Filling The Gaps: Subcontracting

"I was trying to do everything myself, and what I found was that I was creating more of a headache," he said. "I was a jack-of-all trades and a master of none."

Now, the owner of Hennessey Landscape Services, Plainstow, N.H., sticks to his strength – managing large projects. He began subcontracting services such as hardscaping and irrigation five years ago, and now he might have more than four different companies working for him on a project during one day, he said.

"Now, I try to be a master at trying to be a good designer and working with the homeowners, realizing that they don’t have all the time in the world and they need experts to get in there to manage guys to get the job done," he reasoned.

Hennessey delegates various work responsibilities, and he manages, organizes and follows up on the progress. This is what it takes to subcontract services successfully, drawing a line between building significant profit, like Hennessey did when he started subcontracting, or losing credibility and falling behind schedule.

SENDING IN THE SUBS. Subcontracting can sprout service opportunities for contractors and serve as a shortcut for clients – one that means a single phone call, fewer checks and, ultimately, less hassle.

Andy Anderson, owner, Handy Andy’s Lawn Care Service, Twin Falls, Idaho, views subcontracting as a route to customer satisfaction. "Clients will give me a list of everything they need to get done, and then they only have to write out one check to me instead of three, four or five checks to different companies," he explained.

Leasing outside skills is also a way to broaden a company’s expertise, and subcontracting specialized tasks is better than committing to work without the background to finish the job properly, Hennessey noted.

After losing money on several hardscaping jobs, Hennessey decided to focus on key services, or as he puts it, "Do what we do best and forget about the rest." He lets the experts handle tasks that aren’t his forte.

"It came to a point where I needed to make a decision to hire someone and advertise that we do irrigation or go through the subcontracting route where we could still offer the service," he explained. "Our irrigation subcontractor coordinates his schedule with mine so we can get the lawns done in a timely manner."

Hennessey admits this scheduling flexibility is rare among subcontractors – almost unheard of in fact, as many contractors struggle to mesh subcontractors’ schedules with their own to meet project deadlines. So not only do contractors struggle to decide whether or not to branch out their businesses or rely on outside help, they must make sure this help is qualified, reliable and punctual as well.

These necessities deter some companies from subcontracting services. David Biddle rarely has subcontracted a service in his 25 years of business, for example. The owner of Biddle Lawn Care, Savoy, Ill., keeps business ties tight. "Why have this middle man?" he figured. "I think customers should just deal directly with the people who are going to do the work." Currently, his company offers lawn care, tree care and landscape and installation design services. Customers who want mowing can look elsewhere.

"We don’t have the equipment for it and a lot of other people do," he said, explaining why he hasn’t brought additional services in-house. He’ll offer his clients suggestions, but he won’t subcontract or take on a job without the resources to handle the work. "We’d have to have more people, more equipment, more time, more training, more testing, more licensing and the list goes on. And there’s already other people doing it."

BACKGROUND CHECK. An ideal subcontractor is honest, reliable, skilled and fairly priced – qualities that mirror those contractors seek in their full-time employees. After all, people who work under a company’s name can make or break its reputation, pointed out Fred Anderson, owner, Anderson Landscape Construction, Lancaster, Maine.

"They can promise you the world and not give you anything, or they can just tell you the way it is and come through on their work," he said. "Ninety percent of the time it’s the first case."

Intuition guides Anderson when choosing subcontractors to handle specialized tasks, such as lighting, irrigation and masonry. He trusts his gut impression when he meets subcontractor candidates. Also, he considers a subcontractor’s rate, comparing the estimate to his budget. Finally, a solid relationship is extra insurance, he added.

"Subcontracting can be hard – you can’t control them because they’re not your employees," he explained. "So, if you have a good relationship with them, meaning that you give them consistent work, they will help you when you’re in a bind."

Before carefully choosing a subcontractor, Hennessey first decides whether he needs an expert for the project by determining the project’s timeframe, its technical implications and whether his crew can handle the responsibilities. After hiring a subcontractor, he observes their ability to overcome obstacles and cooperation with project deadlines – two factors that determine whether or not he will reinvest in their services.

A bonus subcontractor quality? "The ability to not complain," Hennessey quipped.

