Subcontracting: Both Sides of the Same Coin

 
08/25/2017

Click for bid opportunitiesBy Jill Odom

Anyone who has been in the green industry for any time at all can tell you that there is a plethora of specialties your business can go into, but if you’re wanting to add extra services without having to learn a new skill set, this is where subcontractors come in.
 
By definition, a subcontractor is a business or a person who carries out work for a company as part of a larger project. They may be more expensive than regular employees at times, but their expertise is well worth the price.
 
Subcontractors are often hired as experts in their fields, and are generally more knowledgeable about their work than a jack-of-all-trades. They can also be used to free up a landscaping company’s regular staff.
 
Landscaping subcontractors“They help us when we have a lot of work during the peak season,” said Enzo Parilli, owner of TurfCreek, based in Loganville, Georgia. “When we have too many jobs, we use the subcontractors to fulfill demand and help us still create revenue and meet our customers’ needs.”
 
When subcontractors are used, landscapers can avoid all the costs associated with hiring and training typical employees as well as the need to outfit them with uniforms or vehicles to get them to the jobsite. Another benefit of hiring a subcontractor is it frees your company up from buying and maintaining specialized equipment.
 
“Anything good that a subcontractor does on a job on your behalf has positive ramifications for your reputation with your customer,” said Ken Thompson, director of quality and efficiency for the landscape construction division of Ruppert Landscape. “In many cases, the owner or general contractor sees the subcontractor as you. So good (or bad) work or interactions with your sub can help to enhance your reputation with your customer as competent, skilled, and responsive.”
 
Working with a Subcontractor
 
The tricky thing about starting a relationship with a subcontractor is first finding one, as most landscaping companies hire one that they already know. If you’re just getting started, this is more of a challenge because you know less about who is in the industry. You can reach out to associations like the American Subcontractors Association or suppliers and ask who they would recommend.
 
Over time, as you build up your network, you’ll soon know former co-workers and people from other trades whose work you trust that you can reach out to for help on a job.
 
“By treating our subcontractors like they are part of our team (and not their own separate company), we often get referrals of other quality-oriented subcontractors through sphere of influence,” Thompson said. “Subs often refer each other to our organization.”
 
While a time crunch may tempt you to hire just about any subcontractor, it’s important to remember that your reputation is directly affected by their work. Before hiring any subcontractor, check their references and their work. Thompson advises not to just look at the most recent job as they need to prove they have a track record of success.
 
Other ways to make sure you are hiring a reputable sub is to visit their work in person, check their accreditation, and test their skills. If you’re still trying to feel out their abilities, hire them for smaller projects first before trusting them on bigger jobs.
 
Once you are satisfied with their credentials, it is crucial to have a signed contract that specifies the scope of work, payment rate, and deadlines. Including quality standards can also circumvent any corner cutting in materials and workmanship.
 
“It’s also important to include a provision allowing your company or the subcontractor to terminate the contact upon giving a certain amount of notice,” Thompson said. “Also, check to see if the subcontractor carries an appropriate license for his/her field as well as liability insurance, workers comp insurance, auto insurance, and if they are bondable.”
 
After the agreement has been signed, make sure you have quality control measures in place to ensure the work is done accurately and in a timely manner. For Parilli, he hires someone to supervise the sub on site and make sure that they are doing everything that is outlined in the work order.
 
Without having communicated your standards beforehand, some subcontractors will opt to use cheaper materials or produce substandard work by rushing. One way to avoid the issue with low-quality materials is to buy the materials they will need, saving them the expenses and giving you control over the matter.
 
The greatest challenge of working with subcontractors is probably scheduling, as they have their own business, and trying to match up their availability with the needs of the client.
 
“It’s worth it,” Parilli said. “When you have a lot of business, a customer may like to get things done sooner, but you have to work with the subcontractor’s availability.”
 
While scheduling can be a challenge, there are ways to keep it from derailing your timetable. As you work more regularly with a sub, they are more likely to work to meet your deadlines, and paying them promptly can also incentivize them. Smaller subcontractors depend on the cash flow more and will jump at the chance to be paid promptly by a company that respects their work.
 
