What is the fastest way to get your company doing large commercial projects, starting from a few peices of equipment. Of course your main obstacle would be capital and equipment. My question is, what would be the best plan to do larger projects and become a bigger company the fastest? My plan would be to start small and try to get you a steady amount of work with in a year or two. Then start bidding on larger scale projects, then you would have to have more equipment, so you invest in bigger/more equipment. Then do as many projects as you possibly can a year and then start paying your equipment off and get bigger and bigger. How does that sound to you guys?
Sorry for the bad news. That is the fastest way to go broke that i know of. Bigger projects are not always better anyways. In close to 20 years in business i am just getting to where i have the projects I always dreamed of. I don't know why you would want to be a super big company but that is your business. Most of the companies that made it through the last few years did it by being smart and having a low overhead. Payments will kill you. Good luck. CD
Im not saying its easier but, in the long run i believe you can make more money being a bigger company. Gotta go big or go home in my perspective.
Good Luck. I have no further comment on this subject.
First thing, you have to walk before you can run. Second thing, you have to walk before you can run. The only way there is to go about it is to start on smaller things and work your way up. Commerical work is cut throat when times are good. Now the way it is there are a lot of contractors just barely hanging on, and around here there have been a considerable number of failures of bigger companies too. If you are looking at municipal work getting enough bonding to do larger jobs will be a problem until you grow and are on solid financial ground. As far as private work goes, the project owner is going to be asking what you have done up until that point. Colorado Digger is right. Growing to quickly is the fastest way to go broke. I have it happen around here more times then not.
Probably easier to just head down to the party store and buy a lottery ticket. Talented, reliable people are the commodity you need to find. Get the job and rent the equipment, or sub it out. If you bid it properly, you'll still make money. Tom Oh yeah, a good lawyer too.
Obtaining equipment is easy. As TEC has said, having good employess is the key...once you have the work. Keeping them busy is the next hardest thing. IMO the profit margins on the bigger jobs are less. I have always found the competition on public works, and larger commercial projects, is tougher. It also usually requires more overhead. The amount of paper pushing on public works and commercial will require a lot of time. Managing those big jobs, while doing all the other things too can be challenging. TEC is right about the lawyer too. Not so much for lawsuits (hopefully) but for contract review/modification prior to the job. Wait until you see what the commercial contracts look like. Once you have taken the time to do the bid (bigger jobs take longer and are easier to miss things on), and you have bid the lowest, then you will talk about qualifications (assuming no prequalifications just to be a bidder), and then, if you pass those hurdles, you will enter into the contract/insurance negotiations. Which reminds me that you also need a sharp insurance agent too. If this sounds like your cup of tea (some people love to swim with sharks) then go for the big commercial stuff. So far, I have found that I prefer to work with smaller residential contractors, and light commercial. I still have some that I work with on a handshake. I can work for the margins that I prefer, and once you establish the relationship, you both know what to expect, and can better serve the customer and make more money.
Yair . . . Feller I knew up north a few years back had a tandem tipper with a tag hauling his skid, mini-ex, tools, oxy and a welder. He charged himself out at eighty bucks an hour if he's welding something thats broke, hauling gravel, spreading topsoil with the skid or trenching with the excavator. Since he owns the gear he's laughing and he reckons it's not worth the hassle to employ an operator . . . just the very opposite of the original posters theory. Cheers.
Not to be redundant, but everything everybody has told you in this thread is true. Growing too fast is the fastest way to go broke. If you get enough good people to do big jobs, you will find yourself working at a loss sometimes to keep them working. If you do this much, you will go broke. I grew my business slowly for 18 yrs, and then in July 2011, I downsized it greatly. I am happier and making more money. I only take jobs I want, and no longer have to worry about all those employees. Good Luck, and I hope you are not thoroughly disgusted w/ us, we are just giving you the benefit of around 100 yrs experience in this thread already.
It sounds more like this guy has to crawl first mate dont think he is at the walking stage yet
"Go big or go home"...lol, that's the tired mantra of many men who've walked home with empty pockets and their chins resting on their chests. Running a big business is an office job. If you want a big business, go to business school.
How true ! At least take some classes , accounting , management etc.. Big jobs = big check = big pita= big loss= BIG ULCER ! Btw , payroll taxes suck! :Banghead ointhead:crazy
JSG Parts, This is amazing. For once we agree. You take it one farther with the crawl first. You are right on right here
Wow it is amazing mate i think i will have a beer to that news as something must be wrong haha
Over the past 40 years, I've watched local contractors do the quick growth both ways, with a good bankroll (inherited money) and borrowed money. The guys with inherited money last longer but not one has survived. The small guy with a desire to get ahead that works 80 hours a week and slowly grows with good partners (if he has any) and good employees get there. Another observation, once they get 2nd generations involved (the kids that grew up with good times that didn't or don't have to work 80 hours a week) things start going downhill.
lol
I think the only guys that made fast money in earthmoving were the first guys to come on the scene with the first backhoes and the first hydraulic excavators and before them, the first guys to come on the scene with steam shovels- they were competing against hand shovels, plows and horses!
