Advice Wanted For Starting A Construction Firm

P.J.

Hello to everyone,

I am new and this is my first post. I came across this site while doing some research on the internet. I have read alot of the threads here and saw what a great group of people post here and the sincere advice that is offered. I am hoping to get some of that same great advice on starting a business in the construction industry.

I plan to register as a Veteran Owned Business to pursue government set aside contracts and fill SBA HUB requirements for prime government contractors.

Some background information on myself:

I am currently completing a Master's Degree in Construction Management.
I have LEED AP and PMP certifcations. I also worked as a Landscape Estimator for a year after getting out of the Army. In addition, I am single and have no family obligations.

My basic plan consists of partnering with a trade contractor to bid on government work to build a decent job portfolio. As time went on I would partner with additional subcontractors in order to take on a larger scope of work, with the goal of getting a General Contractor's license within a few years.

My father owned a site work company when I was growing up and I worked for him during the summers - so I think that I will start out bidding on site work.

Can anyone offer me advice?

Any one experienced with government contracts?

Is this feasible or would I just be wasting my time?

What pitfalls should I look at for?

Is there a better route to take than what I am thinking of?

Thanks.

Jason Whipple

The first thing that comes to my mind, with what you're starting with is finances. I hope you have a lot of dough to buy equipment, get insurance policies going, start payroll, and purchase materials.

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Jason E Whipple, General Manager
Historic House Restoration, Cincinnati, Ohio
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P.J.

Jason,

Appreciate the quick reply. In terms of equipment, I was not going to buy any to begin with. When I say "partner with a trade contractor", I would sub the work out to them. So other than my own transportation, I don't see any equipment, I would have to buy. I would just need to find a sub that can perform the work. Same with materials. I ran some rough finance numbers on how much it would cost me to pursue this for a year without working -in terms of office supplies, software, etc. Insurance requirements is the big unknown. As long as the sub is insured and bonded, would the government also require me to be bonded and insured?

Thanks.

Jason Whipple

Yes, you'll need to be insured and bonded as well. If you plan on subbing everything out be prepared for a lot of costs with insurance and legal.

Why would you think that a sub that has it's own insurance and bond need to work through you? It's most likely they would already be qualified for Gov. work without you.

You might want to go to work for an outfit that's qualified before just jumping in.

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Jason E Whipple, General Manager
Historic House Restoration, Cincinnati, Ohio
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dayexco

i'm the sub, all you're bringing is your mode of transportation the way i see it....why do i need you?

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someday, i'll be as patient as Nick.

rbsremodeling

Pimpin ain't easy but somebody's got to do it

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LawnGuyLand

PJ, with all due respect rbs is onto something. It sounds like you want to inject yourself into the process right on top[, skim off your profit and operate as a construction company on paper only.

ChrWright

As I read it--you're wanting to procure the contracts based on your vet status and then sub the work. It sounds like you'll need to be licensed as you'll be acting as the GC.

No offense--but stepping into this without industry experience sounds like swimming with sharks without a cage and with fresh meat tied to your waist.

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Christopher Wright, CR: President @ WrightWorks, LLC/President @ Central Indiana NARI, Named to the 2010 REMODELING Big50
www.WrightWorks.net - Facebook - Twitter - Carmel Remodeling
Indianapolis Kitchen Remodeling Contractor - You Can Get There From Here

headwatermike

Many gov't contracts require that only a certain % be subbed. Especially if you are in an 8a or such. They are trying to help get companies off the ground, not just create a spot for a shill paper contractor to beat the competition with a higher bid b/c of status, only to turn around and sub the work to said competition. You might get away with it occasionally, but understand that you are not the first to think of this.

Thanks for you service.

Good luck...

macatawacab

PJ - With your vet status, degrees, and certifications, research where the government is putting money into dirt. Obama is funding up these shovel ready projects. check out where the biggest chunks are going. Then go get a job working as a site manager, estimator, government liason, or whatever you can get for a couple of years and figure this out.

Your job description reads like you are a broker or sales agent and all the big excavators are on top of what is coming down the pike without you.

