Hiring Project Manager/Profit Share - Business - Contractor Talk

Hiring Project Manager/Profit Share

 
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Old 03-05-2018, 09:41 PM   #1
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Hiring Project Manager/Profit Share


Hi all! I've been in business for 2 years now and have gained traction quickly in our small-ish town. I started with small bathroom remodels and have made my way to building new homes (my dream). Almost complete with my 2nd build. I've done this all while still keeping my full time day job in a tech company working from home. It has not been easy and I'm now to the point where I NEED to hire a full time project manager.

We just had twin babies 2 months ago and I'm not ready to give up the great benefits at the day job just yet. I want to make sure this business is sustainable. What I'm finding is that I would love to share this journey with someone else instead of doing everything alone. I'm great at selling high end jobs and designing and talking with the customers as well as ordering, etc. What I can't do is be there everyday. I want to find someone who will be more motivated instead of simply an employee collecting a paycheck.

Ive contacted a few other small remodelers who are getting started to see if any were a good fit to bring on. I might have found someone but I want some advice on what to offer. I'm thinking of splitting profits some how on jobs maybe for the first few projects as a trial.

For reference we usually have between 4-8 jobs running at once. This last year has been 1 build while other small to large remodels have gone on.
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Old 03-06-2018, 12:11 AM   #2
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Re: Hiring Project Manager/Profit Share


Be ready for some serious nightmares. Regardless of how much money you pay and profit you promise finding someone who will do what you want is as hard as finding the once-in-a-lifetime perfect spouse.

Every applicant puts on a good game face during applicant interviews, but my philosophy has always been that every employee willing to leave their present job and every employee who is out of work and looking for a job has problems and baggage.

Paying more money does not get you a better foreman. Older foreman are too smart for their britches and they have too much baggage. Older foreman are lazy, fat, cocky, arrogant and they won't pick up a nail on the ground. Look for a young less-experienced worker you can train. Start with less hours and less money. Train and explain what you want on a daily basis. Every young person I trained was loyal to my company and I still have workers who started with me when they were 18-years old and they have been with me for 40+ years.

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Old 03-06-2018, 05:41 AM   #3
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Re: Hiring Project Manager/Profit Share


Two problems:

1. What daffysplumbing said.

2. What's "profit"?

Seriously, if you split the leftover money from each job as profit, you will end up paying for all of the equipment, etc. out of your share. If you really decide to go with this idea, a clear definition of profit would be required to avoid misunderstandings.
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Old 03-06-2018, 05:05 PM   #4
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Re: Hiring Project Manager/Profit Share


Wow. Partnerships are serously difficult to manage. Always goes that one person doesn't think the other person isn't pulling their weight. Since you want to keep a day job you are set up to fail from the start. Bottom line is two people cannot be both in charge. You or the other person need to own it even if the other person is an investor and employee. Remodel, roofing, or plumbing it is all the same. Tough. Good luck.

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Old 03-06-2018, 06:28 PM   #5
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Re: Hiring Project Manager/Profit Share


I met this morning with the prospect. He has been in construction for past 10 years working as a carpenter and started running his own jobs 6 months ago. He still works on part of his jobs now and needs the advice and help on how to stop working in the company. I basically said I'm looking for a project manager that I can split profits with if things are running smooth and we work well together. I decided I would write a contract out as project manager on our first job together as a trial to see how it goes. Made it clear that I would make decisions on everything. Have not decided on the split of profit just yet and yes I need to define what profit looks like (removing my operation expenses, insurance, etc).

Guy is young and motivated but not the type that wants to build an empire for himself. Does not advertise etc, sounds like we each compliment each others strengths. Any other advise would be great.
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Old 03-06-2018, 07:57 PM   #6
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Re: Hiring Project Manager/Profit Share


Pearl:

I am a long time builder 150 miles up Hwy 59 from you in Houston. I understand you have a regular steady paying job and sort of dipping your toe in the contracting business. I actually did the same when I started building new homes in 1974, I was young, just married, non-working wife, with a baby. I had a very good blue-collar job (railroad engineer) but I wanted to be a home builder. I took me 2-3 years to let go of my regular job and go full-time, but I finally did.

I suggest you hire a good project manager/superintendent but do not make them a partner. Why do that? First of all this is a tough business and just not enough juice to be giving away profits. Secondly you do not have to give up ownership, you can find good PM's and just pay them well. I pay my PM's a good salary with bonus based on what I call production gain. That is a measurement of the amount of work they manage and complete based on $'s. A very easy metric to measure,

And finally if you are in this for the long-term, there is a nice lady in Austin with a software for builders and remodelers called Custom Home Builders Solution (CHS). I strongly recommend it.

Good luck!
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Old 03-06-2018, 09:59 PM   #7
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Re: Hiring Project Manager/Profit Share


Allan thanks so much for the advice and taking the time! I think this is what I'm going to do, pay a nice salary and a bonus on project completion. I am checking out the software now and if you ever have that itch to give some young buck some trade secrets let me know lol. Would love to meet up for lunch. I come to Houston every now and then to pickup material.
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Old 03-06-2018, 10:21 PM   #8
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Re: Hiring Project Manager/Profit Share


Pay attention to mr Edwards.
he is a custom builder in the Houston market.
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Old 03-06-2018, 10:21 PM   #9
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Re: Hiring Project Manager/Profit Share


I am! Thank you
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Old 03-06-2018, 10:49 PM   #10
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Re: Hiring Project Manager/Profit Share


Money was right I consider throwing down .... Until ....
"Made it clear that I would make decisions on everything."
You don't want a project manager you want a babysitter, to do your bidding. Someone who won't show you up. A lessor being than yourself, like most in this Biz. That's a PM in title only. Just mentioning that speaks volumes.

What you need is a PM that has all the experience you don't, in construction. While you take care of the business, marketing side and growing the business....keeping your day job until the jump.
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Old 03-06-2018, 10:52 PM   #11
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Re: Hiring Project Manager/Profit Share


You might be reading too much in to that one line. I really want someone to go through this journey with me. I meant make decisions on how the business grows and what kind of work we doing aka not a true partner more of a project manager. He has experience in construction and there for there should be plenty of times he makes decisions on the fly for the better of the project and customer.
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Old 03-07-2018, 01:42 PM   #12
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Re: Hiring Project Manager/Profit Share


Quote:
Originally Posted by AllanE View Post
Pearl:
I suggest you hire a good project manager/superintendent but do not make them a partner. Why do that? First of all this is a tough business and just not enough juice to be giving away profits. Secondly you do not have to give up ownership, you can find good PM's and just pay them well. I pay my PM's a good salary with bonus based on what I call production gain. That is a measurement of the amount of work they manage and complete based on $'s. A very easy metric to measure,
Good luck!
Pretty good advice here. Our firm has (3) full time project managers. They are paid a competitive salary and full benefits, then earn a bonus (paid monthly) based on meeting or beating estimated costs on their projects. On a good year they can increase their salary 50% or more with the bonus.

The bonus plan is great motivation to keep projects on track, but you do have to monitor things so that they don't let customer relations, quality or safety be sacrificed in the interest of bonus money.

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