Subcontractors – Tips when starting

“To be.. a subcontractor.. or not to be” – that is the question.

So you’ve decided to go out on your own – or perhaps with a mate – and start your own business. You’re a tradesman so you’re probably familiar with licencing in your country/state and you’ve applied for and have one of those.  So now you’re ready to start making the big bucks!!  Where do you start?  You’ve possibly worked for a company that was a subcontractor or you’ve heard the term used but what does it mean?

So what makes you a Subcontractor?

A Subcontractor is an individual or company that is hired by a head contractor (eg builder) to perform a specific task as part of an overall project. This is usually for the ‘Supply and Install’ of a product and/or service eg Lifts, Roofing, Plumbing, Electrical services.  The main thing to remember here is that the head contractor sits between you and the Client (who pays the bills).  This means your cashflow can be affected by issues or holdups that lie out of your control.  It also contains a Contract. So because of structure of this relationship it is advisable to do some homework prior to undertaking any subcontract works, for anyone.

Step 1. Research who you want to work with. 

Ask around the industry and find out which builders are the best to work with on site and more importantly, who pays on time. You will find ‘talk on the street’ is usually a good source of information.  In Queensland there is also a handy service on the QBCC website called, ‘Find Local Contractor’ (link below).  Here you can get a list of builders by suburbs and surrounding suburbs with their phone numbers and email addresses.

You can also check the type of licence they have and whether they have any restrictions placed on them or whether they have had any claims under the BCIPA.

Other states have similar state government licencing websites with different searches for finding builders.  (Links below).  The Queensland website gives you more general information about a number of builders at a time.

Next visit the builders’ websites and get a feeling for what they do and who they are.  Most construction companies have websites even if they are only Facebook Business pages where you can see the size and type of projects they have undertaken.  Some even list projects they have coming up.  You can also read about their key people on their “About Us” page.

For more formal company financial and taxation checks go to the ASIC and ABN lookup websites (links below). ASIC also has links to credit rating agencies where you get additional information for a relatively small fee, depending on how deep you want to go into a company’s operating history.  This process is part of, what is known as, ‘due diligence’ and if large established companies do it then why not someone starting out.

Step 2. Send The Expression of Interest (EOI)

After you’ve made a list of builders you want to target create an EOI (usually in digital form) to send them.

This is not as daunting as it may sound.  An EOI can be as simple as a letter done in ‘Word’ saying you would like to be considered for work or, a more formal offering with a cover letter and a full glossy capability statement.  It can be project specific or more general, but remember to always include any references you have.

The EOI is the ‘Stock in Trade’ of the construction industry – just like the magic ‘carton’ is its currency.  When you call just about anyone in the industry looking for work they will ask you to send them one.  So be prepared.

Hint: Call first before sending anything by email

Even though it can be daunting calling the builder up first, it’s advisable to do so before sending them anything via email.  If they are not expecting something from you they may delete it.  It can also end up in their junk mail never to see the light of day.  SO CALL.  It will save everyone time and angst.

Once you have sent it call again or even text to make sure they received it.  This shows you are keen and professional.

Builders (like just about everyone these days) are very busy people so you might have to call and email several times before you’re even asked to price a job.  Remember be persistent but always courteous and polite, even if you feel quite frustrated at times.  And remember…….

YOU ONLY FAIL IF YOU STOP TRYING

Getting people to even take a call is getting harder and harder.  James Tuckerman, Successful Entrepreneur and Marketing Trainer from Melbourne, observed that today it can take on average 8 calls before someone actually answers their phone.  Google Market Analytics further state that on average people buying online need at least 14 ‘touches’ before they commit. So keep at it unless the contact actually tells you to stop.  Sometimes ‘Crickets’ can just mean they don’t have anything for you to quote on right at that moment. Remember timing is important.

And also remember the construction industry is as much about building relationships as it is about building structures.  To succeed as a subcontractor you need to not only, ‘do what you do, do well’, but also, build those relationships – on and off site. And good relationships start with the question, “What can I do for them?” not, “What can they do for me?”

There is no such thing as overnight success so take the time to reach out and start connecting face to face with the people you want to work with.

