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Asking For More Money

 
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Old 04-20-2013, 11:13 AM   #221
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Re: Asking For More Money


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I'm still here. Waiting to hear back from the homeowners bank. Their banker contacted me and left a message, asking me to call him back which I did however he was out of the office yesterday
That's actually potentially good news for you...
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Old 04-20-2013, 11:25 AM   #222
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Re: Asking For More Money


Good
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Old 04-20-2013, 11:36 AM   #223
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Re: Asking For More Money


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Originally Posted by Unger.const View Post
How did this post go from homeowner wants remodel upgrades and labor for free to who has the best O&P ratio to happy birthday (happy bday ohiohomedoc by the way)

Did anyone notice if elbud is still alive?

I think we are all glued to his story because on some level we've been in his shoes.
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Old 04-20-2013, 11:58 AM   #224
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Re: Asking For More Money


Were just killing time as we wait on updates.

Happy birthday ohiohomedoctor. Btw you now have more than you did before (years old) so that counts as profit! O.o
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Old 04-20-2013, 12:13 PM   #225
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Re: Asking For More Money


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Originally Posted by Inner10 View Post

Obviously he could be making infinity more money than I do but my point stands, if you are loosing money on SEVERAL jobs a YEAR something has to change.

.
I just am not going to agree to this. Say I go $1,000 in the red on five jobs a year but come in $2,000 good on twenty jobs all using the same system of bidding. Whats the big deal. I just can't get myself to see how your side of this. It is the over health of my business that concerns me.
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Old 04-20-2013, 12:27 PM   #226
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Re: Asking For More Money


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No-one said anything in a malicious way so I don't understand your angst here...
Probably true. I just don't think inner10 has enough information to justify telling homedoctor what areas of business he needs to work on. It came off to me like inner10 thought he could teach Donald Trump a thing about business because Trump has lost money on so many business ventures.
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Old 04-20-2013, 12:32 PM   #227
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Re: Asking For More Money


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I just am not going to agree to this. Say I go $1,000 in the red on five jobs a year but come in $2,000 good on twenty jobs all using the same system of bidding. Whats the big deal. I just can't get myself to see how your side of this. It is the over health of my business that concerns me.
Oh, I don't know... $5K?... really?

Frank, you can lose as much money on as many jobs as you want... you seem to regard it as part of doing business rather than something to be eliminated as part of doing business... I honestly don't understand that thinking...

Got company reserves? Company Emergency Fund? Personal Emergency Fund? All loans paid off? Credit Cards? Retirement funded? Kids college fund taken care of, Etc...

Think about that $5K the next robbing Peter to pay Paul cycle you are in and consider whether you would be in it at all...

Whole industry's have sprung up on capital preservation and process improvement...

Following your line of thinking, what do I need an accountant for? I guess as long as I can show myself in the black at the end of the year, it's all good... of course, coulda' had more black... but, what's the big deal?...

Consider, if you are using the same system that makes you going to the red $5K on 25% of your jobs, there is an implementation problem or a system problem...

The scary thing is you think it's just $5K... it's actually more...
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Old 04-20-2013, 12:48 PM   #228
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Re: Asking For More Money


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Probably true. I just don't think inner10 has enough information to justify telling homedoctor what areas of business he needs to work on.
If someone tells you they lose business several times a year and you don't, do you think you might has some insight? If someone doesn't want to hear ideas and/or solutions they are free to ignore..



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It came off to me like inner10 thought he could teach Donald Trump a thing about business because Trump has lost money on so many business ventures.
I didn't get that impression, and honestly think that's an exaggeration, but I think even Donald Trump would tell you that he doesn't just look at losing money as the way to do business rather finding ways to avoid it...
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Old 04-20-2013, 12:55 PM   #229
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Re: Asking For More Money


Why are you lumping your businesses budget and household budget together?

We look at it different. If I cover all the cost for my jobs for a year. Cover all of my overhead including my salary and end up with my target profit or better then I met my goal. I may have gotten there in a manner that was a bit different then I planned. If I can do this year after year while hitting my goals for growth then my systems are working and I will thank my team for their success DESPITE the fact that some jobs look bad on paper.
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Old 04-20-2013, 01:32 PM   #230
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Re: Asking For More Money


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Why are you lumping your businesses budget and household budget together?
I only listed them in context of "what's the big deal" over losing $5K...