Andy avoids problem workers by talking to other companies that use subcontractors, requesting recommendations and keeping his ears open to their experiences, both good and bad. He also looks for innovators. "I want someone who knows what they are doing and also has ideas they can throw out to try different things," he said.

In addition, he checks that all subcontractors are insured, so he lose money for their mistakes. "If they were doing some landscaping and they rip out the sprinkler system, then you, the contractor, would be the one to end up paying for it," he explained.

But like most contractors, Andy looks for reliability. High standards and meeting goals are image-building qualities he seeks in subcontractors. "All of the subcontractors I use know how important it is for me to keep my word to my customer, because they are also in business for themselves," he noted.

QUALITY CONTROL. Finding topnotch subcontractors doesn’t guarantee first-class results. Contractors who invest in outside specialists to help with projects must also allot time to supervise their performance, Fred stressed.

"Show them a picture of what you’re trying to achieve," he advised. "Say, ‘This is the quality of work that we want.’ You have to have a standard that they can understand."

In other words, be specific, be direct and be there to supervise. And in doing this, dedicate the time and labor to outlining the job’s details, overseeing their progress and ensuring their quality. "It’s called supervision time," Fred defined. "And it comes out of your profit if you don’t plan for it."

Fred considers this management time when he budgets, varying the numbers based on the job, how much instruction is needed and whether or not the project requires daily supervision or a once-a-week check-up.

A 10-percent mark-up for subcontractors allows room for profit and covers supervision, Fred reasoned. Without this padding, contractors will have to eat costs. "Don’t do it for free," Hennessey emphasized. "You should be prepared to do the job yourself or find another subcontractor if the price is not right. You should have the ability to have someone take over your subcontracting needs – don’t deal with just one contractor all the time. If quality starts to lack, be ready to move on to someone else."

Consistent supervision means constant communication, Andy added. When a project is lagging or there are technical problems, both parties need to discuss options. The contractor’s role in offering suggestions and creating a plan are just as important as the subcontractor’s obligation to complete work according to specifications. "You both put your head together so the project will go smoothly," Andy noted.

CLOCKING IN. Smooth operators stick to a schedule. Timing is everything for contractors – it determines their profit, their efficiency and their labor needs. And many times, it is a variable over which they have little control.

"You’re at their mercy," Fred said of subcontractors, adding that a company’s reputation slides with each scheduling flop.

He posts a schedule board that lists the job from start to finish. "They see the responsibilities and you hold them accountable," Fred explained. "There are other contractors that may effect your work that you have no control over, and that has to be understood."

For example, if a contractor is installing the landscape for a general contractor but house construction is running behind schedule, the company can’t begin its portion of the project. "You have to be flexible," he added.

Contractors also have to communicate with clients. Subcontractors must be honest with contractors if they experience challenges on a property, so that they, in turn, can explain the situation to the customer. "You might have to tell the property owner, ‘We’re waiting for this person to do the job because they are really good at what they do. You will be happy when they are done, but it will take longer than you anticipated,’" Fred described.

"Things don’t always go as planned," he continued. "Often, subcontractors don’t have time to run their business – it runs them."

Scheduling is a two-way street, however. While extra workers must meet project deadlines, contractors also need to create a realistic schedule, Andy added.

"Ask the subcontractor when they can get started, talk it over with the clients and see if it is alright, and stop in every other day or so to show the client the progress you’ve made, how things are going and if there is anything slowing you up," he suggested.

How quickly a subcontractor works a project into their calendar can depend on how often a contractor uses their services, Hennessey pointed out.

"Are you a contractor who can throw the subcontractor a lot of work and keep them busy so they are willing to work with you and put you on a high-priority range, or are you someone that is calling them from the Yellow Pages looking for a low price?" he reasoned. Subcontractors don’t like price shoppers either.

Despite scheduling complications, some contractors find that subcontracting allows them to concentrate on their service specialties. Subcontracting can offer specialized skills without hiring in-house experts.

"I find that subcontractors have an expertise in a niche market or a niche field more so than we do," Hennessey said. "I can rely on their experience and knowledge to get the job done quicker, faster, and we are still able to manage them on a project and actually make some money off of them."