When it comes to being self employed, you will find that regulating your work flow, cash flow and schedule is an extremely difficult thing to do. Compared to driving a car, where you can coast, apply the break or give it a little gas –it is usually a different story with being your own boss: From my experience as a building contractor, it’s more like a rocket and a brick wall.
Most sole proprietors will find this to be very frustrating. I did. Sure there were those times in between when everything went as planned, as estimated and as scheduled. It wasn’t even that bad when only one of these areas went out of whack. Like Meatloaf says: “Two out of three ain’t bad.” But for those projects that make you wonder: “Why did I even bother to work on an estimate and a schedule for this job?” –does it always turn out to be a pitfall? No, sometimes when things don’t go as planned you get a happy surprise. These windfalls balance out the pitfalls, so that your overall plans average out, over the long haul, and line up with your estimations. Here is a real life scenario:
I bid a job installing a snow fence to catch litter at a Rhode Island landfill, the RIRRC. We needed to drive a galvanized fence post every ten feet and then zip-tie the orange plastic fence material to the posts. This was a good sized job: five MILES of fencing! I was up against four other contractors, and was the lowest qualified bid leaving only 2% “on the table” –that is public bid lingo for the difference between your bid and the next lowest qualified bid.
At around $2.00 per foot, I had just landed a $50,000.00 contract. Unlike many other Rhode Island organizations, this quasi public corporation, I would find out later, were excellent to deal with. Pat Cerbo and the others in charge were professional and paid within two weeks of an invoice. A slow paying customer, like the Providence Parks Department, on a job this size could have sunk my business. See: Vincent “Buddy” Cianci: Douche Bag -for an interesting “pitfall” story.
I arrived with my crew, the first morning on the job, ready to start the section that went up the mountain of garbage. Stinky and gross? Yes, but the best kept secret in the contracting business is that there is usually more money in dirt, shit and garbage than in silver, gold and diamonds. Dirty germy hands can sometimes make more money than a surgeon’s sterile hands. I was about to prove this true this day.
I encountered the first change of plans as soon as I unloaded the material. I called the project manager to take a look. It seems that there were already galvanized fence posts in place exactly where I was supposed to install mine. I was thinking that I would have to write a change order, a sub alternate, and deduct the cost of installing the poles –about a mile’s worth. Oh well, a smaller contract made me feel more comfortable in case they strung me out for payment as I feared they might.
When the PM got to the site and saw what the situation was -I let him speak first. Good negotiation tip: ALWAYS let the customer make the first proposal. Even if they ask you what you think first, come back with “Hmm, what do YOU think?” Just like when a cop asks you if you know why he pulled you over. Don’t guess “Because I was went through a stop sign?” He might answer “No, because your registration is expired” and then give you a five day tag AND a ticket, thanks to your voluntary confession.
To my happy surprise, the PM said “Our eff-up is your gain. Go ahead and just use the existing poles. No need to change the contract” KA-CHING!! You could practically hear the cash register sound coming out of my ears. I thanked him. Four hours later I was on top of the hill, with the crew, and had just completed $10,000.00 of billable work that boiled down to at least $7,000.00 in my pocket after I deducted material and labor. I paid the crew for a full day, and let them go home. It was a Saturday. A good day. A day that made me thrilled to be a small business owner.
