish27 said:


> Curious Stephen, what do you average in those 8 months (billable hours)? I think we have a much different business model. You are probably much higher in your margins, judging by some of the work you have posted . I know you are a high end specialty company.


 Sailfish,

I am going to be careful about what actual numbers I post on an open forum.
I learned this lesson almost 20 years ago posting on a roofing forum.
I mentioned we were charging $380- $430/sq. at that time ( IIRC) and got lambasted by a bunch of hillbillies who insisted I had to be lying because THEY were only getting $180 MAX and that $180 was "the going rate" and you simply can't get more than the going rate can you ?????

You mentioned " high end specialty company"--- that's now---and we aren't even particularly high end for our specialty.
20-30 years ago----I was a bit more of a generalist--- but I specialized in ONE neighborhood----and MOST of what we actually did was related to ordinary roofing---- primarily 3 tab shingle( 20 years !!!--- 25 year was an upsell---and hard to upsell--- dimensionals were incredibly exotic---- maybe 2-3 dimensional jobs a year.)

In my experience you CAN take 100k out of a small 1-2 man business.
I self performed most of the work---- subbed a few things out. I did a lot of jobs where I would go out solo--- tear off 5-7 sq. x 2-3 layers on a 12/12, repair the wood,dry in the deck---eat lunch--- shingle it in the afternoon---and clean up the debris by 7:30 PM---- next day come out and do the OTHER side of the roof.

Day 3---do the porches,bay windows etc.

I also did a TON of jobs where I re-flashed valleys or Re-flashed chimneys, or Replaced waste stack flashings.


More in a minute.

stephen


----------



## Stephen H (Feb 18, 2011)

Pretty quickly, I learned that I could make as much or MORE money primarily doing chimney re-flashing, valley re-flashing etc.----and I was done working and home by Lunchtime each day.

Almost ALL of my work came from a 10 block radius around my home.
the first few years I made the mistake of thinking" next year will be better--- I will have a lot more referalls etc."

I tracked EVERYTHING---and after a few years I realized that no matter what----- I was only going to be able to work 8 months a year. At that point I had an excellent grip on my numbers----and I was able to use THAT info to reverse engineer what I was charging.

for example--- I was working around 1000 hours a year---- about 700 in production and just under 300 in "overhead"---sales calls, ordering materials etc.
so---700 hours of actual production--- had to cover the nut for the entire year. At that point we owned our own home and I was paying tuition for my 2 kids to attend private schools AND for my wife to go to college and building an investment portfolio. I was the sole support of 4 people on 700 hours of production.

It was EXCELLENT business training because I REALLY zeroed in on where the money came from and where it went.

what pays and what doesn't pay????
remember EVERY hour of my hands on tools time needed to deliver 1/700th of my combined domestic and business nut.

so I slashed everything that didn't earn enough--- and focused on exactly what did EARN.

in hindsight---- I could have done even better if I had moved into employees earlier----- but I strongly preferred the freedom of NOT having employees.

also--- I was LUCKY--- I enjoyed good health for the most part and never had a serious injury( especially working all those years alone.) I could have taken a bit better care of myself--- but even today---once the sun is up--- I will walk both my dogs in town for a mile or 2---and then I take one of the dogs with me out into the woods and we will run 3-5 miles, and then I lift weights at home.

In perfect hindsight--- it was knowing the numbers that made everything possible--- that's what built net worth, that's what let me market more and more, that's what lead me to hire employees...

BTW--- I spend time at my desk every day---- but rarely more than a few minutes at a time---- might be a ADD issue, I don't know. in my opinion desk work--- indoor work---is girls work, LOL. Only speaking partly in jest---- but to me a real life is spent on your feet, lifting,running, climbing, doing--- not indoors sitting. even writing these posts--- takes a long time because I write a few sentences---- then I get up and walk around( big house, LOL)--- then I write so more--and walk some more.

sun is up--- time to get the girls on the move,
stephen


----------



## Stephen H (Feb 18, 2011)

spencer---
before I forget.

in my opinion spending large amounts each year on tools/equipment at this point in your career is a mistake--- but that's just my opinion.

