• Sign In
  • Create Account
  • Sign Out
  • My Account
  • NEWS
  • PRODUCTS
  • CONTRACTORS
  • ENGINEERS
  • RADIANT & HYDRONICS
  • INSIGHTS
  • MEDIA
  • RESOURCES
  • EMAGAZINE
  • SIGN UP!
cart
facebook instagram twitter linkedin youtube
  • CONTRACTORS
  • BATH & KITCHEN PRO
  • BUSINESS MANAGEMENT
  • HIGH EFFICIENCY HOMES
  • TECHNOLOGY
  • WATER TREATMENT
  • PMC COLUMNS
  • PMC COLUMNS
  • Dave Yates: Contractor’s Corner
  • John Siegenthaler: Hydronics Workshop
  • Kenny Chapman: The Blue Collar Coach
  • Matt Michel: Service Plumbing Pros
  • Scott Secor: Heating Perceptions
  • ENGINEERS
  • CONTINUING EDUCATION
  • DECARBONIZATION | ELECTRIFICATION
  • FIRE PROTECTION
  • GEOTHERMAL | SOLAR THERMAL
  • PIPING | PLUMBING | PVF
  • PME COLUMNS
  • PME COLUMNS
  • Christoph Lohr: Strategic Plumbing Insights
  • David Dexter: Plumbing Talking Points
  • James Dipping: Engineer Viewpoints
  • John Seigenthaler: Renewable Heating Design
  • Lowell Manalo: Plumbing Essentials
  • Misty Guard: Guard on Compliance
  • RADIANT & HYDRONICS
  • RADIANT COMFORT REPORT
  • THE GLITCH & THE FIX
  • INSIGHTS
  • CODES
  • GREEN PLUMBING & MECHANICAL
  • PROJECT PROFILES
  • COLUMNS
  • SPONSOR INSIGHTS
  • COLUMNS
  • Codes Corner
  • Natalie Forster: Editorial Opinion
  • Guest Editorial
  • MEDIA
  • PODCASTS
  • VIDEOS
  • WEBINARS
  • RESOURCES
  • INDUSTRY CALENDAR
  • DIRECTORIES
  • EBOOKS
  • PM BOOKSTORE
  • CE CENTER
  • MARKET RESEARCH
  • CLASSIFIEDS
  • EMAGAZINE
  • EMAGAZINE
  • ARCHIVE ISSUES
  • CONTACT
  • ADVERTISE
  • PME EMAGAZINE ARCHIVES
search
cart
facebook instagram twitter linkedin youtube
  • Sign In
  • Create Account
  • Sign Out
  • My Account
  • NEWS
  • PRODUCTS
  • CONTRACTORS
    • BATH & KITCHEN PRO
    • BUSINESS MANAGEMENT
    • HIGH EFFICIENCY HOMES
    • TECHNOLOGY
    • WATER TREATMENT
    • PMC COLUMNS
      • Dave Yates: Contractor’s Corner
      • John Siegenthaler: Hydronics Workshop
      • Kenny Chapman: The Blue Collar Coach
      • Matt Michel: Service Plumbing Pros
      • Scott Secor: Heating Perceptions
  • ENGINEERS
    • CONTINUING EDUCATION
    • DECARBONIZATION | ELECTRIFICATION
    • FIRE PROTECTION
    • GEOTHERMAL | SOLAR THERMAL
    • PIPING | PLUMBING | PVF
    • PME COLUMNS
      • Christoph Lohr: Strategic Plumbing Insights
      • David Dexter: Plumbing Talking Points
      • James Dipping: Engineer Viewpoints
      • John Seigenthaler: Renewable Heating Design
      • Lowell Manalo: Plumbing Essentials
      • Misty Guard: Guard on Compliance
  • RADIANT & HYDRONICS
    • RADIANT COMFORT REPORT
    • THE GLITCH & THE FIX
  • INSIGHTS
    • CODES
    • GREEN PLUMBING & MECHANICAL
    • PROJECT PROFILES
    • COLUMNS
      • Codes Corner
      • Natalie Forster: Editorial Opinion
      • Guest Editorial
    • SPONSOR INSIGHTS
  • MEDIA
    • PODCASTS
    • VIDEOS
    • WEBINARS
  • RESOURCES
    • INDUSTRY CALENDAR
    • DIRECTORIES
    • EBOOKS
    • PM BOOKSTORE
    • CE CENTER
    • MARKET RESEARCH
    • CLASSIFIEDS
  • EMAGAZINE
    • EMAGAZINE
    • ARCHIVE ISSUES
    • CONTACT
    • ADVERTISE
    • PME EMAGAZINE ARCHIVES
  • SIGN UP!
Columns

Dollar-Making Decisions

By Paul Ridilla
March 1, 2011
With these risks, you have some control over winning or losing.

