Alright - A Different Version Of The Other Idea

dirt diggler

what if you and 5 of your competitors simply formed a corporation --- a new company


a merger of several small companies to create another giant


....

ruskent

I can not see that working out good.

roofwiz74

yeah I believe that is what general roofing tried.didn't go so good in the end.

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Pearce Services

I considered a different version of this. A Co-op of different trades, not direct competitors, but a builder, an electrician, a plumber, a site work guy, etc. Each company would keep its own business, but if a memeber brought a project to the group, they would PM the project, each member would be paid directly, with a 10% fee paid to the PM for management. This fee would need to be above board, and agreed upon by the customer.

The customer could save the traditional GC fees of 20-25%, and only pay 10% fee. The projects would be easier to run if all the trades know what is expected from each other, and work well together.

dirt diggler

what went wrong?

dirt diggler

why?

Same Old

You must have never been in a partnership.

Mike Finley

What you are proposing sounds like the same idea as when Sears and Kmart combined company - that's a power house isn't it?

I think a much more powerful method is the Microsoft or Google method of purchasing companies outright and incorporating them into themselves.

A bunch of little rabbit turds banding together usually just makes one bigger piece of crap.

roofwiz74

rabbit turds...lol...

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DamionR

THe partnership concept works on paper - and can work extremely well if done properly - but many screw it up. They get hyped about the idea to start with - are more concerned about what they'll "get" instead of what they can "give"... the idea loses its luster... and then it falls apart.

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bill r

like herding cats.. independents by definition are not joiners. It has to be some sort of very loose federation that still allows independence, but solves an important tactical problem

POOLMANinCT

how about just staying late at you member association meetings & price fixing

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dirt diggler

bill - i agree - this would be one "struggle"

i have to make one clarification

i used "merger" as a misnomer here.

i didn't mean merge 5 companies into one

I meant --- merge five OWNERS to create a seperate company


you still keep yours ... go on about your daily life


but --- you have ownership in this new company (along with the other 4 or however many)




think about this (and i don't mean to say this is a great or bad idea --- it's just an idea ... )


you meet with prospect A, B, and C

by nature of the hypothetical marketshare --- most likely A and B will go with one of the two larger companies.

why??

most likely the prices are lower (the larger co's are going on quantity)

this is realistically why these large companies succeed. They can produce at a lower cost.




so ... prospect B is your customer ....

but just think if you had ownership in a large company that attracted A and C.

you're still running your company --- but you (and 4 others like you) have your thumbs in the rest of the pie as well

bill r

I stand corrected -- a federation of independents -- so that corp could prime A or B or c, turn around and find appropriate subs, etc.

I know that in the DOD/technology contracting world that's done all the time. Problem there is complexity of priming to DOD is a specialty in itself, what with all the paperwork, detail rfp response, etc. The prime itself rarely actually does any tech work, they merely interface with the govt. The work goes to subs who might have also bid direct or not. Similar. is similarity useful??? Idon't know.

dirt diggler

sure, a federation


point is this:

let's say you meet with Prospect A on Tuesday night with YOUR company

what this idea is all about is that

you can also meet with Prospect A on Wednesday night as well with your OTHER company


of course ... you're not actually there on Wednesday night (even though you were Tuesday)... you're collecting dividends on the sales



see what I mean?? You haven't eliminated any competition. In fact --- you would essentially even be competing against yourself

but you're getting to make two "first impressions" on Prospect A

dirt diggler

i guess --- but you're getting into operations and such



the idea of this whole concept is when Prospect/HO gets 3 bids

you can be contractor 1 AND 2



so where does your competition come in (as partners) ???

hmm, i guess you wouldn't HAVE to have your partners be comprised of your competitors

you could just find a bunch of non industry-related investors.

bill r

like playing 2 bingo cards at once. The cautions about competition were appropriate. However, if players 1 and 2 aare honestly competing with each other and with the corp. in which they happen to own shares, what's wrong with that?

dirt diggler

EXACTLY

whew, ok at least im not crazy


unless you are too Bill

bill r

My doctor busted out laughing when I told him what I do. Hammering sticks in the mud! You're in your second childhood!

dirt diggler

dang ... so you are crazy too