Steel Detailing: Are you interested in starting your own business?
Steel Detailing for me is my life. If I had to ask the question, if I chose it for my life I would say “Deep down YES”. I just fell for it.
It all started when I was 18 years old and looking for a job fresh out of high school. I was accepted into an apprenticeship as a structural designer for a company in Newcastle, NSW, Australia, working on mine designs. Back then, the office was decked out with drawing boards, smoking was allowed, and an ammonia photocopier.
The job consisted of standing behind the ammonia photocopier copying CPR drawings, calligraphy, small writing jobs, coffee and food for the first 6 months. This was my introduction to steel structure detailing for mining throughout the Hunter region and it was all about coal processing and handling.
Little did I know that the business owner was in the habit of starting and closing businesses on a regular basis and my job only lasted a little over 6 months. This was enough for me to continue in this career with only a small sample.
Since then I have worked for many leading design firms and have gained extensive experience. It wasn’t until I was given the opportunity to start my own company backed by a construction company in Thornton, NSW, Australia that I really started to learn fast.
The company went from just me to 6 people in a small period of 2 years and I was working very hard. I can’t stress enough the really hard part as the hours were long. The reason for this is that I was working in the business and not in the business and since I was the owner of the business, it had to run smoothly for it to grow.
For those of you who have not had experience with steel detailing, there is a process you need to follow.
First, you are asked to provide a quote. If the quote is accepted, you are presented with a set of structural engineering drawings and a set of architectural drawings based on the project category. There are 3 main categories: mining, industrial and commercial. Mining does not have any architectural requirements.
Second, review the drawings and resolve any areas that may be of concern and require more information and request the information. Usually at this stage because the information will change the amount of work you have to do, so you’ll ask for a variance if the work is much more than you originally estimated.
Third, the client accepts the variation and you start the project. As the owner of the business, I would typically start the design of the project for the rest of the team to detail the steelwork. The design was completed in AutoCAD and consisted of the plan view with all elevations projected around the Plan.
At the end of the day, I was the concealer too. “Why” I reviewed the drawings you may ask. It’s clearly obvious, the buck stopped with me. If there was a mistake, just a little mistake, it would cost me. Imagine being charged again if the builder or manufacturer required the rectification of the error. Imagine if the error was enough to stop the erection of the steel structure on site and they needed to hold up the crane, hold up the erection crew and required a boiler fabricator to fix it. The costs start to add up quickly. The writing job may have only cost you $10,000, but a small mistake could cost you much more.
At this stage, you are probably wondering why you want to start a steel detailing business. The risk is very high, the hours are long. But I need to add fuel to the fire by talking about money. If you make even the slightest mistake that costs more money than you expected to receive for the steel details, the fabricator or construction company will hold your money until the project is complete. An error indicates that there could be more, and if there are, they will retain it. So what does this do to your company’s cash flow?
I talk about bugs in a scary sense because they are so scary. You could, if you had an ego like mine and said there won’t be any mistakes, but you’re kidding yourself. Believe me when I say “there are always mistakes” Keep in mind that the steel details are the lowest details of the project. It’s every nut and bolt. Yes that’s right, if you get the wrong number of bolts you are liable for a back charge, if the steel builder has to go get more bolts it will cost you dearly.
Can you imagine not getting paid for months? In my experience, there are 2 main factors that influence a company’s growth, cash flow, and risk. Think of mistakes as a risk. Depending on the size of the error, the risk increases or decreases, but there is always risk. There are more risks besides mistakes. Yes, that’s right, more risk. That risk is being paid. If you let the manufacturer or building control how you get paid, you’re really in for a big surprise. Imagine that simply asking for 10% of the quoted price to be paid before work begins can cover your overhead. That’s great, what about the other 90%?
Imagine doing business with recognized companies in the building and construction sector. Their terms are generally 90 days with no deposit. That’s the top of the spectrum, what about the bottom of the spectrum? You come across another potential customer, but you’re not sure about the stability of the customer’s company, but you take a chance only to find out that you’ve been involved in trying to help them provide service, and since you’re the last person to be contacted pay, never see payment from them at all. So start legal action. You start shelling out money for lawyers earned on other projects. You hire a personal debt collector who harasses the company to pay you on terms that if you get any money from them, you get a cut. Now imagine companies that start and close like my first job. Suppose the client’s business goes into liquidation and you are not a secured creditor. There is no money here at all.
So I guess at this stage you are wondering why people keep detailing steel. Well, there are ways to protect yourself. By indicating in your quote that you will be paid according to your terms, that you will not be charged any late fees for any errors, and that your contract is created using a secured creditor agreement, you can protect yourself. If you find a trusted customer who won’t charge you and pays you regularly, you’re a winner.
I just wanted to educate you so you don’t make the same mistakes I did. So, be careful when it comes to steel details, because risk can take everything away from you.
The steel retailer…