I own my own company, it is small but I make good money with it. I have been taking business classes for close to a year now. I think you guys are getting the wrong idea, Im not looking to have 80+ pieces of equipment within a short period of time. Im looking to get in to doing bigger jobs and having the jobs pay for my equipment over a period of time. I have done some site work recently and they do come with headache but But that job is finished, i made good money and was extremely busy for a few months. Luckily the area I live in is doing good, it grows every day and more and more companies come here. The company I used to work for is not that big but has 9 quick trip projects and a large shopping center project as well. The owner of that company told me that one of the reasons he got so busy is because he has been advertising a lot, so when a GC comes to town looking for a company to knock out a job he is easy to find and is the first name to come to mind. I hope to become a DECENT size company in the next few years. Maybe do 2-3 larger projects a year and stick with smaller projects as well. So please don't think I am going to buy a bunch of trackhoes and dozers and hope jobs come, I would buy as needed and make sure I can keep it busy... Thanks, Victor
I think in the original poster's defense, he is in South Carolina which, if I am not mistaken, is growing kind of like Texas because they are one of the very few business friendly climates in the country right now, so business owners are pulling up roots and moving there and taking their money with them.
Yes, even during this recession we have been "ok" work wise. But one of the keys to getting jobs in my area is advertising your company and making sure it is easy to find your companies name, Because we have a lot of out of state General Contractors that come here as well. Thanks, Victor
If you're making good money now, keep doing what you're doing....and then do it some more.
That would be living the dream.
Boy I am glad to here that that side of our state is doing well, the coast is picking up a little, but still really slow, and guys are still working for peanuts to keep moving, I've mostly been sitting back and watching them do it. Good Luck
I am agreed with your point of view. You shared nice tips.
Now THAT is how you do it! That is exactly the method I have used and,it works.
I'd rather do a $100K project at a 25% profit than $250K project at a 10% profit. If you're the low bidder on a big public project with several bidders, you're telling the world you can do it bigger better faster and cheaper than anyone else. I'm not that good, so, I'd seldom be low bidder.
Iam with ya 100% there mate. and also the lowest bidder dose not always get the contract i think people new the the business need to remember that.
wow guys, so much negativity. lol and all for a good reason. going big is easy. bid the job, getthe job, rent or lease the equipment, hire people, do the job, end up with nothing. hiring skilled solid workers is as hard as seeing your own faults. the ratio is like 1 out of 20. keeping those workers is a job skill in itself. big jobs means lots of workers and someone or more to babysit them. if they screw you, you wont even know it till you end up almost broke. i have seen this quite a few times. i have worked for quite a few people who have the mindset that i can just hire another one of you. when i quit they almost have tears in their eyes. if you want to be the man, the big boss, by all means go for it. just be careful of how you go about it. nobody here is shooting you down out of envy. we are trying to protect you from whats out there. you wanna be big? get bread and butter jobs. they pay the bills and keep you afloat. get enough of them, build your staff, and your set.
Wow!!!! What a thread full of experience!!! My opinion is this: for some guys a 15k-25k job is a big one, for others a 150mil-250mil job is a big one... I would venture that there are less than 10 companies in the country with capability of executing the latter with less than 5 shareholders. When I was younger and more inexperienced I had nothing but a taste for growth and grandeur and a desire to flip a bird to all of the established companies in the region, and I have seen 1000% annual growth in my business... I've also loaded a machine or two on the repo man's lowboy :throwup I've almost watched my dream go up in smoke (MORE than once) :Banghead ... The thing I've learned is that most of the time, a contractor can stay small, (less than 25 pieces and less than 15 employees) and operate their business with the entrepreneurial spirit performing bread and butter work, but also viewing some projects as deals all their own and taking those opportunities to make a larger margin, or invest in an otherwise impractical piece of iron that will yield great profit once the project is over, or even make a land investment ect. Generally I find this is the method I prefer as it includes the potential for a certain amount of excitement, and in the long run, I can see the fruits of my labor as they effect my quality life and that of my family (which I think is the whole point). The other way I have observed that seems capable of yielding success is to grow a business tight and steady eventually getting very large, but this seems to me to be a much longer game and the position of proprietor of such a business I think looks much different than the first type. In order to achieve success in the latter type, it seems to me you end up in the office tackling problems, and bringing home a good salary... Your net worth is hopefully huge, but it's all wrapped up in this one enterprise and to behave outside of the acceptable lines of that enterprise is to jeopardize everything you and the throng of capable people you have searched high and low to find then given up a stake in the company to. The only way I see any true freedom coming from the latter type is in the event of a buyout. I pick the first type. I also think that those companies which have a small executive infrastructure but large capability and resources if you look into them, generally were beneficiaries of the FHA and grew enough back then when the industry climate was much more favorable, and have behaved well since.
In my point of view it all depends upon the nature of company. company is offering products or services? what are the markets trends at that time. As environment is dynamic now. So good strategy and planning are ways to grow faster.