Better, I think to concentrate on building your net worth and building your reputation.

A skid steer?????? that's a depreciating asset that you will likely NOT use enough to make ownership a smart move.
Also--- at this point in your life you probably don't know what your ultimate destiny will be.--- maybe it's building circular staircases.--- what is that skid steer going to do for you then????????

on the other hand---- if you have the $$$$ you DIDN'T tie up in a skid steer--- you can buy the millworking equipment you DO need as the need becomes definite.

NET worth solves a LOT of problems---owning toys, not as many.

Later, folks.
stephen


----------



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

Stephen H said:


> spencer---
> before I forget.
> 
> in my opinion spending large amounts each year on tools/equipment at this point in your career is a mistake--- but that's just my opinion.
> ...


You got to play with the toy to see if you like it. If you research and make smart used purchases on large equipment the cost to try it can be the same as renting if you decide to sell it off. The only tool I ever bought that I couldnt unload was a generator.


----------



## overanalyze (Dec 28, 2010)

The equipment definitely needs to be used and save you money. We thought we were going to be jack of all trades when we went into business. We bought a dump truck, brand new Bobcat, then a bigger dump truck. We quickly found the dump trucks were not a good choice for us. It is much cheaper and quicker to hire someone that hauls dirt/stone. 

We kept the Bobcat. It has been payed for for years. Dollar wise it wasn't a great purchase. Convenience wise, it is totally worth it. 

I wish I had more knowledge of my numbers early on. It has just been the last 5-7 years that I really started learning what is going where and what needs help and how to really understand how my business runs. We always just assumed if our bills were paid and we were busy that was good enough.


----------



## Spencer (Jul 6, 2005)

Stephen H said:


> spencer---
> before I forget.
> 
> in my opinion spending large amounts each year on tools/equipment at this point in your career is a mistake--- but that's just my opinion.
> ...


Thanks for the advice as always Stephen. 

I am having growing pains big time. I feel like I need to either halt growth (from the stand point of buying tools/equipment) or go full steam ahead and get where I need to be to have employees. 

I will not hire employees until I have the equipment I feel I need to be productive and efficient. I've watched to many guys go down that road to early and it turns into a stressful mess void of profit.

In regards to reputation, even though I've been at it officially for a year, I've been building a reputation for 10 years. Its golden anywhere my name goes. 

I have been following the path that I've been planning on going for years. Making purchases that are key and getting them checked off the list. A skid loader is key to running an addition, new home, decks, demo, etc. They have many uses. Though it may not pencil out the way it would for an excavator I feel it is worth it for not only the convenience, but more importantly it opens the door on jobs that I could not take otherwise. I feel a skid loader is something that I cannot afford to live without for very long. However, i will continue to reconsider my thinking on this. A lot will depend on the jobs opportunities that arise.


----------



## hdavis (Feb 14, 2012)

I'm too much of a control freak to just let the numbers work themselves out on their own. I've about decided I have too much stuff. Just because I can do almost everything, that doesn't mean it makes sense. Storing, maintaining, it's all time and money even if I don't use it.


----------



## hdavis (Feb 14, 2012)

Spencer said:


> I am having growing pains big time. I feel like I need to either halt growth (from the stand point of buying tools/equipment) or go full steam ahead and get where I need to be to have employees.
> 
> I will not hire employees until I have the equipment I feel I need to be productive and efficient. I've watched to many guys go down that road to early and it turns into a stressful mess void of profit.


There is another way to do this. Bank it until you have the money to buy all the critical tools to make the jump, plus the added you'll need for training new employees, then do it all at once. OTOH, picking up tools when they're screaming deals is even better...


----------



## sailfish27 (Jan 25, 2014)

Thanks Stephen, nice post! Couldn't agree more.


----------



## sailfish27 (Jan 25, 2014)

I had a landscaping business when I was 23 working like a maniac with dreams of grandeur. I wanted to be big, so I killed myself working to buy dump trucks and bobcats and trailers etc. Luckily I was living in my mothers basement because I didn't' really make any money. My ego was more concerned with how big I was instead of how much I made.

