Getting Philosophical: The paradox of the one-person business

[Dougster]

Doug... Before you buy another machine.... make a list the jobs that are in your area... then identify what equipment is needed to do each of the jobs... then figure what said equipment will run each month
then calculate what said tasks will pay... any task that will not pay your equipment and salary eliminate from the list... whatever's left will give you an idea of what to purchase.

Hi Paul - I think that's what several of the folks here have been trying to tell me. What you say makes sense except for one thing: I have no idea what the next dozen phone calls will bring. The next dozen phone calls could all be for jobs easily within my current range... or they could all be out of my job size range. Most likely some will be within range, some will be too small for my equipment and some will be too large for my equipment. This is a gross over-simplification of course... there are always bidding/ competition/ subcontractor/ materials/ waste/ scheduling issues... but you get the general idea. I can never tell you ahead of time what the next caller will want. I can only go by experience to date... and, no big surprise, I am losing out about equally on the low and high ends of the equipment requirements scale.

And to clarify... by job size, I do NOT mean duration or bid amount. I only mean the SIZE, TYPE, POWER AND SPEED of the equipment needed to do the job safely, quickly and at a competitve price.

Dougster

 

[Reg]

Hi Paul - I think that's what several of the folks here have been trying to tell me. What you say makes sense except for one thing: I have no idea what the next dozen phone calls will bring. The next dozen phone calls could all be for jobs easily within my current range... or they could all be out of my job size range. Most likely some will be within range, some will be too small for my equipment and some will be too large for my equipment. This is a gross over-simplification of course... there are always bidding/ competition/ subcontractor/ materials/ waste/ scheduling issues... but you get the general idea. I can never tell you ahead of time what the next caller will want. I can only go by experience to date... and, no big surprise, I am losing out about equally on the low and high ends of the equipment requirements scale.

And to clarify... by job size, I do NOT mean duration or bid amount. I only mean the SIZE, TYPE, POWER AND SPEED of the equipment needed to do the job safely, quickly and at a competitve price.

Dougster

Right...
{Some of} what I think I'm interpreting is that you are looking TOO HARD at the jobs that are just beyond your equipment's reach - which is leading you to the conclusion that you should buy more, (or different) equipment.
This seems to be co$ting you time and nervous energy (opinion).
Suggestion;
Of the next dozen enquiries grab the mid band ones, politely decline the two biggest and one smallest (fine tune your script for this, don't just turn 'em away and piss 'em off).
If that feels like you're turning away too much potential work, focus and increase your marketing/selling. Get more enquiries, get a bigger percentage of them to be "suitable". Get to 80%

Recap; I used the work "interpreting" - which just means this is how I read what I think you have been writing. BICBW (-:

 

[Dougster]

Right... {Some of} what I think I'm interpreting is that you are looking TOO HARD at the jobs that are just beyond your equipment's reach - which is leading you to the conclusion that you should buy more, (or different) equipment. This seems to be co$ting you time and nervous energy (opinion). Suggestion; Of the next dozen enquiries grab the mid band ones, politely decline the two biggest and one smallest (fine tune your script for this, don't just turn 'em away and piss 'em off). If that feels like you're turning away too much potential work, focus and increase your marketing/selling. Get more enquiries, get a bigger percentage of them to be "suitable". Get to 80% Recap; I used the work "interpreting" - which just means this is how I read what I think you have been writing. BICBW (-:

Again, my emphasis added to the above.

Addressing your point (in red): This is a lot easier said than done... and is possibly the most expensive and frustrating option of all. Timing also plays a large part in regard to certain increased marketing investments (like phone book ads: one opportunity per year). Also, greater advertising in my particular area ends up mostly wasted on potential clients that are too far away. It's just how our newspaper and phone book systems work around here. I pay more... and all that happens is that they add my ad to newspapers and phone books in towns 50-80 miles away... even though I am looking for work no more than 20 miles away. My advertising/marketing budget is already just about as high as I can possibly stand it. I definitely feel that improvements can be made to get more out of what I currently spend, but there isn't any way I want to spend more just to have more distant and more "out of equipment range" bid requests to turn down. And please don't tell me to post placards on telephone polls and walk around knocking on people's doors all day. Let's not go there again please.

In short, I sincerely understand your point, but I still kinda think the better answer is to secure more of the jobs I am having to turn down or am otherwise losing to cheaper, faster, better equipped competitors.

Dougster

 

[LarryRB]

Again, my emphasis added to the above.

In short, I sincerely understand your point, but I still kinda think the better answer is to secure more of the jobs I am having to turn down or am otherwise losing to cheaper, faster, better equipped competitors.

Dougster

You have now answered your own question..

 

[Rara Avis]

Hi Paul - I think that's what several of the folks here have been trying to tell me. What you say makes sense except for one thing: I have no idea what the next dozen phone calls will bring. The next dozen phone calls could all be for jobs easily within my current range... or they could all be out of my job size range. Most likely some will be within range, some will be too small for my equipment and some will be too large for my equipment. This is a gross over-simplification of course... there are always bidding/ competition/ subcontractor/ materials/ waste/ scheduling issues... but you get the general idea. I can never tell you ahead of time what the next caller will want. I can only go by experience to date... and, no big surprise, I am losing out about equally on the low and high ends of the equipment requirements scale.

And to clarify... by job size, I do NOT mean duration or bid amount. I only mean the SIZE, TYPE, POWER AND SPEED of the equipment needed to do the job safely, quickly and at a competitve price.

Dougster

So are most of your clients....End users?....or contractors?
End Users...are a more predictable baseline for your future business plans or they should be...
Contractors tend to use subs, because either they don't have the equipment or its NOT cost effective for them to do the work...

 

[LoneCowboy]

That has absolutely GOT to be a diesel. My 6.0L gas couldn't even budge that trailer.

Dougster

duh
who would buy a gas truck to tow with?

 

[LoneCowboy]

even though I am looking for work no more than 20 miles away.
Dougster

Why so close?
Now part of this may be the way your area is arranged. But I go easily 100 miles around. (and those 100 miles away pay more)
I would LIKE all my jobs to be within 20 miles, but I'm not established enough to say that, and I have a repeat business, yours is more of a one time thing. (or once every few years type of thing)
I think your area is too small.
Yes, it takes more time to drive there, but that's bid in, somewhat.

I land a surprising amount of the jobs that are really far away (surprising to me) even with my travel costs bid in. I figure for now I don't make a ton, but as I get bigger (not me, the business ) that I can load up a couple on each day or "i'm in that area on friday, I can do it then" and make the costs work for me. And if it's big enough job and I can stay busy all day, it's really not that much more. How far can you drive in an hour or so, that should probably be your minimum circle of work. (anything within an hour).

 

[Dougster]

You have now answered your own question..

Then why am I still so confused???

Dougster

 

[Dougster]

So are most of your clients....End users?....or contractors? End Users...are a more predictable baseline for your future business plans or they should be... Contractors tend to use subs, because either they don't have the equipment or its NOT cost effective for them to do the work...

Hi Paul - So far almost 100% of my clients are homeowners and landowners. I have gotten nowhere with contractors (I really don't think the small guys have that much work right now!!!) and "for profit" home renovators (A very odd and cut-throat group of people to deal with).

But what does this have to do with possibly buying a second piece of equipment???

Dougster

 

[Dougster]

duh who would buy a gas truck to tow with?

Oh Good Lord Brian... NIGHT AND FREAKIN' DAY!!!

You rich folks can afford the diesels. Poor people (like moi) buy gas.

Dougster