New, clean thread

Yes Monroe preaches recovering your o/head thru your hrly. rate. I don't know that he invented it.

Like MikeH said, I think it has been a standard of doing business for yrs. How it has applied industrywide, I don't know. We all know that most fellas (including me) go into the contracting biz w/ a dream and a prayer. (Some of us who survived also had Our fingers crossed behind our backs-- DON'T TELL ANYBODY!)

ANyway this process has helped Mike w/ the Big jobs. It has helped me with small jobs!

I'm thinking that the PROOF program is by Monroe Porter. I've been to a couple of manufacturer sponsored seminars which he conducted. Very good information. The man lives in our contractor heads . . . . Among other things, he also is a columnist for Roofing Contractor magazine.

This thread brings back memories of this forum when it was at it's best. I've missed the professional discourse. Way to go, men.

TWILL, If I recall correctly-the guy with the PROOF system-was originally a painting contractor-or was it plumbing contractor?- Other than that, I couldn't say-as i have never attended one of the seminars etc. Best wishes, stephen

Never heard of a Proof system, or proof management, but in 1994 my accountant convinced me that we were losing money on every big labor job we did and got me to switch.

Our P&L has been steady as a rock ever since.

STephen said: "#3 that describes something called the PROOF system- which basically puts all overhead on labor instead of trying to make it up with material markups etc. Actually I figured this out myself maybe 15 years ago-and then shortly after that learned that a guy had developed a system called the PROOF system which spelled it all out. VERY much looking into- I think there are seminars etc. now"

PROOF Management?

6) From Egg: Everything shiny is a place to hide.

Thanks for the new thread.

And the book recommendations. Off to the bookstore this afternoon.

And the hiring tips.

:)

Virtually every historical figure can be found to have a darker side. It's hard to apply todays standards to anyone from over two hundred years ago and have them come out pure. If you read the diaries of Lewis and Clark, you can't help but be amazed at the leadership, courage and persistence of both men. Yet afterwards Lewis became dysphunctional and eventually committed suicide. Clark was forever in the shadow of his (then) more famous older brother and despite numerous prestige appointments felt himself a failure. Despite the fact that he had made his slave York a full member of the expedition, and York repeatedly proved his bravery and worth, afterwards he made him revert to being just a slave subject to beatings at Clark's whim.

As to Great-great-great grampa Sam, EGG, just proudly mention your relationship ties and if anyone mentions Shays, just change the subject with,"How about that beer."

Jim, when it comes to finding nuggets, I'm just a cowbird pecking a rhino's back, but I'll give it a try. Practice makes perfect.

Someone once asked why it was that everyone who claimed to experience past-life recall had been Pharaoh or a Roman General, or Cleopatra.

My younger brother is still teaching school but for over 30 years his avocation has been genealogy and he's very meticulous and very thorough. One of the items he worked on was tracking his own link to Samuel Adams. Make no doubt, he and I have less illustrious roots as well, but his blood is my blood, so you can say he discovered that for me too. Washington, Jefferson, Adams...why not me? And yet instead of being grateful, I found myself wondering out loud about Shays' Rebellion. After the Revolutionary War, many veterans were given small land grants in western and central Massachusetts, raw country they could till and work for themselves and their families, as compensation for their service. Due to economic conditions utterly beyond their control, along with ruthless taxation, they soon found themselves increasingly manipulated by their wealthy countrymen in Boston and more and more of them faced ruin. When their protestations fell repeatedly upon deaf ears, they took matters into their own hands. (http://en.wikipedia.org/wiki/Shays'_Rebellion) Sam Adams tried to have them all executed. I ask myself, which is more glorious, to be descended from a famous and selfish personage of little heart and selfish vision or a currently unknown and unsung patriot willing to give it all in the pursuit of mutual freedom. Fortunately for me, I can claim both. Life is a river of opposites. To find your own lasting truth, you have to bridge them. Everything shiny is a place to hide. In roofing, there is absolutely no place to hide. Every time, every day.

Jim,

I've known egg, via this forum, for more years than I can trace, and via personal conversations for just about as long, and via personal visitation for.... jeez time flies, is it one year or two? I just love the guy to death.

The man exists on a different plane. This plain ol' country boy tried to jump that high, hurt myself. I hired a plane to reach it, ran out of oxygen, crashed and burned. Just plain can't afford a rocket. Sometimes, you're best just trying to appreciate the artistry rather than attempt to comprehend the concept.

He'll probably craft a simpler explanation, that will still leave me scratching my head.

