Once upon a time a guy who loved building decided to start a business. He was soon working 70 hours a week, “buying jobs,” as they say, and losing money. About 50% of new, small businesses go under within five years, but Troy Leach, owner of ViLeach Development, in Denver, is determined to beat the odds.
Leach had been a framer and concrete worker for years before studying architecture. He worked mostly in construction administration in the field.
Five years ago he started a general contracting company and was soon an example of the small-business cliche where, he says, “I’d bill out at $15 an hour and every month I’d make a salary but not enough to cover overhead. When bills came due, I paid them but [didn’t pay] my subcontractors. I figured I’d use money from the next job to do that. Then I got way behind on everything. I was stressed out. I got to the point that I hated doing what I was doing.” He knew he needed help and education.
Across the U.S., small-business failure rates rose by 40% between 2007 and 2010
He went to a local bookstore and found Melanie Hodgdon and Leslie Shiner’s A Simple Guide to Turning a Profit as a Contractor. “It’s made all the difference,” Leach says.
Leach names three things he is working on after reading the book: calculating burden rate and overhead; how to read a profit and loss statement; and the “biggest thing,” which he says is “job costing so I know where my jobs are and where I’m losing money.”
Leach says that he’s trying to find someone to replace him so he can run the business. He hired a lead carpenter in September and recently scored an addition job — the first “project I’ll make decent money on,” he says. “First, you have to decide if you’re a contractor or a business owner. I’ve made my decision.”
—Stacey Freed, senior editor, REMODELING.