How do I be an effective general contractor?
New to Real Estate 路 WI 路 Member since 2022 路 35 posts 路 7 votes
I am based out of Wisconsin and have recently started to invest into realestate. Seeing as how I have background in construction, I obtained my pre-dwelling contractor license and am looking to get fully licensed in a few years to work on bigger projects. I am asking the BP community on what they think or wish every general contractor would do or know. What are some things or practices that I should have in order to be that 5-star contractor?
Do what you say you are going to do. If you tell someone you'll be there at a certain time show up at that agreed upon time or communicate if you need to reschedule/running late. Under promise and over deliver. Communication is my number one thing.
@Nick Grewe seems like #1 is learning the industry, because your mixing up being a construction co. with being a GC, two VERY different things.
Being a Construction Co. is all about the work you do. Being a G.C. is all about the work you MANAGE.
A G.C. is the "Ring Master", not the performer. They have the ability to build a well rounded stable of "performers" and to organize them into a manner that put's together a concise, efficient production that achieves an end for the client.
There is a common delusion that a person get's good at being a tradesman that they will just be good at being a Foreman, and it's not always the case. Or a good foreman too being a Construction Co. owner, or good Construction Co. owner too G.C.. All these are key people but all different, doing different things, specializing differently.
For myself, most important to being a good G.C. is actually being a G.C., just start there, not being a tradesman who think's there a G.C. because they got a license, a license only means you have permission to try, not that you are anything.
@Nick Grewe seems like #1 is learning the industry, because your mixing up being a construction co. with being a GC, two VERY different things.
Being a Construction Co. is all about the work you do. Being a G.C. is all about the work you MANAGE.
A G.C. is the "Ring Master", not the performer. They have the ability to build a well rounded stable of "performers" and to organize them into a manner that put's together a concise, efficient production that achieves an end for the client.
There is a common delusion that a person get's good at being a tradesman that they will just be good at being a Foreman, and it's not always the case. Or a good foreman too being a Construction Co. owner, or good Construction Co. owner too G.C.. All these are key people but all different, doing different things, specializing differently.
For myself, most important to being a good G.C. is actually being a G.C., just start there, not being a tradesman who think's there a G.C. because they got a license, a license only means you have permission to try, not that you are anything.
You're completely right. I do understand that being a general contractor and a general construction company is different. As I mentioned, I want to learn a lot of the processes of the trades I am hiring out. Until I have some more exposure to my field, I will most likely have to do some of the small work myself. I want to make sure I have my methods, scheduling, financing and papers all figured out before I start sending other people out to work under my company name. It would give me piece of mind knowing that if one of those subs decided to not show up, that I can fill the need if absolutely necessary. Also, I feel as I understand what it's like to do the work, I will understand what the subs should be doing, approximately what things would cost, how long it could take, and what everything should look like in the end. I dont want to hand a sub par job off to my client.
@Nick Grewe There has been some great advice already given. I will add some advice of my own:
Spend the effort to understand the job (materials and labor required) prior to quoting it, and starting it. Whether it's new construction or a remodel, 99-100% of the materials required and labor required can be known. The problem is most contractors just "wing it" on both materials and labor. They "guess" at both, and tell themselves "I will just figure it out as I go".
This results in miscommunication with the client (how do you communicate to the client what appliances are specified in the quote, if you don't even know yourself??), cost overruns, and schedule overruns.
@Nick Grewe There has been some great advice already given. I will add some advice of my own:
Spend the effort to understand the job (materials and labor required) prior to quoting it, and starting it. Whether it's new construction or a remodel, 99-100% of the materials required and labor required can be known. The problem is most contractors just "wing it" on both materials and labor. They "guess" at both, and tell themselves "I will just figure it out as I go".
This results in miscommunication with the client (how do you communicate to the client what appliances are specified in the quote, if you don't even know yourself??), cost overruns, and schedule overruns.
Thank you for further solidifying my thinking! This is what my foundation is going to be for when I move up to bigger and bigger jobs. If I know how something needs to be done and what needs to be done, I can provide much more value to the client by understanding myself the job.
I am based out of Wisconsin and have recently started to invest into realestate. Seeing as how I have background in construction, I obtained my pre-dwelling contractor license and am looking to get fully licensed in a few years to work on bigger projects. I am asking the BP community on what they think or wish every general contractor would do or know. What are some things or practices that I should have in order to be that 5-star contractor?
