Posts By: Joe Pirelli
Homeowners, how do you know which subcontractor to pick for your project? Real estate investors and general contractors, how do you know which subs will be dependable and consistent across multiple projects and for a long period of time?
I’m going to share what I’ve learned in my 20 years in the construction world about how to select the best subcontractors and how to keep them around.
One of the biggest challenges about picking the best subcontractors is that it is not always clear on the surface who your best option is. Every subcontractor will speak highly of themselves and have an abundance of reasons why you should go with them.
If you are a homeowner or real estate investor and have a blank slate, meaning you don’t currently work with any subcontractors, you have two options:
- You can choose to use a general contractor who will take care of the process for you and bring in his/her own subcontractors
- You can seek out subcontractors and build a team yourself
If you go with option #2, you will need to do some due diligence to find out who you should hire to work on your biggest investments: your home, rental property, or office space. One very simple, intuitive way to find solid subcontractors and to look at reviews online. This may seem obvious and redundant, but there is a right way to go about it. Likely, there will be dozens of each type of subcontractor listed. Each of them will probably have multiple positive reviews.
To increase your chance of hiring a top-notch subcontractor, reach out to the 3 subcontractors will the largest quantity of positive reviews, with very few, if any negative reviews. If the subcontractor has a large quantity of reviews, and the reviews are overwhelmingly positive, chances are this person or company produces consistent, high-quality work.
By reaching out to 3 subcontractors to get quotes, you are doing yourself an additional favor because you can experience the professionality of each subcontractor in person when you meet them. One solid indicator of the subcontractor’s aptitude is the level of organization and professionality they show with the paperwork involved in their quote. If someone is not willing to take the time to put together a neat, coherent quote, what makes you think they will demonstrate quality when it comes to your project?
If you get past this step and are satisfied with the work from your first couple of subcontractors, congratulations! From here, things only get easier. Once your establish a short-list of subcontractors that you deem dependable and consistent, who produce high-quality work, you can leverage their networks. If you have a phenomenal carpenter and you need an electrician, ask your carpenter who his favorite electrician to work with is. Chances are he will have someone for you. Great subcontractors love to work with other great subcontractors on jobsites because it makes the process smoother for everyone involved. If you follow this process, you should be able to build a strong network of subs that you can use on multiple projects, over and over.
Now, this next part is especially important for real estate investors and newer general contractors. When you find awesome subs, you want to keep them around and you want them to prioritize your projects. Top-notch subcontractors are usually busy with boatloads of work because there is demand for their quality work and consistent communication. There are a few things you can do to keep your good subs around and keep your projects at the top of their schedules. First of all, it is crucial to pay your subs on time. Subcontractors love being paid on time. Who wouldn’t?!
Second, be understanding when unforeseen issues pop up. Construction is not done in a vacuum. Certain projects can be very complex and surprises are not out of the ordinary. Great subcontractors are good at predicating potential scenarios, but nobody can say for certain exactly what is going on behind the walls of every home or commercial building.
Last but not least, do not always select the low bidder. It is wise to get multiple quotes even once you have an established team of subcontractors to keep everyone honest on pricing. But, you want to give the nod to your go-to subcontractors more times than not. Going with the lowest price is not always the best method in the long-term because you are not pumping consistent work to your best subcontractors and you are not displaying trust in them. It is also not always the best move in the short-term because what you pay in additional labor may worth it on the basis of the established line of communication between you and this particular subcontractor, as well as between this subcontractor and the other subcontractors that you consistently hire.
Taking the time to find great subcontractors or great general contractors who will bring them to the table for you, you will improve the quality of your projects and reduce your stress significantly.
The only thing better than more customers, are repeat customers. Repeat customers are fantastic because they come with an understanding and an insight into you as they have already completed a project with your company and a relationship has been established. This typically makes for a smoother, more respect-driven transaction.
So how the heck so you obtain these loyal repeat customers?
Part of this answer is somewhat intuitive, but the other two keys to earn repeat customers are not always commonplace.
If you want customers to buy from you or work with you more than once, deliver a high-quality product and/or service. This means taking the steps, and spending the time and money to make sure that what you are delivering will go beyond satisfying your customer.
Seems simple enough, right? Well, everyone knows that in business everything doesn’t always go as smoothly as planned. So what happens if one of your customer’s is the subject of an off-chance, less than adequate circumstance?
