Advice wanted for starting a construction firm - Page 2 - Contractor Talk - Professional Construction and Remodeling Forum

P.J. · 04-24-2009, 09:40 PM

Quote:

Originally Posted by 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.

I probably could have worded my initial post alot better, but I think that what I am actually aiming for is to operate as construction management firm rather than a GC.

P.J. · 04-24-2009, 09:56 PM

Quote:

Originally Posted by 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

JumboJack,

I really didn't mean to tick anyone off or insult any GCs. I thought the purpose of this forum was to ask questions. I didn't know asking would make people this angry. Why would it be insulting to GCs if someone with a diploma (education is so evil) starts and runs a construction company. If he fails, then an established person such as yourself looks even better by comparison. I also know that part of developing a business is hiring people that know what I don't know.

JumboJack · 04-24-2009, 11:47 PM

Quote:

Originally Posted by P.J.

JumboJack,

I really didn't mean to tick anyone off or insult any GCs. I thought the purpose of this forum was to ask questions. I didn't know asking would make people this angry. Why would it be insulting to GCs if someone with a diploma (education is so evil) starts and runs a construction company. If he fails, then an established person such as yourself looks even better by comparison. I also know that part of developing a business is hiring people that know what I don't know.

Well one thing is that construction is something you can't learn to do in a class room.Sure,you could learn to do the books I supose but if you have never got your hands dirty in the field you will have a hard time,IMO...

If all you have is a diploma do you really think you could run a job and tell me and guy's like me where to go and what to do and how you want it done?

JumboJack · 04-24-2009, 11:57 PM

Quote:

Originally Posted by 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.

Again.Why would a company,that needs a GC license in most cases,need some one like you to do this?Do you think you could do this better (or as good) than an experienced GC.
I don't mean to bust your balls (maybe I do)...A lot of guy's have degree's and run construction companys.But they also have years and years of field experience to go with it.

Aggie67 · 04-25-2009, 10:57 AM

I used to work with a guy that started his own "company". Set himself up as hub zone and minority owned. Got the paperwork to do Fed and state work (ports, airports, bases). He "partnered up" with a couple outfits that actually did the work. He was basically using his status to get the work, and he'd sub 100% of it out. Usually to one of the other outfits that lost to him because had golden status.

That quote earlier, about jumping into a shark tank with meat tied around your waist? It applies.

After about 3 years of struggle, he called me looking for advice on hiring field crews to do the work in house. One look at the equipment list he'd need, and he settled back into paper tiger he was. All he does now is pay bills with the leftovers he makes off of jobs. His wife is a professional type, and they live off her salary.

Jason W · 04-25-2009, 11:14 AM

Quote:

Originally Posted by 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.

The big problem you'll face starting out with no experience is becoming pre qualified to bid the work. They want to see past experience and so will the bonding agent.

Not saying it can't be done, but most of the bid forms I fill out require that you've done similar work on similar sized projects to even be considered. They also require that you have a certain % of self performance on the project and a certain % of minority owned businesses. I've been in this a long time and even I have a hard time becoming qualified for some jobs.

Don't want to discourage you, but you have a tough road ahead. Start making contacts with developers and Architects that do Gov. work. See if they can help give you a leg up.

SC sawdaddy · 04-25-2009, 11:53 AM

I wish you good luck PJ, its a tough business to be getting into right now. The commercial side will keep on rolling, for government contracts especially. But you will definitely have to be licensed to bid on them unless you are estimating for a licensed contractor. My suggestion, for what its worth, is to keep trying to hook up with an established construction company and work your way up through the ranks learning the trade while doing your research on the business end in your spare time.

P.J. · 04-25-2009, 12:47 PM

Quote:

Originally Posted by Aggie67

I used to work with a guy that started his own "company". Set himself up as hub zone and minority owned. Got the paperwork to do Fed and state work (ports, airports, bases). He "partnered up" with a couple outfits that actually did the work. He was basically using his status to get the work, and he'd sub 100% of it out. Usually to one of the other outfits that lost to him because had golden status.

That quote earlier, about jumping into a shark tank with meat tied around your waist? It applies.

After about 3 years of struggle, he called me looking for advice on hiring field crews to do the work in house. One look at the equipment list he'd need, and he settled back into paper tiger he was. All he does now is pay bills with the leftovers he makes off of jobs. His wife is a professional type, and they live off her salary.

