Being in the contracting business today is a little like playing Russian roulette. You never really know when the end is going to come up.
Being in the contracting business today is a little like playing Russian roulette. You never really know when the end is going to come up. The amount of effort that is expended to, first, get into business and, second, to stay in business is prodigious. The failure rate for new start ups in our industry is legendary for its severity, so if you are in business, congratulations on beating the steep odds. Your success is your own doing and you should be proud of it.
Over the years, it seems that the success stories for contractors in the mechanical trades, by and large, tend to follow the same arc; a journeyman either gets laid off or has the opportunity to do “side” work, outside of his regular employment, and gradually does enough work to keep himself busy full time. He decides to go it alone and voila, or maybe not quite so quickly, he’s in business. Now, depending upon the type of work this journeyman cum businessman has done in his career thus far, he usually continues in that vein. Gradually, some might say glacially, the business picks up speed and a “groove” that is the type or kind of work that is done for the most part, is established.
In years past, the entry was service work. That is primarily because it is work one man can do and the jobs are usually quick and relatively less material (read little or no credit at the supply house) intensive. Now, service work is a the backbone of a lot of shops across the country because it provides a quick, steady cash flow and, aside from labor costs, is a high profit business. The advent of the DIY market and its expansion may have dented the service shop, but they are still doing a lot of business even so. The reason is that, although there are a lot of wannabe do-it-yourselfers out there, there just are not that many mechanically adept people in the general population. Ask any service plumber how often he gets a Sunday call out because Mr. Homeowner has been trying to replace a water heater since Friday afternoon and his wife is now furious because she hasn’t had a hot shower all weekend and the darn thing still isn’t working... I can tell you that the stories, or one’s similar, are many.
From straight service work, it is an easy jump to residential or light commercial remodel. Usually the plumber gets a lead from an existing client, or it is the existing client, who wants to remodel a bathroom, kitchen or laundry room. Piece of cake (and you are already in the door anyway), but the issues here can become sticky if the house or building is old and out of code or has materials that are deteriorated beyond the ability to make a solid, watertight connection. At any rate, the work comes in and you do it. Now you are doing service, repair and remodel work. The business has now moved to the next level. There are many shops that work into this milieu and make it their goal to stay there. These businesses consolidate their strengths and work hard to keep the emphasis on service as well as remodel and alteration. Some add showrooms and a sales staff; others keep it simple but intense by expanding the materials and selections available for sale to their clients.
So now you are in the service/repair/remodel business and you are doing pretty well. Maybe the economy has you down, or maybe your business is in an area that has seasonal influxes (we call them “snowbirds” in the South and Southwest) and you want to even out your work load and/or your income stream. Whatever the motivation, you make the leap into bidding larger projects. These may be large custom homes, residential tracts, apartments, commercial or industrial buildings like hospitals or schools. Once you’ve won a bid on work like that, you’ve moved into a new and different area of the business.
Large projects have long time lines, require a large labor force and are material intensive. As well, the businessman must have an understanding with his supplier(s) and insurance company as to credit availability and limits. There is a considerable monetary and time investment required on the part of the contractor, or now properly called a “subcontractor,” to do this type of work. That subcontractor needs to educate himself to all that there is to know about contracts. Simply bidding a project and being awarded it are exhilarating at first, but the morning after can be rude if one is not properly prepared.
The minefield that is subcontracting in the mechanical trades is treacherous, but it can be navigated successfully if one learns and follows the rules. Next month’s column will detail what you can expect once you’ve landed that big job.
The Brooklyn, N.Y.-born author is a retired third generation master plumber. He founded Sunflower Plumbing & Heating in Shirley, N.Y., in 1975 and A Professional Commercial Plumbing Inc. in Phoenix in 1980. He holds residential, commercial, industrial and solar plumbing licenses and is certified in welding, clean rooms, polypropylene gas fusion and medical gas piping. He can be reached firstname.lastname@example.org.