8 Common Mistakes Subcontractors Make

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In the 8 years of running my exterior siding business, I have learned from the mistakes made along the way to building a company. I have found that these mistakes are quite common for small companies trying to grow when the owner is fully focused on the daily operations. This list is for subcontractors that are confident in the quality of work they provide but still don’t seem to be at the success level they deserve. Here is a list of mistakes made along the way to growing a successful company in the construction industry.

1.     Working “IN” the business and not “ON” the business: This is the first and most important step in growing your company. If you are currently heavily involved in the day to day work of your business you may find yourself saying something along the lines of “I have to be on site for the job to get done properly” or “My employees aren’t good enough to do that job themselves”. If this is the case it is likely that your aren’t allocating enough time to focus on the rest of the items on this list. It is important to give up some of that control and trust your employees to step up so that you can focus more time on creating the business you want.

2.     Not tracking your numbers: Tracking metrics of every job is very important in increasing your profits. For each job you should be able to clearly understand your profit margins. It is most important to have a very accurate measure of what your costs will be and what amount you want to make from the job. Costs include employee wages, materials and equipment use. An accurate estimate of costs and time for each job will help you price jobs properly. Profit margin is the most important number to track and analyze for your business.

3.     Not having a full pipeline of job leads coming in: Most small companies stop looking for new jobs when they have a few jobs lined up already. Now you may not see any problem with that but it is a very common mindset that stops companies from reaching the next level. The reason is many owners don’t realize that there is an enormous difference between just taking the jobs that are available and choosing which jobs you’d like to take. From the outside, both situations seem the same but the big difference is the quality of the jobs will improve if your pipeline is overflowing. 

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4.     Wasting time on unqualified leads: In construction, creating detailed estimates is a required yet a very time consuming job. Certain jobs require subcontractors to meet builders on site to discuss the job details. When doing this it is very important to qualify the builder over the phone before going to site. What this means is exchanging information to determine if your actually a right fit for that job. This can mean discussing price ranges, required start dates and general expectations. Qualifying jobs before driving out to site will save you hours in estimating.

5.     Not focusing on the right advertising: Some companies give up on advertising because they feel it doesn’t work. A reason that the results aren’t showing may be because the ads aren’t targeting the right people or they aren’t reaching enough people. Online ad tools can give you the capability to specifically target certain people and track the success of your ad campaigns. Always keep a monthly budget for advertising in print and through social media because results will show if you focus on properly targeting the ads.

6.     Not having an employee training protocol: Training employees properly is vital in not only the quality of the work but also the happiness of the employee. A business owners job is to allow their team to perform at full potential with confidence. A lack of training often occurs because owners may feel that employees should simply learn on the job. The problem with this is that without a clear training plan a lot of important stuff gets missed. It is your responsibility to provide all the resources needed for your team to feel confident in their work.

7.     Paying good employees low wages: The construction industry has a high turnover when it comes to hiring. Low quality workers are everywhere but good employees are very hard to find. When you find someone who has the potential to run your crew, pay him or her well. It may result in less profits for you in the short term, but in the long term it will give you the ability to focus on crafting the next level of your company.

8.     Not having a clear contract with builders: A clearly defined contract before the job starts is important to ensure both parties know the job details and payment structure. Doing a job based on a conversation with the builder is never a good idea. Problems can arise if builders don’t want to pay on time or at all. Even in situations where you know the builder well, it is still a good practice to have a clearly defined contract.

 

Although these are not all the mistakes you will make when becoming a successful subcontractor, it is good starting point to reflect on. Certain things may not seem important to your business at the current time but building a solid foundation is vital when its time to expand. Having the right systems and processes set up will ensure that you are ready to grow in your industry.

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