As others have said communication is important. Return calls, texts, emails in a timely fashion or even consider setting up a scheduled time dedicated to chatting with clients. I'm not sure how realistic that is in your field but would be nice if possible.
Excel at giving people what they want vs what they ask for. My man @Bruce Woodruff likely has a wealth of examples where he as a contractor exercised this skill. I'll make up a generic example:
Client asks you to install a barn door for a spare room. Rather than drawing up the estimate, you get to know them and understand their needs better. Come to find out they need this extra room to serve as a bedroom for a light sleeper. You recommend something that will eliminate noise better.
Be clear on the how likely or not the estimate you give may have additional unforeseen costs, make sure they understand that agreeing to it in writing or that it's reflected in your estimate, and how much in contingencies they can afford.
Be up front if you're going to accept other jobs while doing your clients so if you're not present a given day it's not a surprise.
Educate clients well so they understand what to expect, what is and isn't possible as to not take it out on you later.
@Andrew Bang I work for a top 5 national general contractor and I agree. Scopes of work, having a detailed construction schedule, keeping your schedule updated, and have your billing line items broken down by activity not just lump sum (this way they can't bill for activities they haven't started).
Yes this^^^
I used to have a weekly meeting with clients and took notes of what had been done, what was going to be done, customer concerns, and financials. 3 part NCR and everyone got a copy. Saves a lot of misunderstandings down the road.
I am based out of Wisconsin and have recently started to invest into realestate. Seeing as how I have background in construction, I obtained my pre-dwelling contractor license and am looking to get fully licensed in a few years to work on bigger projects. I am asking the BP community on what they think or wish every general contractor would do or know. What are some things or practices that I should have in order to be that 5-star contractor?
As others have said communication is important. Return calls, texts, emails in a timely fashion or even consider setting up a scheduled time dedicated to chatting with clients. I'm not sure how realistic that is in your field but would be nice if possible.
Excel at giving people what they want vs what they ask for. My man @Bruce Woodruff likely has a wealth of examples where he as a contractor exercised this skill. I'll make up a generic example:
Client asks you to install a barn door for a spare room. Rather than drawing up the estimate, you get to know them and understand their needs better. Come to find out they need this extra room to serve as a bedroom for a light sleeper. You recommend something that will eliminate noise better.
Be clear on the how likely or not the estimate you give may have additional unforeseen costs, make sure they understand that agreeing to it in writing or that it's reflected in your estimate, and how much in contingencies they can afford.
Be up front if you're going to accept other jobs while doing your clients so if you're not present a given day it's not a surprise.
Educate clients well so they understand what to expect, what is and isn't possible as to not take it out on you later.
You make a great point! Getting to the bottom of what they really want would separate me from the rest of the contractors. It shows I do care about them. I also am going to make a point to try to sit down with clients periodically just to make sure there arent any changes that they want to incorporate before I deliver a finished product. Thank you for giving me this advice!
@Andrew Bang I work for a top 5 national general contractor and I agree. Scopes of work, having a detailed construction schedule, keeping your schedule updated, and have your billing line items broken down by activity not just lump sum (this way they can't bill for activities they haven't started).
Have my line items broken down by activity and not lump sum. I will be sure to incorporate that into my business practices!
Yes this^^^
I used to have a weekly meeting with clients and took notes of what had been done, what was going to be done, customer concerns, and financials. 3 part NCR and everyone got a copy. Saves a lot of misunderstandings down the road.
Breaking down the process for the clients and providing copies for both them and I is a great method that I will be sure to use!
I am based out of Wisconsin and have recently started to invest into realestate. Seeing as how I have background in construction, I obtained my pre-dwelling contractor license and am looking to get fully licensed in a few years to work on bigger projects. I am asking the BP community on what they think or wish every general contractor would do or know. What are some things or practices that I should have in order to be that 5-star contractor?
As others have said communication is important. Return calls, texts, emails in a timely fashion or even consider setting up a scheduled time dedicated to chatting with clients. I'm not sure how realistic that is in your field but would be nice if possible.
Excel at giving people what they want vs what they ask for. My man @Bruce Woodruff likely has a wealth of examples where he as a contractor exercised this skill. I'll make up a generic example:
Client asks you to install a barn door for a spare room. Rather than drawing up the estimate, you get to know them and understand their needs better. Come to find out they need this extra room to serve as a bedroom for a light sleeper. You recommend something that will eliminate noise better.
