# Hypothetical question.....



## P3+ (Aug 16, 2012)

As I was hustling around checking on the 13 job sites today and my mind was racing in every direction I had a thought...or should I say question pop in my head today.
So I pose this to you, the PP contractors that are still at it fill tilt. Keep in mind this question is only relevant to those that come from a differing background than the PP world.

Would you go back to your trade if the work was there?
(base this on a strong economy in your given area)

Our housing market here in the soybean capitol of the world is BOOMING! From minor remodels to full custom homes. I'm fortunate in that sense. I ran into a PP contractor that I got started in the biz about 6 years ago (he was a concrete flat work contractor previous to the bust) the other day. He's in hog heaven now doing the PP thing, loves every minute of it. He asked me straight up....why I don't go back to it. My response: "I saw the writing on the wall in 2009 when the stallions in the stable started in on flat rate pricing." 
So for me personally after being in the trenches of the PP world....I am gladly out of the riff raff and couldn't be happier. Yes, I've noticed a slight decrease in earnings. BUT, the peace of mind far outweighs the alternative.

What's your take?


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## Wannabe (Oct 1, 2012)

PPP,

Heck NO I would never go back to P&P crap! What a merry-go-round of chain-jerk desk jockeys that cannot do anything but try to tell a knowledgable person what to do.... 

NOW the real question to YOU:::)) Need some more work? To much to handle here!


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## GTX63 (Apr 12, 2012)

Plumbing, electrical, carpentry, landscaping, preservation. Which four do you think will be around in their current form in 5 years?


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## Gypsos (Apr 30, 2012)

Precisely why were are diversifying our portfolio.


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## Ohnojim (Mar 25, 2013)

*What preservation work has done for me is.*

allowed me to be more selective in the contracting/home improvement business. I don't have to take the jobs I really don't want, or negotiate my price as much. The two go hand in hand, there is no reason to look at them as mutually exclusive. In my mind your hypothetical does not exist.


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## GTX63 (Apr 12, 2012)

The preservation industry is a game of musical chairs, and if you stay in this biz as your sole income, you will find a time when you are standing and there is no place to sit.


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## STARBABY (Apr 12, 2012)

GTX63 said:


> Plumbing, electrical, carpentry, landscaping, preservation. Which four do you think will be around in their current form in 5 years?


 
So how do you think it`s going to change in the next five years? I would think the prices can only go so low!


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## BPWY (Apr 12, 2012)

Ohnojim said:


> In my mind your hypothetical does not exist.






I'd disagree.



In March 09 when I quit trucking and came off the road I was doing only P&P. 
It only took a couple months (before the end of the summer) to realize there were some SERIOUS issues with the direction the industry was headed.
I knew that I would have to branch out in order to survive. 
In 10 I picked up some private work, in 11 I picked up some more private/local customers.

By 4/12 I dropped all of the P&P and concentrated on my lawn business with local customers. 
Fall of 12 I needed some work and when one national called with a trash out I took it. I immediately regretted that.
Sitting in front of the computer doing uploads all evening takes soooooo much time that I'd been able to reclaim for myself.
13 rolls around and I'm doing no P&P, even told my insurance agent to drop that from my services offered list. (doesn't really make much difference in what I'm doing or how I'm insured).

I like local customers. Example I did a couple tree jobs last week. PAID IN FULL before I left the property.
Got another one to do this week..... ALREADY paid in full, and I haven't even started the job.

Others I billed monday for last month's snow removal. Two days later I've got checks in the mail, paid in full.
You just can't beat this in the P&P industry.


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## BPWY (Apr 12, 2012)

STARBABY said:


> So how do you think it`s going to change in the next five years? I would think the prices can only go so low!







Based on what I hear I expect things to go back to the agents hands and they'll hire contractors...... LONG before 5 yrs is up.


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## Ohnojim (Mar 25, 2013)

*The two are still not mutually exclusive.*



BPWY said:


> I'd disagree.
> 
> 
> 
> ...


Your post just proves that point. I have never done only P&P work, or relied on any single customer, that would be bad business. I do plenty of local face to face work, but still like the money from my p&p accounts. Housing markets work in cycles always have, in the better times we sell home improvements, in the lean times we cut the grass, and mop the floors, that's life. What the mortgage crisis created was a lot of "Joe **** the Rag Man" so called contractors, and now they are finding out nothing lasts forever, I have been through these cycles before. The original post spoke in absolutes that frankly do not exist. Additionally a business that can not survive a 30-60 day billing period is not a business to begin with.


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## BPWY (Apr 12, 2012)

Ohnojim said:


> Additionally a business that can not survive a 30-60 day billing period is not a business to begin with.





Think about that statement for a minute.









Now think about the thousands and thousands of pay on the spot businesses.

