Shortage in the labor pool? Introduce Good Subs.
We shot ourselves in the foot over the last 20 years, riding on the coat-tails of the union training programs. I say that generalizing of course.
In 1990, I remember making a transition from a full employee company to hiring independent workers. I did it because at that time, the workflow had tremendous highs and lows, and I found I could concentrate on sales and administration more if there were responsible tradesmen in the field.
There are MANY responsible employees out there, but I was referring to having field personnel (sub-contractors) that were totally responsible for: keeping the schedule, material procurement, quality of the assembly, satisfying MY clients, as well as their weekly budget needs.
Now,,,, having said that,,,,,this really raises the bar in the way that you package a project. You had better comb through the details and make sure that everything is in there, or word your specs and contracts such that it is the workers responsibility to bring up un-specified items before the estimate is presented to the client. A package includes good/pertinent project pictures, accurate scaled floor plans and adequate elevations, and most of all specifications that tie your project together.
What a concept! It really works, and your clients like their total package and the trades like what they are using for a basis for their bids.
In closing,,,if you are going to enlarge your labor pool with the use of experienced professionals, do check references, and put them into their first project with you where your established people can report back on how they fit. Be as careful about a new trade sub coming into your mix, as you would be hiring a new W-2 employee. Just make sure that your stay legal and require that they work for at least 2 other contractors. Also, that the majority of your workforce moves towards independent tradesmen, as you grow the size of your business. Otherwise they might be viewed as employees under the law.
Do your subs have a strangle-hold on your business?
Not a day goes by that I don’t hear a contractor express concern that he is not in control of his business. “My subs will never do it that way. They won’t submit their bids to me through an online system. They can barely return e-mails.”
Too many remodelers that use outside contractors get only one bid per trade. It is my belief that while your “favorite sub” probably provides great service, you could be paying more than you need to, or you could get better service from someone else. It might surprise you to know that there are other subs out there, that have as good of workmanship, yet are 10-30% less expensive?? Could this be costing you work? Could your service improve with more timely estimates? Would you possibly get better pricing if you told your sub of 10 years that he was about 20% higher than another bidder?
How will you ever know until you try. I remember as I was 10 years into the business, a mature contractor offered to share his subs with me. He knew they were professional and would help my business grow. But boy, I will have to admit, I was totally scared! New people? How could I have 2 or 3 plumbers and electricians?
Having run a remodeling company for 38 years, I fully understand how our sub-contractors can play off of a secure relationship. It is the same with your suppliers.
Now, don’t get me wrong. I value loyal tradesmen and suppliers, but we all have businesses to run and part of a successful business is keeping our costs low so we can markup our projects, make a profit, yet still get/win the business!
If you are suspect that your subs might be getting the best of you, it might be worth a listen about a system for setting up projects with “fool proof pricing”.
Which Sales Process do you use? How can we best add value to the Salesman/Client relationship?
When I put my ear to the ground, and pay close attention to the posts in all of the Group discussions I belong to, it seems that there are two predominant schools of thought:
1: Don’t need any tools to enhance the sales process. My reputation is far superior to all of my competition, my sales and design skills are the best in the business, and I have as much business as I can handle. After all, if what I have is working so well, why should I change?
2: My business is growing. Each lead is precious, and after determining that I can work with a particular client, I am trying to offer the best service, which includes engaging them with good communication, sharing project ideas, and developing good project specs to the point where the project can be properly estimated.
I would be willing to guess that 90% of the our readers fall into #2? Thoughts?
The WHAT and HOW difference to project bid packages:
We’ve had some recent online discussions about how much specification and drafting work should be done on a complimentary basis before the sale? Some believe that as remodeling salespeople we should hold our cards close to our chest, and sell our projects based totally upon what we have done for others. Our reputation and portfolio should be adequate enough for the client to make a decision to move forward with us.
I believe that our work developing the WHAT question is the most important, and needs to be revealed.(after all, isn’t that what our trades need to know?) WHAT are you capable of doing? WHAT are you proposing you do? WHAT grade level of fixtures are you proposing? Isn’t this important information that our potential customers need to have?
Once we, as professionals, begin answering the HOW too early on, aren’t we really solving their remodeling challenges? When our engineer sees our proposed opening, asks us a couple of questions about what’s above and says “you will need approximately a 30# beam” over the opening, based on his experience, that to me seems to be the WHAT. When he gives us a worksheet, calculations, and HOW to fasten the wood to the steel, we definitely should be sending in a check.
It seems no different when we are writing specs, doing simple drafting, and annotating our pictures for review. Aren’t we just telling them WHAT they need to know? We know HOW, and that confidence should show through, so that our clients will move ahead with us.[NARI-CT]
Exact fixture selections or dollar allowances, which works best for your company?
I think if we asked 5 different contractors, we might come up with 5 different answers. There is not a hard and fast standard, but I am compelled to share the fixture allowance policy that was a success for my company. Over time, I felt that helping the client describe what the fixture looked like early on was a great help.
If we were doing a lav faucet, we’d specify the following: Widespread lav faucet, polished nickel, 12” o.c. With a cast brass housing, pop up and overflow to match, and white porcelain cross handles. [Allow $400 our cost]
We put our material markup on the 400 and we were free to show them our invoice. Overages and underages were calculated without markups to avoid confusion. Overhead and profit numbers were never mentioned. Most of the time, we could give them back a refund. That, they really liked!***[C/T,NARI]
Intelligently Reveal Specifications to Qualify Clients and Build Trust in One Meeting
All good contractors know that a key element to avoiding confusion or disagreements in project planning involves properly detailed specifications. It’s amazing what well, thought out specs can do for your planning, for the accuracy of your estimate and for building trust with a prospective client. Many of you are also painfully aware that clients can take your hard work and use it to secure other bids.
Prior to showing your client plans, or any information that is costly (and should be a line item in the bid), find out if they are truly interested in doing business with you by having them review your specs. Specifications are really important in nailing down the details. A homeowner that avoids reading your specs will probably not do business with you. This is a tell-tail sign of their interest.
So, next time you have a feeling that you are giving your prospect valuable information, realize that this information is the trust-building glue that will hold your relationship together should something pop-up during construction. It is the most important part of the planning package and the sooner they see it, the sooner they will gain trust that you are the right contractor for their project.***[P/R,NARI]
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