Be clear on the how likely or not the estimate you give may have additional unforeseen costs, make sure they understand that agreeing to it in writing or that it's reflected in your estimate, and how much in contingencies they can afford.
Be up front if you're going to accept other jobs while doing your clients so if you're not present a given day it's not a surprise.
Educate clients well so they understand what to expect, what is and isn't possible as to not take it out on you later.
You make a great point! Getting to the bottom of what they really want would separate me from the rest of the contractors. It shows I do care about them. I also am going to make a point to try to sit down with clients periodically just to make sure there arent any changes that they want to incorporate before I deliver a finished product. Thank you for giving me this advice!
My pleasure. You're going to be BUSY. People won't always understand that or be aware there's more to your life and business than just them and their property. In their defense there's typically a lot of money on the line and the performance of a large investment making them nervous in need of reassurances. I imagine it would save you headaches and put them at ease to plan general discussions vs them getting mad you're not responding while your hands are busy.
I Appreciate you making a point to research this. I value contractors. Their hard work and expertise make success possible for investors.
Congratulations on your new endeavor.
There is money to be made as a contractor.
However, it is a difficult if not impossible field. You must be able to embrace chaos. It will be like that every day if you are successful. The business is not about what you think it is. You will see as you really dig in. You will be held accountable for situations that are beyond your control and frankly you never could have known about. On the upside, there is more work than you can get to.
Just to name a few challenges:
1. Labor / Subs Will they show up? What will they do while they are onsite, work, smoke, talk on the phone?
2. Supply availability and cost
3. Pricing. If you discover something that is not part of your scope of work, will you eat the cost? Will the customer pay the difference?
4. Getting ripped off. Materials being taken from job site, subs not showing or doing a good job, customers refusing to pay.
I am not disouraging you from doing this, just offering a few thoughts to keep in miind as you start your journey.
@Lesley Resnick thank you for providing examples of the negatives/problems I need to look out for. Knowing how I can fail or what troubles I may encounter is just as important as the steps that will make me succeed. Knowing some of these problems will help me make an action plan for WHEN they happen. Just like investing, anything can and will go wrong eventually and I need to make sure I have my bases covered.
Congratulations on your new endeavor.
There is money to be made as a contractor.
However, it is a difficult if not impossible field. You must be able to embrace chaos. It will be like that every day if you are successful. The business is not about what you think it is. You will see as you really dig in. You will be held accountable for situations that are beyond your control and frankly you never could have known about. On the upside, there is more work than you can get to.
Just to name a few challenges:
1. Labor / Subs Will they show up? What will they do while they are onsite, work, smoke, talk on the phone?
2. Supply availability and cost
3. Pricing. If you discover something that is not part of your scope of work, will you eat the cost? Will the customer pay the difference?
4. Getting ripped off. Materials being taken from job site, subs not showing or doing a good job, customers refusing to pay.
I am not disouraging you from doing this, just offering a few thoughts to keep in miind as you start your journey.
Very good post, Lesley! It almost sounds like you've done this as a living! Let me address your points from a long-time GC point of view.....
1) You, as the GC, must have firm jobsite rules. No smoking in the house, maybe not even outside, no loud music (I added no Rap or Metal), minimal phones...You have to be the leader and make them respect you. They will because you sign ALL of their checks, but try to be a leader above that.
2) Not much you can do about this except manage the customer expectations and timeline.
3) Hard rule here. If it is not listed specifically in the SOW or related Contract, it is a Change Order. Period.
4) Keeping track of jobsite materials is easier. Forcing some wealthy client s to pay if they are not good people is tough....you will end up eating some large $$. It's part of the game. Unfortunately this becomes part of your overhead and is paid by other customers.
Yes, it is a rough and tough business and not for the faint of heart....but can be fun and possibly even make you decent money... :-)
@Brandon Plombon This. I have a very good GC. What would make him great is by doing what he says he is going to do when he says he is going to do it. He's good because he would do the task and he would do it well for a very reasonable price. Where he fails is timing and scheduling and then communicating it with me. It's okay if things are running behind schedule- just tell me so I can plan around it.
I don't like surprises if you communicate with me and I am well aware that the project is behind schedule or over budget; no problem just be upfront and honest. Let me know so I can make a plan and budget around it. I would much rather be annoyed with constant communication from a contractor than have no communication. Communicate communicate communicate. If you think you are over communicating - communicate more.