Fast food, sit down restaurants, wal mart, sears, the tire store................ the list is massive.


Besides I have customers that exceed 30 days. I'm not happy about that but that does happen. 
WHY should I be their bank and float them for up to 60 days?????????????
That is not my business, that is their banker's business.


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## BRADSConst (Oct 2, 2012)

BPWY said:


> Think about that statement for a minute.
> 
> Now think about the thousands and thousands of pay on the spot businesses.
> 
> ...


I totally agree. I've checked Quickbooks, my business cards and my website. I can't find anywhere that I list "financial services" as something my business provides.

Furthermore, most Nationals and Regionals should NOT be in business then as most of the contracts read "you will be paid when we are paid". Apparently they can NOT afford to be in business and should not be in business either......

I sat down last night to bid my first trashout in 5 months, after 1.5 hours labeling every picture and uploading bids and condition reports on a severely vandalized house. It hit me how much I want my nights back and to drop that last client. My PITA tolerance is gone........


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## BPWY (Apr 12, 2012)

BRADSConst said:


> It hit me how much I want my nights back and to drop that last client. My PITA tolerance is gone........






Yup!!!

You don't realize what you've given up to be in P&P until you are away from it and then go back.


I have no problem with doing P&P work. But I will only do it thru a realtor. My days of working for nationals/regionals are over.


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## Gypsos (Apr 30, 2012)

My experience with commercial construction was if you got your first draw check in less than 6 weeks of your start date on a project it was a fast paying job. Typically you had to wait 2 to 3 months for the first check and then 4 to 6 weeks for each payment after that. So for me being paid every 30 days is good. 

Most General Contractors now have clauses that state you will be paid when and if they are paid.

Financing in any construction type work (i.e. P&P) is simple. The lowest tier subcontractor finances every project and assumes all the risk. 

I pointed this out to a banker at a job-site meeting once and he got real upset and declared I had no clue about financing. 

I said I would have to pay for the materials, the labor to install it and all insurance and overhead for the same at least one month in advance of seeing my first penny to pay for it. And all he had had to do was wait for me to get done so he could inspect the work and cut a check to the CG, who in turn would cut a check to me two weeks later. 

I told him he was financing a mortgage. I was financing a project. The difference was that he was allowed to charge interest and I had to hold on to my ankles and hope I got paid someday.


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## GTX63 (Apr 12, 2012)

STARBABY said:


> So how do you think it`s going to change in the next five years? I would think the prices can only go so low!


The same thing has been said in 2008 2009 2010, etc. Price cuts don't have to be in your face. They have been throwing in back door reductions for quite some time. Repackaging the initials has been the most obvious. Rewriting contracts so that they are now so convoluted and tilted towards the National, many vendors don't understand everything they are signing up for. Background checks, specific E&O that they can tap into at will, radom chargebacks, on and on.

A 20 yard trashout with sales clean, winterization, lock change, yard service was around $950 or more just a few years ago. Now they bundle it for $400, maybe. Broom swept condition used to be an empty interior. Now it is including cleaning stoves and refrigerators. Yard cuts used to be yard cuts; now you are to cobweb and dust the front porch. 

There are countless ways to make a living in the private sector. 
The only way a contractor can make money in preservation is volume.


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## BPWY (Apr 12, 2012)

GTX63 said:


> A 20 yard trashout with sales clean, winterization, lock change, yard service was around $950 or more just a few years ago. Now they bundle it for $400, maybe. Broom swept condition used to be an empty interior. Now it is including cleaning stoves and refrigerators. Yard cuts used to be yard cuts; now you are to cobweb and dust the front porch.






In early 2010 I ran into a Cyprexx vendor at a job site. He had been with them for 15 yrs he said. 
In the old days the flat rate was $1350 and they would give trip charges on top of that. 
He would cover a 200 or 300 mile radius for them.

We sure see where the industry has gone now.


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## Cleanupman (Nov 23, 2012)

boy howdy....
I have always been into custom glass and wood work...
We have two clients...both are small time lenders....I traveled 210 miles round trip yesterday...invoiced and emailed everything off to Tennessee last night...I was notified at noon today of payment received by our bank...those are the only type of clients we will work with now...
All this extending the credit on a maybe I'll like your photographs....not happening anymore.
Sooner everyone starts putting their foot down the sooner the BS will stop.
This industry has gotten to where it is because everyone has allowed it to go this way...

I'll put it this way....if you were my neighbor and I built a fence 20 feet into your property and you just "went along" with that...that 20 feet is mine....
That is what has happened in this industry....Nationals put their buddies in play the numbers go down and every so desperate for work not having a lick of business sense jump on the opportunity to make a living not knowing they won't because they thought all they and to do is get a business license and be a business person..... meanwhile the banks have exploited the common man once again and everyone just wants to take it....
well the majority at least....right now the only ones making money are the ones assigning work....ya gotta stop and tell them to get bent or they will continue to keep their hand in you pocket...and I so bad want to say...and up your ass!!!!!!!


