How to Become a Subcontractor
Being a subcontractor can help you speed up the success of your business, and it could also lead you to a part of the industry you could really enjoy. It also has the ability to open the door to a flood of work. Many contractors in the industry have found that it’s much easier to build up revenue for their company this way. This article is designed to answer the big questions you might have and to provide you with an introduction on how to become a subcontractor.
While you could boost the success of your company by being a sub, there are some things that you need to know. This is a completely different world than working with residential customers. Knowing the pros and cons ahead of time will prepare you for this new chapter.
Step 1: The Basics of Being a SubContractor
Before you can build a subcontracting business, you have to have a solid foundation. This will ensure that you’re prepared to take on more growth and have the processes in place for everything to go as smoothly as possible. Below are some of the basic things that, as a subcontractor, you should keep in mind as you take on this type of work.
Keep it strictly business – and back it with paperwork
There’s a reason that the most successful people in the world will tell you that business is strictly business. If you approach it like you’d approach your best friend, more times than not it will lead to being taken advantage of.
We love giving people the benefit of the doubt, but we don’t love it when our kindness is taken as a weakness and abused. To avoid this, you need to make sure that you have a detailed and well-written contract to use when you take on jobs as a subcontractor. A contract gives you the opportunity to lay out your process, what’s going to be done, and what’s expected of the General Contractor (GC).
You do have rights and responsibilities
The best way to learn about what your rights is to reach out to a local agency specializing in the oversight of construction companies. As a subcontractor you’re responsible for the work you take on as well as the safety of those who work for you. Make sure you’re fully aware of your rights and responsibilities to prevent unwanted situations from arising in the future.
Know your capabilities, and how long results take
Knowing your limitations is important. This will prove to be a big benefit when you’re bidding on prospective jobs and scheduling new jobs. By knowing what you can do and how much time it’ll take you, you’re no longer blindly giving timeframes. Not to mention, it lets you know whether the requirements of the GC are feasible and whether or not you’ll be able to fulfill their expectations.
To get a better idea of how important this part is, think about it in a different light. When a GC subcontracts work, that work usually has to be handled perfectly for them to get paid for the job. This means that their cash flow is dependent on you providing quality work in a time-efficient manner. It’s not uncommon to overlook this critical aspect when getting started as a subcontractor.
Insurance is a requirement, not a luxury
It’s no secret that some contractors avoid obtaining insurance. However, this isn’t something you can ignore when trying to break into the world of subcontracting. GCs actually require their subcontractors to carry their own liability insurance as well as handle all of the legal requirements of their employees.
The most important part of all is that it protects the life of your business. In construction, anything can happen and cause you to be liable for any losses that result. Instead of having to pull the cost of replacement out of your pocket, insurance helps minimize your losses.
Be fair to yourself during the bidding process
Thanks to the invention of Google, today it’s easier than ever to be informed. Know what local rates are for the work that you do and try to stay in tune with them. You don’t want to charge too much (as you’re risking losing the opportunity if you do) and you definitely don’t want to charge too little (because it might make you lose money where you shouldn’t have to).
Everyone is focused on getting the best deal, and it’s no different in the world of construction. GCs may try to get you to do the job for the cheapest price, but you don’t have to break your back doing it. Make yourself knowledgeable about what it’s going to take financially to handle the work and at what point you become profitable.
Using contractor software can really help you in this process. The right product will let you keep track of all of your bids, track costs and profits, and invoice quickly when the project ends.
Keep a professional attitude
From your initial meeting with the general contractor to completion of the project, make sure you remain as professional and transparent as possible for the best results. As a subcontractor, you won’t have the level of freedom you’d have with your own jobs. You have to be able to accept that, and there’s no way around it.
You might think this isn’t necessary to point out. The truth is, it can be surprising to know how often this has led contractors to lose a lot of business. While it’s good to have your own way of doing things, ask the contractor how much leeway you have. Check to see whether you’re free to express your opinion and point out differences without having it to come back to bite you later.
Also, your attitude has more of an impact on your reputation than what might seem apparent. Many people judge how a company does business by the people who complete it (the owners, managers, and anyone that works for you). Having a good attitude and rock-solid set of ethics will make you much more likely to develop a positive reputation and brand image.
Show you know what you’re doing
Ask questions. Present solutions. Be opinionated.
Awareness before, during, and after a project is the true key to success. This will keep you from any surprises. For example, what if they had something else in mind or you were expected to do something you didn’t know about? By asking questions, presenting solutions, and giving your own input, you’re showing you know you’re doing and willing to learn.
You may also find that this helps you become on point with the outcome of the project. This helps you avoid having to go back and redo something or adding something significant. Beyond that, it will also save you a lot of time (and money) in the process.
Step 2: Distinguishing Your Company from the Rest
Setting yourself apart from competition is critical. This will prove invaluable when it comes to driving business to your company. Even if you’re only interested in subcontracting, it will say a lot about who you are. In fact it could lead to getting contracts you didn’t even consider obtaining.
Distinguishing yourself boils down to three things:
- The quality of your work
- The passion that you and your team possess
- Your dependability
If you keep these three things in mind, you’ll start to really stand out from the rest. Make sure that all of your marketing helps your brand image shine, and you’re sure to receive a great response.
Step 3: Duplicate Your Methods Across Every Job
You want to make sure that your company is ever-evolving. Having a set system of processes/methods that changes with the times ensures your company does exactly this. This idea is time-tested and how some of the greatest achievements have come about.
They say the more that we do something, the better we become at it. By making sure every employee does things to your standards, you’re encouraging higher levels of repetition and quality. In the end you’ll find that this will actually be the more efficient approach.
How to Become a Subcontractor and Making the Choice
Becoming a subcontractor is a big decision for your business. It could be one of the most important ones you make. Think about what it takes, and if it’s the right kind of work for you. If you make that decision, then following these steps will get you ready to take on the challenge ahead.