Helpful links

http://www.onlineservices.qbcc.qld.gov.au/FindLocalContractor

https://consumer.etoolbox.buildingcommission.com.au/Pages/Search.aspx

https://www.commerce.wa.gov.au/building-commission/find-registered-builder

http://www.fairtrading.nsw.gov.au/

https://connectonline.asic.gov.au

https://www.abr.business.gov.au

 

Do you know where money is made in construction?

excluding the office punter’s club, the coke machine on site, or “incentives” from the ‘well-meaning’

This is not a trick question and for some it may just sound a bit naive.   However, believe it or not, some construction companies lose site of this.  They get caught up in support services like HR, IT and finance, which are extremely important activities, but only in so far as they support the primary activity of the building company. To erect a structure, on time and to quality, that someone will pay for. That someone being the owner/developer, supported in most cases by his/her funder. The funder generally engages the services of a QS to put a figure on the progress of the build based on the percentage of works complete.  So this is where the builder makes the money.

On the Jobsite

It is the builder’s job to make sure program is met and quality maintained so he gets paid on schedule.  Then he can pay what he owes.  Sounds pretty basic but somewhere along the line some builders lose site of these priorities or just don’t have the resources to make sure they happen.

So what are the critical components for a successful build and who provides the resources?

A lot has been written about this but I believe it can be condensed down to the following:-

The right

  • site manager,
  • documents,
  • subcontractors,
  • supplies,
  • and the last 3 delivered at the right time.

This is not necessarily a definitive list by any means.  Some would argue that QA and Safety be identified on their own. However it is my experience that when you have the right site manager quality and safety follow, like a truck and dog.  A good site manager drives site safety for his workers and quality for his client.  His site is his responsibility and he knows it.   He is a strong leader with a firm hand whose mission it is to keep everyone’s “eye on the prize”. The project delivered on time, to quality, with margin in tact and everyone delivered safely home at the end of each day.

Obviously it is the builder who is responsible for finding the right site manager.

So where does etender come into the picture?

Right from the get go – from estimate through to the end of construction.  By helping you find the right subcontractors and suppliers who will perform on site and providing you with an easy to use system.

A straight-forward collaboration area means office and site people have direct access to the latest documents as they become available from the consultants. System generated automatic addendums and a site app ensures subcontractors are up to date, in and out of their offices.   Everyone on the build is on the same page with a “we’ve got your back” mentality and isn’t that what you want?  To make money and have a happy workplace.

That’s how etender’s document control and tender management system fits into your equation.  It saves you time and money and helps create a project with less angst. It is not rocket science. It’s about doing the right things, in the right way, to make sure the Jobsite has what it needs, when it needs it,  in order to meet program and make margin.

You can take our short quiz and see if you have what it takes to make margin on your projects now.

https://survey.zohopublic.com/zs/cMB05V

(copy and paste into your browser).

www.etender.net.au

 

How to improve cashflow – 8 things a builder can do.

Your cashflow, or lack thereof,  will keep you awake at night.   Various factors affect it.  Some are obvious and more direct e.g. a wage rise given to a site manager. Others aren’t as easy to identify.  Like inadequate document control systems and tender pricing procedures. These may not be as obvious but they do affect cashflow and in a more far reaching way as they are not confined to any one project. Using inefficient, time-consuming systems invariably means your staff’s time is wasted. Not to mention the costs that can arise from variations because subcontractors might be pricing the wrong revisions of documents.

Here are some of the things you should be looking at.