We work in construction, which is one of the most unpredictable, variable industries. Everyone in construction encounters circumstances where something unfortunate happens, i.e. unforeseen delays or changes, both of which effect cost. When we come across these issues, we do something that is not as common as it should be. We are honest and give a timely heads up, as soon as we know that a delay will happen or if a change has to be made or is requested and what the cost and time implications are. Honesty and timely communication are paramount to please customers.
A good best practice for implementing this way of communicating with customers is to be as timely when communicating a negative a circumstance as you are when communicating a positive circumstance. If you are in a different industry, this is applicable to you as well.
If there is going to be a delay in delivery of your product or service, or if the quality doesn’t meet expectations, be upfront and honest about what happened. Then, let your customer know how you plan to rectify the issue.
Being honest and accountable will get you a lot further than making excuses and delaying communication. People will respect you more for over communicating than they will for under communicating. When in doubt, communicate.
So provide good quality, be honest and upfront, and communicate in a timely fashion…sounds like the perfect recipe to keep customers coming back, right? Well, this is all great practice, and I recommend you implement these into your business as values and mindsets. But, there is one final crucial action that you can take that most people do not.
The interesting thing is, this is by far the easiest and least time consuming part of earning repeat customers and probably the most effective. All you have to do is genuinely care about these people enough to add more value than you take in pay. How do you do this? Two simple things that we do for customers that we want to work with again, that they really love:
- We sometimes deliver in excess. This doesn’t mean we lose significant money or time at the end of every job, we just add a bit more value. For example, for some customers, we will hang their artwork on the walls for them since we have the equipment on site already to do so with little effort and time. But for them, this is a big deal because it may have been a laborious, time consuming task that we took off their shoulders.
- We reach out to them periodically for about 6-12 months after the project is complete to see how their move into the new office (that we renovated) is going or how they are liking the new kitchen or how the new tenants in their building are liking their new homes. Sometimes we’ll ask “How are you adjusting to the new space?” to earnestly make sure the new client is happy and comfortable with the product we delivered.
Give it a shot. Deliver quality. Be honest. Communicate. And add a bit more in value than you take in pay. I’d be willing the bet you’ll have happier customers who want to buy from or work with you again. They may even refer you to a friend…
We’ve all heard stories about bad breakups between business partners. Maybe you’ve even been a part of a stressful business partner relationship. Having a business partner can be your biggest source of stress or your biggest asset, depending on how you go about the relationship.
Step one of a successful business partner relationship is committing to working with the right kind of person. Not only is this the first step, but it’s by far the most important step. For that reason, this article focuses solely on how to go about selecting the right business partner.
The primary factor to consider when deciding if you can build a successful business with somebody is:
‘Do you trust this person?’
If the answer to that question is anything but a firm “Yes.”, then this person is probably not the right business partner for you.
If the person passes the ‘trust filter’, that’s a great start. Maybe you have multiple potential business partners in mind. Or maybe, it’s just one person in mind, but you really want to think through your decision of building a business with this person (or not). What other ‘filters’ should you put potential business partners through?
A crucial, and often overlooked factor, is whether you like being around this person. People tend to want to separate their business and personal lives completely. This is idealistic and not based in reality.
If you build a business with somebody, you will spend a lot of time with this person. A lot of time.
For hiring employees, a general rule of thumb that I use is, “If you wouldn’t want to spend a day on the water, in a boat, hanging out with this person, don’t hire them.” This concept is even more applicable for your business partner.
The third critical filter to put a potential business partner through is their ability to stay logical and hear feedback without taking offense. It is extremely difficult to brainstorm, problem solve, and make major decisions when one or more business partners are more outwardly intouch with emotion than logic.
On the contrary, working with someone who prefers to make the decision that he/she thinks will have the most positive impact on the company can be enjoyable and fulfilling. When everyone can be direct and honest, problem solving becomes effective, efficient, and oftentimes satisfying.
When both (or all) business partners are aligned in their mission for the company to succeed, as opposed to pushing personal ideas and agendas to “win” or “be right”, a company can flourish.
Details such as distributing responsibilities, deciding what direction to take the company, and day-to-day decisions come together organically when you put in the ground work to choose the right business partner.
So get out there and build your business. Vet your potential business partners. Put them through the ‘filters’(whether it’s in your head or on paper). Choose someone who you trust. Choose someone who you like. And choose someone who can take feedback and have objective conversations.
You’ll have a strong foundation and leadership team battle through the obstacles and challenges that come with growing a business and thriving in the long term. Not to mention, you’ll be a much happier, more fulfilled person.