Yeah agreed but the secret sauce can be operating at no margins for initial years since there are almost no startups in construction thus nobody else would be able to do the same thing and a bit of market can be captured.
what do you say ?
The secret sauce for construction is just finding the cheapest labor you can. There’s not a lot of efficiencies to be had.
And then "sorting out" all the mistakes you can expect from such kwality.
- Hire 5 guys, on the books.
- Those guys each bring 5 guys, off the books. (illegal immigrants)
- Those 5 guys on the books get paid for all 25 guys and distribute it within their team.
It's a bit sad to hear about this sort of thing happening, but it seems all too common in business.
That same person told me about another story-- regarding quality:
- At another job site, the company had a new project manager. The new PM approved moving forward into a new phase of the project without plans (plans didn't arrive by the time contractor arrived). The contractor of that project build something incorrectly (as you'd expect) due to lack of coordination with other contracting teams (i.e. lack of plans). The result: $1-2 mil worth of work needing to get fixed.
Ahhh.... freshly-poured concrete conceals all.
No matter a $250,000 nor $2,500,000 will prevent this in my Southern experience. I know in the South Dakota of my childhood memories, the "illegals" were undocumented Russians (not brown).
A strategy of mergers and acquisitions seems more productive, but good management to actually build something without going bankrupt is still needed.