want to start a new business - opinions wanted

[snowforfun4]

As I respect my fellow boaters and have enjoyed the thoughts shared on this site, I thought I would throw this one out there for comments. I am a VP of a commercial construction company, but have come to the realization that working for someone else is not my ultimate dream. My wife has a solid background as an office manager in construction so I would have some good support at home and in the office. So here is one option that I am kicking around.

I am thinking about a full service home owners construction representative. Something similar to a Construction Manager for commercial construction. Possible services include:

Represent buyers of new home construction - budget and pricing reviews for base bid and change orders, progress reporting, quality control, adherence to drawings and specifications, possible help regarding financing options, dispute resolution.

Represent home owners during renovation/addition projects, Same deal as above including contracting the work and cost estimates. The big selling point here would be to remove the burden of stay at home moms from having to deal with it, and owners who may not be familiar with construction. Since we would work for them, we would be protecting their interests regarding cost, quality etc.

We could also also be present to let subcontractors into the property and keep an eye on things.

Sorry for the long post, but I wanted to get some feedback to see if you guys think there may be some potential here as I have not been able to find much in the way of similar services.

 

[JB]

Re: want to start a new business - opinions wanted

Don't know much of anything about construction, SFF, but I have great respect for entrepreneurship. Best of luck to you.

 

[tx1961whaler]

Re: want to start a new business - opinions wanted

Who would pay you and how would you get paid, particularly for new construction?

 

[Scott Danforth]

Re: want to start a new business - opinions wanted

basically you would be the general contractor dealing with the subs

 

[aspeck]

Re: want to start a new business - opinions wanted

Not sure I would see the need for that extra cost, because you are doing the job of the General. But then I have a general contractor that I trust. Have worked with some commercial building managers and have not been impressed, but we had to use them because of the funding. Felt they were a waste of our resources. But then I know a little about construction.

If you go this route, good luck to you!

 

[Bob_VT]

Re: want to start a new business - opinions wanted

Not a bad idea.

Specialize or find a niche. With the amount of foreclosures I am sure there are real estate companies and banks that would love to get more money during a sale. Consider renovating those homes/buildings.

I guess it would all be based on the economy and building rates in your area. Here in my town in VT ....... construction is slow however, in other parts of the state it is booming.

Think it out carefully and also be positive you want your income and your wifes income come from a single source. When it is slow for you ......it would be slow for the family.

So who is the salesperson? You or your wife? Who will prepare the bids?

Best of luck............. Find that niche!

 

[snowforfun4]

Re: want to start a new business - opinions wanted

Who would pay you and how would you get paid, particularly for new construction?

My thought is that I could set up a couple of fee options that the owner would pay. One would be a flat percentage of the cost of the work where I am doing more of the ears and eyes for the owner. The other option would include a percentage of the savings that I was able to gain for the owner thru value engineering/constructablity review and negotiation.

The thought is that a portion of my service would be adding a level of confidence in the process for the buyer and the other wing of my services would be actually representing them in negotiating.

 

[snowforfun4]

Re: want to start a new business - opinions wanted

basically you would be the general contractor dealing with the subs

That is correct, but the services would include more than that. I would represent the owner, not a contractor, so I would need to set up the fee structure such that the more value (lower cost of the work), the more I would get paid. Shared savings where I would get a percentage of the amount saved.

 

[duke33]

Re: want to start a new business - opinions wanted

Sounds good on paper but in my opinion it seems like you'd just another person I'd have to pay to get something done. Just a thought.

 

[snowforfun4]

Re: want to start a new business - opinions wanted

Not a bad idea.

Specialize or find a niche. With the amount of foreclosures I am sure there are real estate companies and banks that would love to get more money during a sale. Consider renovating those homes/buildings.

I guess it would all be based on the economy and building rates in your area. Here in my town in VT ....... construction is slow however, in other parts of the state it is booming.

Think it out carefully and also be positive you want your income and your wifes income come from a single source. When it is slow for you ......it would be slow for the family.

So who is the salesperson? You or your wife? Who will prepare the bids?

Best of luck............. Find that niche!

My target demographic would be the high end new construction and renovations. Starting price for the house would have to be at least $500k. I don't think this kind of service would really add anything to the non-custom homes. My best client would be VERY picky, not interested in learning about construction the hard way, and not be building from a standard plan. Houses in the $800k and up would likely account for 90% of the business...I think. Looking for people building a house where the husband travels to pay for the house and wife wants to be at the spa, not watching people pound nails.

The whole business model revolves around the premise that while the contractor is there to maximize his profit, I would be there to minimize the hit to the owner and stress quality, life cycle costs, etc.

