By REMODELING Magazine Staff. Experience counts
Running a remodeling business is a complicated thing. There's the obvious stuff, of course: bidding jobs, paying bills, compensating employees. But there are also aspects to it that aren't readily apparent to a lot of people, such as calculating overhead and figuring out how much money to put back into the business to foster growth. Guys who have owned a company before understand these subtle nuances. You don't have to explain to them why they only make $15 an hour when we charge the customer $40.
Having a former owner out in the field is an incredible asset. These guys are experienced in working with clients of all types. When the job foreman or lead carpenter can handle a problem with a difficult customer right off the bat, it cuts out a lot of time and hassle on my end. They might be able to spot a potential problem I miss because I'm not out at the site every day.
Ownership is not for everybody
There are many reasons why a former owner might decide to work for someone else. A lot of younger guys have wives and kids now, and they want to spend time with them. They can put in their 40 hours a week, but after that, they want some free time. We understand that. Our priorities are family, work, and hobbies, in that order. We want our employees to share those priorities.
If he's out of business for other reasons, then that's something you need to probe when you interview him. If a guy claims it was just bad luck, well, that's a warning sign that he probably thinks his way is best and won't listen or follow directions. But a lot of the time, he just isn't business-savvy. There's nothing wrong with that. Do your thing, and do it well -- just let someone else run the business.
Bellamy & Sons Construction
Learning the hard way
I used to be on the "pro" side of this debate. I've hired former company owners three times, and three times it hasn't worked out. I'm gun-shy now, and here's why.
I had the notion that someone who had been in business would have a lot to offer, would know more, and therefore would have an advantage as an employee. He's been through it all before and should have a sense of the logic of expenses, profit, job cost, and efficient problem-solving. Well, I put too much stock in what they should know and lost sight of the likely reason they were not still in business for themselves.
When you run your own shop, you know about employment taxes, health-care costs, and vacation pay, and you understand that a saw on the Visa card still costs real money. Yet I've found that former company owners don't quite see the value of the burden costs that go with their employment. The biggest problem is that they seem to want their share of the profitability built right into the hourly wage before the work is produced. In too many cases, they forget (or never knew in the first place) how profitability fits in.
I wouldn't say I'd never again hire a guy who has owned his own business. The guy who sold his successful operation, sat out for a while, and then decided he wanted to work for me likely would be a good addition. But the guy who has failed and wants to work for me because it's safe--that's not a good situation for me. If he has the right attitude, the experience is a plus, but if not, it's an even bigger minus.
M M "Mike" Weiss, CGR, GMB, CAPS
Weiss and Company