When I finally gave up and went to work for a developer I learned two lessons. One the business I built was worthless, and two, I was making a lot more working for someone with less headaches. 

Only a very small percentage of people ever make it big, if I were to guess I would say 1%. They become famously wealthy doing what we do but it's extremely rare to be that guy. I'm not that guy and never will be. I don't know what it is they posses to make it happen but I don't have it, oh well.

Here's to making a good living.


----------



## Stephen H (Feb 18, 2011)

spencer.
you should do what you want.--- That is what makes america a great place to live---- you can do what YOU want, I can do what I want and the guy down the street can do what he wants.---or try to.
It's the "pursuit of happiness" thing.
however----
I firmly believe you are approaching this thing backwards and inside out.


accumulating tools and marking them off on some master check list---- does not build a business---- the tools are just not that important.


what builds your business--- is your ability to meet people, communicate effectively with them ,sell the project at the right price for YOU, and then organize the money,material,manpower,time etc. to produce the project---while extracting profit from the job.

all in all--- the tools just aren't that important---- not even in the top 5--- maybe not even in the top 10!. Actually--- the tools are just a by product of the other things----"stuff" accumulated along the way.

Not that I don't personally have some favorites---- but ultimately they just are not that important.

also--- keep in mind----for your entire career you need to buy,maintain,store, replace tools--- they wear out, they become obsolete,---you buy a tool today----and there is a BETTER one on the market 5 months from now---- it never ends

you aren't going to spend 5 years accumulating a storage unit full of tools and then SHAZAM!!!!--- sundenly you are ready for a business employing 5 guys.

If you have enough tools for YOU to work with---- you have enough tools to get started.


work on your sales----sell a bit more work than YOU can keep up with----and start training an employee---work like that and then sell more work than the 2 of you can keep up with---and hire another. Learn to manage the work of OTHERS--- that's waaaaay more important than buying tools.

anyhow--- just my opinion.
Stephen


----------



## Stephen H (Feb 18, 2011)

hdavis said:


> I'm too much of a control freak to just let the numbers work themselves out on their own. I've about decided I have too much stuff. Just because I can do almost everything, that doesn't mean it makes sense. Storing, maintaining, it's all time and money even if I don't use it.


 Boy---ain't THAT the truth.

I own a laddervator that hasn't moved in 4 years I think.
Once we stopped doing shingle work with FREE roof top delivery--- I was SURE I was going to need it to move slate and tile 

Had it all worked out with pencil and paper.....LOL

turns out we used it maybe 4-5 times and haven't used it since--- just isn't necissary and it's to0 big a pain in the butt.

I bought a really GOOD one--- durable, big, HEAVY, robust!!!!!

turns out one NOT so good would have been BETTER.
cheaper, flimsier, lighter, more usefull!!!!!!!!

GAWWWD I wish I had the money I wasted on that laddervator.

I could buy more pipe staging( which would actually get used)----- or better yet spend it on more marketing.

stephen


----------



## Spencer (Jul 6, 2005)

hdavis said:


> There is another way to do this. Bank it until you have the money to buy all the critical tools to make the jump, plus the added you'll need for training new employees, then do it all at once. OTOH, picking up tools when they're screaming deals is even better...


The biggest problem I see with that strategy is the loss that will be incurred at tax time by saving the money over a period of years. 

Lets say my goal is to have employees in 5 years. So I save $50k/yr for 5 years. That would be a $50k tax hit on $250k vs getting the deductions on the tools/equipment that are going to be purchased in the near future anyway, especially if they could be expensed 100% under section 179.

Ok ok....so i'm a tools addict...getting the fix makes me happy...I have a problem...I love tools more than money... :sad:

I really do like your idea though. It makes a lot of sense.


----------



## Spencer (Jul 6, 2005)

Stephen H said:


> spencer.
> you should do what you want.--- That is what makes america a great place to live---- you can do what YOU want, I can do what I want and the guy down the street can do what he wants.---or try to.
> It's the "pursuit of happiness" thing.
> however----
> ...


I've very open to your feedback. I want to figure out the best way to get where I want to be.


