Steel Detailing – Are You Interested in Starting Your Own Business?
Steel Detailing for me is my life. If you had to ask the question, if I chose it for my life I would say “Deep down YES”. I just fell into it.
It all started when I was 18 looking for work straight out of High School. I was accepted into an apprenticeship as a Structural Designer for a company in Newcastle, NSW, Australia, working on mining designs. Back then the office was decked out with drawing boards, smoking was permitted and an ammonia copier.
The job involved standing behind the ammonia copier copying drawings onto CPR’s, Penmanship, small drafting jobs, the coffee run and the food run for the first 6 months. This was my introduction into detailing steelwork for mining jobs throughout The Hunter Region and it was all coal process and handling.
Little did I know, the owner of company had a habit of starting and closing companies on a regular basis and my job only lasted just over 6 months. This was just enough for me to continue into this career with just a small taste.
Since then I have worked for many prominent design companies and have gained extensive experience. It wasn’t until I was given the opportunity start my own company with the backing of a building company in Thornton, NSW, Australia before I really began to learn fast.
The company went from just me to 6 people in a small 2 year period and was working really hard. I cannot emphasize the Really Hard part enough as the hours were long. The reason for this is that I was working in the business and not on the business and because I was the business owner, it had to run smoothly in order for it to grow.
For those that have not had experience with steel detailing there is a process you must follow.
Firstly, 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 depending on the project category. There are 3 main categories – Mining, Industrial and commercial. Mining has no architectural requirement.
Secondly, you go through the drawings and work out areas that maybe of concern and require more information and request the information. Usually at this stage because the information is going to change the amount of work you have to do, so you would ask for a variation if the work is allot more than you originally estimated.
Thirdly, the client accepts the variation and you begin the project. As the company owner I usually started the project layout for the rest of the team to detail the steelwork. The layout was completed in AutoCAD and consisted of the plan view with all of the elevations projected surrounding the Plan.
At the end of the day I was the checker also. “Why” did I check the drawings you may ask. It’s plainly obvious, the buck stopped with me. If there was an error, just a small error, it would cost me. Imagine that you would be back charged if the error required rectification by the builder or fabricator. Imagine that if the error was just enough that it holted the erection of the steelwork on site and they needed to hold the crane, hold the erection crew and a boiler maker was required to fix it. The costs start to add up fast. The drafting job may have only cost $10,000, but a small error 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 more fuel to the fire by talking about money. If you make the smallest mistake that costs more money than you were expected to receive for the steel detailing, the fabricator, building company will hold your money back until the project is complete. One error indicates there could be more and just in case there is, they will hold it back. So what does this do to your company’s cash flow?
I talk about errors in a frightening sense because they are very scary. You could, if you had an ego like I did and say there will be no errors, but you’re just kidding yourself. Believe me when I say “There are always errors” Consider that steel detailing is the lowest detail of the project. It’s every nut and bolt. Yes that’s right, if you get your bolt quantities incorrect you are liable for a back charge, if the steel erector has to go and get more bolts, it’s going to cost you.
Can you imagine not being paid for months. In my experience there are 2 main factors that influence a company’s growth, cashflow and risk. Think of errors as a risk. Depending on the error size the risk increases or decreases, but there is always risk. There are more risks other than errors. Yes that’s right more risk. That risk is getting paid. If you let the fabricator or building control the way you get paid, you are really going to be in for a big shock. Imagine just asking for 10% of the quoted price to be paid before work begins can cover your overheads. That’s great, what about the other 90%?
Imagine doing business with companies that are well recognised in the building and construction business. Usually their terms are 90 days with no deposit. That’s the top of the spectrum, what about the bottom of the spectrum. You come across another potential client, but your not sure about the stability of the clients company, but you take a risk only to find that you have been involved in trying to help them service and since you are the last person to get paid you never see payment from them at all. So you begin legal action. You start shelling out money for solicitors earned from other projects. You hire a personal debt collector that harasses the company for payment under terms that if he gets any money out of them he gets a cut. Now imagine companies starting and closing like my first job. Imagine the clients company goes into liquidation and you are not a secured creditor. No money here at all.
So I guess you are asking yourself at this stage, Why are people still detailing steel. Well there are ways to protect yourself. If you put in your quote that you will be paid under your terms, that you will be not back charged for any errors and your contract is created using a secured creditor arrangement you can protect yourself. If you find a reputable client that won’t back charge you and pays regularly, your on to a winner.
I just wanted to educate you so that you don’t make the same mistakes I did. So please be careful when it comes to steel detailing, because the Risk can take it all away from you.
The Steel Detailer…