  • Technology and systems need a regular spring clean It could be your computer system or an inefficient method of distributing documents to project users.  A lot of innovations have been made in recent years, the application of which leads to efficiencies and positive affects on cashflow in the long term.
  • Signing with the wrong client.  Yes! always a problem! Do your ‘due diligence’ stuff before signing the contract. Conduct a thorough check on the potential client’s financials and credit history.  Get a couple of referrals/testimonials from previous builders the client has dealt with in the last two years. Make sure you call these people, or meet them face to face.  Ask around the people you know who may know the prospective customer. Subbies can be a good source of ‘info’ as they go between builders and hear what’s going on.
  • LDs – Liquidated Damages – get them out of the contract, or if you can’t, negotiate them as low as possible. Make sure if they’re present there are bonus amounts for early completion and these are similar in size to LDs.
  • Nominated Suppliers.  Prior to signing the contract with the client, check for any nominated suppliers e.g. for tiles.  If you do not have accounts with those proposed this could flag as a potential problem. Account applications need to be submitted for new suppliers.  These can take up to 6 weeks to open and even then as a new account they may still require a 20-30% deposit to get the order in the system.  If you can’t get rid of them or change them to your preferred supplier, aim to negotiate a payment from the client for the deposit and get this in the contract. New suppliers are also an unknown quantity so get some referrals for them as well.
  • Supply and install subcontracts with large pre-install payments required for the supply component e.g. lifts or carstackers.  More often than not, you can’t get paid for any part of the payment prior to the install, unless you supply the client with a bank guarantee, with them nominated on it as an interested party. Painful.  Some Carstacker companies can be even more painful.
  • The basics.  Submit progress claims on the correct date, to the correct contact, in the correct manner, as specified in the contract.  Double check carried forward figures and percentages claimed in head contract progress claims and marry up to subcontractor claims and major supplier invoices e.g. concrete and reo.
  •  14 day payments – standard response to request – NO, WE DON’T DO THEM.  Only entertain IF the quote is substantially less than everyone else’s – I’m talking at least 15%
  • Finish on time, to the requisite quality – goes without saying really

Builders operate in a very fluid economic environment.  Continual review and improvement is needed to stay relevant to clients, maintain a positive cashflow and be profitable for owners.

40 Hour work week? I remember my first part time job.

I recall a few years ago I was working 55 hour weeks. We all were and had been doing so for a few years. My project manager used to get in at 5 in the morning and leave late in the afternoon. I got in a bit later at 6.30 and left at 5 or 6, as did most of our team. One day I bailed him up in the lunch room and said,  “things have to change. I want to go back to working a 40 hour working week. We have to learn to work smarter not harder.” – or some similar platitude.

He stopped, looked directly at me with his head tilted to the side, you know, the way a dog does when it’s a bit confused, and said, “You CANNOT go back to working part time hours“. I’m pretty certain he issued a few expletives as well. We both laughed, a lot …..but he was serious.

People are not the problem……

Long hours, in pressure situations characterizes the construction industry. Both builders and their workers complain about the long hours they work. They are flat out, their staff are flat out. There are deadlines to meet and cost implications to face if targets aren’t met. However, its this human cost that doesn’t seem to be taken into consideration. With profit margins less than 5% (at best) the money just isn’t available to spend time quantifying this area. The sad fact is that people are the collateral damage.

The price of an inefficient system is one of the greatest hidden costs for any firm. Managers must also stop blaming staff alone for productivity issues. Highly customized, patched-up system are also responsible for much lost time.

To improve efficiency and claw back lost margin the builder must look beyond his staff for answers. If the labour component of the process is being used to full capacity, it’s time to look at his/her systems and procedures.

The good news is help is out there for companies that are interested in looking and we don’t all charge an arm and a leg for our services. etender is an example of such a company. We are not just in the business of streamlining processes and system implementation. We are in the business of giving people back their time.

Ipswich – a great place to live and invest

Dean Pegg of the Pegg Group is excited about their next development that is due to commence construction in May, 2017.  The development, consisting of 108 residential units in two towers, with ground floor commercial space and 5 basements for car parking, is the first of its magnitude in Ipswich.

Dean has been dedicated to the project for nearly 9 years, working closely with council to ensure the area gets what it needs to house and service its growing population. He has confidence in the area and the town’s leadership which he says is pro-development.   etender’s team is working with Dean to help him bring his goal to fruition.

Ipswich’s population is increasing at twice the rate of the rest of Queensland sitting at 190,000 residents.

Due to the $1.5 billion expansion of the Amberley RAAF Base, 2000 new base staff and their families will soon call Ipswich home; the current population is projected to increase to 435,000 by 2031. Tthat is just a short 15 years time placing immense pressure on the supply of housing in Ipswich. Planned growth to 2041 = 520,000 residents!

Think of the big picture : A population growth over the next 24 years of 330,000 new residents in Ipswich @ 2.3 persons per household; will require

  • 143,000 new dwellings in the next 24 years
  • OR 5,978 dwellings per year

Worlds tallest timber building coming to Brisbane

WHEN built, 5 King Street, in the RNA Showgrounds redevelopment precinct, will be the tallest engineered timber building in Australia and one of the greenest. The engineered timber has a lower carbon footprint than traditional building materials, and is sourced from certified sustainably managed forests. It enables precise offsite prefabrication and safer onsite construction.

