Copus And Business Size

maj

Ruger.... You'll do just fine as long as you remember those words you just typed. You nailed it on the head there buddy... Good job

I spent the first couple of years on my own trying to be the new big dog in town. I didn't make a whole lot of profit at first. As stated in my previous post, I had too many crews & not enough quality control. I soon realized bigger is not better. I downsized and turned my attention to quality control. I am now able to pick & choose what work I want. Who I want to work for. And when I want to do their work.I never advertise for work. Only community event sponsorship.

I do not agree with the contractors logic of "taking it all" or the fact that some seem to think theirs is the ONLY company that can do the best job.. That's just bs, and they are only fooling themselves. I have a great reputation in my area and stay busy year 'round, but then again, I would recommend 90% of the other guys too(my direct competeion). What I'm saying is I am not the only one who can do a great job, so can my competition. Almost all the construction contractors around here get along great, and even work off of eachother occasionally. I think this is very important to be successful too.... Working WITH,not AGAINST, your competitors. Establish a good name in the community. Treat customers the way YOU would want to be treated. BE FAIR... do not overinflate your prices, just because you "CAN".

I am almost always 8 months to a year booked, This is not crappy work(I turn that down), my work is new residential construction. New houses(start to finish), additions, remods, etc.

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Gordo

Ruger, your post is so true. Just the fact that you see how the system works will enable you to get to that point sooner. It took 6 years for my company to get there. All our business is word of mouth from day one. Keep in mind, my company consists of 2 employees and one of them is me. We have a couple of good subs, but the majority of the work is performed by my company.

The question is how long can we keep this pace as we age?

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Gordo

Over the past three months, we have had literally 20 leads for kitchen and bath remodels. How many have we taken? Zero. Why? Because they were not the right jobs.

George, you are correct about the constant flow of leads so you can pick the profitable ones. I do not think you need to advertise if your referral base can generate more than you need.

You make your money taking the right jobs whether you are a big or small company.

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Bone Saw

this is word 4 word absolutely true

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Grumpy

It seems the common sterotype is that big=poor quality. I can agree to this to a point, but it all depends on the management. Proper training of your key people "should" eliminate these problems from occuring.

Remember doing more work means you have more chances to make mistakes. Maybe that's why it appears bigger businesses make more mistakes?

Quality is very important to me. My trademarked slogan is "Quality Work Ahead (tm)". As I was driving today I was pondering expanding and elaborating on my pre-existing standards of quality. I am going to add more phots and include more standards about things like general site conditions, and not just installation practices. I think I may even pay to send some of my subs to Saftey Seminars (it's like $35 a seat)...

Like everyone has said, when they were growing they wern't making very much and were just churning big numbers. I can see how this is very possible. I'm doing that right now, but I anticipated it as part of my growth strategy and knew I would have to sacrifice for a few years to reach my ultimate goals. Like I said, I plan to grow to a point, then farm profit for awhile before I grow more.

Everything looks good on paper LOL but what doesn't look good on paper? Only time will tell... and I am an open book. Anyone who has been to this forum long enough has followed me from the days of being a project manager for someone else, to putting my plans together, and then finally going on my own. All of my triumphs and tribulations are posted here for all to follow. Like I said I am an open book. Stay tuned.

Grumpy

Copus, perhaps my choice of using the word "business" wasn't the best choice. But the point is still the same, if your company can not operate without you, the owner, you are simply self employed.

Take a Doctor for example. If he takes a day off work, quite often no patients get examined or treated, thus no revenue is generated that day. This doctor is self employed.

Compare a doctor to a hospital. A hospital has many doctors and even if one takes a day off, the others can pick up the slack and revenues are still generated. These doctors are not self employed. Even if the CEO takes a few weeks off, the hospital still generates revenues. He has financial independance (for the most part).

You said you put your workers on larger jobs when you go out of town, but in my trades, very seldom do jobs last longer than a coupe days. Also you really have to have good employees you can trust to leave them un-attended. Many of the owner operator types constantly complain that their workers need their constant attention to get jobs done right. If this is true, this person needs new workers, but I actually think it's actually a flaw of the boss not being able to let go.

It was not my intention to insult those who choose to stay small. I just absolutely do not see the point to it what so ever. All the reasons you mentioned for being small are the exact same reasons I want to be big. I've said it quite a few times, I want a business that can operate without me. That means I want time to spend with my family. I'd like to be able to take two vacations a year and not shut down business operations.

Look at it this way; if I were an owner operator type, like yourself, and I have a high margin, I don't need to work alot. BUT what about my helpers who are paid hourly? Sure we are working 3 days a week and I am pulling in $70k a year... what are they earning $12k? Unless they are workign for the fun of it, and have a rich wife or something, I don't know how you can keep an employee for very long. I couldn't support my family working 3 days a week.

You could be right, growth may be a challenge I can't live without, but I have become very goal oriented and have since tried to always rise to a challenge. I am an extremely stubbor person which is sometimes a good thing and sometimes a bad thing, but I have a set goal and I am very focused on achieving that goal... Once I do acheive that goal, if I find that my quality of life is not as I had intended, I will have to sit back and re-assess and re-evaluate my goals and strategies exactly as you did.

Melissa

So, I'm thinking that in order to stay small and live well, you would have to charge more/make a much higher profit, so that you can take vacations and not have to worry about income coming in that week or two and you can still retire on it when you're too old to work. But is that possible? You would have to do some type of very custom work that is in very high demand to be able to charge what you want/need or have an extremely good reputation and sales pitch. Right?

maj

Right

Less the sales pitch..... who needs that??

