Ask the Expert: Tips From Successful General Contractors

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Posted on
December 4th, 2020
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Integrity is the top priority for John and Richard Wood, owners of American Contracting Services. (Credit: Breadmaker/Shutterstock)
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Brothers John and Richard Wood run a general contracting firm in Chesapeake, Virginia, and their company, American Contracting Services, has grown beyond their wildest dreams. They’ve taken it upon themselves to pay it forward by mentoring those considering a career in the skilled trades. 

Q: Why do you recommend a career in the skilled trades?

A: John: My brother has three sons. By all means, one should be in the plumbing business, one should be in the electrical business and one should be in HVAC. Forget about being a doctor anymore. There’s a joke: A plumber gives the guy a bill at the end of a project, and the guy goes, “Are you kidding me? I'm a doctor, and I don't make that much money.” And the plumber goes, “Yeah, that's why I quit being a doctor.” Because that’s literally the way the trades have become.

Q: How many projects do you manage at any given time?

A: John: Right now, probably 35 to 40. We do a lot of custom work, like in-law suites. 

A: Richard: We also do a lot of additions. We just finished a 30,000-square-foot build-out. We also are at the tail end of a 1,500-square-foot addition where we basically built a house next to an existing house.

Q: What are important steps in getting started?

A: Richard: I would never recommend somebody go straight from nothing to being a general contractor. You really need to have some sort of experience in order to make that transition. We help a lot of contractors with that, and usually they're coming from a background in the trades — they will be the carpenter who wants to become a general contractor or a plumber tech who wants to run a plumbing company.

The next thing is licensing and insurance. I genuinely cringe when I see people working without a license. However, once they get it, you can see their chest is poked out and they have more confidence. There’s a legitimacy that comes along with that. It allows people to see that you mean business.

Q: What is your advice for contractors once their businesses are up and running?

A: John: There is always a next step for you to take. Never be complacent. Have self-awareness, knowing where you’re at and where you want to be.

Q:  How do you find the right subcontractors? 

A: John: It's difficult, and you're always leveraged against cost versus quality. 

A: Richard: We have to first find people that can handle our workload. We then have to figure out a price point. We're in a unique situation because we have so much work that we can kind of get into a relationship. At the end of the day, once we realize that we can work with somebody, then they become like family. It’s not just about the work anymore. We’re there when they go through stuff. If a guy’s truck breaks down, we get him a truck. The relationship is really where it starts.

Q. What is the most surprising thing about being a general contractor?

A. Richard: You never stop learning. I can go to a job that I did two years ago. And I can remember in my mind how awesome that job was, and I walk in and I can’t believe I did it that way. I’m not saying that it’s bad. It’s just that I’ve grown every year.

Q: What is one thing you wish you knew when you started your business? 

A: Richard: There is an overhead cost of doing business. I wish I'd known that going into it because my price points would have been different a long time ago. It's really easy to focus on “this is the cost of the job, this is the cost of the labor, this is how much profit I want to make,” but that profit is not actual profit. There's a whole other mechanism running in the background that keeps the business doors open, that keeps the lights on. What I know now is that if I had charged more, I still would have gotten the work. There's a fear that if you charge more, you're not going to get the work. I guess that's all summed up in the word confidence.

Q. How important is your reputation and having integrity in this line of work?

A: John: We worry about doing the right thing first, and we have faith that everything else will work itself out. That does not mean we don’t make mistakes. It just means when there’s something that a client is not happy with, we make it right.

Q: How has your business changed due to COVID-19?

A: Richard: We used to go on one new business appointment a day. But more recently, we go on about four appointments a day — because during quarantine everyone sat looking at their four walls, watching HGTV. 

Q: What advice would you give someone who is considering going into the trades? 

A: John: My brother and I find honesty and integrity most important. If a challenge arises during the course of a project, it’s only a problem if you don’t immediately bring it to the customer's attention, identify whether addressing it fits within the original scope of work, and discuss the remedy. Be ready to negotiate and, if need be, remedy the issue for little or no profit, even if it wasn’t your fault. This approach achieves three goals. One, you don’t leave a problem that may be found later. Two, the honesty will bring positive online reviews and tremendous referrals. Three, as you continue to operate with this type of integrity, you will earn a sense of satisfaction, a stellar reputation, and continued success.

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