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Originally Posted by FrankSmith View Post
We look at it different. If I cover all the cost for my jobs for a year. Cover all of my overhead including my salary and end up with my target profit or better then I met my goal. I may have gotten there in a manner that was a bit different then I planned. If I can do this year after year while hitting my goals for growth then my systems are working and I will thank my team for their success DESPITE the fact that some jobs look bad on paper.
Look bad on paper? They either are bad or they are not... You are making them "look good" and is an example of you making the numbers say what you want them to say by doing it the way you are stating...

Frank how do you hit your target you set at the beginning of the year using the same system for all your others sales when you are losing money on 25% of the jobs?

What you are not seeing is that the $1K LOSS is not only $1K, but $1k PLUS the gross profit you would have had on the job...

So your other jobs have to make up not only the LOSS of $5K that was above and beyond your contract, but they ALSO have to make up the LOSS of gross profit...

How you make that up is of course to you, but the NET EFFECT is that it is still lost money because the actions you took to make up that LOSS could've been taken anyway to garner you an INCREASED PROFIT... and that's really the point...

So like I said, you are welcome to lose as much money on as many jobs as you want, but until you are at the point of learning to EXTRACT profit from your company, you will always look at the $5K loss as only a $5K loss and no big deal... when in reality, it is and creates a snowball effect until you get caught in a rob Peter to pay Paul cycle...

Example: (simple numbers using your sample numbers examples in an attempt to avoid confusion)

$10K job
$1K GROSS profit
$1K LOSS above contract

That means you now have $2K to make up... the gross PROFIT and the LOSS... if you plan on hitting your profit target set at the beginning of the year, the $2K has to be made up somewhere else... EVEN IF you were able to get $1K more for the same $10K job (making it $11K), you would need TWO of them just to BREAK EVEN or find some other way (process improvement, working quicker to get job done, reducing material costs, etc.)... now if you had 5 other jobs where you lost the same $1K, how many jobs would you have to do to make the lost profit up just to break even?

Your job as a business owner is to protect the profit margin because this directly affects your business... and as we can see from the above simple example, that IS a big deal...

Last edited by KAP; 04-20-2013 at 01:51 PM.
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Old 04-20-2013, 01:40 PM   #231
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Re: Asking For More Money


Happy birthday ohio! Frank, glad to hear you are meeting you're goals.

Just read through this puppy, cant wait for the next episode. I would probably have to agree with having a lawyer handle this while you start putting in some extra sales and closing hours. But then again it may not even come to that. Just keep your cool and dont give up! Do you have a mediation clause?
I was subbing my crew to a gc who ran into a few tough customers in a row. I learned from his problems and added a bunch of articles to my contract (im always thinking about ways to improve it). Biggest thing i got out of it was to be very specific!

Good luck!
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Old 04-20-2013, 02:20 PM   #232
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Re: Asking For More Money


KAP, When you sell a job you put your markup on your cost. That job has the opportunity to pay for a set amount of your business expenses based on that. When the job goes over budget it still covers business expenses, just not the amount you planed it to. You have three opportunities to fix this. Increase your volume, lower your overhead, or maintain your volume and cover it with jobs that came in under budget.

You can come in under on every job all year and if you never hit your target volume you still lost money.

You can go over on every job all year and if you kill your volume you not only make money you make more money then you where going to originally.

If the weather is obviously going to cause your crew to loose productivity on a job what do you do. They can work the job and it will only bring in $2,500 above the line when it was supposed to bring in $3,000. Do you allow them to bring in some money to cover operating expenses and keep volume up or do you wait tell the weather allows the job to operate when the weather clears. I will always choose to bring in some money to cover operating expenses on a given day rather then $0. I am not going to sell every job high to make sure the ones completed in bad weather come in good. It is okay if some jobs come in behind if the overhead and profit are paid for at the end of the year.
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Old 04-20-2013, 02:57 PM   #233
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Re: Asking For More Money


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I just am not going to agree to this. Say I go $1,000 in the red on five jobs a year but come in $2,000 good on twenty jobs all using the same system of bidding. Whats the big deal. I just can't get myself to see how your side of this. It is the over health of my business that concerns me.
Frank I don't care how you much money you lose. With that example I'd say your bidding system is far too rigid if you lose that often.