----------



## hdavis (Feb 14, 2012)

Spencer said:


> I've very open to your feedback. I want to figure out the best way to get where I want to be.


Broadly, you can take two different approaches to business growth planning. One is do it like you're shooting - carefully identify a target, zero in, pull the trigger. The other is to look for opportunities that come up, and jump on them - an opportunist approach. Things can change a lot in 5 years - sometimes the target is gone when you're ready to pull the trigger. That isn't a criticism, or favoring one approach over the other. I tend to be an opportunist with some very good long range planning skills. The difference between the two is for opportunism, you have to be more flexible to be able to respond to the opportunities, or you'll have to pass some up.


----------



## Spencer (Jul 6, 2005)

hdavis said:


> Broadly, you can take two different approaches to business growth planning. One is do it like you're shooting - carefully identify a target, zero in, pull the trigger. The other is to look for opportunities that come up, and jump on them - an opportunist approach. Things can change a lot in 5 years - sometimes the target is gone when you're ready to pull the trigger. That isn't a criticism, or favoring one approach over the other. I tend to be an opportunist with some very good long range planning skills. The difference between the two is for opportunism, you have to be more flexible to be able to respond to the opportunities, or you'll have to pass some up.


In many ways the direction I am trying to head now is an opportunist approach while using it as a means to get to the long term goal.

I have identified that I can be very profitable by taking on larger remodel jobs as a GC and managing those, while at the same time doing smaller jobs at the same time. I have found this to be the best way for me to get into really really good profit margins.

That being said, it takes the right jobs, and it requires me to have some equipment to handle various aspects of those larger jobs efficiently.

I am also looking at the possibility of building my first house this year. 

Basically the model is to stay as one man which allows me to:

- Operate profitably at my current overhead without getting in over my head and bogged down with employees, 
-GC key projects that come along, 
-Be very selective about what self performed jobs I take on. 

That is the basic plan I have been working. 

I should also add that the GC aspect of it is key because you can only sell so much when you are self performing all the labor. Doing jobs with higher material cost and leveraging sub contractor labor is key to the plan.


----------



## hdavis (Feb 14, 2012)

Spencer, I'm glad your focused on margins and efficiency. In the end, the people and systems give a business value, especially the people. If you've ever seen a bankruptcy auction, the tools go cheap. Yes, have the tools to support your systems - breaking your systems to add someone isn't a good idea. 

If you spend a lot on a piece of equipment, you have to be able to keep it busy or it's a drain on the business.


----------



## Xtrememtnbiker (Jun 9, 2013)

TNTSERVICES said:


> I can drop a few grand in a day easily. Heck my wish list right now is sitting around 20K.



Only 20k  I can give you some more ideas. Sounds like you need help bad. Lol.

I've got a list. A lengthy one thanks to you guys and all the stuff I learn on here. We spent 10k last year and Dad said "At least that's not normal"...

I'm hoping to spend more this year.


----------



## BamBamm5144 (Jul 12, 2008)

Jaws said:


> Only one trade though, right?


Not entirely. Roofing, Siding, Windows, Gutters, Doors, Soffit, Fascia. I'm also getting into Egress windows but I'll sub that out. I've also got three more garages planned to be built this year.

I am now also GCing two different house remodels. That includes entire exterior, electrical work, concrete, new floors, some plumbing, drywall, etc.

I guess I can see the point in having that many tools if you do everything yourself but I know for me, I can make more subcontracting drywall, paint, floors, concrete, electrical, framing and then I don't have to worry about paying for tools I'll only use once in awhile.


----------



## ohiohomedoctor (Dec 26, 2010)

Sold


----------



## WarnerConstInc. (Jan 30, 2008)

I use a rebar bender constantly remodeling.


----------



## skillman (Sep 23, 2011)

I can go to any big box store and spend 2,000 dollars and can do $ 50 dollars to $ 100,000,000 dollars jobs . Spending on tools has no bearing on a homeimprovement company.


----------



## WarnerConstInc. (Jan 30, 2008)

Eventually you realize that you bought a bunch of useless crap that you never use.


