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Advice For Expanding My Company.

 
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Old 07-01-2012, 09:01 PM   #1
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Advice For Expanding My Company.


Hello everyone, thanks for reading. I am a small home improvement company, we have done all phases of renovation inside and out. I want to take my company to the next level and finally make some money. I have been in business for 5 years now and have nothing to show for it. No savings, financial difficulty, mortgage problems, and new child to care for now.

I don't know what I am doing wrong, I always do the right thing, never cut corners, we do exceptional work, and never have any problems with customers. I always create a great relationship with all my customers. I always take the time to do it right the first time. But, it always seems like the job takes longer than it should and by the last payment of a large project (say kitchen or bath) I don't seem to have much profit. And small ones dont seem worth it at all.

I love what i do, but I have back and neck problems that are keeping me from doing what i love and i have to start letting the help do it the way I want it done...it's hard. I have to do something soon or I will have to hang it up and figure out something else.

Please, any advice will help...thank you.
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Old 07-01-2012, 09:10 PM   #2
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Re: Advice For Expanding My Company.


raise your prices.

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Old 07-01-2012, 09:32 PM   #3
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Re: Advice For Expanding My Company.


ok please understand this is my 2 cents and offererd as advise, you are not ready for the "next level" what ever that may be, 5 years no $ mortgage problems, you have to be succsesful at this level to move forward, get some professional advise, look at job costs mark ups your bids (your estimate skills may need tweeking), BUT ITS NOT THAT BAD YOUR STILL IN BIZ AFTER 5, and the last 3.5 have been hard.
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Old 07-01-2012, 09:33 PM   #4
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Re: Advice For Expanding My Company.


Raise your prices and allow for the additional time that all projects seem to take.
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Old 07-01-2012, 09:36 PM   #5
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Re: Advice For Expanding My Company.


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raise your prices.
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Old 07-01-2012, 10:05 PM   #6
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Re: Advice For Expanding My Company.


sunkist..thanks. And for the others, i think i am pretty good with estimating..well getting better. If I go any higher I wont get the job, but on the other hand I always feel I could have charged more when I'm twards end of the job.
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Old 07-01-2012, 10:08 PM   #7
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Re: Advice For Expanding My Company.


Your pretty good at estimating but don't make any money on the jobs you estimate?
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Old 07-01-2012, 10:09 PM   #8
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Re: Advice For Expanding My Company.


Quote:
Originally Posted by Premier_929
sunkist..thanks. And for the others, i think i am pretty good with estimating..well getting better. If I go any higher I wont get the job, but on the other hand I always feel I could have charged more when I'm twards end of the job.
Sounds like you're selling on price then and not ability or anything else.

My question to you is where do you want your company to go?
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Old 07-01-2012, 10:16 PM   #9
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Re: Advice For Expanding My Company.


You should be organized enough to be able to break down jobs and find out where the problem is. You should work on "systems" in your business so things become predictable. When things are predictable problems are easily identified and solved.

On your last job what went well? What didn't?

You see, you are ready for the next level if the next level means creating a system around individual components that make up your business.

Look at the bright side, you identified a problem. Many people don't until it's too late.
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Old 07-01-2012, 10:16 PM   #10
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Re: Advice For Expanding My Company.


Quote:
Originally Posted by Premier_929 View Post
sunkist..thanks. And for the others, i think i am pretty good with estimating..well getting better. If I go any higher I wont get the job, but on the other hand I always feel I could have charged more when I'm twards end of the job.
Quote double what you think it's worth. I recently started subbing work from another company. They charge double what I charge. A real eye opener. It is easy to sell their jobs too. I think the reason is I don't care if I get the job or not. I price it for double my rate, they can take it or leave it. Funny thing is, I've given 5 quotes and sold 3 jobs. 60% close is pretty good.
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Old 07-01-2012, 10:18 PM   #11
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Re: Advice For Expanding My Company.


Quote:
Originally Posted by BamBamm5144 View Post
Sounds like you're selling on price then and not ability or anything else.

My question to you is where do you want your company to go?
I just got the "2012 National Construction Estimator" to help out with my bids, and like I said, I think if I raised my prices anymore I would get LESS work.

I want my company to work on larger projects where I can make MORE money. What I want to know is where does these successful companies get all the opportunities. Maybe hook up with an architect?
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Old 07-01-2012, 10:21 PM   #12
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Re: Advice For Expanding My Company.


on this board some where it says i never lost a penny on the job i did not get, or some thing like that, over head and profit its all part of business, with out it you are a hourly worker, a low paid hourly worker. CHARGE MORE.
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Old 07-01-2012, 10:21 PM   #13
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Re: Advice For Expanding My Company.


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Quote double what you think it's worth. I recently started subbing work from another company. They charge double what I charge. A real eye opener. It is easy to sell their jobs too. I think the reason is I don't care if I get the job or not. I price it for double my rate, they can take it or leave it. Funny thing is, I've given 5 quotes and sold 3 jobs. 60% close is pretty good.
thats great, I would love that opportunity...but the jobs dont come around that much. They never have. Every year its week by week to get jobs.
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Old 07-01-2012, 10:24 PM   #14
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Re: Advice For Expanding My Company.


