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Being a general contractor is a hard way to make an easy living. There are lots of moving parts totally out of our control. On every job, we have more than 5,762 chances to make a mistake, miss a schedule or tick off customers. Things aren't perfect, including the plans, specifications, field conditions, inspectors, subcontractors, suppliers, deliveries, conflicts and payments. Our customers expect everything to go exactly as scheduled, with perfect quality, no hiccups or extra costs. Wow, I'm getting depressed just thinking about trying to accomplish this!
The problem with the construction business is every party wants to make more money by providing the minimum. The scope of work is clearly defined, and most contracts are awarded to the lowest qualified bidder based on price. The bidder who offers better service for more money rarely gets the contract. This causes every GC, subcontractor and supplier to balance providing great service and exceptional quality while making a fair profit.
I am a GC and developer of commercial and industrial projects ranging from $2,000,000 to $15,000,000. On every project, we select from our database of over 3,000 companies to eventually hire at least 35 subcontractors and buy from five to 10 suppliers. Following are things you can do to impress GCs like me and improve your chances of getting the job.
1. Man the Job
It is easy to get jobs you can't handle—bid them cheap! When bidding, be prepared to properly manage projects with enough qualified trained workers. A larger wood flooring job may take six workers to maintain the schedule. If you only have eight on your entire crew, don't bid it and hope you can find enough help when you need them. I want trained crews led by job-site foremen who:
- Have ongoing training
- Speak English
- Can make decisions
- Can read the plans
- Understand codes
- Know the contract
- Run a safe job.
2. Be Well-Financed
I've heard many times, "I've got to get paid by Friday or I can't make payroll." This is not the GC's problem. All general contracts and subcontracts include payment procedures for every project. Generally, when you invoice by the 25th of the month, you will get paid by the following 15th through the 30 th of the next month. This is how the construction business works.
Undercapitalized subcontractors and suppliers don't have enough working capital or adequate bank lines of credit to handle the work they can get. This causes a cash-flow crunch that doesn't allow them to hire enough help to get their jobs done on time. This makes everyone upset, including the GC, construction manager and project developer. It also hurts the other subcontractors on the job. The underfinanced subcontractor then makes his problem become his customer's problem, which ends up in lost profits and no repeat work.
To run a successful subcontracting business, I recommend you have at least 20 percent of your annual sales volume in working capital plus a bank line of credit of at least 15 percent of your annual sales as a backup. When a subcontractor hits me up for money, I ask him what his line of credit is. When he answers he doesn't have one, I know I am dealing with a poor business owner who doesn't know how to run a profitable business.
3. Manage the Contract
Step one: Read the contract! I take care to write specific and complete subcontracts that clearly lay out how I want the project managed. Most subcontracts include clauses that clearly define how to:
- Provide proper notice
- Get paid for extras
- Proceed on changes
- Present a change order
- Delay the project
- Keep the schedule
- Communicate
- Attend meetings
- Submit items for approval
- Get paid
- Proceed when not paid
- Handle disputes.
What strikes me as unprofessional is when subcontractors ask for change orders 13 weeks after the extra work was completed. I need subcontractors and suppliers to manage per the contract and follow it to the letter.
4. Be Proactive
Typical subcontractors wait for the GC's field superintendent to call and inform them when to start work on the project. For example, a superintendent calls the flooring contractor on Wednesday and says, "OK, we need you next Monday." The subcontractor replies: "Gosh, Monday, I can't start on Monday, I wish you'd called me earlier. I am really busy right now."
A proactive subcontractor is on top of every job he has a contract to install. He takes responsibility for monitoring all his projects by visiting job sites ahead of time and staying in touch with project superintendents on a regular basis. When he gets the call to start, his materials are approved and available, the foreman is familiar with the project, and he is ready to man the job as required to maintain the schedule.
Be proactive rather than reactive. Meet with the GC and ask how you can make the job run perfectly for him. Walk the job with the superintendent one or two months before you're supposed to be there. Stay in touch with the project manager or field superintendent on a weekly basis to monitor progress. Ask: "How can we help you meet your project goals?"
5. Manage the Job Site
It would be really special if subcontractors and suppliers treated our job sites like their own homes. In your home you don't leave trash all over the place. You don't leave fasteners, scraps of wood or fast-food bags lying around for others to step on. You don't borrow your neighbor's phone, power or toilet without asking. You don't damage other people's work and sneak away without telling someone you'll fix it. You don't create unsafe conditions and leave them exposed for your family members to encounter.
I shouldn't have to do a final walk-through and make a punch list for all of the subcontractors to complete. They should notice that there's something wrong with their work. Here's a job-site management checklist that would impress me:
- Hold weekly safety meetings
- Clean up daily
- Haul away your own trash
- Keep your tools locked up
- Do your own punch list
- Keep your own set of plans
- Protect finished surfaces.
Check in with the project superintendent every day before your crew starts work and discuss the schedule, priorities, manpower, conflicts and issues. Before you leave the job site, again check in with the superintendent to discuss what's left and what's next. Never leave a completed job without a final walk-through to inspect your workmanship.
6. Help Me Out
Today, we are nearing completion on a 12-building project; each building has been sold, the occupants are waiting to move in, and we need the subcontractors to finish and get their final inspections. The subcontractors I have worked with often have countless excuses why they can't complete their work and man the job properly. Unfortunately, this poor attitude and unacceptable business practice are too often the norm in the construction industry.
I need subcontractors and suppliers who care about the overall project goals and will do whatever it takes to make it happen. I am not asking them to lose money or go beyond the call of duty—just do what they are contracted to do. This includes meeting the schedule and caring about their customer and the ramifications of not completing projects on time. On the project I described above, we have a $14,000,000 loan clicking along at $2,300 per day interest. Plus there are 12 homeowners trying to schedule their move-ins. When subcontractors miss their deadlines on this project, over 100 people are affected and everyone incurs the associated costs.
7. More "Wow" Ideas
- Send me a thank-you note
- Get bids in on time
- Don't overcharge on change orders
- Send me product literature
- Keep me informed of new ideas
- Help me make a profit
- Give me a referral
- Train my superintendents
- Get an e-mail account, and use it
- Carry a handheld e-mail device
- Carry and use a digital camera
- Take me to dinner
- Ask me, "How can we improve?"
When we've got a choice to hire Joe's Wood Flooring vs. Bob's Wood Flooring on a project, we weigh many variables. Consider our choices: Joe's Wood Flooring has five guys, is a pain to deal with and generally asks for non-reimbursable change orders. Bob's Wood Flooring has 15 trained guys, is always there when you need them and is fair and timely on change-order requests. If the two bids are in the same ballpark, we are going to award it to Bob's Wood Flooring every time, even though Bob's is a little more expensive. I don't need the hassle. Life's too short and construction is too hard.
How subcontractors and suppliers can impress GCs is to be more proactive and less reactive. Impressing a GC is easier than you think. It doesn't take a lot to set your company apart from the pack. Try a few of these tips and you will get more work, make more money and have more fun.