If you can get Egg, Pgriz and RoofX all talking about a subject with some passion, about all I can contribute is a "WTF"? LOL

Egg, regaurding the 700 hours of production

I carry an "Artisan" policy that allows me to do a limmited amount of roofing and hire 2 employees- but I strongly prefer having no employees.

Equipment I keep quite low-in fact I was able to work for 20 years or so without even a dump trailer- i only bought one 2-3 years ago to handle excess work caused by a hail storm- before that I was able to successfully sub out the clean-up-used the same sub for clean-ups for years and years.

i live in N.E. Ohio-so basically we aren't going to do much roofing from about Thanksgiving untill after St. Patricks Day-so roofing 2000 hours a year just isn't going to happen

I don't view employees like pieces of meat- but I also don't feel any responsibility to provide anyone with a job. In my opinion- If a person is skilled enough that I would WANT them as an employee- they are skilled enough that they could be running their own small business-and that's what I think they should do.- I accept that other people have other opinions however.

In another thread discussing hailstorms- another contractor mentioned that he NEEDS about 150 roofs a year to meet his overhead etc.

Let's think about that for a moment- how much work,effort, and liability goes into just reaching the break even point? keeping legitimate-while running a VERY lean organization, means that I can afford to stay at home for days,weeks, months without much concern-and that i can largely pick and choose what i will do because I feel no pressure to take on a project to keep crews busy

i should possibly mention that at age 48- I have been together with my wife since she was 16 and I was 15-and that we bought our first house for about 32K when we were each making about $5/hour, LOL-so I have never paid any alimony, child support etc.- BIG money saver there , I imagine, LOL.

700 hours production- I will tell you exactly what I do. each year between thanksgiving and early January i sit down and look at the upcoming year. I know my overhead( I have been tracking it precisely for over 20 years), I know how many hours I am highly likely to work( I have been tracking them for years)- and I calculate the household expenses- what tuition we will be paying, what investments we plan to make, improvements to the house, taxes, ordinary household budget etc.- Basically It's pretty simple to come up with what my NUT is for the upcoming year-and at that point i know exactly what I have to sell my services at.

it's simple- but it also means that some types of work will be eliminated- i won't be cleaning out anybodies gutters, usually spouting installs don't make my numbers work, a lot of carpentry is lucrative enough etc.- but it really focuses my attention on what I MUST charge-after all- it's right there in black and white.

i spend a lot of my "free" time working in my garden, I do some personal woodworking, I run and bike and lift weights, for years a coached baseball and basketball, I am an ineptly practising buddhist---so i meditate, I read a LOT-excessively so.

my sons are pretty much grown and just about self sufficient-we are in the exploratory stages of forming another LLC to buy multi family houses to fixup and rent out.

I gotta get moving here- i have a couple hours of busines chores to take care of this morning-and then i need to do some work on my bike because my oldest son and i have a 4 hour bike trip planned for tommorrow, best wishes all, stephen

VAA, your hiring experiences sound a lot like mine were for a significant portion of my career. I wrestled with that maddening employee thing for two decades before I found a way to smooth it out. Your frustration with the loss of the union, and it's accompanying apprentice program strikes a chord with me. My solution involved the apprenticeship concept.

First, a little background. I served a formal four year apprenticeship with the union. I was a foreman in my third year and I worked for my mentor for 7 years before I was jettisoned into the world of business in 1982. We were victims of the oil embargo. Our town, known as the Motor City, went dead when people stopped buying gas guzzling cars. Shortly after that, the unions fell out of disfavor in the residential field and most journeymen left the trade.

When the housing market began to recover, there weren't enough tradesmen left to fill a decent crew. Instead of a crew of five journeymen and one or two apprentices, we ended up building houses with one journeyman and five laborers. Often, the "journeyman" was one of the better laborers who decided to hang out their shingle. It was the blind leading the blind.

Anyways, I struggled finding help too. At one point in my career, I hooked up with another great journeyman and we framed house after house with just the two of us. It was quite fun, entertaining (he was a very funny guy) and lucrative. Unfortunately, he took off all winter and went sailing in the Carribean. I actually ended up framing two houses by myself during those times.

Back to hiring.....We couldn't find decent help and we quit trying. At some point, I decided that we had to put together a crew because I didn't want to frame houses alone again...since we were putting up "cutup" customs....3000 sf or so. My partner parted...he just didn't want the crew idea and I was left doing the merry go round thing again. Then....I figured it out.

I finally hired a brand new raw guy...right out of the machine shop. He wanted to "learn to be a builder" and I obliged him. The key to keeping him, and the subsequent hires was the "apprenticeship" program that I offered them. I hired them at laborer wages and then set up a 6 year wage scale program to get them to journeyman pay. Every three months, I gave them a .50 raise. At that time, I was also paying full health benefits. He loved the program and he worked hard. He brought in a few friends and I put them all on the same program.