(Photo credit: ©iStockphoto.com/Rafal Olkis.)


During a break at a convention in Vegas, three contractors and I walked through the casino watching the people gambling. Most were playing slot machines. Some were at the roulette wheel while others were rolling dice, and many folks were playing poker or other card games. We saw some people winning money and some who were not so lucky.

One contractor asked us which of these games we thought gave the best odds of winning. The second contractor said he enjoyed playing blackjack, but didn’t always win. The third spoke up and said, “I do my gambling at home where I made the money to come here and have fun watching these losing games. You realize the only winners at casinos are the owners of all these games that are programmed to take in more money than they pay out!”

We all laughed but totally agreed. When you decide to become a contractor, you become a gambler with whatever risks and odds you want to take. The big difference is you have some control over the odds of winning or losing.

Comparing Risks Vs. Rewards

We then enjoyed our lunch sharing “risk vs. reward” dollar-making decisions.

The first, and biggest, dollar decision is, “Do I want to work for wages or gamble on making more money as a business owner?” If you are lucky, you will find good work, get the right bid and contract, finish the job on time, satisfy your customer, and receive your money with enough profit to stay in business and take good care of your family.

The next critical dollar decision is, “What can I do to reduce all the risks involved with this financial gamble?” If you came up through the trades with on-the-job experience, you need to have enough business knowledge to capably deal with bidding, negotiating, reading and writing contracts, handling extras and change orders, generating critical documentation and collecting your money on time. This list continues with liens, insurances, bonding, taxes, overhead costs and investments.

You can reduce these risks by studying, going to school, hiring a knowledgeable employee, and using an attorney and certified public accountant. Belonging to your local trade association will provide access to affordable sources.

Likewise, if you have a business education, you need jobsite knowledge and applicable code information that you can gain by working at the trade or hiring capable employees who have that expertise and experience.

You simply cannot gamble in this competitive industry without having both!

  • You will need enough money or credit to buy everything you need, pay your labor and provide for your family. You may consider subbing parts of a project or using a partner or joint venture.


  • You can reduce many of the risks involved in submitting a bid on any project, large or small. The word “estimate” means “a guess.” You must predict everything you will need to do or furnish to complete that project, as well as what might possibly go wrong. You should value engineer any feasible cost-saving methods or design changes to improve the project. You must carefully read the entire set of bid documents, visit the jobsite, submit requests for information, and include every alternate and addenda in your proposal.

    I hope you have ample experience, job knowledge or historical labor costs to accurately estimate your labor costs. You may rely on your estimator or one of your foremen who has that ability. There are also estimating manuals available for all types of construction and flat-rate pricing guides for service work.

    When you consider gambling on a new type of construction or in a new market area, you can order the bid documents and establish what you feel would be a competitive bid. Attend the bid opening but do not submit your bid yet.


  • Once you become the successful bidder on a project, you need to negotiate a fair contract or subcontract to guarantee you will be paid on a timely schedule. Do not sign a standard contract until you carefully determine every risk has an equitable reward. Many contractors submit all these potential problems on their proposal:

      1. When monthly draws are submitted and when they get paid.
      2. Reasonable retention during and after the project.
      3. Scope of work included.
      4. One-year maintenance and warranty provisions.
      5. Maintain progress schedule without liquidated damages.
      6. Processing extras and change orders monthly.


  • You now encounter a very costly risk of not getting your equipment and materials to the job on time. You can reduce this risk with a simple pre-job conference with your estimating staff, purchasing department and project managers. Create a simple checklist with all the critical submittals, samples, shop drawings and purchases with “by whom” and “by when” assignments for every task.


  • Producing a quality, on-time project  and collecting all of your reward is your greatest risk. To do this, you need an efficient, cost-conscious management team. You also must establish and post a written chain of command to ensure positive communication between project team members. Use detailed job descriptions for employees, and maintain pluses and minuses in each employee’s file to encourage and reward extra effort.


