Cultivating solid trade contractor relationships

Some remodelers have been known to take an adversarial, lowest-price-is-best mentality when it comes to dealing with their trade partners. They still view trade contractors as subcontractors. The good news is that most of these ultimately fail in business before too long.

December 10, 2010

Some remodelers have been known to take an adversarial, lowest-price-is-best mentality when it comes to dealing with their trade partners. They still view trade contractors as subcontractors. The good news is that most of these ultimately fail in business before too long.
At the opposite end of the spectrum, many remodelers see their trades as true business partners, key to their long-term viability. One easy way to separate really good remodelers from the merely good is to ask their trade contractor partners to offer an opinion. Plumbers, framers and electricians all have a pretty good vantage point from which to judge. The traditional underpinnings of solid trade relationships are on-time pay, quantity of business generated each year, and overall ease of doing business.
Really good remodelers tend to pass each of these tests without much trouble. The result is a group of strong, profitable relationships that are typically measured in years and decades as opposed to weeks and months. The increased tenure pays dividends in terms of general on-time, on-budget reliability. But today, more remodeling pros are moving beyond these traditional underpinnings and exploring more profitable ways of partnering.

Trade contractor councils

A long-identified best practice among building and remodeling firms involved in the National Housing Quality Certification and Award program is to organize a panel of top trade contractors doing business with a given firm. The idea is to get everybody in the same place for a few hours every few months to step back and take a look at the bigger picture. For example, some snafus are unavoidable. What happens when one trade misses his or her slot on the schedule? Is there a better way to handle the communication to minimize the collateral impact of a missed slot on subsequent trades coming to the jobsite? Many builders and remodelers who’ve successfully employed a trade-contractor council cite benefits ranging from improved communication to the creation of a steady stream of suggestions that ultimately improve quality. It is also important to be consistent. One-and-done type councils tend to give credence to fears of ulterior motives on the part of the general contractor, specifically to ask for lower prices.

Trade contracts with expected behaviors

Managing customer relationships is vitally important to most remodelers, yet many fail to recognize that their customers equate their firm with the behaviors exhibited by the trade contractors who work at the jobsite each day. Many remodelers now spell out required behaviors in annual agreements with their key trade contractors. Commonly found rules: the jobsite must be broom-clean at the end of each work day; no foul language, no offensive images or language on T-shirts; a prohibition on agreeing to do additional work for the homeowner; and the list goes on. By removing any mystery about jobsite expectations, good trade contractor agreements often result in greatly enhanced levels of customer satisfaction, which in turn, yield more referrals and repeat business.

Involve trades in plan-preview meetings

One sure way to create a steady stream of snafus in the field is to keep trade contractors in the dark on scopes of work and design details until the last possible minute. Conversely, many firms have altered their design process to meet with key trades to review construction plans prior to the commencement of construction. Framers, plumbers, electricians, even drywall contractors often quickly spot glitches in drawings that would be invariably more costly to change when they get there to complete their part of the job.
These are just a few ways to move beyond the traditional underpinnings of good trade contractor relationships. In general, it is important to constantly be looking for ways to improve communication and build trust that leads to better quality results and greater profits. One new home builder, Brad Jagoe of Jagoe Homes in Owensboro, Ky., recently gathered his key trade contractors for an idea generating-session known as a Lean Building Blitz. During the session, Jagoe’s drywall contractor suggested the firm try being more specific in the sizes of drywall ordered for specific rooms. Instead of buying all 54-in. wide boards and cutting to fit, the firm then began mixing in specific volume of narrower 48-in. boards that greatly reduced the wasted product. The idea saves the firm $70,000 annually.
 “That is money we would otherwise never see,” says Jagoe. “In time, we will certainly make sure that our trades see a share of those savings.”

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