Aggie,

Thanks for the advice. Did this guy ever elaborate on why he couldn't make money doing that i.e was it the amount of legal costs, insurance, etc. Was it the fact that he had to charge a rock bottom fee in order to get the job? I understand there will be risks involved in any kind of business. I definitely don't want to get into a loosing proposition.

Thanks,
P.J.

P.J. · 04-25-2009, 12:55 PM

Quote:

Originally Posted by Jason W

The big problem you'll face starting out with no experience is becoming pre qualified to bid the work. They want to see past experience and so will the bonding agent.

Not saying it can't be done, but most of the bid forms I fill out require that you've done similar work on similar sized projects to even be considered. They also require that you have a certain % of self performance on the project and a certain % of minority owned businesses. I've been in this a long time and even I have a hard time becoming qualified for some jobs.

Don't want to discourage you, but you have a tough road ahead. Start making contacts with developers and Architects that do Gov. work. See if they can help give you a leg up.

Jason,

Thanks. Someone had a good saying on another thread they started which seems to be what I am facing: "You can't get a job without experience, and you can't get experience without a job." I talked to a bonding company and they said that starting out I would have to go after jobs less than $200,000 and that my ability to get bonded would depend on my personal credit (no problem there).

Do you have any suggestions for making contacts with developers, architects, government prime contractors?

Thanks,
P.J.

P.J. · 04-25-2009, 01:00 PM

Quote:

Originally Posted by SC sawdaddy

I wish you good luck PJ, its a tough business to be getting into right now. The commercial side will keep on rolling, for government contracts especially. But you will definitely have to be licensed to bid on them unless you are estimating for a licensed contractor. My suggestion, for what its worth, is to keep trying to hook up with an established construction company and work your way up through the ranks learning the trade while doing your research on the business end in your spare time.

Sawdaddy,

Thanks. Great suggestion. Definitely the safest route and the one I would prefer to pursue. I will continue to look for openings with GCs. Just hard to find right now, with project managers that have over 20 years of experience looking for jobs.

Thanks,
P.J.

Mike Finley · 04-25-2009, 01:13 PM

The biggest problem you are going to have is the same problem anybody is going to have in business. In that whether you are a small time guy who started in the trades 25 years ago as just yourself and now have a crew of 10 under you or a guy like yourself who has a crew of 10 subs under him...

The bottom line is in both cases if you aren't doing the dirty work that produces the product ---- then you have to rely on somebody else.

Now as a guy with 25 years of experience who has worked his way up from the bottom or looking at you with no experience.... who is going to be in deep sh*t the first time something goes wrong with those you have trusted to produce your product??

The very first time somebody comes in over bid or plays one of the 1000 different games to be played on somebody like yourself, you are going to be defenseless and not know what even happened before it's too late.

This is not like buying a Subway franchise and checking in once a week to make sure the bread is fresh and the 16 year olds aren't playing too much grab ass.

SNA · 05-11-2009, 05:29 PM

PJ, school took you lots of hours and lots of work. In this industry its hand and hand long hours and lots of work to get jobs running. Make sure you are ready, owning a company partnership or not is not in my exsperiance an 8 - 5 job. Make sure you can handle that pressure along with all the other nicks and crannies

SkylineElectric · 05-21-2009, 10:41 AM

Quote:

Originally Posted by P.J.

I probably could have worded my initial post alot better, but I think that what I am actually aiming for is to operate as construction management firm rather than a GC.

There's no benefit ever having set foot on a construction site or worn a tool belt or swung a hammer if you plan to run a construction business. Actual experience in an industry is highly over rated. Your Masters degree in Construction Management is really all you need to successfully bid on and complete lucrative public works projects.

The business model you are contemplating is one that is becoming more and more popular: Insinuate yourself between the customer and those who actually do the work and skim funds as they pass through you to the workers and when the job turns out great, take complete credit for it.

There is nothing unusual or outrageous about what you propose.

naptown CR · 05-21-2009, 11:12 AM

You can do this. I would however get a job first with the most sucessful GC that you can. Once there network your a** off with the people whom are the decisionmakers for the govt. From speaking to others in this business that seems to be the key to sucess. Knowing people at the decisionmaker level. When you strike out on your own start wwith small jobs under 25k and most times there is no bond required. Bonding is going to be the single most challenging thing you will encounter. Once you have established a track record then go for larger jobs. good luck!

Roy Propsner · 10-09-2009, 01:51 PM

Contact my company to discuss possible commercial work in New Mexico.
Roy Propsner (Google Me) Our client is in Texas and we will start a town building project soon.
Just a few questions and a discussion of what might be.