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Do You Need To Lose Money Developing Your Brand And Making A Name For Yourself?

 
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Old 12-03-2018, 06:22 PM   #1
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Do You Need To Lose Money Developing Your Brand And Making A Name For Yourself?


Truthfully, my first few years in business have been pretty good. I ended my first year at 35%GP and kept it about the same since then.

Whats wrong?

Well it seems the leads Ive gotten lately, the budget is just not there, and were competing against complete idiots 'bidding' at insane numbers.
Even when Im able to get a PCSA or feasability agreement, many more projects are being abandoned before CDs and permitting it seems.


These crazy competitive quotes get me thinking if we need to play the same game- which of course leads to the inevitable walking off the job when they realize they screwed up, or the jawdropping change order to stay on the job."Man I am sorry, we just didnt see the structural sheets when we bid, it wasnt included"...etc. BUT, THEY GET THE PROJECT UNDER CONTRACT AND WE DONT..

Anyways, Im sure Ill work through it, but just seems the leads have gone downhill as of late. And im talking about through the same architects, and through very good word of mouth referrals. Not like were burning bridges and bidding from a subpar group of projects.


Just venting, as they say....

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Old 12-03-2018, 08:37 PM   #2
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Re: Do You Need To Lose Money Developing Your Brand And Making A Name For Yourself?


no, you do not need to lose money while making a name for yourself.

however, you may not make as much as you will once you become established.

it is becoming increasingly difficult for a legit contractor to compete against unlicensed guys or those who don't have legitimate payroll or a business.

and competing against a low baller and playing the change order game is criminal.

now as for some idiot that says he didn't see structural pages or whatever...shame on the owner for not throwing him out the door.

they deserve what ever they are going to get.

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Old 12-04-2018, 01:07 AM   #3
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Re: Do You Need To Lose Money Developing Your Brand And Making A Name For Yourself?


If you know what you're doing, know your numbers and you just keep your word your business will grow. The last three years have been the best in my 13 years. There have been much much harder years.

There's an old saying, "When things get bad dont get too excited they will get better. When things get good, dont get too excited things will get worse."

It's almost easier to borrow yourself out business during a boom than it is to go out of business not working during a recession.

Always remember, there's no reason to go to work if you're going to go broke anyway. In other words, dont get yourself into work you lose money on just to have something to do. Sometimes the best thing to do is be patient.

Whenever I'm out of work and I need a sale I get in my kayak and go fishing. Invariably I'll get a call just when the fishing picks up.

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Old 12-04-2018, 07:46 AM   #4
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Re: Do You Need To Lose Money Developing Your Brand And Making A Name For Yourself?


I’m not actually going to play that game, but man it sure seems like the competition around here is all on board.

Just priced out a new build, shell cost was 160k. Client got two other bids at 80k and the other apparently a little under 100k. The whole homes SOV side by side, the numbers were often 60-70% of our total line items.

Just seems like the numbers I’m seeing lately are stupid. Maybe some new businesses popping up not knowing what to charge or what it costs to be in business?
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Old 12-04-2018, 11:23 AM   #5
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Re: Do You Need To Lose Money Developing Your Brand And Making A Name For Yourself?


You can't judge your business by a string of refferals. My ex boss is all WOM, like I am, and his business is in 10-12 million range at this point. His office disqualifies 80% of their referrals on the phone before they even get sent to his desk and he disqualifies and number of those.

Part of building a reputation as being sought after often takes some balls and costs some money. It is all fun and games until you need the project or you will be paying overhead and staff out of your pocket. I've been in that situation twice in the last 15 months, had 2 projects going but 1 short of over head. We paid the money, passed on the projects that did not have the budget and went out hunting and found something to kill. It's still a risk. There's a reason hunting isn't called killing.

My give a f*** about homeowners hiring these f****** losers is about 0 at this point. They know what they are doing unless they are complete dumbass's, and if they have any remote possibility of being able to afford me to build them something in the first place, either they are smart enough to know or their daddy was or somebody.

Let them hire the handy hacks and get what they've got coming. I see it all the time, people pass on quality contractors, hire some idiot who is either a fast selling paper contractor or a wannabe loser who looks like a wannabe loser because he is cheaper.

I just went and looked at a old whole house remodel in my hometown, his Banker told him to call me when he gave him a loan to do the project, he hired some handy hack instead of calling me, the guy walked off the job because he did not have enough money to finish or remotely even come close to finishing, and then this guy calls me to come and look at finishing it. I showed up looked around and told him no thanks. You should have called me to begin with, hoss.

Why didn't He? I sounded expensive. Well who's expensive now? Lol
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Old 12-04-2018, 11:52 AM   #6
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Re: Do You Need To Lose Money Developing Your Brand And Making A Name For Yourself?


there was aperiod of time when banks were big in to owner builder projects.

some i bid on only to be told i was too expensive.

6,8 12 months later i get a call to come look at the project.

of course it is an absolute abortion red tagged by bldg dept and bank pissed off.

people would ask can you fix this????

why of course i can, but if you thought i was expensive before wait until you see the price now....
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Old 12-04-2018, 11:58 AM   #7
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Re: Do You Need To Lose Money Developing Your Brand And Making A Name For Yourself?


Quote:
Originally Posted by griz View Post
there was aperiod of time when banks were big in to owner builder projects.

some i bid on only to be told i was too expensive.

6,8 12 months later i get a call to come look at the project.

of course it is an absolute abortion red tagged by bldg dept and bank pissed off.

people would ask can you fix this????

why of course i can, but if you thought i was expensive before wait until you see the price now....
I need to get there with giving them a price. I generally just say nope, not interested.

I told a guy the other day who hired some two bit hack to add a second story onto his house, guy failed so many inspections the owner fired him and inspector told him to holler at me.

