The lack of planning in the construction industry amazes me; with all of the meetings and scheduling software used, people still don’t talk to each another to solve problems before they occur. This industry is plagued with a reactionary cycle of dealing with issues one emergency at a time. I have done internal research and discovered that working with the same General Contractors on the same type of job is much more profitable than working with new teams on different types of projects. I have used this information to help promote a better profit model for the future. The problem with our industry, is that we are drawn out of our comfort zone to chase work to feed the “machine”. It is necessary to build up a backlog, and that sometimes leads contractors into uncharted territory. While it is not always controllable, working on jobs that are consistent and predictable can add to productivity; when consistency is not possible, planning ahead is necessary.
Don’t fall pray to the usual pitfalls! It is easy to get stuck in the rut of business as usual during the inertia of a busy schedule; however, when you have to retool and move to a different job, you must look at it with a fresh perspective. In our industry, one of the common issues on many of our jobs is the floor slope; as a flooring contractor, we do not bid sloping a floor into the price of a job because it is the responsibility of the concrete contractor. Unfortunately, the slope usually does not get checked until we arrive on the job-site. I am amazed at how many concrete contractors are not held accountable for slopes that are clearly marked on project plans. Flooring contractors usually get the undeserved privilege of breaking the bad news about how much it will cost to correct the problem to the General Contractor. Why is a floor with a drain not inspected for slopes? Because the construction industry is still operating on a reactionary production model rather than a preventative model. This is just one example of how communication and planning can save a projects budget one solved problem at a time.
There is hope. Many projects today are being planned with “pull planning” meetings, where subcontractors get together and work out the details of there scopes by using sticky notes on a white board. This process sounds archaic, but the process works well and helps subcontractors react to possible conflicts before they happen. In projects that utilize this type of communication, many pitfalls are avoided. If the concrete contractor and the flooring contractor talk about the floor drains and slopes prior to construction, the costly slope repairs can be avoided. Unfortunately, subcontractors are not always in control of the schedule and get trapped installing their products at the wrong time, or get their products damaged by other workers due to poor planning. There is a solution…
What Can You do?
- You can plan ahead, when everybody else does not: Even thought the companies around you don’t plan ahead, you can stand out to your customers by showing up when you are expected and planning pre-construction site visits to make sure that you have all of the details covered before you begin a job – even if (especially if) they do not ask for you to visit the site prior to beginning.
- Keep a list – if you cannot remember it in your head: No matter what your trade, you have some important things that need to be completed before you arrive on a job. If you are not the type of person that can remember it all, keep a list. Do you need permanent lights? Do you need HVAC running? What are your power requirements? What does your trade require? If you make sure the job is ready, you will save yourself money and the General Contractor wasted time.
- Don’t compromise: When it comes to providing a superior service for a reasonable price, you cannot compromise on your requirements. Many contractors find themselves in trouble when they are convinced to start a project to early, or perform work that was outside of the original scope without proper approval. Even the best Superintendent will sometimes get their backs up against a wall and approve something that is unauthorized to get a project moving or finished on time. Don’t fall victim to compromising on something that is going to negatively effect your finished product or bottom line.
- Hold your ground: When it comes to change orders and pre-project planning, hold your ground. You are the pro at what you do; do not let a General Contractor or another sub convince you that they know your products or service better than you do.
- Ask for a meeting: This is different from #1; beyond utilizing per-construction site visits, ask to meet with other sub contractors that might have an impact on your work. If you are not working on a job with “pull planning”, do your own planning. Ultimately, you are responsible for your finished product.
Moral: “an ounce of prevention is worth a pound of cure” In the resinous flooring industry, like many other trades in construction, we are faced with enough problems internally; we do not need to let outside influences compromise our work quality. If you give into the pressure of a rushed schedule or a poorly planned project, your final product will be compromised. Be uncompromising and deliver consistent quality, and all of your customers will appreciate it when the project is closed out. In the end you are only as good as your finished product.
Moral: I always try to end with a positive note or message, this one is easy: Work very hard and relax completely to recharge. Never let your teem or yourself get so berried that you cannot see a way out. Part of the fun in what we do everyday is finding creative ways to solve problems. If you take the time to relax your mind and take in some beautiful scenery now and then, you will find that you can solve any complex problem one piece at a time.
Residential Construction has very specific challenges tied directly to a homeowner’s opinion and satisfaction; while lien laws can serve as protection for contractors, they do not speed up the rate of payment if there are conflicts. Most subcontractors that do good work will get paid either weekly or bi-monthly to keep cash flow moving, and while this is a much better rate than the average commercial contractor, money is held from one project to entice contractors to the next project. There is very little regulation protecting subcontractors from general contractors. Payment can also be tied to customer satisfaction; if a homeowner doesn’t like the work, no matter how good or complete it is, the payment is often held for long periods of time. In many ways, residential constitution is like the wild west of construction. It is very hard to get predictable and fast paying customers because of how volatile the housing market is. One wrong move and a Home Builder can get stuck with unmovable inventory and no money to pay subcontractors. If a good relationship is formed between the contractor and the subcontractor, residential construction has the potential to pay much faster than commercial projects, however the rates for work are often lower.
Commercial Contractors have a whole different set of problems to deal with. Most of my experience is with commercial construction (not all), so I have a more comprehensive description of the problems that plague commercial contractors, especially subcontractors. To understand the billing and payment challenge I need to go through the billing – payment process for most contracts. When a job is complete, a subcontractor is required to bill a project on a specific date (usually on the 15th, 20th, or 25th). A contractor can bill through the end of the month (projected) but if the estimate is not accurate, the entire pay application can be denied and the billing can be pushed to the next month. Once a pay application is received (and let’s assume that all the “i’s” are dotted and the “t’s” are crossed), then the General Contractor turns in their pay applications to the owner. When the owner pays, and that is usually 60 days, the General Contractor has 10 days to pay the subcontractor. If you do the math on this time table, most subcontractors can expect to get paid anywhere from 45-90 days from the beginning of their work on a project. Retainage is the money that is held until the job is 100% complete by all contractors involved; this is money that can take up to a year to collect on most jobs and it is usually between 5% and 10% of the total contract. In many cases, the retainage makes up a subcontractor’s profit.
Resin Adviser 