After finding subcontractors from each trade that you need, with whom you work well, make a point to keep this relationship strong.
 
“While it’s a balancing act between trying to get the best value for the work being done, it’s usually worth paying a little bit more to build a long-term relationship with a subcontractor who aligns well with your company values,” Thompson said. “Hiring an untested contractor who doesn’t live up to your customer’s expectations could end up costing you far more in the long run.”

Having focused on the benefits of hiring subcontractors and the ins and outs of working with one, now it’s time to flip to the B-side and see what it’s like to actually be a subcontractor.
 
Working as a Subcontractor
 
Many landscaping companies will turn to subcontractors to help them on a project that features an element that is out of their depth. Likewise, general contractors can often turn to your landscaping company when they are in need of someone with your expertise.
 
Similar to hiring subcontractors, finding work as a subcontractor depends a lot on who you know in the industry. TurfCreek, based in Loganville, Georgia, not only employs subcontractors, but also often serves as a sub to general contractors.

“We work our way up so that we get referred,” said Enzo Parilli, owner of TurfCreek. “You also get referred because you do a quality job and they know they’re getting quality so they don’t have to worry as much.”
 
Aside from standing out from the competition with quality craftsmanship, you can also find subcontracting jobs by bidding on projects that have already been contracted through a general contractor. When these relationships are cultivated, they can soon become a dependable source of revenue.
 
“We work with them on future projects, almost becoming an arm of their company,” said Taylor Boyle, general manager for Purlieu Landscape Design + Build, based in San Luis Obispo, California.
 
According to Boyle, one of the biggest benefits of working as a subcontractor is the fact that the general contractor is the company that handles all the marketing and is the lead for the client relationship.
 
“Your team is just responsible for the success of the project,” Boyle said.
 
Parilli’s favorite aspect of subcontracting is how the projects are generally very large, providing months of work.
 
Yet it’s not all roses as a subcontractor, as scheduling and pay are the two common challenges landscaping businesses face. Aside from having to schedule around your regular customers’ needs, working for a general contractor can mean having to cooperate with a number of other subcontractors all trying to finish their own jobs.

“You could be grading and getting ready to install sod, but there’s people working outside on the house doing brickwork or concrete or painting, so you have to work with the other contractors,” Parilli said. “Schedules interfere a lot.”
 
As for payment, it is a common complaint from subcontractors that they do not get paid in a timely manner.
 
“We have a weekly payment system for our subcontractors, we pay as we go, but when we’re subcontracting it could be a thirty- to sixty-day turnaround when working with a large builder,” Parilli said. “I wish it was the same way on both ends. It doesn’t matter how big you get, you still want to get paid as soon as possible.”
 
Boyle agreed that timely compensation is the hardest part and it is important to find good general contractors where this is not a problem. Jobs can often go to the lowest bidder, but by becoming exceptional in certain areas, your company can be a more expensive, but trustworthy option.
 
For example, TurfCreek has worked for a number of different builders and is known for its drainage work, and it is the reason why many businesses seek them out.
 
“We’re a very custom company and we have three levels of supervision,” Parilli said. “I’m on site making sure it’s done right. I want to make sure every person is doing their job right.”
 
Purlieu Landscape Design + Build focuses on offering incredible customer service to the client and being responsive to the general contractor as its method to stand out from the competition.
 
“These two things build the reputation of the general and makes the general’s job easier, which creates a team environment and helps encourage peaceful dealings and future projects,” Boyle said.

Jill Odom is editor for Total Landscape Care, a Randall-Reilly brand based in Tuscaloosa, Alabama. Odom graduated from Troy University with a degree in English and a minor in journalism. Odom is responsible for writing online content and managing the website.



Back To News



Connect with us


 


Tappan Zee Constructors


KWM Goethals
John P. Picone
Skanska
Kiewit

Railroad Construction Company
J. F. Shea
Sovereign Publishing

SBE 33







 

© 2017 Small Business Exchange, Inc.