Commercial Management

buildiq

Hi guys,

I came across this site while researching for a potential business idea. I hope I can trouble you for just a little bit of feedback on what I'm proposing and in return I'll hang around and try to lend me 2c to the site.

I am a Commercial Manager for one of the largest construction companies in the world, currently running a $400m USD high-rise project in Abu Dhabi, UAE. My job entails a whole bunch of stuff, but the short version is that I manage the financial and contractual aspects of the job.

I would like to return home (Australia) at the end of this project and look at starting my own consulting business for subcontractors and small commercial contractors, helping them to stay on the "winning" side of a contract and maximise profitability and efficiency. I started out working for a small contractor, and I know just how much I could be of benefit.

My question is, as a contractor, would you pay for this service? I know that I could save a contractor far more than I would charge, but if there's no demand for this type of service, that's all pretty redundant.

Thanks for your time and if you have any commercial question whatsoever, please send me through a message, I'll be happy to help. I have all the usual qualifications, and while I'm currently playing with the big kids, I've done about 3 years at the smaller end of town too.

modterry

I am not sure what your proposed services might be. If you will be a consultant to teach small contractors how to implement a "project manager" role in their company - that may be of some benefit. Project Management comes into play in larger jobs where there the job is large enough to pay a PM. I would say for companies with less than $ 1M in volume - that role is left to the owner. In our company - the job foreman takes alot of that role's duties with - job management, sub contractor schedule, customer relations, while working with tools. It is the only way to make it affordable on jobs of less than $ 100k

Best of Luck.

Terry

buildiq

Thank you Terry, I really appreciate the feedback. In particular you make a good point that the service offered would need to be specific, with an agreed objective and deliverable.

My thoughts were to act as a consultant for subs/GCs turning over $2-$10m. Anything less than that and there just isn't enough turnover for me to be of benefit to anyone, nor for me to be affordable.

Briefly, the service I am proposing to provide involves focusing on the areas of contracting that, in my experience, can be swung in a contractor's favour. Such as:
Creative Estimating
Overhead Reduction
Contract Administration
QA/QC and cost of quality
Using automation and technology

Contracting is a game, and like any other game it has rules and an objective. If you're the smartest tactician with the best players, you'll win. I've been on the winning team long enough to know how they got there, and I'd like to start showing the smaller guys how to get there too.

Bob Kovacs

"Creative Estimating, huh? I've been estimating for almost 20 years now, and "creative estimating" is something that should be avoided- not taught.....

I'm also curious as to why a contractor would want to hire someone who has a whole "3 years working on the smaller end of town" and is now part of a huge team on a $400 million project in Abu Dhabi- I'm thinking you'll need to get some more experience under your belt before anyone will take you seriously. Any contractor who's already doing $2-10 million/year probably has far more experience than you do, and isn't likely to be willing to pay you to hear what you think you can do for him. Sorry to be blunt, but I think you've got a good idea- it just needs some time to simmer.

buildiq

Not at all Bob, I appreciate anyone who's blunt to me. I don't want comments to be wrapped in cotton wool, I want to know why this won't work and your type of input is probably going to be of most benefit of all! The main reason I am considering this whole thing is because my job is very high pressure, with 60+ hours on-site each week, and only one day a week off. My wife is having a baby soon and I'm not going to be a Dad who never sees his kids. I'm looking for a way to provide myself with a better quality of life and I think I have a lot to offer for the right type of business.

First off, I probably didn't express my experience very well there, I was trying to be brief and to let you all know I'm not just someone who has only worked on big jobs.

I started my career 11 years ago working for a small commercial contractor doing jobs $500k-$10m. I was with them for 3 years before I was recruited by a mid-tier builder on jobs mostly ranging from $10-$50m, where I progressed to project manager. I spent 3 years with them and moved to my present employer, originally as a project manager on a $130m job. At the completion of that I was relocated to Abu Dhabi where I was placed on the current project.

My position here is quite senior, I sit next to the project director on the organisational hierarchy - his job is to manage the project through its 4 project managers, mine is to oversee the tactical and strategic decisions that he makes to ensure commercial security for the Company. You're right, we are just a small part of a big team here with some 200 people in the office, 93 subcontractors with their own combined staff of 1500 plus our self-delivery labour force on-site of around 2,000. But I'm at the top of the tree

I'll stop there because I'm rambling on a bit, but just to briefly go into "Creative Estimating". I'm NOT talking about teaching how to get a bid in to then screw a client for varis and EOTs to make my money back. If there's one thing I've learnt it's that the best way to work in this game is to make everyone elses life easy - and estimating like that ain't easy for anyone.

I AM talking about things like exploring different construction methodologies to compress programmes. With 20 years in the game you would know how much cheaper a 3-shift 24/7 project can be built than one in normal hours. But it's very rare a builder will offer this. Or being able to value engineer a project because you've got different experience and objectives than the consultants. What's cheaper, rebuilding a road down 600mm including export/import of subbase or stabilising it? As long as you achieve the same ESA, the consultant will be happy and the client will pay a quarter of the cost!

Thanks again for the comments. Be as blunt as you can, please.

Bob Kovacs

The challenge there is that what works on a $400 million project won't work for a company doing $2-10million/year, which is who you said your clientele is. Their projects are much smaller and of a shorter duration, and don't warrant going 3 shifts, or even 5-10's in many cases- you're not going to see the savings in GC's to make up for the cost of the premium time.

I'm not saying that there's not value to be added to the equation for contractors that size- there's plenty. The challenge is finding clients who are willing to pay for your time- most guys in companies that size have "been there, done that", and often think they can do (and usually do do) everything themselves, and they'd rather just muddle along "doing what they've always done" rather than part with some $$ to see what you've got to offer. I've tried what you're talking about, and while there's always that one guy out there who's willing to pay (and listen), they're few and far between.

buildiq

Cheers Bob, I think you're probably on the mark there.

My feeling is that since of the 90 people who have read this thread, only two have commented - one of whom is a consultant (no offense there Bob, just you're not the target market) - it's unlikely that sufficient demand exists out there to make it a viable option.

Thanks all for your input