----------



## hdavis (Feb 14, 2012)

Sometimes more is less and less is more.


----------



## Spencer (Jul 6, 2005)

WarnerConstInc. said:


> Eventually you realize that you bought a bunch of useless crap that you never use.


Now that is funny. Of all people on this forum you have room to talk. Don't you have some rust to scrape of an old piece of cast iron or something... :whistling You can keep your useless crap, I'll gladly keep mine.


----------



## WarnerConstInc. (Jan 30, 2008)

Spencer said:


> Now that is funny. Of all people on this forum you have room to talk. Don't you have some rust to scrape of an old piece of cast iron or something... :whistling You can keep your useless crap, I'll gladly keep mine.


I am smart enough to buy right and buy often. I turn 95% of what I buy, over. 

Have 4 things selling in a high profile auction this weekend. 

Should get 10x my investment or more.


----------



## Stephen H (Feb 18, 2011)

BamBamm5144 said:


> I'm trying to figure out what group of tools costs 50k for a one man business. I don't own 50k worth of tools, not even 40k worth and I've been buying stuff for going on 6 years now.


 good point Bam---- I tried to point him at that a while ago.


I am pushing 30 years into this gig and I don't think I have spent that 50K TOTAL on tools in 30 years.

as an aside---- I think Bam and I have it easy.
Carpenters??? well a lot of them suffer from "brother-in-law syndrome"--- they think they have to be an "expert" in everything

I might need to sand a floor one day---so they own a floor sander
and somehow they end up owning a bob cat

and aluma-poles

and a CNC milling machine, for all I know:whistling

but what they are actually doing TODAY--- is spackling a wall with a $5 joint compound knife

Stephen


----------



## Stephen H (Feb 18, 2011)

Jaws said:


> He said 30k was his truck and van.
> 
> Cargo trailer, a couple fat beds and a dump trailer is 20-25k. Welding trailer 7-9k. Then you got to put all the tools in the cargo trailer and maybe a cabinet saw and equipment for the shop ( which i believe he has a shop)
> 
> ...


 most of that you don't remotely need to own as a one man band doing general remodeling.
I will bet there are a TON of guys on this forum with a truck, they put $3K down on and MAYBE 3 or 4 K in tools. If they occasionally need a bobcat--- they RENT one. ( now THAT--- is actually efficient)
Stephen


----------



## Stephen H (Feb 18, 2011)

Spencer said:


> Your business is completely different. If you were in high end remodeling I think you would completely understand. Part of it is being able to wear all the hats. It just comes with the territory. The nice thing about it is you can charge accordingly for being able to wear so many different hats.
> 
> You can't be a minimalist with the type of jobs I do or you will be competing with other minimalists and getting paid like them too. I'm offering a premium service.
> 
> ...


 this is the nitty gritty right here spencer.-----

there is a difference between PRODUCING high end work

and You, SPENCER actually doing high end work

look at your list above.

it's EXTREMELY unlikely that YOU, personally are able to TRULY excel at all of that.

not to insult you--- but look at the sprayer-------- YOU personally might produce barely passable results with that sprayer. It is unlikely that you can produce results even remotely approaching what a guy who uses that sprayer,all day every day can do.

so you sell a highend job---and then YOU spray????? did you really deliver the high end result????

Even in my business-- roofing--- you would think it would be pretty simple ?

but the better we get a a few things---slate work, ceramic roof tiles, copper work---- the more we have to let go.

For Example EPDM rubber--- I have done probably hundreds of small EPDM roofs----- but basically I have let that go. we are competent------ but the arena we work in now--- there are better people for the EPDM roofs that come our way---- in short---we just are not good enough.

Copper work?--- we do a LOT of copper work now--- but even so---locally there is a guy who specializes in copper work. this week I will be looking at a complete restoration or replacement of a 140 sq. ceramic tile church roof. there are MILES of integrated built in copper pans etc.

As a practical matter--- to TRULY produce a high end result--- I am going to need to bring in the specialist---a guy who is specialized even beyond ME.

I honestly think that the better you get at some things---- the more you are going to let a lot of other things go--- because you will realize you just were not that good at them after all.

