Efficiency or rates?

Date 11-04-2012 18:54

Tommy, I TRY to stay around 75% but thats w/10 guys & somebody in the office(doing books, ordering ,taxes,payroll,etc.) Best I could do was CLAIMING a profit of around 300K!!!! :cool:

Looks good on the surface but with all that work comes alot of headaches and sleepless nights!! :confused:

Unfortunately the last 3 yrs. have been terrible, jobs just not generating the type of money they should so this year downsized to just 2 guys that have been with me 20 plus yrs. If I run about 40k a month I can pay EVERYBODY every month and still turn an "acceptable" profit!!!!!! I've noticed over the years (good years) that after you hit a certain number(per month gross) it is the" LAW OF DIMINISHING RETURNS" as my CPA calls it :eek:

You just can't physically or mentally take care of EVERYTHING AND BE EVERYWHERE so profits aren't MAXIMIZED from each job so you start to lose money off the backend of the job........ When you can't cover all the jobs you need a 2nd & maybe a 3rd in command and findin' them ain't EASY or INEXPENSIVE :eek:

I'm 51 now and could retire but over the last 5 months of being off injured I realized I still want/desire to work , just not like I have been over the last 30 yrs. WHAT I'VE LEARNED at least in my journey is "BIGGER ISN'T ALWAYS BETTER" sometimes hard work only produces more hard work!!!!!! :roll:

My plan the next 10 yrs., take smaller jobs that are in MY comfort zone (that my shop is GOOD at), hire nobody else unless somebody leaves, (doubt that cause of lower stress level/pace of jobs) and me I'M only gonna do "high dollar" work that isn't going to take up alot of my time / long periods of time. (IE. crane lifts, pipework/pipeline, quick repairs in the gas fields for the energy companies) :cool:

And watch my shop !!!!!!! (might just start "TINKERING" around there) if you know what I mean!!!!! :evil:

Hopes the "INSIGHT" helps keep MAKIN' MONEY not just hard work TOMMY :lol:

!!!!!!! From Pittsburgh: the home of dem'STIILERS hope today ain't a bad one!!!!!! :yell:

By KSellon (****)

Date 11-21-2012 20:56

By strother (***)

Date 11-04-2012 22:41 Edited 11-04-2012 22:53

I am at about 68% . I'm working on lower that number. Reading a book call Simple Numbers , Straight Talk, Big profits. It is basically about how your numbers can lie to you if don't keep accurate records. Its a pretty interesting book, blows a lot of the myths about making money out of the water, Especially when it comes to taxes and all the creative ways of handling your tax liability. Right now I'm working myself and three part time . One welder, One helper who can cut and weld on simple tasks and one laborer. On paper I would be better of with one full time welder and share the helper roll. I'm just not confident enough to take that leap right now!

By Smooth Operator (***)

Date 11-05-2012 01:47

IMHO, The days of hiring a laborer for a realistic number are over, (mandated min. wage killed it!!!!) Now all my welders who work for me have to be able to labor!!!!!! If you can bring an apprentice in from a trade school it helps but not much!!!!!!! (wants paid like the big dogs and gets a tude' when you won't) Thats why I don't want to hire anymore than I got now......... Stillers pull it off, something to be said for the beef on the offensive line!!!!!!!! :yell:

By Cumminsguy71 (*****)

Date 11-05-2012 15:17

Last year I was right around 75%, leaving me with my "owner salary" according to the gubment. Bought a bunch of equipment last year, tools, another truck, keeping the welders going but I tend to spend more on the business leaving me with a low salary for tax purposes. This year is different though. Have done a lot of residential rail and things this year so even though the overall gross is down from last year I have spent more on materials in steel due the the type of work I've taken in. Last year I did several big projects where I just paid for rod/welder gas and some jobs they paid for everything and I just showed up with my right arm warmed up!

By strother (***)

Date 11-05-2012 22:10

Smooth Op , I think you are right about the laborer . Luckily my guy works cheap and is willing to work as much or as little as I need him. I don't think I would ever hire a Full time laborer . At one point I had 2 full time welders plus myself working but I planned poorly and when the recession hit it the wheels fell off! So I'm kinda of gun shy about hiring now. I don't even like have part time but there is only so much i can do by myself.

By Tommyjoking (****)

Date 11-06-2012 00:31 Edited 11-06-2012 00:51

ARRGGHHHH those numbers.....I reckon I am doing "reasonable" then. A diesel machine and a new truck or different motor would make a decent dent in running costs just in fuel. But I got my sights set on a second rig. I agree with you Shawn, the jobs I just go out and weld on I think end up showing higher profit...I need to separate them out and compare....seems funny cause on bid jobs I average $125-150 hr before expenses. I need to break it up and see what the rig is doing straight hourly vs bid jobs vs shop work. Here comes another expense as of today...credit cards. :confused:

But I gotta do it to help the cash flow.

Far as help, I higher what I call semi skilled labor from time to time, but lately I have just called in other rigs to get it done. No profit from doing that really just doing what I got to do to keep schedules. Got part time help at the shop for handrails and grinding chores.

I am not turning near what you guys do a month I am sure...but I am only one guy and I can see the limits of my hands, time and space right now.

At least the job I am on right now is turning out to be a real winner $$$$$.

By Smooth Operator (***)

Date 11-06-2012 00:55

Thats' the" high dollar jobs" I was talking about where YOU make a max. profit!!!!!! Priority #1 when you hire help, YOU personally take care of those jobs because they are the high dollar jobs you can do quicker than an employee and MAXIMIZE the profit from it!!!!!! Fabing rail/misc. in the shop thats what GOOD help is for.......... :cool:

From Pittsburgh where the stiilers' just came back to after puttin' an arse whoppin' on ELLIE and his GIANTS!!!!!!! :yell:

By Tommyjoking (****)

Date 11-06-2012 01:19

HOW ABOUT DEM BRONCOS!!!!!!!!! :grin:

I am not a fair weather fan....been suffering ever since Elway decided keeping the ability walk without morphine was more important then football.

By Cumminsguy71 (*****)

Date 11-06-2012 14:15

That's how I'm looking at it Smooth. Got the water line job AKA bridge project coming up, fab and field work but want to keep handrail going on in the shop especially if I get this building I'm looking at and more now than ever I drive to go bid a job, pick up steel, do work in town and I'm thinking about the job in the "shop" not getting done. Think about it more when I'm going to look at other jobs. Gotta keep the jobs coming in but also need to get them done. A second capable hand would be heavenly!

Keeping myself on the hire end hourly jobs where you can blast out welds quickly and expertly while keeping the young lad in the shop doing the not so criticle handrail is what I have been thinking myself. But need to keep an eye on them to make sure the quality is still there. Glad my thinking is running in line with an experienced businessman such as yourself!!

By Sberry

Date 11-21-2012 14:32

I hire off and on but generally I have a helper, a personal assistant type. Some call him my shadow, he has his drawbacks but does what I ask when without kick or complaint.

By KSellon (****)

Date 11-21-2012 21:14 Edited 11-21-2012 21:20

Im 57% cost of goods/supplies Operating expenses takes another 32%.. ARGGHHH...