Do you have documentation in place that lets your subcontractors know what is expected of them?
Who is responsible for costs and delays when things go wrong?
Watch the video now, or read the transcript below.
Setting Standards
Duayne
If you’re not setting a standard and expectation, you can’t get frustrated when things don’t go how you want them to go.
Amelia
Duayne, delivering a project means that you’re going to be bringing in subcontractors to deliver various parts and parcels of work. How do you deal with contractors to make sure that they actually work in accordance with the standard with which you want to deliver your projects?
Duayne
I think this is a really good one because it’s something we worked on really hard over the years, and it’s one that we’ve had some comments on recently. When I was doing a podcast interview with one of our contractors who does a lot of work for other builders, the other builders said to him, “How do you manage dealing with Duayne Pearce? Like we see all his stuff and is he very particular?”
I think that if other builders are asking those questions, it means that we are setting a good standard. And the reason that we’ve been able to get to that stage is we’ve got a system and a process for basically everything in our business now. One of them is actually called ‘Working With DP Constructions’.
A lot of the stuff we talked about is about setting an expectation.
If I want contractors to perform work to the quality that I expect, it’s about me setting a standard first.
Finding The Right Contractors
We’ll never ever take on a new contractor without having a phone call and at least one in-person meeting with them. I’ll generally try to meet them on other projects. And then at those meetings, I’ll show them a copy of our Working With DP Constructions system, or the office will email it to them and we’ll run through that.
When you set a high standard, a lot of people are going to run away. And quite often when we’re in positions where we are looking for contractors, we quite often have to go through a lot to find one that wants to work with us, because we do set a high standard.
And for me, that’s a reflection of my business. It’s taken me a very long time to build the reputation we have, and that can all be ruined in one job. One of the things that I point out very quickly when I meet a contractor is the standards don’t mean anything to me. Because I believe, especially here in Queensland, the standards and tolerances guide is not really up to my scratch.
Over the years we’ve had contractors say to us, “I’m not fixing that because it passes a standards and tolerances test” and I say, “that’s not my standard. If you want to do my work, this is my standard.”
Systems and Processes for Your Building Contractors
So I think having a document or a process that you can run through with contractors, that lets them see right off the bat how things are going to happen when they work with you, and that has to cover everything. That’s just not about the quality of work you expect them to do. That’s when you expect them to have invoices in, what do you expect when they send an invoice in, when will they get paid. All those types of things. Most businesses should be doing a basic amount of that anyway, with their period sub-contracts and all those types of things.
Beyond that, and like we have it in Live Life Build, we have those subcontractor agreements where we talk through with our members about actually outlining everything you expect.
One of our other systems is securing the site. And we have that system that goes out to a new contractor. And then we have another system that goes out to all of our contractors when they’re getting their work orders and things that again, just keep setting a standard of what we expect at the end of the day. We want the site cleaned every day. We want the site fence shut and locked up. We want the house locked up. Some people probably laugh. Again, it’s that assuming thing. You want to have a system for that. They should lock the fence. They should clean the site.
If you’re not setting a standard and expectation, you can’t get frustrated when things don’t go how you want them to go.
Amelia
I see what a lot of builders do, they feel, ‘I just can’t find decent people to work with, so I have to lower the bar of what my expectations are’. Rather than, ‘what do I want my business to look like’, and then ‘how do I raise the expectations of those that I’m working with so that I get better results’.
It’s really interesting, because what you’ve found in doing that, is you’ve then found contractors who also want to grow themselves. Who are aligned with your values, who want to grow their businesses. You get that fantastic match of people who are like-minded that you get to do business with every day.
Duayne
And it makes your business better.
Amelia
Yes, and it’s just amazing to see. How do you do research and check the previous work of subcontractors and those kinds of things before you start with them?
Duayne
This one can be a little bit tricky, but I think the important thing is that most builders are going to have a group or a bunch of building mates that they can talk with regularly. Generally when we are in a position we need a new one, the first point of contact is another builder I know. I’ll get some contacts, I’ll ring them, have a chat with them on the phone, then I’ll always go to one of their jobs.
And look, we’ve had a situation not too long ago where we did all of our homework, and we got the contractor to site. And then that contractor had employed someone new and just completely dropped the ball. And they fixed it. We had to have a conversation with them. But again, because I set the standard of what I expected first, all the costs were back on them, and they resolved the issue and we moved on.
Amelia
I think that’s a really interesting thing when we did take our ELEVATE members through that Subcontractor and Supplier Agreement, you could see the light bulbs going off.
We had members saying “oh my gosh”. All the things that I regularly have problems with, I can actually preempt them and get agreement for a standard of quality I’m expecting. That then means that if they don’t measure up to that, if they’ve signed this, that means that I can then transfer costs, time delays, those kinds of things back to them.
Which is so important if you’re as a builder, just constantly being the one who is the bottleneck between what a client has agreed to pay, and then at the whim of what subcontractors keep stuffing up and then charging you extra for. Or not quoting correctly and charging you extra for. You’re in the middle of that crunch and never able to actually get ahead. So setting expectations is so important.
Duayne
Definitely. And at the end of the day, it’s about finding people that are as passionate as you. I’m passionate about carpentry and building. So, we’ve found that our electrician, he’s passionate about his job, knows everything. Our plasterer. If you put it out there, you’re going to get it back.
But I think it is important to remember that you are going to have a few trials along the way. You are going to have a few things that go wrong, and that’s just all part of you setting an expectation and getting the people that work for you to the level that you want your business to be. And it’s a really important part of your business and it’s a really valuable part to put time and energy into.