Tips to Become a Successful Subcontractor

Are you thinking about starting your own specialized construction company? Have been working as second or third tier subcontractor and want to make the jump and work directly with General Contractors? Whatever the reason you are reading this, I congratulate your decision, we need more successful specialized contractors to build the infrastructure needed to continue the economic growth of North America.

I will start with this statement: to be a successful subcontractor you need more than just doing great work, you need to do great management, and great business development. You can be a great worker, foreman or superintendent, but it doesn’t mean you will be a great business owner, there is much more to know than how to do quality work. Think about your preferred fast-food restaurant, you probably can prepare a better product than they do, or you know someone who can, but this companies are successful because they know how to deliver the product to their target customers, have a consistent product quality, know how to manage cost, constantly invest in their own business, market their brand, among many other things. Success is not just about the product, that is the start.

Second, you cannot do it by yourself, you need a team you can trust that complements your talent. You need someone that knows how to execute and manage workers, you need someone that knows how to estimate new projects, you need someone that know how to manage cost, payments, and invoices; and you need someone that know how to consistently get more business. This are the basics, you can probably start with one partner, one in the field and one in the office, both equally committed and talented.

Here are three basic concepts that you must know or learn, to become a successful subcontractor:

1. Learn the construction life cycle.

Foreman and superintendents understand how to read blueprints and organize workers. This is an art in of itself, you need to do scheduling, know what tools will be needed and make them available, forecast material needs and make sure they are on the jobsite as needed, site logistics of how material and people will get in and out, you need to know what production rate to expect from your workers, keep track of time for weekly payments, how to size crews, you need to know sequencing, how to communicate with management team, etc. There are a lot of soft skills, and management skills that if you are involved in this phase of the construction life cycle, you most likely already have, but there are other phases that you will need to know and understand as well.

·       Pre-construction/Design

·       Planning/Bidding

·   Execution (You are Here)

·       Monitoring & Controlling

·       Closing

As you can see, there is much more to construction than just the action of building, and in order to be a successful subcontractor you need to understand the rest of the phases and why they are important. You need to learn how to get new business which happens in the first two phases: Pre-construction and Planning. You will also need to learn how to closeout a project, in order to free your insurance and move on to the next project. Knowing how to execute is not enough to be successful in construction.

2. Learn how construction documents are organized.

Construction and contract documents are much more complex than just the drawings/plans/blueprints. If you want to start your own construction business you will need to learn what all the construction documents are, how they are organized, and what is the function of each one. Here are the most important:

·       Request for Proposal (RFP)/ Bid invitation.

·       Project Manual.

·       Scope of Work.

·       Schedule.

·       Request for Interpretation/Information (RFI).

·       Specifications.

·       Change orders.

·   Plans/Drawings. (You work with this).

Again, knowing how to read drawings is not enough to be a successful subcontractor, you need to learn and use the rest of the construction documents to be succesful. To get new work you need to know what a RFP, bid invitation, Project Manual and Scope of Work are; to manage work you need to know how to create and interpret construction schedules, how to submit RFIs, and how to read specifications. This involves serious amount of office work, that is why you need a partner or someone to help you.

3. Learn how to close a project (Turn Over).

Closing a project involves more than just finishing the work, it involves understanding the specification requirements and contract requirements. Some the items you need to close a project:

·       Attic Stock.

·       Punch list.

·       Operation and Maintenance Manual.

·       Warranties.

·       Training Videos.

·       Final Billing/Retention.

Finishing your scope of work is the beginning of the close out process, then you need to start submitting all, or some of the items above, depending on the requirements of your project.

To be a successful subcontractor the most important thing you need is a team, and you need to be willing to learn new skills. The basic team is someone doing office work, and someone executing the field work. It is not possible to be a good subcontractor managing your business exclusively from the office or from the field, the workload is just too much. There are a lot of opportunities in the construction industry currently, and there will probably be even more in the future, because in order to continue to compete with the Asia-Pacific region, a lot of investment in infrastructure will be needed. Let me know what you think, let’s open the conversation!