VERY good point about the single source of income. That is one of the big hangups I am having. My wife has a decent job, but we would need her early on in the process so I can continue to bring home the bacon until (and IF) the business would get traction.

 

[Scott Danforth]

Re: want to start a new business - opinions wanted

depending on the location, the housing market may still be saturated in the $0.5M+ range. I know that it is on the coasts, as well as SE wisconsin. right now you can get many high end houses for as low as 40% of what they were at 5-8 years ago.

 

[Tim Frank]

Re: want to start a new business - opinions wanted

I am a VP of a commercial construction company,

What does your company build?

 

[snowforfun4]

Re: want to start a new business - opinions wanted

What does your company build?

We are a commercial masonry company. Our projects include schools, hospitals, retail buildings...any commercial or public work. I have a good amount of general contracting experience beyond masonry alone.

 

[Tim Frank]

Re: want to start a new business - opinions wanted

You are more or less speaking of building commissioning/project management. You represent the owners' interests.
There is a niche there in new home construction, but it is a tough sell. (it is tough enough on commercial projects), as mentioned, it has the appearance of just another cost.

The General contractor will view you as a PITA; if saving $$ is your goal, I am not sure how you would do that in an already contractual situation. You seem to be assuming a far greater access to a site (being present to allow subs access??) than any general i have ever known would grant.... happily.
That might cause a negative impact on $$.

Your biggest role would/could be as QC, to ensure that plans are adhered to, systems are installed and proof-tested to meet design performance etc.
There is very real value in that....to both the homeowner AND the general ....(and indirectly to the mortgage holder.)

 

[Flysfloatsor]

Re: want to start a new business - opinions wanted

Yes, youre talking about a Project Manager.
IMO, its a though sell. Because if you do a good job, the homeowner will never know, and think they could have done w/o you. (making referral business hard to obtain)
If things go wrong, the GC has you as a REAL easy target to blame. (Again making referral business hard)

Project management is a tough job that takes alot of skill and a certian level of decision making authority the homebuyer is unlikely to relinquish.
PM's only work in a orginization that has set up a projectized enviroment. So the PM's leadership is generally accepted.
Wont be the case for you. And even in a Projectized enviroment, a PM never finishes a project w/o getting dirty and having some people displeased.
Take it from me - a Vice President of Project Mangement at a place where alot of you keep your money.

 

[foodfisher]

Re: want to start a new business - opinions wanted

Fubars? Who will be on the hook in an enivitable mistake by any sub w/your oversite.

 

[snowforfun4]

Re: want to start a new business - opinions wanted

Thank you all for the honest replies!! You are confirming my gut feeling that while there are some merits to this in theory, finding enough clients to sustain a business would be difficult if not impossible. This may be better suited as an additional service offered by a home inspection company.

For those of you who are self employed, how did you get your start and in what line of work?

 

[DECK SWABBER 58]

Re: want to start a new business - opinions wanted

Go with your gut feeling.

What about becoming your own general contractor since you are experienced?
Depending on your relationship with your company, do they turn down jobs that are too small or ones they deem unprofitable for them but could be for you?

I'm a self-employed used car dealer for the past 27 years. I got my start as a technician then found an opportunity to buy a small shop who's owner wanted to do something else. The business didn't come with much of a client base but all I really bought was the equipment and the name and phone number and the price was low. I just about starved to death but then merged with a friend/partner who had a dealers license, we still had a lot of lean years but stuck with it and built a good reputation and a loyal following of customers. Once car sales generated enough income we axed the auto repair and just repaired our own. 27 yrs. later I have 0 complaints (except sometimes the stress of dealing with the public), not rich but I've made a decent living for my area. Lots of satisfaction but you better be prepared for a lot of blood sweat and tears and HARD WORK.

 

[gibletts]

Re: want to start a new business - opinions wanted

My missus worked for a big corporate in the city, had one too many bad days at work and chucked the job in one afternoon. Anyway she started up her own accounting practice, she didnt have a single client so the first six months was delivering flyers and bugging people trying to get them on board, and to make it worse the economy wasnt that bouyant at the time. Anyway those first few years were tough, we were paying the bills and mortgage and down to one income plus we were paying rent for an office and all the other expensices that go with it, there were a few weeks where we went without groceries not to mention fuel for the boat.

The business has grown and this year we have taken on a staff member and have made a little money for the first time. Starting up a business is tougher than you might think and you have to curtail the lifestyle you are used to, but in the end its better than working for the man!

 

[jkust]

Re: want to start a new business - opinions wanted

For those of you who are self employed, how did you get your start and in what line of work?

My wife has been self employed for a number of years. I am in an ultra high dollar career, she saw a void that was lacking in my industry and filled it. Have you heard of Lloyds of London?