“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.