Quote:
Originally Posted by Premier_929

I just got the "2012 National Construction Estimator" to help out with my bids, and like I said, I think if I raised my prices anymore I would get LESS work.

I want my company to work on larger projects where I can make MORE money. What I want to know is where does these successful companies get all the opportunities. Maybe hook up with an architect?
The larger project theory is a myth. It's all work, it's all hard, and it all requires a good running business. Lots of people make money doing what you do. If you are already going through the process of remodeling houses don't change the nature of your work just figure out the problem. It's easier to fix than to change.
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Old 07-01-2012, 10:32 PM   #15
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Re: Advice For Expanding My Company.


I strongly suggest reading the book Markup & Profit by Micahel Stone. I am in business 27+ yeras and am currently reading it because I heard good things about it, and wish I had read it years ago; I have made many mistakes that he mentions. I was in your position many times, where I felt I had to close up shop, but I always plugged along, but unfortunately with a credit line. What helped me move along, is commercial work. Others may tell you otherwise, and say that residential is better, and I have seen both sides, and still do, but rarely do I hear, "I can get it at Home Depot for..." in commercial work. Sure there is more paperwork involved, but I would never trade it for residential; the pros outweigh the cons in my opinion; others may have had a different experience.

Do not give up, you made it 5 years, with most of them being a recession, so that says something. This is my 3rd recession in business, and have always been very busy during the recessions. I currently have work for my crew and subs until the end of the year, but I am actually also looking to take it to the next level myself, as I have my oldest son on board now; that is why I am reading Markup & Profit, to figure out what I have been doing wrong, and learn something new.

Good luck to you!
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Old 07-01-2012, 10:35 PM   #16
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Re: Advice For Expanding My Company.


Quote:
Originally Posted by Premier_929 View Post
I just got the "2012 National Construction Estimator" to help out with my bids, and like I said, I think if I raised my prices anymore I would get LESS work.

I want my company to work on larger projects where I can make MORE money. What I want to know is where does these successful companies get all the opportunities. Maybe hook up with an architect?
What's wrong with less work for more money? Why work yourself to death to break even?

It may be rough at first when you raise your prices, it was for us. But if you do great work and take care of the client, you will eventually be booked at your rates.

Not to pry, but we can't help if we don't have more info. There has to be something you are falling short on in your business or your projects? I spend a lot of time analyzing both aspects of my company, and trying to fix the inefficiencies.

You mentioned that your projects seem to take to long. Do you use critical path scheduling? Any efficiencies that can be repaired there? Scheduling and not making to many trips, ect.. are important to maintaining profit margins.
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Old 07-01-2012, 10:39 PM   #17
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Re: Advice For Expanding My Company.


Based on what you have so honestly admitted, I would stop before you end up in real trouble. Keep one man and focus on small jobs where the bean counting is on a daily basis. Go to the NAHB shows and read all you can about sales. Sounds like you leaped in to remodeling without looking.
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Old 07-01-2012, 10:40 PM   #18
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Re: Advice For Expanding My Company.


Just noticed you are on the Island; is most of your work there? I hear there is really not much going on there, other than the Hamptoms, I believe, so it may not be that you are doing anything wrong, just a bad time. I know an HVAC contractor from there that started going into the city because of no work, and then up and down the east coast for a co. renovating McDonalds.
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Old 07-01-2012, 10:41 PM   #19
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Re: Advice For Expanding My Company.


Quote:
Originally Posted by Oconomowoc View Post
The larger project theory is a myth. It's all work, it's all hard, and it all requires a good running business. Lots of people make money doing what you do. If you are already going through the process of remodeling houses don't change the nature of your work just figure out the problem. It's easier to fix than to change.
I agree to a point.

As a GC, with an inhouse crew, which it sounds like he has, having atleast one larger project at a time makes it a lot easier to keep guys busy. It also helps you build a more impressive portfolio. Just depends on your model.
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Old 07-01-2012, 10:44 PM   #20
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Re: Advice For Expanding My Company.


Quote:
Originally Posted by FGCC View Post
I strongly suggest reading the book Markup & Profit by Micahel Stone. I am in business 27+ yeras and am currently reading it because I heard good things about it, and wish I had read it years ago; I have made many mistakes that he mentions. I was in your position many times, where I felt I had to close up shop, but I always plugged along, but unfortunately with a credit line. What helped me move along, is commercial work. Others may tell you otherwise, and say that residential is better, and I have seen both sides, and still do, but rarely do I hear, "I can get it at Home Depot for..." in commercial work. Sure there is more paperwork involved, but I would never trade it for residential; the pros outweigh the cons in my opinion; others may have had a different experience.

Do not give up, you made it 5 years, with most of them being a recession, so that says something. This is my 3rd recession in business, and have always been very busy during the recessions. I currently have work for my crew and subs until the end of the year, but I am actually also looking to take it to the next level myself, as I have my oldest son on board now; that is why I am reading Markup & Profit, to figure out what I have been doing wrong, and learn something new.

Good luck to you!
thanks for the advice FGCC, I do have experience in commercial and DO do couple jobs each year. They are better proffit always but still I cant get the opps.

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