One of my sons???--- I honestly think some of his work approaches art. currently, he acts as my lead man, sort of. but long term--- he isn't the guy to orchestrate the over all product. Our over all product will truly be "high end"--- if I arrange for K. to excell at what HE excells at---and arrange for the copper guy to excell at what HE excells at.

there is simply NO WAY, we can produce over all high end work if I insist that I ,Stephen , must personally produce that work. I need to produce it--- I don't need to personally DO IT.

And this is something simple like roofing.

what YOU are talking about???--- it is a complete impossibility that you will truly excell at it all----and insisting that YOU personally do---will pull your over all work closer to the mediocre--- than the truly high end, in my opinion.

want another example???-- do you own a spackle knife? sure you do.
do you personally produce ornamental plaster work like Resta???? of course not.
that doesn't mean that Spencer, inc. cant produce fantastic projects featuring fabulous plaster work--- but you, personally are going to have to put down the trowel to accomplish it.

Very best wishes,
stephen


----------



## Spencer (Jul 6, 2005)

Stephen H said:


> this is the nitty gritty right here spencer.-----
> 
> Very best wishes,
> stephen


Whheewww.....thats a lot to digest. 

First, I see what you are saying. I read and reread your post several times. You are cracking open one of the greatest problems I have with the business model I am pursuing, and that is, how can you get employees who are knowledgeable and proficient at all these different trades. I think the truth is, you can't, or at least 99% of the time you are not going to be able to find that guy. Like you are saying, better to find guys who can excel in a few aspects than be mediocre at many.

What you said about PRODUCING high end work vs DOING high end work is embarrassingly kind of a revelation to me. I've never heard it put that way before. It goes in line with the book, The E-Myth, about working on your business rather than working in it.

I have to back pedal on a previous comment when I talked about doing "high end remodeling." When I said that, in my mind I was comparing the guy who shows up and owns a couple grand worth of tools with what I give my clients, which I feel like is a much higher end product. 

I am not doing jobs like what our member Davinci does, or even close to that, on my jobs it often makes much more sense to keep things in house rather than bringing in a specialized sub for a variety of reasons. Point is, I can offer better than satisfactory results for my clients with my sprayer, tile saw, concrete tools, whatever it may be, even though I don't use them day in day out and it adds a measure of control of the jobs for me, along with convenience for me and the client in a variety of ways. Being able to wear multiple hats is a large part of what helps me sell myself and get paid better than a one trade guy.

My sprayer for example has more than paid for itself in just this first year. It is common for me to have situations where the HO want to do the final painting on the walls which is fine. Just this fall I had two jobs where I came in after drywall was complete on a remodel, primed the walls, sprayed the ceiling, installed doors and trim, sprayed doors and trim and moved on. They are profitable jobs that allow me to more than justify owning the piece of equipment and then I get the convenience of having it there when I need it. Am I as good as someone who uses a sprayer day in day out, no, but I would bet 99.9% of people would walk in and not be able to tell the difference on this caliber of job.

I could go on and on with reasons why I own some of those specialty tools....but....I see the light of what you are saying. Continuing to try and produce high end results in all these different areas is not the answer long term...that being said it has helped me get my start in business but will likely change as business focus and specialty narrows.

Once again you've given me a lot to think about. Thanks for your thoughts as always.


----------



## Jaws (Dec 20, 2010)

Stephen H said:


> most of that you don't remotely need to own as a one man band doing general remodeling.
> I will bet there are a TON of guys on this forum with a truck, they put $3K down on and MAYBE 3 or 4 K in tools. If they occasionally need a bobcat--- they RENT one. ( now THAT--- is actually efficient)
> Stephen


you're the expert.


----------



## EricBrancard (Jun 8, 2012)

Stephen H said:


> not to insult you--- but look at the sprayer-------- YOU personally might produce barely passable results with that sprayer. It is unlikely that you can produce results even remotely approaching what a guy who uses that sprayer,all day every day can do.
> 
> so you sell a highend job---and then YOU spray????? did you really deliver the high end result????


Not following the logic here. I spray my own work as well. If you think that it creates "barely passable results" you are sadly mistaken.


