There are all different sizes of projects you can pursue, ranging from projects you can work on yourself right away – smaller jobs in town, for example – to big jobs on bigger sites.
In-town, you’ve got traffic issues. It’s going to cost you more to mobilize and demobilize, and get your men to and from work each and every day.
If you’re working at a large site, you’re going to have room to move and roam around. You will have easier access to your materials, and get production fairly quickly.
When you get in a restricted area, you may have the same amount of material you have to move, or the same amount of pipe you have to put in – depending on what you’re doing – but it’s going to be much slower. You’re going to be working with other contractors. You will have more limited access to trucks in and out, and more limited access to supplies in and out. Access to resources is going to be restricted because of dealing with traffic issues.
Another thing to consider is your traffic control. When you’re in-town, the local municipalities and government are going to make you have a certain amount of traffic control in place. That’s going to cost money.
If your biggest concern is having someone to help you coordinate the administrative issues, you can justify hiring one person to oversee that and your legwork for you. But if you’re going to have to double the size of your company to do the job – take on a lot more manpower and more equipment – you should probably shy away from it.
One reason is that if you start renting, you’re going to have to pay more than what you would if you owned the equipment, and that’s going to reduce your income, reduce your profit, and increase your overhead. So you’re losing money all the way around. If you do have more jobs in the queue, you should probably look into purchasing your equipment instead of leasing it.
You’re also going to increase your number of employees. The only way I would even consider this was if I knew that I was going to have other projects of the same size coming up, and I could justify that. You don’t want to be in the position of hiring people only to have to lay them off six months down the road.
Don’t bite off more than you can chew.
Smaller jobs make good money, as long as you know what you’re doing, and you use your time wisely. But regardless of job size, as a smaller or younger company, I would lean towards out-of-town jobs. When you get into town, it’s more complex and you’ve got to have more people involved. Either way, just make sure your bids properly reflect the location and size of the job.
Try to grow at a steady, reasonable rate, but don’t take on a job that’s going to require you to do a whole lot of hiring, or get real big real fast, if you don’t have a stream of work coming up after that. It’s going to be a lot less headache on you, and make your business a lot more enjoyable.
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