Keep Your Foot In The Door For Repeat Business
Building solid relationships with your general contractors
can help you on that next bid.
How many of your general contractor customers give you that enviable “last look” on hard bid projects? Wouldn’t that be better than simply hearing, “Sorry, you were a close second or third”?
Let’s look at some of your options for keeping the door open in order to sit down and negotiate a bid:
1. At the top of this list is submitting your “Value Engineering 20” cost-saving options and ideas with your bid proposal. Everyone is looking for a better way to save time and money (refer to my February 2010 column, “Add 20 Percent To Your Bottom Line With Value Engineering”).
Recommend more economical or more
efficient equipment and materials. In addition to input from your own employees,
you can gain design data from your suppliers. Survey your warehouse and yard
for material or equipment that would do the job.
Maintain time-saving prefab and
flex-time options.
Ask questions during bid time to
create and maintain open communication. Many of your comments will create
sincere interest and an indication of your competence, as well as viable RFIs.
Visit the general contractor’s
office whenever it is convenient. This is especially critical when you have no
previous working experience with that particular customer. Let him know who you
are and what your company is capable of providing.
2. Keeping the door open with contractors that you are presently working for is also crucial. Exert all of your efforts to becoming an ongoing member of their teams.
Honor your word. If your word is not
good, then neither are you! This is crucial to building a trust relationship.
You would certainly not want to work with someone you don’t
trust.
Provide quality product on time or
ahead of critical schedules. Attend jobsite meetings to coordinate delays and
propose time possibilities.
Finish the contractor’s last project
by completing the punch list as soon as possible. The general contractor cannot
collect his money until this is all finished. Follow up with all required
maintenance and warranty work.
Your foreman should constantly value
engineer every task and share cost- or time-saving suggestions with your
client’s jobsite team and the other trades’ foremen. Any one of those helpful
suggestions will bond your relationship and possibly open more doors with the
other trades. Making a profit is the primary reason all of them are working on
that project.
The Good Samaritan deeds (helping others in need) that we discussed in last month’s column (“Good Samaritan: Good For Your Business,” April 2010) could easily open more doors with the other trades and with other prime contractors working with them.
This opportunity is always open with the plumbing, mechanical, electrical, fire sprinkler and irrigation trades. You can sub work from them or to them as the need arises.
Another option is to form a joint venture team to bid future projects. This creates a worthwhile opportunity to bid on bigger projects and complement each other’s capacity.
When you are working with out-of-town subcontractors, there is always a possibility to negotiate their punch-list work. In addition to relieving the subcontractor of this costly and frustrating obligation, you open the door to future work with that owner.
In addition, your value engineering could produce a better and more efficient system for the project owner, which would lead you to more of his construction work, as well as service and maintenance work.
3. Avoid costly, relationship-damaging confrontations regarding extras, change orders or liquidated damages. Review your foreman’s daily log every week to make certain any changes involving extra time or money are documented, along with the names of whomever authorized or approved the change. And get signed work orders whenever possible.
Submit any financial changes each month with your draw. If you did the extra work this month, you should be paid next month. Do not wait until the end of the project when no one remembers what you did or the person you worked with is no longer available. Keep in mind, the general contractor must get authorization from his customer to settle your claim.
Horsetrade as much of the extra work with your contractor and with the other trades, but make sure to document this in your foreman’s daily log to eliminate future misunderstandings or backcharges.
If a disagreement should occur, you need to accumulate all the pertinent data and meet with your client to amicably negotiate and resolve your differences. I’m certain you have heard some say, “I’m going to get every last penny.” Unfortunately, that attitude will assure that you will not get another job with that contractor.
Negotiation requires compromise by both parties to arrive at a mutual agreement. You need to be fair with your prices to reinforce your opportunity for future work. Eliminate any possibility of legal action because that will definitely shut the door on forthcoming opportunities
Let’s look at some of the gestures that subcontractors can use to show appreciation to their general contractors:
1. Take an interest in their recreational activities. This could include all types of sports and sporting events, as well as social entertainment. Informal discussions with your contractor or any of the company’s employees will generally reveal his personal entertainment and recreational preferences.
Golfing provides a first-class social environment and convenient time for sharing common interests. However, you should avoid discussing business situations. My advice when you are socializing with family or friends is leave your tool belt at work.
Hunting and fishing are a top priority for many construction personnel. We work in, live in and enjoy the great outdoors. Both activities provide an opportunity to enjoy everything Mother Nature has to offer. And something is always in season. We have big-game, small-game and archery hunting. We have inland stream fishing, lake fishing and ocean fishing on party boats, as well as guided tours and private vessels of all sizes.
Most construction personnel are sports enthusiasts. You can invite your contractor to any sports event or accompany him to his favorite event - especially one in which a son or daughter is playing.
You can also give him tickets to a sporting event. Even if he doesn’t attend, he would appreciate the pleasure of giving them to an employee, friend or family member.
Also, depending on where you live, there could be a variety of shows, concerts and other live performances available that your contractor might enjoy.
