THE KEY TO GETTING HIRED AS A GENERAL CONTRACTOR
Landing a client can be challenging these days, especially with all the competition in the construction sector. Winning new work is critical to a construction company’s survival, and the key to prevailing over competitors often comes down to providing the best cost estimate. Generally, a General Contractor (GC) enters into a contract with the owner to complete a project and will take full responsibility to get the job done for the bid price. In general, the General Contractor purchases the materials, hires the tradesman, and brings in subcontractors to get the work done. The subcontractors are responsible to the general contractor. The owner of the project is the person that hired the GC to make sure the job is done right. Great plans, contracts, and construction documents is only part of the job skill or integrity is something that people look for in a General Contractor as well. Prospective clients want to feel they can trust the person they hire to work in their home, and often times, among their family, so they want to feel comfortable working with you. Revealing to the prospect that “You get what you pay for,” means convincing the client they may need to pay a little extra to hire the right person, and that they won’t regret it. You may know that the savings from hiring the low bidder can often evaporate as the job progresses, but the prospective client may not know that, which means, you sales pitch has to educate them. Education, however, takes time. Time is something you may in a race in against the competition. So how do you land that next client?
1. Choosing a Contractor
Often times, a prospective client is already working with an architect, which means that architect may provide, and do often provide names of contractors who they have worked with successfully. So, networking with architects is one tactic you may want to consider. That’s a good place to start, but whether you are starting from scratch or with a list of names, the process is pretty much the same. The bigger the job, the more effort the prospect will put in to finding the right contractor. One strategy is to get them to hire you to do a small job and so they can see how it is to work with you. However, no matter what size of the job is, there is plenty of work to be had. $57 trillion in infrastructure is needed by 2030 to keep up with global GDP growth, according to the McKinsey Global Institute, and there is an estimated 85% growth in the volume of construction output to $15.5 trillion by 2030, according to the PWC.
In general, they will hunt for a general contractor the same way they find a doctor, lawyer, or other professional they you have to trust that needs to be competent and reliable. As with a doctor or lawyer, a lot is at stake if the contractor messes up. Problems can range from small annoyances (escaping pets, loud bad music) to major lawsuits if things go badly.
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Prospective clients will then start with who they know first - close friends and acquaintances, neighbors and people they work with. This means making sure every job you do well is done right, is important because a referral could bring you your next project. They will look contractors that have done projects similar to they need done in size and complexity: new home, dormer, large addition, kitchen revamp, gut-remodel? They will ask who did the work, how it went, who did the design work, who did the fine carpentry etc. You can answer these questions in person, but it is ideal to have the answers ready on a website, a brochure, or in a one-sheet you can hand out or leave behind when you meet with them for the first time.
QUESTIONS YOU MAY BE ASKED AS A GENERAL CONTRACTOR
- How long have you been in business at your current location?
- How many jobs like this have you complete?
- What is the average square-foot cost for this type of job?
- They will get specific: How much experience do you have with energy-efficient construction, green building, passive solar (or whatever your special interests are)?
- Who will supervise the construction on site?
- Who will I communicate with about job progress, changes, and any problems that may arise?
- What work will your own employees perform (as opposed to subs)?
- How do you prefer to work: competitive bid, cost-plus, negotiated price, or something other?
- What is your company’s greatest strength?
- (For remodeling): What efforts do you take to keep the job site clean and safe for children, and to keep dust out of the living quarters?
- Do you have a standard set of written specifications?
- Do you use a standard written contract that I can review?
2. Be Thorough for Bidding
Trying to put together a solid estimate without all necessary information is difficult, if not impossible, according to contractors. Being able to access the project drawings, specifications and other necessary data not only ensures accuracy and transparency but usually impacts the project budget as well.
When there is more clarifications and agreements than question marks, the cost of construction goes down. If contractors can’t adequately define an aspect of the work, then it is fair to typically add contingencies or allowances to compensate for what that work might entail in order to give a ballpark cost, but be very clear it is an “estimate” and that the cost may be higher, so you don't throw the client later. The same holds true for subcontractors, who are usually an extra step away from the owner. To be thorough and get proper pricing, the GC has to share relevant information on the project in order often have to give a thorough bid.
