Lupberger: How to Create Strong, Effective Trade Contractor Relationships
authors David Lupberger | April 26, 2021
It’s a great time to be in the remodeling industry. The market is strong, interest rates are low, and consumer demand is at an all-time high. All of this has led to an unprecedented demand for custom remodeling work all over the country. But flip side of this unusually strong demand. Simply put, there is more work than there are contractors to complete that work. Some contractors I know are starting to book work into 2022. They have already filled their 2021 project pipeline. It is a great time to be remodeling.
As you already know, the industry is being stretched thin in its capacity to respond. Labor costs are going up and supply chains are so burdened that delivery dates for materials such as kitchen cabinets and appliances can be as long as several months depending on what is being ordered. Demand is fierce. This same demand is also creeping into our working relationships with our key trade contractors.
Our trade-contractor partners are dealing with the same issues as we are. They have work but are struggling to find competent employees to do that work. This labor shortage is the biggest issue in construction today. I hear that competing contractors are now trying to poach trade contractors with offers of additional compensation if they come onboard with the new contractor.
Let’s address this concern and put it to rest. Every good general contractor has a preferred list of trade contractors that they like to work with. Here is generic list of potential trade-partners:
- Trim carpentry
Any good GC has a list of subs they like to work with. These good relationships lead to ongoing work. As your trade partners are as stressed as you are regarding project deadlines, let us start to formalize these key working relationships.
The Biennial Trade Contractor Meeting
This is a working partnership, so let’s formalize it! What I mean by that is to review and highlight the best aspects of your GC/trade partner relationship. It starts with an offsite breakfast or lunch. Do not do this onsite as there are too many distractions. Set a time when you can meet for breakfast or lunch to review each working relationship.
The meeting invitation is simple. Call your trade-partner and say:
“Our company is growing and we like working with you. As we grow, I want to identify those companies that can grow with us. Can we meet for breakfast or lunch to review this working partnership so that it benefits us both”?
Your trade-partners already know you so this should be an easy invitation. If I can grow with you, it benefits us both! Here is a simple review of the plan:
- Arrange a breakfast/lunch review with your key trade contractors:
- Plan to do this meeting twice a year
- Discuss joint expectations and opportunities
- We are growing and need trade partners to grow with us
Major Tip Before Your One-on-One Meeting
Prior to meeting your trade partner, identify how much work you have done with them in the previous 2 years. Meaning, in actual revenue, how much work did you do with them in the previous 2 years (or 1 year if that is the case)? I will guarantee you that they will not have that number available when they come to meet with you. They are working with other general contractors so they will not know that total sales number.
In speaking with some of my consulting clients, that number can often exceed $100,000 or more! It is our job to remind them of this sales total. When we share that number, you will have your trade-partners full attention! He or she will recognize that you are one of their primary customers and they should want to keep it that way! This is at the heart of any win-win relationship!
Once we have established the past strength and revenue of this working relationship, the rest is easy. This is a simple 2-way conversation about what is working, and what can be improved. I have included a sample meeting agenda below.
As the general contractor I want to review:
- Jobsite expectations:
- Onsite rules
- Jobsite clean-up
- Warranty visits
- Estimate response time, and…
- What do you need from us?
The last question is one of the keys to a successful meeting! A review of onsite expectations, estimate response time, invoicing, and unplanned schedule changes goes both ways! As you are reviewing your expectation with your trade-partner, it is appropriate that you ask what will make their job easier when working with you. As you may ask for certain accommodations, how can you better accommodate them when they come to your worksite? Learn what will assist them!
Make notes of what you have agreed to and send that after meeting each tradesperson as a follow-up note. Confirm what you have agreed on. Upon agreement, you can share this these notes and agreement with your production team so that when these trades show-up on your worksite, expectations are clear!
I have asked my consulting clients in the past if they thought that their trade-contractor partners took them for granted. Often, my clients have said “yes” when asked that question. This bi-annual trade contractor meeting will change that dynamic.
On a larger commercial project that I was involved with in the past, I once got to participate in a project “partnering” meeting. Before the project start, the general contractor scheduled a meeting that included all the key trade contractors so that there was a project review and so that people could meet each other. I got to see the benefit of this type of meeting first-hand. Expectations were addressed!
I am strongly encouraging you to take the time to meet with your key trade partners twice a year. Establish and clarify expectations. Confirm the benefits of working together. This strong working relationship benefits everyone and it will also get you preferred service. This is a relationship-driven business. Build and nurture these relationships – the work will follow. QR
David Lupberger, CR, is a business consultant to the remodeling industry. You can contact him at email@example.com.