  • Your jobsite foreman (a superintendant on large projects) is now in total control over how much reward you will earn on that project. He has the authority to make financial and legal decisions. The foreman’s documentation and communication with the main office is extremely critical, especially with job logs, deliveries, change orders, inspection, rentals and commitments.

    A foreman or superintendant’s friendly, “How can I help you?” attitude will motivate your employees and assure positive cooperation with your customer’s representatives and the other contractors on that site. He should encourage value engineering with employees to produce a faster, cheaper and better product.

    You must reduce your risks by providing qualified, skilled craftsmen to produce quality workmanship. I hope you are using a skills inventory database to clarify what employees can do and what training they need.

    Many contractors utilize union craftsmen to minimize necessary training. The UA’s Standard for Excellence is helping to ensure better production and cooperation. Open-shop contractors already have a skilled team or must find, hire, train and maintain employment for additional craftsmen. They can minimize these risks by:

    1. Reviewing résumés and checking with previous employers. Many contractors require a drug test.

    2. Proper orientation including a skills inventory, haz-com and MSDS locations, safety policies and possibility of flex time.

    3. Much of the specific task training for new employees can be accomplished on the jobsite, during or after work hours. Your fab shop or outside classes also may be necessary to enhance their skills inventory.

    4. In addition to rigid lost time, cost control at starting time, coffee breaks, lunch time and quitting times, you need a measure of actual work performed. You can use piecework, a 6-8-10 daily rating on employees’ timecards or cost-code each labor task to compare with your estimate. This also provides valuable historic information for future estimates.

    If you do not already know the reputation of your potential customer, you should ask anyone you know who has worked for him.

    At the end of our lunch, one contractor laughed and said, “I never realized that old saying, ‘No risk, no reward,’ should actually be, ‘The smaller the risk, the bigger the reward!’”

    Links

    • Follow PM on Twitter!

    Share This Story

    Looking for a reprint of this article?
    From high-res PDFs to custom plaques, order your copy today!

    Ridilla

    Questions? Need help? Call Paul at 407/699-8515, on his cell at 407/467-4916 or e-mail him (reference Plumbing & Mechanical magazine).

    Recommended Content

    JOIN TODAY
    to unlock your recommendations.

    Already have an account? Sign In

    • Worker using the Milwaukee Tool SWITCH PACK drain cleaner

      Pipeline profits: Drain cleaning, pipe inspection create opportunities

      Drain cleaning and inspection services offer lucrative...
      Green Plumbing and Mechanical
      By: Nicole Krawcke
    • Uponor employee, Arturo Moreno

      The reinvestment in American manufacturing and training

      Plumbing & Mechanical Chief Editor Nicole Krawcke and...
      Plumbing News
      By: Nicole Krawcke and Natalie Forster
    • March 2024 Women in Plumbing hero image of woman engineer overlayed by circle of hexagon shapes with numbers from 1 to 10

      Celebrating 10 Influential Women in the Plumbing Industry

      Celebrating Women's History Month and Women in...
      Plumbing News
      By: Nicole Krawcke
    close

    1 COMPLIMENTARY ARTICLE(S) LEFT

    Loader

    Already a Registered User? Sign in now.

    Subscribe For Free!
    • eNewsletters
    • Online Registration
    • Subscription Customer Service
    • eMagazine
    • Manage My Preferences

    IPEX celebrates grand opening of new Florida distribution center

    IPEX celebrates grand opening of new Florida distribution center

    NIBCO Press Solutions

    NIBCO Press Solutions

    Bell & Gossett Illustrates Path to Net-zero at AHR Expo

    Bell & Gossett Illustrates Path to Net-zero at AHR Expo

    AI can boost efficiency and profitability for plumbing, HVAC contractors

    AI can boost efficiency and profitability for plumbing, HVAC contractors

    More Videos

    Sponsored Content

    Sponsored Content is a special paid section where industry companies provide high quality, objective, non-commercial content around topics of interest to the Plumbing & Mechanical audience. All Sponsored Content is supplied by the advertising company and any opinions expressed in this article are those of the author and not necessarily reflect the views of Plumbing & Mechanical or its parent company, BNP Media. Interested in participating in our Sponsored Content section? Contact your local rep!

    close
    • J.J. Keller CMV vehicles on road
      Sponsored byJ. J. Keller & Associates, Inc.

      The dash cam game-changer for small business safety

    Popular Stories

    Figure 1 is a sketch of the flow problems of the current plumbing system.