Yes, communication is the key, but often it is the customer who does not provide the communication, such as details of products, or what their real expectations are, upcoming plans, etc....
Case in point - I had a client (the wife actually) who had a huge 4th of July party planned, 6 months in advance. There were of course cost and time over-runs due to them changing everything on the whole project. When do you think she told me about the huge party? Right....middle of June. And then it went to court over this.
How could this have been avoided? a) tell the GC well in advance about special events like this. b) Don't change everything in the stinkin' project every day.
Yes, communication is the key, but often it is the customer who does not provide the communication, such as details of products, or what their real expectations are, upcoming plans, etc....
Case in point - I had a client (the wife actually) who had a huge 4th of July party planned, 6 months in advance. There were of course cost and time over-runs due to them changing everything on the whole project. When do you think she told me about the huge party? Right....middle of June. And then it went to court over this.
How could this have been avoided? a) tell the GC well in advance about special events like this. b) Don't change everything in the stinkin' project every day.
Communication is definitely a 2 way street!
@Bruce Woodruff that's something I didn't consider yet. Specific deadlines that would have to be met. This gives me more reason to really know the processes of the work I am hiring out that way I can tell the customer whether or not their desired remodel may cut into their holiday get together
I am based out of Wisconsin and have recently started to invest into realestate. Seeing as how I have background in construction, I obtained my pre-dwelling contractor license and am looking to get fully licensed in a few years to work on bigger projects. I am asking the BP community on what they think or wish every general contractor would do or know. What are some things or practices that I should have in order to be that 5-star contractor?
From a licensed contractor to another..
1) You're a GC, not a handyman or tradesman. Put the tools up, it took me years to get past that stage
2) Always provide a contract. That's one of the main roles in being a contractor. Contract - Contractors. Everything should be in writing, scope of work, estimated completion date, warranty, change orders...everything.
3) Team up and build relationships with good subs. Your subs are your team, the better your subs the better your team and results. Good subs are not cheap, so you may have to boost prices. My guys have been with me for years.
4) Study your craft...Study the code book. There is a reason the GC code book has every trade code. We are suppose to know codes from each trade. You should know, framing, foundation, HVAC...all codes. You should know the codes like the city inspectors and not fail inspections.
5) If you make a mistake, eat it, don't boost price on customer for a mistake you made
It took me years to learn this, I wish someone had told me this. Took a lot of years to learn the hard way and get to this point. Good luck.
Great points, Alex! Better yet, know the code BETTER than the City Inspectors. Be able to challenge them when they call you on BS stuff.....
I am based out of Wisconsin and have recently started to invest into realestate. Seeing as how I have background in construction, I obtained my pre-dwelling contractor license and am looking to get fully licensed in a few years to work on bigger projects. I am asking the BP community on what they think or wish every general contractor would do or know. What are some things or practices that I should have in order to be that 5-star contractor?
From a licensed contractor to another..
1) You're a GC, not a handyman or tradesman. Put the tools up, it took me years to get past that stage
2) Always provide a contract. That's one of the main roles in being a contractor. Contract - Contractors. Everything should be in writing, scope of work, estimated completion date, warranty, change orders...everything.
3) Team up and build relationships with good subs. Your subs are your team, the better your subs the better your team and results. Good subs are not cheap, so you may have to boost prices. My guys have been with me for years.
4) Study your craft...Study the code book. There is a reason the GC code book has every trade code. We are suppose to know codes from each trade. You should know, framing, foundation, HVAC...all codes. You should know the codes like the city inspectors and not fail inspections.
5) If you make a mistake, eat it, don't boost price on customer for a mistake you made
It took me years to learn this, I wish someone had told me this. Took a lot of years to learn the hard way and get to this point. Good luck.
Thank you for all valuable tips! I will make sure not to become the worker as much as the contractor. I will also make a great effort to know the code better than the inspectors! I want to also make my subs the most sought after workers around.
Great points, Alex! Better yet, know the code BETTER than the City Inspectors. Be able to challenge them when they call you on BS stuff.....
You're right! Once you know codes you'll realize how easy it is to challenge them. I now keep the book in my truck. Just last month at final, senior inspector tried to fail me for not having tempered windows in bathroom, but code also actually allows laminated glass. You should have seen the look on his face when I opened the book and read it to him, priceless. He didn't realize the code also allows laminated glass.