I lost money in my first couple years but since then I've only taken it in the shorts a couple times...like when an employee steps through the ceiling from the attic space. Or when a manufacturer screws me on a non warranty repair.

If you were an estimator and you screwed up that often you would be fired.
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Old 04-20-2013, 03:05 PM   #234
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Re: Asking For More Money


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Frank I don't care how you much money you lose. With that example I'd say your bidding system is far too rigid if you lose that often.

I lost money in my first couple years but since then I've only taken it in the shorts a couple times...like when an employee steps through the ceiling from the attic space. Or when a manufacturer screws me on a non warranty repair.

If you were an estimator and you screwed up that often you would be fired.
Even if the only variable is the weather?
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Old 04-20-2013, 03:13 PM   #235
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Re: Asking For More Money


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Even if the only variable is the weather?
Why you made out of sugar?
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Old 04-20-2013, 03:34 PM   #236
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Re: Asking For More Money


Now we are getting to the bottom of it. We disagree on how big of an impact jobs that loose money have on our businesses because I am made of sugar. Because I am made of sugar I get sticky and melt in the rain and don't get very much work done. My crew can no longer produce because they are so busy laughing at my sticky self and I have to rob Peter to pay Paul every time this happens. Thanks for the help.

http://www.windycitynovelties.com/24...FSJlMgodHykAZA

I will order one of these and all should be good.
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Old 04-20-2013, 04:28 PM   #237
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Re: Asking For More Money


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Now we are getting to the bottom of it. We disagree on how big of an impact jobs that loose money have on our businesses because I am made of sugar. Because I am made of sugar I get sticky and melt in the rain and don't get very much work done. My crew can no longer produce because they are so busy laughing at my sticky self and I have to rob Peter to pay Paul every time this happens. Thanks for the help.

http://www.windycitynovelties.com/24...FSJlMgodHykAZA

I will order one of these and all should be good.
Should keep them in the truck for any employee that complains about working in the rain.
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Old 04-23-2013, 07:17 PM   #238
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Re: Asking For More Money


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Happy birthday ohio! Frank, glad to hear you are meeting you're goals.

Just read through this puppy, cant wait for the next episode. I would probably have to agree with having a lawyer handle this while you start putting in some extra sales and closing hours. But then again it may not even come to that. Just keep your cool and dont give up! Do you have a mediation clause?
I was subbing my crew to a gc who ran into a few tough customers in a row. I learned from his problems and added a bunch of articles to my contract (im always thinking about ways to improve it). Biggest thing i got out of it was to be very specific!

Good luck!
Didn't McCarpentry really hit the OP's issue here. His Contract... First it seems it should be his contract (assuming he doesn't have the experience to evaluate someone else's contract).

He needs specifity in the contract and a factor for "unknowns". If he is weak in estimating, or the job is expected to be complex/indeterminate, maybe he should not do firm-price and only do CM for awhile.

He needs someone to build him a decent/fair contract... apparently he does not have one.

Without getting into CPA accounting nomenclature, there are times to take a loss on a job... viewed as either a reduction in his hourly rate or his contribution to company overhead/profit.

If he has no better opportunity at present, then any wages or any contribution to overhead/profit is beneficial. Assuming he has some fixed overhead, a technical loss on one job can minimize his company's hard loss by contributing to his fixed costs (personel that can't be laid off, a backhoe lease etc)

I suppose that there are sometimes an absolute loss (materials and subs exceeding the contract price) might/could be beneficial, or necessary, (maybe when it is tied to a subsequent profitable job.)

However, isn't the OP's issue really focused around developing a good standard contract that fits his and the jobs circumstances.??
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Old 04-23-2013, 09:15 PM   #239
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Re: Asking For More Money


if you lost it paying your subs hourly then you need to get your foreman or yourself to learn how to push guys
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Old 04-23-2013, 11:07 PM   #240
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if you lost it paying your subs hourly then you need to get your foreman or yourself to learn how to push guys
...or you miss bid/contracted the job.... everyone else can't always make up for your own mistakes

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