Should specialty contractors require down payments even when working through a General Contractor?
Training in construction is important, especially with a shortage of employees. A general contractor asked about a subcontractor who is training an apprentice.
There are always at least two sides to any scenario, but if you want to stay in business, consider this a lesson on how not to treat a subcontractor.
A contractor friend called to complain about problems he’s having with specialty contractors in his area. This isn’t a one-time complaint; I’ve heard the same from others around the country.
The note stated, “Because I’m the middle man, my subcontractor loses out a potential project.” That’s true, and it’s one reason you shouldn’t get into the position of being a middle man.
For the past few years I’ve had general contractors tell me that they can’t get specialty contractors to return their calls, show up on time or show up at all for a job. Now I’m hearing from generals who are getting calls from subs, looking for work.
Payment schedules need to be in writing, that includes between a general and specialty contractor.
When subcontractors or employees are approached, they are obligated to notify the general contractor who brought them there, and let him handle the lead.
There are business owners who think it’s okay to put the screws to someone else as long as it helps them make more money.
Does subcontracting raise the price of the project?
Without a paid design agreement from the client, you aren’t sure you’ll get the job. Your subs are even less sure they’ll get the job.
I was asked recently by an electrical supplier, “Why do general contractors often not want their subcontractors to have any communication with the home owner?”
Last week’s article discussed the pros and cons of using employees or subcontractors to get jobs built. This week, Myles Corcoran of Myles F. Corcoran Construction Consulting Inc., presents another point of view.
Recently I’ve had a number of discussions with company owners about how to get their jobs built. It all comes down to using subs or employees, or as some like to say, “Should I be a paper contractor or a real contractor?”
One of our coaching clients was telling me about his problems finding a subcontractor for a job. If you’re a general contractor, this might sound all too familiar.
It’s important to define the ground rules of your relationship.
One of the questions we’re asked most often is how a subcontractor can get jobs. How do you go about meeting general contractors and letting them know you’re available to build their jobs?
Sometimes they request you use employees instead of subs, or work on a T&M basis. Clients don’t understand how the construction world works. It’s your job to educate them.
From time to time, you will go out to see a potential client about doing work for them and they’ll ask if they can choose their own subs for their job.
When business relationships are in writing, there are fewer problems. A customized employee manual and subcontractor manual is important.
Contractors have cash flow problems for two major reasons: poor money management, and poor payment schedules.
We’ve noticed the same problem that we’ve seen with other specialties. They believe that because their work is focused on one thing, their business operates differently.
A friend called today with a problem. He subbed his work to a general contractor from the east coast to do a job here on the west coast at a government facility.
Now, if you are a subcontractor, it doesn't matter what trade, if a general contractor has hired you to work on a job your obligation is to that general contractor only.
He asked a sub for a quote on a job, and it was higher than expected based on past jobs. When he asked, the response was, "Well, I just wanted to see if it would stick".
This article was originally published in our newsletter, and it garnered more responses than usual. It was loved and hated, so we are posting it here for more to read.
I read an article by a practicing attorney dealing with pay when paid (or pay if paid) clauses in contracts, specifically between general contractors and subcontractors.
I read an article in Entrepreneur Magazine titled “Freelance Nation”. The author discusses the proper tax handling of subcontractors versus employees.
The old law said that the owner could recover 100% of the money they had paid a contractor if it was found that the contractor did not have a valid license.
Many contractors tell me they only use subs to do their work on jobs. But when it comes right down to it, many are claiming employees as subs.
A question I hear all too often is, "Why should I help educate my competition? I'd rather they went out of business so I got the work."
Quick question here: Has anyone been using a reward/penalty system in dealing with other contractors on your job sites?
In the last month I’ve heard from more specialty contractors having problems being paid by generals than I’ve heard in years.
In another post, Larry Steward commented …
A contractor called recently with a question about a homeowner complaint that some of their liquor has been stolen (just the liquor – the bottle was left behind).
My biggest challenge as a residential remodeler is obtaining and keeping qualified and experienced sub-contractors willing to do smaller type projects.
We keep hearing complaints about sub-contractors that don't show up on time, if at all. You need to take the time to explain the importance of being on time.
If you are a general, and you want good subs, treat them well.