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Gordo

You would not necessarily have to charge more because you would be more efficient/productive as a small company. Your husband IMO has the right idea. He is servicing the client=good reputation=charge a little more=branding=word of mouth.

I would love to be proven wrong.......somebody show me a full service kitchen and bath remodeling company with more than 20 employees. If you find one, then I will show you one stressed out owner/manager/operator that could be just as profitable at less than 5 employees.

The truth is if you get an employee as good, or as close to as good ,as you then he will more than likely go out on his own. I see it time and again. Nothing wrong with that because this is America. I will even use my former employees as subs on certain jobs. This is where you can really benifit because they know how you want the job but now they are held financially responsible to a higher degree than if they were just an "employee". You will see greater production/responsibility.


Whether you are big or small, profitability is what you want to maintain. Pay your guys good, service your client base, everything else usually falls into place.

Sonny....Shell are you out there?

Anybody else that has/had a big residential remodeling company?

We are all ears.

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specwood

http://www.qualifiedremodeler.com/2005Top500.pdf

Gordo

Thanks Spec. I will check this out later today.

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Grumpy

It is very possible, with the right reputation, image and sales presentation... then obviously delivering what you promise during your sales pitch. Melissa afer reading many of your posts, you seem to think it's impossible to make a good margin on your work. You must be doing something wrong IMO. I'm usually not the cheapest, and haven't been for years, yet we do ok. It's all about convincing the customer that you are worth what you are asking.

Grumpy

With proper systems in place, systems to deal with the usual problems that arise every day, and with well trained staff the manager need not be stressed out. I mean jeez guys, there are huge corporations with thousands of employees all across the world. Why do we make it seem like running a small business is impossible? Just look at the list posted above.

Honestly though I have problems every day, I always have and always will, the only time I am really stressed out is when work is slow and money is slow. I've said many many times my stress level is directly tied in with my bank account balance.

copusbuilder

I think you are pretty much on target. Efficency with a smaller crewwill outperform size any day.

Below is a quote from my website:

A PROMISE: in 1996 Copus Construction had a work crew of 25 and an office crew of 6 including a full time advertising person. We had three large billboards, displays at bank of america and signs on kroger shopping carts. I steadily saw the quality of our work deteriorate. There is a reason why there are no nationwide remodeling businesses, it is impossible to manage on a larger scale. We are now a company that maintains a small workforce of 6 people. Our quality is back to where I can sleep at night again.

Now in fairness to Grumpy he is a roofer and you likely do not see a lot of repeat business. Is it going to be smooth sailing???
http://www.contractortalk.com/f11/big-f-up-10644/

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pwrpapa

It's pretty hard to get repeat business, When a roof last for 20yrs.
Hell, I'll be dead by that time.
This is the number one reason I got out of the contracting arena.

pwrpapa

What gets me is I thought I did have a fool proof method of catching crap like this, by sending out a person to remeasure everything before we cash the down payment check, order materials, and schedule the work.

Ok I acknowledge that the estimator is an idiot and now he's gone because of a drug problem. I acknolwedge the installer is/was a hack and he's gone as well. It doesn't suprise me at all that these guys both messed up; but what is shocking is that someone with years and years of expeirence, who is supposed to know what's going, would allow something like this to slip through.

HAHA, Grumpys fool proof system was to hire drug addicts an hacks.LOL

copusbuilder

When it's not their business that's pretty much what you are going to get. Of course you can put rose colored glasses on and all will be fine!

I have seen people work their ass off their whole life to make a business grow.
When you are putting all your effort into the business you can't see the forest for the trees.
I have known a few who finally got to where they wanted to be but they had grown away from their families and ended up with the wife divorcing and ruining the business....So in the end they had nothing?

I had my wife tell me I was an asshole when we were going and going. I realized she was right and downsized. It saved my marriage and lifted mounds of stress off of me.

But that's what being a smart business man is all about. You have to control your business and not let it control you

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Shellbuilder

Gordo,
It can be done, in fact there are several companies here doing it,,Greenwich, Accent, Marjos...don't know if they are doing the right thing or not but it is being done. I had maxed at 28 employees at one time doing additions kitchens and baths for a while. I was stressed , theres no doubt. The construction company owners who can do this are the guys who are the best coach, the best managers and know how to build teams. This is pretty typical of the great CEOs of our world. I will admit that i took a position of doing a good job and made money and did a lot of work by refferrral for such a large company, but I admit that I was really not the coach. manager type of leader that could keep a company together. I admire anyone who can run a remodeling company and has those qualities. Over the years I attended many of the RC shows and the common ground for the leaders in our industry was leadership. Fortunately for me , the remodeling business can be whatever you want it to be, I'v chosen to get away from employees and so many customers but I really like hearing success stories, Someone post some good news here once in a while.

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Cole

Wow, good info here.

Keep it going, guys!!!

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Gordo

Thanks Shell. Were you able to sell your company at a profit? Or did you absolve and start the new company?

I am trying to figure out if going big is worth the time invested or stay smaller making a good living with my sanity intact?

Personally, I would like to stay small and manage my profits in retirement.

As far as the competition you listed above all I am hearing is horror stories about 2 of the three. The complaints mainly revolve around customer service during the remodeling process which leads me to believe bigger is not better. Once you lose that bond with the client its hard to get back. That personal touch has got to be there on a continual basis. I definetly respect everybodys opinion here so thank you all.

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