Why 'Oscar Plumbing' Will Never Make Much Money
"Sam Oscar" owns a small plumbing and heating contracting company. He just installed plumbing for a good friend of mine.
Although Sam did some things very well, unfortunately, he will never make much money. Here’s why:
Prior to submitting his bid, Sam walked the job with the owner. He had several excellent money-saving recommendations his competition did not think to suggest. When he left, the owner felt good about the prospect of working with him.
Sam submitted a very competitive bid. Like all low bids, however, to make any profit, Sam’s margin for error was zero.
Black Mark 1. Sam was to start a week later, but when the day came, none of his crew showed. And, no one called. His piece of work was squarely in the project’s critical path, so every delay of his also bumped subsequent subs back. The owner called and politely let him know this. He apologized, giving the typical excuses. His new start date would be four days later.
Black Mark 2. His crew showed, two guys, only one of whom could speak English. This fellow had about as much enthusiasm as a loaf of bread. He wore his job-dissatisfaction like a bad suit. The crew promptly made the following mistakes:
- Routed plumbing in the zero-clearance area under the jetted tub
- Installed the shower nozzle and valve on the wrong wall of the walk-in shower
- Neglected to install outside faucets and other minor fixtures, though they were clearly included in the scope of work
I realize everyone makes the occasional mistake and is sometimes late. I would bet however, in Oscar’s case, these are chronic problems.
Mistakes suck profit like a shop-vac. By the time a mistake is corrected, it costs three times the bid amount. Plus, relationships take a beating. If Sam Oscar really wants to make money, here is what he needs to do:
- Never Again Be Late. Being late says everything about your character and your company. Being late is a conscious choice and you will be late as long as you allow it. Some people/companies are never late. They understand the damage that can be done, and schedule accordingly. They don’t overbook themselves or their crews.
- Check in on the Job. Of all the mistakes contractors make, in my judgment, not checking in is the most common and the most costly. Sam Oscar was the one who initially walked the job, not his crew. Yet the crew did the work and Sam never came back. I don’t care how good a crew is, it is impossible for them to read the mind of their boss — especially when the plans are inadequate, and no notes were taken initially.
Sam himself needs to check in — visit every job daily, walk it with his foreman and discuss the details. Although this takes Sam from other things, in the end, mistakes will be significantly fewer, profit will increase and his reputation will soar.
Tim K. Garrison, P.E., M.S.C.E., of ConstructionCalc.com has authored a book and several short courses, and lectures on topics relevant to builders. Reach Tim at timg@constructioncalc.com.
The views expressed in this article represent the personal views, statements and opinions of the author and do not necessarily represent the views, statements, opinions or policies of the National Association of Home Builders. NAHB does not necessarily endorse any of the views expressed by the author and NAHB is not responsible for any direct or indirect consequences arising out of the views expressed in this article.