    Hydronic heating glitch solved: Why adding a circulator won't fix primary loop flow issue

    The interior of a government building.

    President Trump signs executive order promoting skilled trades and apprenticeships

    Underfloor heating installation with drain sewer hole in bathroom close up on water floor heating.

    Using hydronics to leverage time-of-use electrical rates

    PM BEMIS June 25 Free Webinar: Optimizing Plumbing Solutions for Single-Family, Multi-Family & Public Spaces

    Events

    November 13, 2024

    Future Proofing MEP: Navigating the 2026 High Efficiency Water Heating Standards

    Join our deep dive into DOE’s new standards so you can future-proof your MEP practice.

    EARN: 0.1 ASPE CEU; 1 AIA LU/HSW; 0.1 IACET CEU*; 1 PDH

    View All Submit An Event

    Poll

    Will business be up or down in 2025?

    Do you anticipate business in 2025 to be up or down in comparison to 2024?
    View Results Poll Archive

    Products

    The Water Came To A Stop

    The Water Came To A Stop

    See More Products

    Download the FREE Water Conservation, Quality & Safety eBook: Plumbing Trends Increasing Safe Water Availability

    ×

    Keep your content unclogged with our newsletters!

    Stay in the know on the latest plumbing & piping industry trends.

    JOIN TODAY!
    • RESOURCES
      • Advertise
      • Contact Us
      • Directories
      • Store
      • Want More
      • Supply House Times
    • SIGN UP TODAY
      • Create Account
      • eMagazine
      • eNewsletter
      • Customer Service
      • Manage Preferences
    • SERVICES
      • Marketing Services
      • Reprints
      • Market Research
      • List Rental
      • Survey/Respondent Access
    • STAY CONNECTED
      • LinkedIn
      • Facebook
      • Instagram
      • YouTube
      • X (Twitter)
    • PRIVACY
      • PRIVACY POLICY
      • TERMS & CONDITIONS
      • DO NOT SELL MY PERSONAL INFORMATION
      • PRIVACY REQUEST
      • ACCESSIBILITY

    Copyright ©2025. All Rights Reserved BNP Media.

    Design, CMS, Hosting & Web Development :: ePublishing

    search
    cart
    facebook instagram twitter linkedin youtube
    • Sign In
    • Create Account
    • Sign Out
    • My Account
    • NEWS
    • PRODUCTS
    • CONTRACTORS
      • BATH & KITCHEN PRO
      • BUSINESS MANAGEMENT
      • HIGH EFFICIENCY HOMES
      • TECHNOLOGY
      • WATER TREATMENT
      • PMC COLUMNS
        • Dave Yates: Contractor’s Corner
        • John Siegenthaler: Hydronics Workshop
        • Kenny Chapman: The Blue Collar Coach
        • Matt Michel: Service Plumbing Pros
        • Scott Secor: Heating Perceptions
    • ENGINEERS
      • CONTINUING EDUCATION
      • DECARBONIZATION | ELECTRIFICATION
      • FIRE PROTECTION
      • GEOTHERMAL | SOLAR THERMAL
      • PIPING | PLUMBING | PVF
      • PME COLUMNS
        • Christoph Lohr: Strategic Plumbing Insights
        • David Dexter: Plumbing Talking Points
        • James Dipping: Engineer Viewpoints
        • John Seigenthaler: Renewable Heating Design
        • Lowell Manalo: Plumbing Essentials
        • Misty Guard: Guard on Compliance
    • RADIANT & HYDRONICS
      • RADIANT COMFORT REPORT
      • THE GLITCH & THE FIX
    • INSIGHTS
      • CODES
      • GREEN PLUMBING & MECHANICAL
      • PROJECT PROFILES
      • COLUMNS
        • Codes Corner
        • Natalie Forster: Editorial Opinion
        • Guest Editorial
      • SPONSOR INSIGHTS
    • MEDIA
      • PODCASTS
      • VIDEOS
      • WEBINARS
    • RESOURCES
      • INDUSTRY CALENDAR
      • DIRECTORIES
      • EBOOKS
      • PM BOOKSTORE
      • CE CENTER
      • MARKET RESEARCH
      • CLASSIFIEDS
    • EMAGAZINE
      • EMAGAZINE
      • ARCHIVE ISSUES
      • CONTACT
      • ADVERTISE
      • PME EMAGAZINE ARCHIVES
    • SIGN UP!