At a height of 52 m1, or 10 levels, it will be the tallest building of its kind in Australia and the largest of its type, by gross floor area, in the world. It has been designed by architect Bates Smart and is expected to be completed by the end of next year.

Bates Smart director Philip Vivian, said timber buildings were the next generation of workplace design, aimed at enhancing wellbeing.

“The timber construction recalls the vernacular ‘Queenslanders’, as well as ­relating to the historic RNA pavilions, to create a site-specific and innovative tall building that connects with nature,” he said.

The building is also on target to receive the highest possible green rating and top energy rating through the use of new, sustainable cross-laminated and glue-laminated timber as well as energy-efficient LED lighting, occupancy ­sensors, optimized air conditioning and rooftop rainwater harvesting.


.

 

How document control and tender management save you money

Document control and tender management is pretty straightforward. It’s about getting the right documents to the right people at the right time.  It ensures the builder gets “apples for apples” pricing from subcontractors and that everyone has the current set of documents during the build.   Focusing on the ‘back of house’ systems, will save you money immediately by limiting variations on the job and also save you money down the track as staff work more efficiently. It starts at the estimate stage and ends when the client takes the keys.

According to Engineers Australia Qld,  when you focus on project documentation you can reduce project costs by up to 15%. In their 2005 Report, “Getting it Right”, it also stated that poor design and documentation is the major cause of variations on a project.

“60 – 90% of all variations are due to poor design and documentation”. 

and,  “poor documentation leads to:

  • cost overruns, rework, extensions of time;
  • high stress levels, loss of morale;
  • reduced personal output, and
  • a decline in safety standards.” Page 3

It makes sense then to focus on the front end of the project where document control and tender management begins.

Using etender.net.au means you can get design consultants involved early.  Design changes can get to project users quickly. Revisions are easy to upload and register.  These can be approved by the builder and distributed almost immediately.  There are no delays or added costs because of complicated file naming protocols and no new documents are being left in someone’s inbox.

Control is maintained by the builder who sets up who gets what documents and when .  Subcontractors are automatically kept up to date with document revisions during tendering so you always gets ‘apples for apples’ pricing.  These updates continue to be received by the successful subcontractor after contracts are awarded.

Also, project documents are stored in one place which means everyone involved in the project has access to the same current set of documents. Your ‘all-important’ site staff are also included.   Putting up a block wall from a superseded drawing will be a thing of the past.

In the end you not only ‘make margin’ but gain more sleep and peace of mind.  And isn’t that what you want? To

  • make money, and
  • enjoy what you’re doing on a daily basis.

So to see how this can work for for call now, on 0422 037 027 and start enjoying the benefits today!!!


 






etender ticks all the boxes

etender’s ‘e‘s 

easy to use

efficient – it does things right

effective – it does the right things

enforces  – company rules and policies 

enables – staff 

enlarges – database of subcontractors and suppliers

eliminates – errors

7 good reasons why YOU should use etender.

Oh and it costs less – but that doesn’t start with “e” 

Grant help for small business

Owning and running your own business can sometimes feel like a really lonely affair – there is only one of you in it.  It’s always a pleasant surprise to find that some of those tax dollars we pay are funneled back to us in the form of grants for small business.  Federal, State and even local governments have initiatives that are aimed to help new or established businesses grow and succeed. The grants are not generally in a large amounts of cold hard cash that you can use to pay the wages for a year.  There are rules to follow and usually you have to match dollar for dollar and report regularly on progress but if you are prepared to do the paperwork there is money to be had to help you build your business.  At present the Queensland government has several types of grants that can be accessed ranging from matching funding up to $10,000 (ex GST) for mentoring and business coaching to Digital grants for the purchase of hardware, software and services. You might even be able to get your website updated now. Accelerate Small Business Grants – put in applications now Digital Grants Program – round 2 applications opens on 8 March 2017

For more information visit – https://www.business.qld.gov.au/starting-business/advice-support/grants

etender’s triple bottom line – people, planet and profit

etender’s  GREEN COMMITMENT

Like most other Australians etender is concerned about the effects human activity has on the environment and is committed to help reduce this at the corporate level.

