Tip:
Highlight text to annotate it
X
>> Steve Wright: But it's difficult.
Well, I'll give you a good example.
About 1999, I think, we did a new store in Mt.
Zion in Illinois up by Decatur.
At the same time they were adding on, it
was 180,000 square foot store.
At the same time, they added 40,000 feet to the existing
store, which is on the north end of Decatur.
Ours cost less and we got it done faster.
So, our 180 cost less than 40, and
we were done 2 months sooner.
I can't even remember the dollar numbers now, but I guarantee you
you will spend a million dollars protecting those
customers and keeping them open.
Just insane.
But maybe they are landlock.
In certain places, a new piece of land
is the price of the store.
I'm sorry.
>> male speaker: Have you always
done commercial buildings?
>> Steve: Since I've been in
business for myself, yeah.
Commercial or institutional, not residential if
that's what you are asking.
[unclear dialogue].
I've built 2 houses both for myself.
I was over budget and late both times.
I heard somebody grouch when I said
something about homebuilders.
Whoever it was give me the name of that good one you know
because I've got 40 people who would like to know who he is.
It does seem to be very typical to not worry about the schedule.
That is so foreign to the way I have to do mine.
One thing about commercial work is that you are not dealing with
anyone's wife, generally, that wants to change it.
Oh that's not the way I thought that would look.
The commercial user or here's another observation
from 30 years of this.
Wal-Mart would build no buildings if they could sell
that stuff out in the parking lot.
Since that doesn't work, if they could sell it out of a tent that
would be the next best choice.
Because it's cheap.
My point is all we are is necessary evil to any business.
Buildings are expensive.
A good example is look at this university.
Who knows how much money is invested here.
You use it 8 hours out of the day, maybe 10.
Not very practical.
Wal-Mart runs 24 hours a day.
Most manufacturing companies run 24 hours a day.
That's why there are a lot of advocates that school ought to
be year round.
Maintenance, commercial building of pleasant appearance and good
quality that's not going to break or wear out quickly.
That's the quality part of it.
The price part of it is no building at all is best.
Schedule, since I've got to have this building and you've given
me a low price and by God I need it.
Seven months from now, and honest to God guys they don't
mean 7 months and one day.
If my completion date is, well I've got one
coming up November 18th.
If we don't give that store, on the 18th, there is going to be
about 30 Wal-Mart semis show up there.
I've never had that happen to me.
>> male speaker: Have you ever gone over
the agreed upon completion date when building a Wal-Mart?
>> Steve: No, what are you guys?
Twenty, twenty-two years old?
I didn't know that when I was your age.
I am really a believer in a contract.
I think my dad taught me that, and his dad probably taught him.
It's like the old thing around here that if you give your word,
you've got to do it.
Well, we have agreed to build.
They gave us a set of plans.
We were going to build that, and we were going to have it done on
this day, and they are going to give me
14 million dollars to do it.
We both got to hold up our part of that.
I'll tell you to avoid, now we have had jobs where I remember
one year, we were building one in Carbondale.
I spent 3 years down there, didn't have two
inches of snow the whole time.
We got two 10 inch snowfalls in 3 days.
Even Wal-Mart says look guys, you got to shut down here.
We are going to give you a two-week extension.
But you don't ask for them.
The easiest answer is no.
But they are realistic sometimes, and if they know it
soon enough then the 30 trucks don't show up.
The problem you get into is those 30 trucks are supposed to
come there and unload in 48 hours and be at some other new
job site a week later.
If they are sitting on mine, they are mad.
It's a good thing to learn.
It doesn't have anything to do with college.
If you make commitments, you got to live up to them.
We've managed to do it 100 and something times.
>> male speaker: What's the penalty
for being late?
>> Steve: You don't get
to build anymore.
Actually, they do have.
That's the worst penalty.
Actually they in the contract it says if we are
early we get 1,500 a day.
If we are late, then we give them 1,000.
But think about this.
They do about a million dollars a week out of those stores.
This is all public information.
They make about 8% on that.
So, that's 80,000 dollars a week profit.
A thousand dollars a day doesn't really make up for it.
You got to have something.
I have to admit that I've never collected a bonus either.
Well, I did get one from Lowe's once for being done early.
The big penalty, oh I suppose you could get away with being
late once if it wasn't insane, but I'm postponing my one free
one as long as I can.
There's a few things you just don't do.
You don't let someone get killed on your job site.
One of our competitors was using the same electrical contractor
we were, and this was recent last 2 months.
Pulled the crew off of our job because they were behind on one
in Bloomington, Indiana.
Sent them down there and electrocuted 5 guys.
Because they were behind, the general contractor would not let
them shut the power down and they wanted to hook it up hot.
Some tool fell into 440 volts.
Only one of them died.
There is just no, how are you going to explain
that to someone's family.
We were too busy to turn the power off?
>> male speaker: I was wondering if the
job is $10 million, how much of that do you get?
>> Steve: Yeah, well, that's on extra
work we get 10%.
That's something else I want to talk to you about.
But to answer your question, that's kind of priveleged.
My company will run anywhere from 6 to 8
percent net before taxes.
That's after paying the overhead.
I kind of forgot about this.
I wanted to run through this before, change orders.
Here is something that Dr. Wahby and I always differ on this.
You guys are, or will be taught, you never do a change order
without paperwork.
I'm here to tell you, if you take that position, that
7 month Wal-Mart will take you three years.