2. You can express your appreciation of your client and his staff by having food baskets delivered to the office. Also, when you visit your client’s office, the staff would welcome a package of donuts, bagels, baked goods or fruit.
In addition, you might offer calendars, pens, ball caps or pocket knives personalized with your company name. Many subs send a box of high-quality candy, chocolates and cookies at Christmas and other holidays.
3. When the need arises, you should provide below-cost service, repairs, maintenance and remodeling at the contractor’s home, office, shop or warehouse.
All of these ideas will keep the door open for that invaluable last look in the bidding process and your opportunity to negotiate.
How many of your general contractor customers give you that enviable “last look” on hard bid projects? Wouldn’t that be better than simply hearing, “Sorry, you were a close second or third”?
Let’s look at some of your options for keeping the door open in order to sit down and negotiate a bid:
1. At the top of this list is submitting your “Value Engineering 20” cost-saving options and ideas with your bid proposal. Everyone is looking for a better way to save time and money (refer to my February 2010 column, “Add 20 Percent To Your Bottom Line With Value Engineering”).
2. Keeping the door open with contractors that you are presently working for is also crucial. Exert all of your efforts to becoming an ongoing member of their teams.
The Good Samaritan deeds (helping others in need) that we discussed in last month’s column (“Good Samaritan: Good For Your Business,” April 2010) could easily open more doors with the other trades and with other prime contractors working with them.
This opportunity is always open with the plumbing, mechanical, electrical, fire sprinkler and irrigation trades. You can sub work from them or to them as the need arises.
Another option is to form a joint venture team to bid future projects. This creates a worthwhile opportunity to bid on bigger projects and complement each other’s capacity.
When you are working with out-of-town subcontractors, there is always a possibility to negotiate their punch-list work. In addition to relieving the subcontractor of this costly and frustrating obligation, you open the door to future work with that owner.
In addition, your value engineering could produce a better and more efficient system for the project owner, which would lead you to more of his construction work, as well as service and maintenance work.
3. Avoid costly, relationship-damaging confrontations regarding extras, change orders or liquidated damages. Review your foreman’s daily log every week to make certain any changes involving extra time or money are documented, along with the names of whomever authorized or approved the change. And get signed work orders whenever possible.
Submit any financial changes each month with your draw. If you did the extra work this month, you should be paid next month. Do not wait until the end of the project when no one remembers what you did or the person you worked with is no longer available. Keep in mind, the general contractor must get authorization from his customer to settle your claim.
Horsetrade as much of the extra work with your contractor and with the other trades, but make sure to document this in your foreman’s daily log to eliminate future misunderstandings or backcharges.
If a disagreement should occur, you need to accumulate all the pertinent data and meet with your client to amicably negotiate and resolve your differences. I’m certain you have heard some say, “I’m going to get every last penny.” Unfortunately, that attitude will assure that you will not get another job with that contractor.
Negotiation requires compromise by both parties to arrive at a mutual agreement. You need to be fair with your prices to reinforce your opportunity for future work. Eliminate any possibility of legal action because that will definitely shut the door on forthcoming opportunities
Show Your Appreciation
Building an ongoing open-door relationship also requires an ongoing show of sincere appreciation. Remember the saying, “Why would anyone continue doing something nice that wasn’t appreciated?”Let’s look at some of the gestures that subcontractors can use to show appreciation to their general contractors:
1. Take an interest in their recreational activities. This could include all types of sports and sporting events, as well as social entertainment. Informal discussions with your contractor or any of the company’s employees will generally reveal his personal entertainment and recreational preferences.
Golfing provides a first-class social environment and convenient time for sharing common interests. However, you should avoid discussing business situations. My advice when you are socializing with family or friends is leave your tool belt at work.
Hunting and fishing are a top priority for many construction personnel. We work in, live in and enjoy the great outdoors. Both activities provide an opportunity to enjoy everything Mother Nature has to offer. And something is always in season. We have big-game, small-game and archery hunting. We have inland stream fishing, lake fishing and ocean fishing on party boats, as well as guided tours and private vessels of all sizes.
Most construction personnel are sports enthusiasts. You can invite your contractor to any sports event or accompany him to his favorite event - especially one in which a son or daughter is playing.
You can also give him tickets to a sporting event. Even if he doesn’t attend, he would appreciate the pleasure of giving them to an employee, friend or family member.
Also, depending on where you live, there could be a variety of shows, concerts and other live performances available that your contractor might enjoy.
2. You can express your appreciation of your client and his staff by having food baskets delivered to the office. Also, when you visit your client’s office, the staff would welcome a package of donuts, bagels, baked goods or fruit.
In addition, you might offer calendars, pens, ball caps or pocket knives personalized with your company name. Many subs send a box of high-quality candy, chocolates and cookies at Christmas and other holidays.
3. When the need arises, you should provide below-cost service, repairs, maintenance and remodeling at the contractor’s home, office, shop or warehouse.
All of these ideas will keep the door open for that invaluable last look in the bidding process and your opportunity to negotiate.
Links
Looking for a reprint of this article?
From high-res PDFs to custom plaques, order your copy today!