The key was the carrot....the journeyman wages at the end of the 6 years. They could all go home and tell their friends that they were going to make professional wages. It was a very satisfying arrangement for all of us. I stopped losing my trained guys to other crews for a measly buck an hour. My guys didn't need to leave to get a raise...they knew they had one coming!

Those guys stuck with me till I retired from that business. The economy sucked the life out of them now though...but they still are good carpenters LOL!

Ps...don't ask us to roof a house though.....

Thanks for the nice clean thread Egg and thanks for the welcome. It is much appreciated.

I'm curious about this statement "There are a lot of cosmic jokes that get played against everyone, a lot of tests, and a lot of people who enjoy pretending to look down on other people. We in the roofing profession are in the very enviable position of being exactly where we can help people find themselves and I don't just refer to our workers."

I've read it three times and I'm not sure how it applies to the roofing profession. Even when I try to transfer that thought process to my trade (I am a carpenter: custom rough framing was my specialty), I can't make a connection. Hopefully, your explanation will deliver one of those nuggets that I so cherish.

Stephen, congrats on reaching that agreement with Gramps. I know your business model can't work if you have to negotiate too much. Your self imposed limit on hours (per year) forces you to be much tighter on every sale. For me, giving up 674 wouldn't even cause me to think twice although I always act like it's killing me. Actually, I usually know which people need a break and I'm really good about finding a way to lower my price so they can get their roof done by us. It's funny.....often, the people who need the most help are more likely to pay full price...but I've had my share of well off people paying full price too. In the end, it all balances out and as a result, I'll horse trade, happily, all day long.

Every once in a while, I get a customer who tries too hard to lower the price. I happily get down to the nitty gritty and offer to do a "recover". I've only had two that accepted. Usually, they'll talk it over, then they miraculously "find" enough money to do the job. I don't know why, but I just enjoy the negotiating part. Usually, once they start dickering...I know the job is sold....I just don't know at what price. I jot down a "bottom line" price going into every proposal. I shoot for a 40% gross profit markup and "settle" for a 30%. I do walk on some customer and hold the line at 40% if they are difficult in any way. I think I'm really hoping they say no.

Ok, from lefty:

1. Never treat a man working for you like a piece of meat.

2. (He'd be with me on this one: It is but it aint.)

Stephen, I'm extremely impressed that you can stay in the game on only 700 hrs. field time. I run things much as you do, though go farther afield geographically and keep one or two guys busy with me, more in the peak months, but I keep a full complement of insurance and equipment going and couldn't think of flourishing without working at the very least three times as many hours as that in a year. Of course, this trade is almost a spiritual practice with me, which is a strange kind of story that needn't be told today, so I approach it differently I think. I'm one of those weirdos that actually cherishes the brute physical part of the job (can you spell Vaa Fakaosifolau aka MikeNZ) but I in no way consider that a requirement to running an upstanding and excellent company whether it be a small one, a medium-sized one, or a large one. I warrant running would be much better Quality Exercise for sure.

All the guys I've hired in the years gone by fall into two categories. People who aspire to craftsmanship when every conceivable force is working against it, and people who don't. When you find one who does, in whatever capacity you hire him, grab hold and treat right. For the rest, who scream to be treated like a piece of meat, surprise them and give them a reason to ask themselves why they insist on telling themselves the world sucks when it doesn't.

There are a lot of cosmic jokes that get played against everyone, a lot of tests, and a lot of people who enjoy pretending to look down on other people. We in the roofing profession are in the very enviable position of being exactly where we can help people find themselves and I don't just refer to our workers. Lefty used to agree with that too. Don't know if he still does or not cuz he disappeared. Maybe somebody needs to go and find him now.

Anyway, welcome to Stephen and Blue and carry on by all means.

egg, a couple of thoughts on your list

#2- lost 34# over the last 2 years or so-and last OCT. 3rd started a running program- i can run 8 miles now- but it is a strain.- went from no running- to a long run max. of 8 miles.

during the roofing season i have backed off of that and mostly Bike( easier on the knees)

#3 that describes something called the PROOF system- which basically puts all overhead on labor instead of trying to make it up with material markups etc. Actually I figured this out myself maybe 15 years ago-and then shortly after that learned that a guy had developed a system called the PROOF system which spelled it all out. VERY much looking into- I think there are seminars etc. now.

Once i learned what my overhead totall actually WAS-and that I had to recaprure that in onloy 700 hours of production- it helped make me much more efficient- if a bit mercenary, LOL. best wishes, stephen