Need guidance in helping a Welder in Virginia become a contractor... - Contractor Talk - Professional Construction and Remodeling Forum

Max Nomad · 12-26-2008, 11:25 AM

Happy Holidays and all that good stuff...

I've got an uncle that's been a welder with a local shipyard. All total he's got about 20+ years of experience, trained and certified in all kinds of metals and fun welding-related stuff that goes completely over my head. Last summer he was in a bad motorcycle accident and although he's up and around again there's no telling when the shipyard is going to allow him to come back to work. He's been seriously looking at going into business for himself in the state of Virginia to do something with welding, particularly in lining himself up to bid on government contracts -- but I'm pretty sure anything that would help keep the bills paid would be welcomed.

I've been giving him info about becoming a Contractor but I'm only a Home Improvement Contractor in this state. I don't know anything about what's required as a welder or how that side works, plus neither Google nor Virginia's DPOR site has been much help. If anyone has any advice, recommendations, pointers, books or anything else helpful we'd definitely appreciate it. Thanks in advance.

JTMcC · 01-06-2009, 09:46 PM

I see you haven't gotten any help, but the question is too vague to get much help.

The welding world covers a lot of very different fields.
I'm not familiar with Virginia, but the first thing he needs to do is determine, fairly specifically what type of work he would like to go after.
He would need to check with the state contractor licensing authority and determine if that work requires a license in Virginia. If so get very familiar with what exactly that requires and the expense.
Then start getting quotes on liability insurance, being very specific in defining they types of work to be done to the insurance agents.
Make a list of everything needed to start up including of course welding equipment, trucks, tools, basic office equipment, and price all of that.
Educate himself on what form of business to start, and determine the cost's involved in that.
Take a hard objective look at his ability to competively estimate jobs.
If he can't or doesn't want to handle taxes and books, learn what that will cost.
Price any rental on shop, office, yard space if needed.
Determine how much he needs to pay employees, and learn the overall cost's of an employee.
Determine if he can find and keep skilled hands. And how he's going to do it.
Figure the likely weekly payroll and operating expenses and determine how long he can operate before seeing income coming in.
Call the local welding supply and learn the cost's of consumables.

That's just a few things off the top of my head, I'll add that for someone who's never run a business, to jump in from the get go and try to pick up government contracts is a huge, huge, probably impossible leap.

Just some things to consider, not a comprehensive list by any means. And, just my opinion.

JTMcC.

Max Nomad · 01-07-2009, 07:27 AM

Quote:

Originally Posted by JTMcC

I see you haven't gotten any help, but the question is too vague to get much help.

The welding world covers a lot of very different fields.
I'm not familiar with Virginia, but the first thing he needs to do is determine, fairly specifically what type of work he would like to go after.
He would need to check with the state contractor licensing authority and determine if that work requires a license in Virginia. If so get very familiar with what exactly that requires and the expense.
...snip...

Greetings JTMcC,

First and foremost, thanks for the feedback. Everything you shared will help me to help him put it all into perspective. I've already checked with DPOR (Virginia's state contractor's licensing board) and found out the type of license he'd need to get but it's the other things you've mentioned that are where all the reality checks are going to come in. His skills in the various types of welding aren't anywhere near as much of an issue as whether or not he can make that Big Leap from half a lifetime in shipbuilding to going into business for himself. The only thing I can do is help him by scouting out some of the paths he needs to take.

JTMcC · 01-07-2009, 10:55 AM

You're welcome.
Keep in mind this is a field where you don't have to have a shop, office, employee's. You don't have to go after big govt. contracts.
Entry is incredibly cheaper if you put together a mobile rig, any used solid 3/4 ton truck will do, a 1 ton is nicer. An used engine drive welding machine, bigger is better, I'd avoid the 2 cylinder air cooled machines and get a deisel driven 250 -300 amp machine. Torch paraphanalia, hand tools, a couple of come-a-longs, ect. He'll have a understanding of tool requirements if he's got 20 years experience.
Get licensed up, run a small office out of his home, get insured and start hustling some work.
I've watched close to a hundred people start up this way in my area only to go bust quickly, but I also know several who've started out like that and really done well long term.
Just another, and for most people more realistic, option .

JTMcC.

JTMcC · 01-07-2009, 01:20 PM

I'll add one more important point. Of the dozens of start ups I've watched come and go, the vast majority seem to fail for one reason. Charging too little.
A lot of this type of work is done at an hourly rate, even if you quote the work you have to have an hourly cost in mind to set your pricing.
These guys base their rates on their "employee, wage earner" mentality and way underestimate the actual cost of making a profit in a substainable business.
Call around to successful, long term business' in the area that do similar work and ask their rates. That's a starting point.
I see newcomers confuse cash flow with personal income. A small, one man welding operation may be billing, just for an example, $5000 per week (which looks like a lot to a wage earner), but if it cost's him $4500 per week to do the work, he's better off flipping burgers.
They will say they are working cheap to "get their foot in the door" or "I don't have the overhead those big outfit's have". That's cutting your own throat. They only pick up the bottom of the barrel, low profit work. For the slow or no paying bottom of the barrel customers.
The real customers won't take you serious if your rates are too low.

You probably already know all of this and more but I see it over and over.

JTMcC.