I passed on it as well, not slow enough to need to handle stitching up a POS, and I told the guy you know there are good shade tree mechanics - but I'm not going to find out which of the few are. My mechanic is legit, insured, certified and established ect... Next time I suggest you do the same.

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Old 12-04-2018, 12:04 PM   #8
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Re: Do You Need To Lose Money Developing Your Brand And Making A Name For Yourself?


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I need to get there with giving them a price. I generally just say nope, not interested.

I told a guy the other day who hired some two bit back to add a second story onto his house, guy failed so many inspections the owner fired him and inspector told him to holler at me. I passed on it as well, not slow enough to need to handle stitching up a POS, and I told the guy you know there are good shade tree mechanics - but I'm not going to find out which of the few are. My mechanic is legit, insured, certified and established ect... Next time I suggest you do the same.

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it was really good work.

backed by the bank because they wanted their investment done right & finished.

there were only a couple of us that ventured in to this game but when the bldg inspector, engineer, architect or bank asks you to go see if you can save a job it ended up being beneficial.

and it was expensive....dam banks finally learned their lesson
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Old 12-04-2018, 12:08 PM   #9
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Re: Do You Need To Lose Money Developing Your Brand And Making A Name For Yourself?


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Originally Posted by griz View Post
it was really good work.

backed by the bank because they wanted their investment done right & finished.

there were only a couple of us that ventured in to this game but when the bldg inspector, engineer, architect or bank asks you to go see if you can save a job it ended up being beneficial.

and it was expensive....dam banks finally learned their lesson
We've done a couple. We did one a couple years ago we won a number of awards with. City inspector and structural engineer got us involved.

We are about to build those people a big ass boat dock.

But they honestly got taken by a con artist who's been around forever. He looks and talks the part.

Not like hiring a guy who looks, sounds and smells cheap and then being dismayed when he pulls up late with 3 drug addicts with one saw and one nail gun between them, starting late, quitting early and drinking between why their jalopy spills oil on the driveway lol

In my case 90% of these are second homes, I don't feel bad for any of them LOL . To be honest I don't feel bad for anyone unless it's some little old lady who got taken advantage of or something. People should learn to be more competent in their judgement

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Old 12-05-2018, 08:56 AM   #10
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Re: Do You Need To Lose Money Developing Your Brand And Making A Name For Yourself?


Looks like I did not mention another thought..

I recently read a perspective that- as your move along an economic expansion, the leads eventually transform into clients whom are stretching themselves more thin than before. People with the real coin, begin work during the dip, and as a cycle rolls along- thinning out to make way for the people whom were not necessarily financially viable initially.

These people either become more financially stable ( or think they are) at a later point in the economic recovery cycle.

Interesting, as it seems to mirror the stories we have heard before the 2008 events, and recently the larger balance of issued subprime financing. I am not a professional economist, but it would seem that the pool of qualified borrowers is thinning or at least maxed out, leading banks to find other sources of income-i.e. subprime.
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Old 12-05-2018, 08:59 AM   #11
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Re: Do You Need To Lose Money Developing Your Brand And Making A Name For Yourself?


Quote:
Originally Posted by LPG View Post
Looks like I did not mention another thought..

I recently read a perspective that- as your move along an economic expansion, the leads eventually transform into clients whom are stretching themselves more thin than before. People with the real coin, begin work during the dip, and as a cycle rolls along- thinning out to make way for the people whom were not necessarily financially viable initially.

These people either become more financially stable ( or think they are) at a later point in the economic recovery cycle.

Interesting, as it seems to mirror the stories we have heard before the 2008 events, and recently the larger balance of issued subprime financing. I am not a professional economist, but it would seem that the pool of qualified borrowers is thinning or at least maxed out, leading banks to find other sources of income-i.e. subprime.
90% of my work is Cash luckily, but the ones that are borrowing I'm having a lot of problems with the bank. I emailed ninja framer the other day to see if he was having problems with his appraisals. He said he has figured his out but he's using local banks, most of my borrowers are using big Banks. I will not work with Bank of America ever again.

I am trying to get to people that we're working with right now on design to use my local bank, I think that they took my advice. Now that they offer interim and Mortgage in the same bank it makes it a lot easier to.

I am not seeing a crash, but I do see a lot of signs for a Slowdown, may be significant, maybe not, in the near 18 month) future here. That's not necessarily A Bad Thing, everything gets so out of whack during a boom.

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Old 12-05-2018, 06:25 PM   #12
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Re: Do You Need To Lose Money Developing Your Brand And Making A Name For Yourself?


Quote:
Originally Posted by LPG View Post
Looks like I did not mention another thought..

I recently read a perspective that- as your move along an economic expansion, the leads eventually transform into clients whom are stretching themselves more thin than before. People with the real coin, begin work during the dip, and as a cycle rolls along- thinning out to make way for the people whom were not necessarily financially viable initially.

These people either become more financially stable ( or think they are) at a later point in the economic recovery cycle.

Interesting, as it seems to mirror the stories we have heard before the 2008 events, and recently the larger balance of issued subprime financing. I am not a professional economist, but it would seem that the pool of qualified borrowers is thinning or at least maxed out, leading banks to find other sources of income-i.e. subprime.
The credit cycle. Standards got tightened in 2009 2010. Trump got elected and they gutted the regulations that prevented subprime lending. The banks cant do any more refinancing because there's only about a million homes that actually have higher interest rates than are currently available. So to keep growing and pumping up the stocks they have to lend on shadier and shadier deals. Eventually the loans collapse and then the standards get tightened again. Happened with the Savings and loans. Happened in 09. Itll happen again when unemployment goes from 3.7 to 10 percent.



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