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3. How to Give Them Peace of Mind
You’re clients are going to worry about getting the project done well, but that is because they will not have control of the implementation. This means they will have no checks and balances, so how do ensure they can put a lot of trust in you as a GC. We discussed referrals and the BBB above, but laying everyone the table quickly and efficiently is another way to provide peace. If there are problems, there’s no one to mediate (although some contracts have a mediation or arbitration clause). This means they have got to work things out directly with the contractor, who probably knows a lot more than they do about construction, so being friendly, and easy to talk to helps a lot, but so does having zero lawsuits or complaints from previous clients, which is why a website can help, especially one that shows the success of previous projects. If the contractor writes his own plans and specs, it may be difficult for the prospect to evaluate them for quality and completeness, especially if they have never hired a contractor before. Make sure the prospect knows the bid will include everything they want done. If there are problems, delays, change orders, and upcharges, make sure the prospect knows you will have limited leverage in negotiations. Make sure the prospect knows if there are any gaps or if there are any local laws or codes that could alter the scope of work. The client will appreciate the clarification right away.
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4. ABC’s Always Be Closing
You may have become a General Contractor because you like to build things, but you never thought you would have to have the skills of a top salesman. To close the next bid, you will have to not only provide peace of mind, but some practical sales pitching as well. Ensure the prospect knows that hiring a GC is the simplest way to get a large project completed. The client doesn’t want things to be complicated or messy. They want to know this is going to be an organized effort… be sure you referrals talk about how “easy” it was to work with you. This may go without saying, but try to be the least expensive in competitive bidding (other than self-contracting). You may not be able to do that every time, but again, if you have ever single aspect of the project budget laid out, rather than giving an invoice for the work in total with no breakdown, you may win the project low bid or not. Let the client know you will be the one-point responsibility for materials, workmanship, scheduling, and budget controls. You can do this by telling them about the project management app you use and that you can keep in constant touch with them via that app, specifically for their project. It should help them to feel special. Let them know, of there’s a problem, it’s your, the contractor’s responsibility, to fix it. A good contractor will have good subs, who show up on time and do work to the standards set by the contractor. Let the prospect know that you have been working with the subs a long time, and that you can vouch for their work ethic and hard working attitude.
And last but not least, if you have a good contract, and a fair payment schedule, you will have some leverage throughout the project, but so does the customer. In fact, you should always make the final payment contingent on all work being completed properly. This makes your client feel secure and will help you CLOSE.
BONUS: California Pulse: Construction bids for June 2018
The City of San Luis Obispo Utilities Dept. is seeking bids for the construction of the Water Resource Recovery Facility project. The $110-million water treatment plant will include offices, a laboratory and educational space. City of San Luis Obispo Utilities Dept., David Hix, Deputy Director, 879 Morro St., San Luis Obispo, 93401-2710. DR#15-00546222.
The City and County of San Francisco Airports Commission is seeking bids for the construction of the 350-room, $225-million Grand Hyatt Airport Hotel. The 275,000-sq-ft design-build project will also include a connecting bridge to a new AirTrain station. Webcor Builders, 207 King St., Suite 300, San Francisco, 94107-5499. DR#15-00629862.
The Orange County Transportation Authority is seeking bids for the Orange County Streetcar Project, which will extend 4.15 miles through Santa Ana and into Garden Grove. The $150-million project will include about 20 proposed stop platforms, a parking lot and modifications within the Santa Ana Regional Transportation Center. OCTA-Contracts, Michael Le, Contract Administrator, P.O. Box 14184, Orange, 92863-1584. DR#15-00528361.
The Los Angeles County Dept. of Public Works is seeking bids for the $69-million Devil’s Gate Dam and Reservoir sediment removal project, removing 2.4 million cu yd of excess sediment in the reservoir. LACDPW, Brittany Barker, 900 S. Fremont Ave., Alhambra, 91803-1331. DR#15-00495119.