3 ms·

> It is a highly profitable business It’s not. Margins are thin. Most companies make money though sheer size.

ProllyInfamous 3y ago
The typical lifespan of a residential contractor is MUCH LESS than alternatives (commercial, industrial). This is mostly due to the difficult nature of constant-lowest-bid-acceptance — and no amount of change orders will make up for such an unrealistic bid. At the end of the day, what you are building is typically a single individual's most valuable possession, and they have every right to nitpick poor build quality (which is endemic). A couple "bad make-up jobs" can end a contractor entirely, and usually quite suddenly (even in the middle of a project). In my 20 years working residential, it was extremely rare to find a crew that didn't have a scheduling, drug, and attitude problem. Towards the end of my career ("retired" 2020) I began working primarily on 5000sqft homes thinking that this wealthier clientele might have less difficulties — turns out there's more. ADVICE: invest in commercial/industrial tradeshops, because residential is "fly by night" in their much shorter existences. SRC: Retired residential electrician (IBEW-trained).
- expertentipp 3y ago
  > it was extremely rare to find a crew that didn't have a scheduling, drug, and attitude problem I guess the only area for potential improvement by a startup is the physical labor, which no one wants to perform. As others mentioned in the comments, there exists stereotype that people in construction are dumb which is linked to the profitability "secret" - finding the cheapest labor. To the point even of importing entire crews from dictatures on another continent. Otherwise real estate is full of architects, designers, inspectors, controllers, agents, and whatnot. They oftentimes have education and qualifications, access to data not available to you, and a professional network.
  - ProllyInfamous 3y ago
    The "smarter" you are, the faster you leave this industry (if you can help it). Unfortunately the massive usage of drugs (alcohol, minimum) to cope with a failing body from decades of not-being-given-a-hoot-about... tends to dull any potential brain development. Around the time most subs begin "realizing their value [wage]," is when the next-lowest bidder becomes king. I'm stereotyping my own kind, and once thought of myself as "a fairly intelligent person" — but my occupational history would prove otherwise. I absolutely loved the freedom of running my own shop (typically just myself, one-man one-van) — but after standing up for a few undeserving GC's, one of them sat me down and explained that "he has insurance for a reason, and necessarily must continue using sub-qualified labor to remain competitive [insurance covers his good name, he says]".
bombcar 3y ago
This is correct. The long-term companies in the building market either focus on industrial/commercial, are high-cost, or otherwise "barely get by". If you actually run the financials, they're not as high margin as you think. And the opportunities for cost-savings have often already been done (simplified design, cookie-cutter, etc). And every single time the housing market even slows down, tons of builders go bankrupt. Many you've never heard of.

The typical lifespan of a residential contractor is MUCH LESS than alternatives (commercial, industrial). This is mostly due to the difficult nature of constant-lowest-bid-acceptance — and no amount of change orders will make up for such an unrealistic bid. At the end of the day, what you are building is typically a single individual's most valuable possession, and they have every right to nitpick poor build quality (which is endemic). A couple "bad make-up jobs" can end a contractor entirely, and usually quite suddenly (even in the middle of a project). In my 20 years working residential, it was extremely rare to find a crew that didn't have a scheduling, drug, and attitude problem. Towards the end of my career ("retired" 2020) I began working primarily on 5000sqft homes thinking that this wealthier clientele might have less difficulties — turns out there's more. ADVICE: invest in commercial/industrial tradeshops, because residential is "fly by night" in their much shorter existences. SRC: Retired residential electrician (IBEW-trained).

expertentipp 3y ago
> it was extremely rare to find a crew that didn't have a scheduling, drug, and attitude problem I guess the only area for potential improvement by a startup is the physical labor, which no one wants to perform. As others mentioned in the comments, there exists stereotype that people in construction are dumb which is linked to the profitability "secret" - finding the cheapest labor. To the point even of importing entire crews from dictatures on another continent. Otherwise real estate is full of architects, designers, inspectors, controllers, agents, and whatnot. They oftentimes have education and qualifications, access to data not available to you, and a professional network.
- ProllyInfamous 3y ago
  The "smarter" you are, the faster you leave this industry (if you can help it). Unfortunately the massive usage of drugs (alcohol, minimum) to cope with a failing body from decades of not-being-given-a-hoot-about... tends to dull any potential brain development. Around the time most subs begin "realizing their value [wage]," is when the next-lowest bidder becomes king. I'm stereotyping my own kind, and once thought of myself as "a fairly intelligent person" — but my occupational history would prove otherwise. I absolutely loved the freedom of running my own shop (typically just myself, one-man one-van) — but after standing up for a few undeserving GC's, one of them sat me down and explained that "he has insurance for a reason, and necessarily must continue using sub-qualified labor to remain competitive [insurance covers his good name, he says]".

bombcar 3y ago

This is correct. The long-term companies in the building market either focus on industrial/commercial, are high-cost, or otherwise "barely get by". If you actually run the financials, they're not as high margin as you think. And the opportunities for cost-savings have often already been done (simplified design, cookie-cutter, etc). And every single time the housing market even slows down, tons of builders go bankrupt. Many you've never heard of.