Bidding with no money...how? - Contractor Talk - Professional Construction and Remodeling Forum

gibson · 11-07-2009, 04:03 PM

I am a licensed gc and started my own business this year. I have had no breaks come my way. Few small jobs here and there but nothing to keep me above ground. I signed up for bidclerk recently and have found a few big jobs on there that I feel confident I could do which is a plus. I just have the issue of no money. I have do not have money to buy supplies or pay employees till I get paid. Is there any way to bid on these big jobs without having money to start with? Is my best option to try to sub all the work out, I have not been in business long enough to get any kind of loan. Please any suggestions or help would be much appreciated.

kevjob · 11-07-2009, 04:34 PM

1. Why would you finance the clients job?

2. Get deposit at start for all materials, then a draw when you start.

I would never finance a clients job even if I won the lottery, only exeception is a repaet client whom I worked with before and even then its still iffy.

Framer53 · 11-07-2009, 04:36 PM

Quote:

Originally Posted by gibson

I am a licensed gc and started my own business this year. I have had no breaks come my way. Few small jobs here and there but nothing to keep me above ground. I signed up for bidclerk recently and have found a few big jobs on there that I feel confident I could do which is a plus. I just have the issue of no money. I have do not have money to buy supplies or pay employees till I get paid. Is there any way to bid on these big jobs without having money to start with? Is my best option to try to sub all the work out, I have not been in business long enough to get any kind of loan. Please any suggestions or help would be much appreciated.

You need a bank or SBA loan!

Failing that, an Angel might help. That is what they call people that help fund new businesses.

Framer53 · 11-07-2009, 04:37 PM

Quote:

Originally Posted by kevjob

1. Why would you finance the clients job?

2. Get deposit at start for all materials, then a draw when you start.

I would never finance a clients job even if I won the lottery, only exeception is a repaet client whom I worked with before and even then its still iffy.

Kev, I have a fealing he is from California that limits your deposit mone

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kevjob · 11-07-2009, 04:39 PM

they dont limit the amount of draws do they?

material draw 10%

Permits submittal 20%

Start of project 10%

etc... Not sure of Californias laws but would that work?

Heritage · 11-07-2009, 04:48 PM

I could have a Million dollars sitting in my business chequing account and I wouldn't finance a client's job either.

You have a duty in the contract to provide a number of services and deliver a number of goods.

The client has only 2:
-Fund the project
-Keep the driveway clear and access to the home available at certain hours.

You shouldn't have a problem, just make sure you have:
-A good critical path
-A good contract
-An intelligent payment plan

BKFranks · 11-07-2009, 05:28 PM

Quote:

Originally Posted by kevjob

they dont limit the amount of draws do they?

material draw 10%

Permits submittal 20%

Start of project 10%

etc... Not sure of Californias laws but would that work?

In CA you can only ask for 10% down or $1000, which ever is less, otherwise you face citations and administrative charges. You can certainly have a draw schedule just like you said for permits, materials, or even weekly draws.

kevjob · 11-07-2009, 05:40 PM

Wow 1000.00? how do you order 17k in cabinets for the project?

**Leo G** · 11-07-2009, 05:47 PM

As far as I know. The 10% or $1000 down is just at the contract signing or to get you in the work cue. Before you start you can collect whatever is require to run the project.

If not. Move. That would be rediculous for you to have to front that kind of money for a client to have their dreams come true. And then screw you over.

jmacd · 11-07-2009, 05:49 PM

Are you asking about commercial or residential projects? Very different answers for both. You are looking at BidClerk so I assume you are asking about commercial and that will need working capital, bonds, subs, etc.

You never get any money upfront on commercial, payment's are made on progress.

kevjob · 11-07-2009, 05:52 PM

Quote:

Originally Posted by Leo G

As far as I know. The 10% or $1000 down is just at the contract signing or to get you in the work cue. Before you start you can collect whatever is require to run the project.

If not. Move. That would be rediculous for you to have to front that kind of money for a client to have their dreams come true. And then screw you over.

When i have them sign thats when I get all materials money up front, order everything when it is delivered start.

**Leo G** · 11-07-2009, 06:13 PM

Yer not in Kalifornia, that's how I do it also.

tinner666 · 11-07-2009, 06:32 PM

When I started with a nail pocket and a truck, I got with a supplier. We drew up a contract that included him, the client and myself. After a few jobs were done, and I had some 'experience' under my belt and a good relationship going, my credit level went up and I didn't need 3 way contracts.

bdoles · 11-07-2009, 06:37 PM

Quote:

Originally Posted by gibson

I am a licensed gc and started my own business this year. I have had no breaks come my way. Few small jobs here and there but nothing to keep me above ground. I signed up for bidclerk recently and have found a few big jobs on there that I feel confident I could do which is a plus. I just have the issue of no money. I have do not have money to buy supplies or pay employees till I get paid. Is there any way to bid on these big jobs without having money to start with? Is my best option to try to sub all the work out, I have not been in business long enough to get any kind of loan. Please any suggestions or help would be much appreciated.

I was wondering how you got your license? Here in GA you need some pretty good financial standing (LOC, etc...) or a commercial bank account with your company name on it for a min. of 24 months.

There are many out here in ATL that I wonder how they got their license, when they don't have a pot to piss in and are just starting out.

480sparky · 11-07-2009, 06:49 PM

Quote:

Originally Posted by bdoles

I was wondering how you got your license? Here in GA you need some pretty good financial standing (LOC, etc...) or a commercial bank account with your company name on it for a min. of 24 months.
............

So in order to be in business, you need a license, and in order to get a license, you need to be in business for 2 years, but in order to be in business 2 years, you need a license, but you can't get a license because you haven't been in business for 2 years, and you can't possibly be in business for 2 years without getting a license, but in order to get a license, you need to have been in business for 2 years..........

rselectric1 · 11-07-2009, 07:00 PM

Chicken or the egg dilemma.

Sounds kind of like when applying for a loan, you must first prove you don't need one.

mahlere · 11-07-2009, 08:40 PM

resi and commercial play by different rules...you don't have to agree with them, but you do have to live with them if you choose to play in the arena....

Roofman20033 · 11-08-2009, 02:14 AM

Here in Michigan, i get 50% down on every job! Remaining upon completion. I think a lot of it has to do with how you or the salesman asks the homeowner for it! I don't ask "can you put 50% down?". I tell them it is 50% down, and remaining upon completion, end of story. The more you get up front, the easier it is to get the rest at the end! I knew a salesman that got about 70% of his jobs paid in full, before the job ever started! How did he do it? He told the homeowner as they were writing the check for the downpayment that if they write the check for the whole thing, he would knock off $100.00. Of course he had it built in, but it worked!

KennMacMoragh · 11-08-2009, 03:21 AM

For the guys that charge up front, what do you do if the customer tells you the bank won't pay him until the work is complete? That was the case for me building my own house, the bank wouldn't pay me to pay any subs until after the work was done and inspected. If I had a sub who demanded some of the money up front, I wouldn't be able to use him.

kevjob · 11-08-2009, 10:50 AM

I get just materials at signing, my subs are paid as soon as they pass their rough inspections.