We aim to help move ourselves and client companies towards achievement of the triple bottom line – people, planet and profit by providing an efficient system that replaces demand for non green products or services.

By partnering with etender clients are helping themselves prepare for the expected future ‘carbon constrained’ economy.

Here are some etender “Green Facts”

GREEN FACT 1 One tonne of paper makes about 400 reams of A4 paper. One ream (500sheets) will take about 50 litres of water to produce. Looking at the example above it will take nearly 20 reams of paper to produce those documents or 1000 litres of water.  That’s the daily water usage for nearly 7 people or over one year, 2,555 people! So then you think – we won’t print them and send them we’ll burn a CD – well maybe you should THINK AGAIN  GREEN FACT 2 –

  • To manufacture half a kilogram of plastic (30 CDs per half a kilo), it requires approximately 100 cubic metres of natural gas, 2 cups (around 400ml) of crude oil and 96 litres of water
  • It is estimated that it will take over 1 million years for a CD to completely decompose in a landfill
  • a cd/dvd is considered a class 7 recyclable plastic

GREEN FACT 3 – Number 7 Plastics? These types of plastics are found in: Three- and five-gallon water bottles, ‘bullet-proof’ materials, sunglasses, DVDs, iPods and computer cases, signs and displays, certain food containers, nylon and a wide variety of plastic resins. A few are even made from plants (polyactide) and are compostable. Polycarbonate is a number 7, and it is this hard plastic that has people worried these days, after studies have shown it can leach potential hormone disruptors which may affect the endocrine (glandular) systems of humans and wildlife resulting in development and reproductive problems.

Always look out for your mate on site

Yes safety is primarily the responsibility of the individual but staying alert and keeping an eye out for your friend can help prevent things like this happening.

Workplace Health and Safety Queensland is investigating a fatal incident that occurred on Sunday 27 July 2014 in Fortitude Valley.

A worker died after falling into a two metre deep trench which collapsed while being excavated to replace a sewer line.

Could this happen anywhere your employees are working?

This  is a reminder for you and your organisation to consider the effectiveness of your safety management systems in preventing an incident like this from occurring at a workplace.

For information on workplace health and safety visit the Workplace Health and Safety Queensland website at www.worksafe.qld.gov.au.

Project Collaboration now even easier on etender – D & C the easy way!

etender has introduced a new feature enabling consultants, clients and builders to collaborate on a project with one central repository for project documents.   Project team members can upload and download documents keeping immediately up to date with all project document changes.

“Old hat” I hear you say!!  NO!

Not only can participants upload and download documents easily they can see their ‘up/down’ history.

The project coordinator can also keep his finger on the project’s progress via etender’s tracking facility.

All this at a fraction of the price of other systems with similar features.

Find out more by contacting support@etender.net.au for more information.

Showcase your new product

If you have created a new product yourself or have come across one you would like to tell the world about you can.

Contact etender by emailing – support@etender.net.au

Who knows it may become as successful as the plastic bank notes which were developed in a combined effort by the Reserve Bank of Australia and theCSIRO.

The polymer material of the bank notes makes them very durable and counterfeit resistant. The bank notes first circulated in Australia in 1988.

Looking to sell your product?

Would you like to be able to be put in touch with more customers without having to use a huge sales team to source them?
etender is accessed by over 10,000 builders and subcontractors regularly. People who are actively looking for your type of  product or service. This means time spent sourcing and pricing jobs is kept to a minimum but is still effective. etender’s unique tendering system allows you can receive tender documents online and submit your price to a secure online tenderbox. It’s a simple and straight forward process. Easy to understand and use.In the future you will be able to upload your current price lists and catalogues for etender users to access in real-time. No more out of date pricing or product information it will be up to date all the time. We’ll keep you posted on site developments via our email alerts.Online collaboration is undoubtedly the way of the future for the construction industry so sign up now and start making better use of your time.
Subcontractors and suppliers use the site for FREE to
  • find work
  • download tender documentation
  • communicate directly with decision makers
  • participate in online Q&A tender forums
  • automatically receive addendums
  • organise and track tender responses
  • submit your price electronically via etender’s secure online tenderboxes.
  • advertise your business directly to contractors

 

Click here to sign up to etender.net.au