Many people in the construction industry are making the transition from laborer to leader, from swinging a hammer on a job site, to managing multiple crews as a general contractor. However, while it may seem straightforward, there are numerous pitfalls and obstacles that can hinder one’s progress. In this article, we delve deep into the nuances of this transition, pinpointing the potential stumbling blocks and providing actionable insights to navigate through them successfully.
The aspirational goal for many laborers is to eventually transition into a multi-level company that allows them to grow, duplicate their efforts, and elevate their roles. But many fall into the trap of the proverbial hamster wheel, continuously stumbling over the same issues and finding themselves unable to move forward. The underlying problem? Many don’t truly understand the complexities of the monetary transition and where their finances should be allocated.
On a job site, the money a client pays typically goes into three distinct categories:
- Labor Cost: This is the cost associated with the manpower required to complete the project.
- Material Cost: The expenses related to the materials needed for the job.
- Profit from Managing the Job: This is the profit that accrues from overseeing the project.
Understanding and managing these financial categories effectively is imperative. But, to truly grasp their intricacies, one needs to be acquainted with their underlying mathematics and the percentages associated with each category.
So, how does one transition from a mere subcontractor or laborer on a job site to a full-blown general contractor? Well, the transition can be broken down into three distinct phases:
- The Laborer: This phase revolves entirely around you. Your time is directly exchanged for money. As you become more efficient and gain a reputation for excellence, more opportunities arise. However, this stage has its limitations, primarily tied to the amount of time you have available.
- Subcontractor or Partial Manager: At this juncture, some laborers attempt to manage a few jobs while personally handling the larger or more profitable ones. The challenge arises when they spread themselves too thin, leading to a decline in the quality of work, which subsequently affects their reputation. This is a common trap, and many find themselves sliding back to being just laborers.
- The General Contractor or Project Manager: This is the ideal stage where you’re no longer involved in the nitty-gritty of labor. Instead, you’re managing people who are doing the actual work. At this phase, the client is not hiring you for your manual skills but rather for your expertise in overseeing the entire project. Your new product is no longer a tangible outcome like a new cabinet or paint job; it’s the entire experience of delivering the project smoothly.
The essence of the transition is to evolve from being the primary laborer to becoming an entity that offers a product, which in this case, is efficient project management. It’s about understanding that the company’s growth and value shouldn’t be solely dependent on one’s labor but rather on the product and experience it offers to clients.
In conclusion, the path from laborer to a general contractor is one of growth, learning, and understanding. While the journey is riddled with challenges, with the right focus, understanding of finances, and dedication to offering value, it is entirely possible to transition successfully.