Thanks for your service to the country. You need to find your niche and getting inside is a great way to do it. Keep posting too, you sound like you can make a contribution

thom

It seems to me you're looking for a short-cut to a license. "Partnering-up" is a euphamism for cheating and it probably won't get you where you want to go.

You could become a real partner, that means on paper and in reality you would need to be a part owner of the company. That could get you the work experience needed but won't work on a per-job basis, it must be a real and legally established partnership. The partner with the license could not have a separate licensed company that doesn't include you.

What do you bring to the table that would make this arrangement attractive? The best place to look is a small company with an older owner that doesn't have someone to take over when he retires. Youthful vigor and hardwork might be enough for you to bring to the table.

I retired almost 2 years ago. My sons had no interest in the construction industry. I'm incorporated and fully licensed, GC, EC, and MC. I would have been fine with working a deal with someone.

consolidatedbui

good luck

Handymanservice

I believe what he is asking is a fair question. Is it opportunistic? Sure! Does that make him a leach? No!

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"You can shear a sheep every year, but you can only skin him once!" Remember that when dealing with your customers and pricing.

http://www.yourhandymansite.com

JumboJack

I think the thing is posts like this tick off most GC's.To become a GC in most states it takes many years of work experience in the field.
For someone to think they can come in with a diploma and run a construction company is rather insulting. Just my 0.02

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in texas with framing and cornish people will do it for 3.00 a foot. What do yall think about that? Just laber

greg24k

Before you start looking for a partner and for easy way to get a piggy-back ride to become a GC, start by getting the job first, get your hands dirty and start from the bottom... learn how things work, how things get done. Don't start building a house from the roof, start from digging a hole first and forming the foundation and work your way up.

Doing big Government jobs, you don't need Diploma. You need a bank-roll to carry the job and someone who can type without looking at the keyboard, because paper work is all you be doing to get your money back.

Your diploma is a good thing, education is very important, but if you want to succeed, put the Diploma in a nice frame, hang it in a nice quiet place and read it when you don't have enough time to grab the paper.

Most importantly remember this my Friend... It is a long way up, but its a quick way down... so take your time and let the wet spots behind your ears to dry up.

Good luck

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P.J.

Wow, so sorry to have upset you. Strong language on your part. Not out to hurt anyone. Just trying to figure out a way to pay the bills like everyone else.

Handymanservice

Reread Greg24k's post, that is almost as much good information you could ever expect from a stranger.

Real good advice.

Just hang around and learn, ask questions, show you are serious and the knowledge will come.

You have to take part in these discussions though, not just your own. 3 posts, let's get busy, start getting involved and more people will get involved in your growth.

__________________
"You can shear a sheep every year, but you can only skin him once!" Remember that when dealing with your customers and pricing.

http://www.yourhandymansite.com

rbsremodeling

There is a very large market for some one who holds the qualification/ criteria that you meet.

1. I plan to register as a Veteran Owned Business to pursue government set aside contracts and fill SBA HUB requirements for prime government contractors.

2. I am currently completing a Master's Degree in Construction Management.

3. I have LEED AP and PMP certifcations.


I would get my own contractors license and sub the work out as you plan to. Nothing really wrong with it. Lots of guys work like that. If you have good credit and can get a few loans, lines of credit etc. even better.

BUT By having your own license you can hire, fire or determine how and when someone works for you.

HE who holds the license Makes the RULES.

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P.J.

Yes, I would love to go work for an outfit that is qualified before just jumping in...however there is not alot of hiring going on... My understanding is that the amount of dollars in the stimulus plan is just enough to keep companies from laying off more people and that the construction industry will not begin hiring in earnest until the second half of 2010. With that being said I was hoping to get my legal, accounting, and other business systems in place and be prepared when things pick up.

P.J.

Well...if you are already bidding on government work then you would not need me. But I think that basically we are approaching this from two different angles (I know I have alot more research to do on this). I am looking at it from more of the role of a construction management firm rather than a GC. Alot of times for big commercial jobs, there are separate bid packages. There may be a bid package that contains, landscape, irrigation, and hardscape, while there will be a separate one for the actual building. I would start out with the exterior improvements package providing pre-construction coordination in terms of putting bid price together for this package, scheduling, and schedule control.