----------



## KAP (Feb 19, 2011)

EricBrancard said:


> Not following the logic here. I spray my own work as well. If you think that it creates "barely passable results" you are sadly mistaken.


I think his point was that someone doing spray finishing day in and day out is going to produce a higher-end finish than someone who does it a dozen or so times a year...

That's true of any craft...


----------



## hdavis (Feb 14, 2012)

This really begs the question of what a person's business strategy is. I think a big difference between different remodel contractors (besides how fast and what they charge) is finish quality. If you're shooting for the best available, chances are you're subbing it out to a real artist. I'll ignore that for this discussion - there aren't that many real artists you'll be competing against in the average remodel. Who you do compete against are the guys that get average or a little better finish results.

For the one man show, it takes a little more time and attention to detail to be above average on finish quality. A lot of what people see as quality indicators is drywall, paint, and trim. There is only so much that can be done with carpet and sheet vinyl installs. Around here, a smooth drywall finish is pretty common. Being able to do a good class 5 routinely sets you apart. 

On small jobs, it can be tough to schedule subs - roofers, for instance, may be trying to fit you in in between bigger jobs, and around here they're plenty busy during the prime roofing months. So, to control schedule on small remodels, you're self performing much or all. As the project gets bigger, it's easier to get subs in who have the quality level you're looking for. The last thing you sub out usually is the thing you can do the best (cost and quality, especially) that you can perform to schedule. 

So, yes, you wind up with LOTS of tools to be able to perform all work at above average finish quality with reasonable efficiency. You also end up tweaking how you do things, or at least trying out potentially better ways of doing things, fairly regularly. More tools.


----------



## TNTRenovate (Aug 19, 2010)

KAP said:


> I think his point was that someone doing spray finishing day in and day out is going to produce a higher-end finish than someone who does it a dozen or so times a year...
> 
> That's true of any craft...


No he pretty much did you can't produce high end not higher end.

I think most of what he said it's true for some, but I disagree that a remodeler can only be good at a few things. There are still Renaissance Men out there.

Just because one can't do it or understand how it could be done doesn't make it impossible.


----------



## hdavis (Feb 14, 2012)

KAP said:


> I think his point was that someone doing spray finishing day in and day out is going to produce a higher-end finish than someone who does it a dozen or so times a year...
> 
> That's true of any craft...


I'm not so sure about that. I'll agree that there is a lot to it, but prep, masking and how many coats you put on make the biggest difference. Prep and masking can easily take the most time.


----------



## Mr Knucklehead (May 31, 2014)

Everybody approaches this business differently. You can see that by the posts. I don't think there's a right or wrong approach. The bottom line is are you making enough money with your time.


I'm at the end of my career in the remodeling business. I could bow out today if I wanted and live the life of Leisure. But I've gotten smarter as I got older in this business and realized I didn't need the equipment that I once owned. I sold off anything that doesn't fit in a standard work van and I'm still able to do high quality home remodels easier and with less effort. Two main reasons, trade relationships and employees. 

You can't make pet projects out of your clients jobs. There is a time you just got to get the job done. Clients are patient but eventually you have to give them back their house. Employees and bringing in other trades is the only way. 

B ut getting back to the OP's question. I doubt very much he's billing out 1800hrs. There's no way you can get an employee to be productive that many hours and make you money each of those hours. So his numbers are low to cover those non billable direct hours. 

You always need to think about your business in this mindset: If I worked for a company would I work for free cleaning out the company truck? work for free waiting for materials? Work for free picking up material during the work day? etc.. 

So those 1800 hours may look nice and full of meat on paper but just wait and see how much those 1800 hours really makes you. Productivity equals Profits. You can bill out all you want, but if there's no productivity you'll be on the job longer and there goes you're bottom line getting eaten alive because you didn't plan for unproductive time on the job. 

I mentioned approx $35/hr for the 20/hr employee to cover all the costs associated to include unproductive time and a profit. 

Believe me you're not getting rich on that one employee, but if you're working along side and know how to keep that worker busy you can do very well, very well.


----------