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## Ohnojim (Mar 25, 2013)

BPWY said:


> Think about that statement for a minute.
> 
> 
> 
> ...


You seem to think the owner of the McDonalds is working the drive thru window.


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## BPWY (Apr 12, 2012)

Ohnojim said:


> You seem to think the owner of the McDonalds is working the drive thru window.






Brother you've lost me. I'm not getting what you are trying to say. 
Maybe its because I haven't had coffee yet.


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## Ohnojim (Mar 25, 2013)

*I had not had my coffee when I posted that*



BPWY said:


> Brother you've lost me. I'm not getting what you are trying to say.
> Maybe its because I haven't had coffee yet.


What I'm saying is, the owners of a business get paid last in many cases. Most of the enterprises you listed as cash businesses require years or decades to actually make a profit, they work on positive cash flow,but are still under the burden of huge debt. I broke even my first day doing p&p work, even though I had to wait for the money, I was in the black the first day. Of course I already had insurance, licenses, certifications from related fields, but even factoring in their per diam cost still in the black. With some P&P clients, I wait the extra month to save the early pay premium, whenever I can. It was a bit of a transition for me too, going from local pay upon completion contracts to waiting, but after the first few cycles, it should never be a problem for those who can manage things.


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## mtmtnman (May 1, 2012)

Ohnojim said:


> What I'm saying is, the owners of a business get paid last in many cases. Most of the enterprises you listed as cash businesses require years or decades to actually make a profit, they work on positive cash flow,but are still under the burden of huge debt. I broke even my first day doing p&p work, even though I had to wait for the money, I was in the black the first day. Of course I already had insurance, licenses, certifications from related fields, but even factoring in their per diam cost still in the black. With some P&P clients, I wait the extra month to save the early pay premium, whenever I can. It was a bit of a transition for me too, going from local pay upon completion contracts to waiting, but after the first few cycles, it should never be a problem for those who can manage things.



The point is the nationals get paid in a week to 10 days and they are holding on to YOUR money making interest on YOUR money for another 4-6 weeks. If a small time regional like US Best can pay in a week why can't SG and others??? FWIW, my local banks pay in 1-2 days after completion. Realtors the same........


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## Splinterpicker (Apr 18, 2012)

mtmtnman said:


> The point is the nationals get paid in a week to 10 days and they are holding on to YOUR money making interest on YOUR money for another 4-6 weeks. If a small time regional like US Best can pay in a week why can't SG and others??? FWIW, my local banks pay in 1-2 days after completion. Realtors the same........


Throw momma fro the train remember Danny Divitos business model ??? OPM Other peoples money is what it stands for as I have said about the big nationals. Other than the technology and office furnature there uis NO cash outlay by the BIG nationals ! I have been saying this for years !! Itys a huge ponzi scheem and the last p&P contractors will be left holding NOTHING ! I have gotten a gig at one of t he universitys grounds keeping and it rocks I dont get hastled by my boss and tehy ALL see the improvement, Benefits and steady work I am keeping one national that is easy as pie to get along with for a bit of extra income but the rest are gone no thoughts of ever wanting them back !


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## Ohnojim (Mar 25, 2013)

mtmtnman said:


> The point is the nationals get paid in a week to 10 days and they are holding on to YOUR money making interest on YOUR money for another 4-6 weeks. If a small time regional like US Best can pay in a week why can't SG and others??? FWIW, my local banks pay in 1-2 days after completion. Realtors the same........


The only point, and frankly the one you do not seem to grasp is. You sign a contract with certain terms, if the terms were not acceptable to you, you should walk away. Everything after that is bull****. Getting paid fast is always better,(barring certain tax issues) that can't be seriously argued, but to agree to terms and then bitch repeatedly about those terms is a bit silly.


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## STARBABY (Apr 12, 2012)

Splinterpicker said:


> Throw momma fro the train remember Danny Divitos business model ??? OPM Other peoples money is what it stands for as I have said about the big nationals. Other than the technology and office furnature there uis NO cash outlay by the BIG nationals ! I have been saying this for years !! Itys a huge ponzi scheem and the last p&P contractors will be left holding NOTHING ! I have gotten a gig at one of t he universitys grounds keeping and it rocks I dont get hastled by my boss and tehy ALL see the improvement, Benefits and steady work I am keeping one national that is easy as pie to get along with for a bit of extra income but the rest are gone no thoughts of ever wanting them back !


did you stop working for FAS?


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