Why Subcontractor Relations Are One of The Key Factors To Growing A Construction Business
General contractors looking to grow their construction business often start by redeveloping their company into a lean, well-oiled machine. While focusing on operational efficiency is crucial to expansion, many contractors can still be held back by a commonly overlooked factor: the relationship you’ve built with your subcontractors.
Subcontractors are a key requirement for executing larger, more complex construction projects. It stands to reason that when you nurture strong subcontractor relations, you encourage a stronger work ethic, greater communication, and quality workmanship.
In this article, we explore why construction businesses with robust subcontractor relations are more likely to grow. We then unpack steps to improving your relationship with subcontractors. Let’s dive in.
A Rising Tide Lifts All Boats: The Importance of Maintaining Subcontractor Relations
The health of your relationships impacts the outcome of each project. Under ideal circumstances, general contractors and subcontractors enjoy a professional mutually beneficial relationship that spans over multiple projects. The benefits of maintaining these relationships include:
- Greater project flexibility and earlier start dates — when you have a strong relationship with subcontractors, they may be more willing to work with you on short notice or adjust their schedules to accommodate changes in project timelines. This flexibility can be essential for meeting client needs and staying competitive in a dynamic market.
- Accurate project planning — the more you work with the same teams, the more you understand their capabilities. This improves the accuracy of your project budget, resource allocation, and timelines. Reliable subcontractors can also collaborate on planning, becoming an invaluable resource for identifying challenges and optimizing project execution.
- Cost savings, fewer cash flow issues and project delays — by working with the same subcontractors, they become familiar with your business and processes, leading to greater efficiency when executing projects. Good relations and clear communication also make it easier to share information, keep track of project milestones, and handle paperwork, including payment applications and lien waiver exchanges. With a more efficient back-office, payments are more likely to be made on time, leading to smoother project progress and cash flow stability.
- Winning repeat business and referrals — as strong subcontractor relations can lead to better workmanship, project owners are more likely to rehire you or refer your business for other opportunities. The better work your subcontractor produces the more they enhance your reputation.
While there are many benefits to nurturing subcontractor relationships, negative partnerships can have detrimental effects on your business. Poor subcontractor relationships can create communication breakdowns, delays, and inefficiencies during project execution. This can result in rework, cost overruns, and delivering a lower-quality product.
Subpar work and subcontractor dissatisfaction can damage your reputation with project owners and other subcontractors. And, as there is a limited number of skilled and reliable subcontractors in construction, alienating a dependable partner will limit your hiring options for future projects.
5 Steps to Nurture Long-Term Subcontractor Relationships
1. Establish Clear Communication Channels
Relationships are won and lost based on their level of communication. Safeguard your relationship by prioritizing open communication. That means ensuring that expectations, project details, and any changes are clearly communicated. Regularly check in with subcontractors to address any concerns or questions they may have.
2. Provide timely Payment
Payment delays can create cash flow issues for both you and your subcontractors. Avoid payment delays by implementing a reliable payment process. This is easier said than done, as multiple factors can lead to payment delays. Fortunately, payment application apps like GCPay streamline payment processes, automate workflows, and ensure accurate and timely payments.
Related: Check out our cost-benefit calculator to learn how much we can save your business.
3. Streamling Administration
Simplifying administrative tasks and reducing paperwork will remove points of friction while helping ensure that documents are submitted correctly and on time. The right construction software automates document and process management and enables general contractors and subcontractors to create and submit documents including invoices, lien waivers, and compliance documentation.
4. Resolve Issues Properly
Address any issues or disputes promptly and professionally. Listen to subcontractors’ concerns, seek resolutions, and aim for a win–win outcome. Promptly addressing and resolving issues shows subcontractors that their concerns are taken seriously and helps maintain trust and goodwill.
5. Provide Feedback and Recognition
Regularly provide feedback to subcontractors regarding their performance. Recognize their contributions, acknowledge their achievements, and provide constructive feedback when necessary. This demonstrates your commitment to building strong relationships and fostering continuous improvement.
How GCPay Can Help
At GCPay, we provide a software solution that fully automates the end-to-end payment application process between general contractors and subcontractors. Built to enhance collaboration between construction partners, our platform provides a centralized hub for communication, document sharing, and payment management
With features that streamline communication and simplify administrative tasks, GCPay helps general contractors foster transparency and trust, and build stronger, long-lasting relationships.
Want to learn how GCPay can help grow your construction business?