Safe To Say That Most Small Contracting Business Don't Make A Profit..

ruskent

We have had a ton of good threads this winter. A ton. Most have helped me alot.

I am really starting to think that the majority of small contracting business are not actually making much or any of a profit.

There are alot of guys out there with 0-5 employees. They may always be busy and have pleanty of work. The guy thinks hes doing great since he is pulling down 120k a year.

I have a feeling there are a ton of guys who pay themselves decent salaries, yet their is no money left over after they pay themselves and their overhead.

Now, i never heard of any not for profit contracting firms.

Am i right or wrong here with my assumptions?

dirt diggler

it comes down to this


ya wanna be the guy flippin through the rolodex

or ...

swingin the hammer

POOLMANinCT

the money is all mine

my only concern is increasing my wealth

Forry

I actually prefer swingin' the hammer, but I know I could do better, and I know I'm not gettin' any younger, so it'd be good to learn a little more delegation, etc. And it'd be good to learn how to make $ without being on site. For now though, I go pack lumber with the grunts.

ultimatetouch

Rusket how are those mailers going.

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Ultimatetouch
Illinois Remodeling Company, Kitchen Remodeling Chicago, Room Additions Illinois

thom

Rusket, the point is money in my pocket. What difference does it make if I pay myself nothing and make a $125,000 profit or pay myself $125,000 and make no profit. Assuming I'm a sub-s or an llc, it's the same thing (with the exception of self employment taxes on the salary but not the profit).

ruskent

2500 going on on tuesday, than another 2500 the following monday.

Then hit them again in 3-4 weeks.

Bone Saw

horse crud

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the_turd_man

MY FIRST 2 YEAR's WAS VERY ROUGH. I actually rented my equipment when needed sub contracted the haulling. and turned $375 GROSS NET$200k working about 3-4 days a week. That is excellent in my book. I spent every dime I never had money before like that.I raped my company for all it would cough up I bought a corvette, a new suv, a new pick up, trips, escort girls, strippers,the works. every night was a party All of a sudden there was the sinking feeling I still had no equipment, no budget and I was doing my own work except for 1 employee at $12 hr. I could not break away of the 3 day weeks. I was getting my share of this type of work and doing as much as guys around along time.
alot of referals were comming

odd I still make the same salary even though we have grown many times larger. and I work many more hours. now marketing is important and image. Im working twice as hard if not 3 times with more salaries, equipment problems and taxes yet cutting the same check to me. I do not draw dividends
i get a salary and the business owns the rest

every dollar beyond that I put back in my business. I am greatful from where I started. I am not scared to try new areas to install. I rent my equipment in a new area just like the old days. we service 11 counties now. You can either take it all for yourself or sacrafice for the future today we are 4-5 million gross bracket

dirt diggler

THAT'S IT!!!!


TOMORROW --- I AM GETTING INTO THE SEPTIC BUSINESS!!!!

Forry

Amen!

Brian

More than 90% of small businesses close the door within 5 years. Of those that survive, another 90%+ shut down in the next 5 years. Very few businesses make it 10 years.

Why? Because they aren't making a profit.

Why? A good tradesman does not necessarily make a good businessman. Running a business is much different than swinging a hammer or slapping paint on the wall.

It's usually relatively easy to start a business. It's another thing entirely to make it work.

From my perspective, very few contractors want to learn how to run a business (present company excepted). For example, a frequent question is: How to I price this job? In my mind, pricing 1 job well doesn't address the real issue-- how to price jobs in general.

The thread on profits is another example. The confusion over a basic business concept shows that there is a general lack of business knowledge and skills in the contracting trades.

I'm not pointing a finger at anyone. I was in that boat for a long time, and at times it seems like a semi-miracle that I've made it 20+ years. But I do see a lot of contractors resists learning basic business skills.

I doubt contractors are alone however, given that so few small businesses succeed.

Brian Phillips

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ultimatetouch

It takes time for those jobs to pull through but. How many have you pushed out this far. How many calls and estimates did you go on and did you land any. I know your pretty agressive with the mailings thats why Im asking.

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Ultimatetouch
Illinois Remodeling Company, Kitchen Remodeling Chicago, Room Additions Illinois

ruskent

All i did so far this year was about 200 letters a few weeks ago. Got 2 calls. One estimate for 32k. They are waiting for estimates back from the other 2 guys they talked too.

Call number 2 is a guy that lives in europe (is american but works for a pharmacutical company). We have been sending emails back and forth just talking ideas for the house he bought here.

I'll track all my results and post them.

ultimatetouch

Forget the dollar amount you should charge. It comes down to image and puting money out there(the right target market) to drive more sales and finding the time to drive more sales. Start delegating F*** the lowballers. Business is marketing and sales and production, Making those run smoothly and tweeking it. In the end the lowballers lose and they put added pressure on there industry.

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Ultimatetouch
Illinois Remodeling Company, Kitchen Remodeling Chicago, Room Additions Illinois

dirt diggler

THINKPAINTING

I have been hearing that for 25 years, but I only know of 2 painting contractors in my area, with real empoyees let alone making a profit.

You are absolutely right about tadesman not making a good business man, but the difference today is all the information that"s out there to help ya get out of the bucket or learn how to make a profit.