Dead Drop podcast episode 3 is about lining up enough work so that can confidently quit your day job. Spoiler alert: it is not as soon as you think
The information you are about to receive is top secret, meant for ladder-climbing carpenters in the Business World. For your ears only, this is Dead Drop: Secrets of el jefe
This dead drop contains inside information that gives career advice to people who wear nail bags, but who want to start a business of their own. It is a limited-length podcast that will culminate in a book. Fernando walks through hypothetical but realistic conversations, to pass on secrets of an old goat to young construction entrepreneurs
The backstory: A drywall finisher who wants to take the next step
Like many young men, Christopher found his footing upon the birth of his son, Marcel. Suddenly becoming the provider to a young family, Chris saw the need to carve a career path that would do more than putting food on the table.
He was making a good hourly wage finishing drywall for a commercial contractor, but he hoped to earn more and gain the freedom to spend as much time as possible with his boy.
The obstacle to striking out on his own, it came with finding enough steady work give up his dependence on a weekly paycheck.
Beyond finishing drywall, Chris had apprenticed with a plumber for a few months, and he had worked with a remodeling contractor, he had pounded a few roof shingles, painted walls, and had even done a little carpentry. He felt confident that he could use his skills and his contacts to build a business but wondered how to go from the occasional side-job that fell into his lap to set up a pipeline of contracts that will reliably pay the bills.
His specific question was – “…just how much work will I need?”
My answer was, “It all depends.” It depends on what kind of work you want to do.
I started with the example of an insulation contracting. How long does it take an insulation crew to finish insulating a house? I asked Christopher.
“About one day,” he replied.
So, if you wanted to set up an insulation company and work five days a week, 50 weeks out of the year (taking off between Christmas and New Year), how many jobs do you need? Simple math yields about 250 jobs. It takes a lot of energy, marketing, bidding, and coordination to generate that many jobs.
But if you were a custom home builder, and you built a house every three or four months, how many jobs do you need? … maybe four or five jobs a year.
Chris could see where I was headed.
What he may not have seen is that for short and sweet jobs, like being an insulation contractor, the margin must be higher than a longer-term contractor, such as a drywall, framing, or remodeling.
But that’s a topic for another day
I was not trying to tell Christopher exactly how to strike out on his own but signaling the type of thinking that’s necessary – strategic thinking.
Building a business takes time and patience
Like many young people, Chris has two important things going for him, youth – which equals time – and low expenses – which also equals time, time to develop and grow a business without the pressure of high monthly bills.
Many, if not most entrepreneurs start their businesses young and on a shoestring. They often endure a few years of living-on-edge, earning less than minimum wage. Yet I’ve never heard anyone regret it. Even when most do not become millionaires, the sense of accomplishment and independence makes up for the effort.
I know; I started out just like Chris in my early 20s, with ambition, middling skills, and oodles of energy. I made many mistakes along the way, but today I record this podcast sitting on my deck a few feet from the Pacific Ocean. My dreams have come true. So, I know that the nature of dreams, when pursued, is that they do.
I advised him to continue working for the man, but knowing that he wants independence, to build his competence with reading trade magazines, taking classes if he can, and to gradually explore opportunities for more side work, not only for himself but his buddies.
Build a referral network
“Make as many friends in the trades as you can,” I advised him. Offer everyone you know to help them with any type of job they need. “Even you don’t do electrical work,” I told Chris, “…but you know an electrician, recommend that electrician when somebody needs to change a lightbulb (only half kidding). Because someday this electrician friend will do the same for you.”
In other words, build a referral network.
This is how you begin to get jobs—through friends, neighbors, colleagues, and family… at first.
When I was his Christopher’s age, I used to put out flyers door to door, and by the time I got home, some folks would be calling. If you put out the word, jobs will come. When they do, you may have to work cheap, and nights and weekends. At first, you’ll have even less free time that you do now—no free Saturdays! The freedom and free time does come, but later—many years later.
Reduce your expenses and squirrel away cash
Since your new business will not take off like a rocket, but likely crawl along like turtle, a few months before quitting your day job, hedge your fortunes by reducing your expenses as much as possible. Because your income is likely going to go down, make sure your outgo goes down first. Don’t look at it as an excuse to buy tools. Do NOT take on new truck payments. Look for a cheaper apartment.
If you can, join forces with another friend seeking economic independence. For example, I room-mated with my first business partner, Jim, which helped us to do more than share housing expenses, we bought tools together and an old VW wagon as our work truck.
We named our business, “Hammer, Spade, and Brush,” to indicate we’d be willing to do almost anything—from carpentry to landscape and painting.
Willing did not mean able. We knew absolutely nothing. When we got a call, we went and looked at the job, and then ran to the library to read up on how to do it. We talked to suppliers and often brought knowledgeable friends into the deal. Sometimes we made a little money, sometimes not.
A year later, we had some skills and even a customer base sufficient to pay the bills.
It all works out if you’re willing to learn and not afraid to try.
Don’t burn bridges with anyone
Calibrating your quitting day is not an exact science. As a rule of thumb, if it takes you a month to get a nice side job, then you can quit your day job when you have enough side jobs that it will take you about a month complete them. This way, you have a month to find the next job or jobs.
As you approach quitting day, instead of telling your boss to take his job and shove it, see if your boss will give you work under a contract. Offer to save her money by paying you less for side work than she does now with you working full time.
It’s not that your work is worth less money, it is that this may help you guarantee enough work to squeak by as you build your brand, even if it pisses off the boss that you’re becoming competition.
There’s no way to go from the security of a paycheck to the risky independence of an entrepreneur without working much harder, longer hours, and likely taking a cut in pay. At least at the beginning. If you expect differently you’ll be disappointed, and you should not go out on your own, but instead, seek to climb the economic ladder within an existing company.
Entrepreneurs are often driven by freedom and creativity more than security and dollars—even so, the dollars will come. Construction is not software or social media or a new hair loss drug; quick fortunes don’t come to tradesmen.
The fortunes made, even by developers, require decades and sometimes generations.
So, to go out on your own, take it slow. Don’t quit your day job yet, and cut down on the outgo. Prepare yourself for a couple of lean years and know that in the long run—and it is a very long run—your dreams will come true.
Remember, you get paid for what you do and what you know. Dead Drop is here to help you know more. If you like it give it a thumbs up or five-star review and share it on Facebook, Snapchat, LinkedIn, or how ever you reach your peeps.
—Dead Drop is written and narrated by Fernando Pagés Ruiz, edited by Dan Morrison, and a production of the SGC Horizon Media Network