[Tom Struble]

no,you never said you were lurking here did you?you need to start at the top of the thread and read...i know but it's a requirement:sad:

 

[11678]

Here's a million dollar tip.
Don't do this. "This would be done for family and a few friends involved in real estate development."

 

[SPCarpentry]

no,you never said you were lurking here did you?you need to start at the top of the thread and read...i know but it's a requirement:sad:

I did read it. That's were the "never mind" comes in.

 

[hansol04]

I don't know if this guy is serious or not, but here we go:

After reading your post, there are a couple glaring issues you are going to encounter. Firstly, the lack of on-the-tools experience (as another poster pointed out to you) is going to be a problem. I understand you saying "Oh, we won't be in that kind of business", but that is 100% the wrong attitude for a start-up to have. You 100% HAVE to understand what the guys on the tools are doing so you know when you are getting the run-around from subs on job costs etc. You also need to know exactly what is involved in the day-to-day operations so your bidding process is accurate. You can use a generic blue-book estimate, and while that may work in the short-term, it will screw you in the long-term.

The only way to remedy this is to get time on the tools. You don't need to become an expert, but you need to be able to understand the lingo, and be experienced enough to know that when the form-work crew says it took them 8 hours to do a job, and your inexperienced ass can do that same job in 5, you can turn around and ask what the hell happened. Without that, your business will constantly be eating the 3-hour cost difference, which long-story-short will cause your business to go broke.

The second issue you're facing is capital. You're in finance, so you should have an easy time understanding this. All your materials and labour will require cash. Either you have a large ($500,000) bank account flush with cash, or you need financing. Being a start-up, good luck getting a $500k line of credit. If you have access to capital via family or something, then you might be able to work that. If not, then you will have some serious problems. A 10 mil revenue operation with a 15% (generous) profit margin means you will have $8.5 mil in expenses that somehow will need funding. You'll also need to be able to pay the $400,000 tax bill that Mr. Harper will tell you your business owes.

I appreciate your enthusiasm, but unfortunately there are realities to the construction industry that you can't get around with financial analysis. (Like the saying goes, if analysts are so brilliant, why aren't they running a hedge fund making billions instead of taking an $80,000 paycheck.) You'll most likely be damn good at cost accounting, but if you don't know why your expenses are the way they are through lack of industry time, you won't know whether you are doing alright or not. Your company won't be getting jobs, and you won't know why.

That being said, it sounds like you are on the right track with taking industry courses. The only other thing I would recommend is getting a couple years of real tools experience. Learn how to do the work yourself, so that even if you never have to (or desire to) fill in in a pinch if your crew is caught a man short, you can at least tell when guys are screwing you around and that your bids are accurate. Oh yeah, and get some really deep pockets.

So take it for what it's worth. I'm an accountant who deals with trades companies on a daily basis. I also was in the trades for 5 years before I made the switch to white collar. And trust me, degrees and financial analysis and all that fancy jazz is no replacement for experience. Listen to these guys who have been feeding their families with the businesses they have run (successfully) for the last 20+ years. They know what they are talking about. I just add numbers.

 

[Sar-Con]

Hey, even a blind squirrel gets a nut once and a while.

Thank goodness you didn't say you were going to focus on green construction or I might have just thrown up a little in my mouth.

I will offer some advise: on your way to making millions, remember that people help you get there, not money, and not numbers. Treat people with respect, listen to their ideas, foster a culture of trust and the money and numbers will follow.

Oh, and pay your subs! On time, every time!