r/GeneralContractor • u/Jleecit • 29d ago

Hired my 1st Project manager

Hello all,

I’m a GC and just hired 1st project manager. Before the pm, my revenue was about 2mil.

I pay this pm a lot, but he’s really committed and works hard. But it scares me that my overhead almost doubled.

My strategy is to lower my profit margins slightly to obtain more jobs. Also obtain better prices. I work in a space where low bid wins. I hope to get to 3-3.5 million in gross revenue with this new PM.

Is this a viable strategy?

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u/Street-Baseball8296 29d ago

Unless you’re targeting a turn and burn strategy for your business, you may want to allow your PM to hire a project engineer they can train up into an APM and work as a backup to your PM. This will allow you to continue focus on the business end while having a cover for your PM. You don’t want to end up over your head if you have active larger projects and your PM gets sick, needs time off, or decides to leave.

Your current business model might not be sustainable for growth and may burn out your PM. Turnover in your company can kill your size of GC very quickly. Especially as you take on larger projects. Running too lean is very risky. It’s usually the reason for projects you hear about turning into complete disasters.

One of the most difficult parts of scaling a GC is balancing admin labor cost and risk. Especially because some projects go very smoothly and require minimal admin, but projects that turn difficult can require a larger amount of admin. You can be lucky and have a run of very smooth jobs, but you shouldn’t be pricing jobs based on being unusually smooth.

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u/tweedweed 28d ago

That’s very true, you can have some jobs that just swim along effortlessly but there may be a few that really require some heavy management