Make Subcontracting Pay
1 Mar, 2003 By: Don Dale Landscape ManagementStrategies to boost revenues and still deliver your high level of service by enlisting the help of other firms
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Human beings by nature want to have as much control over as many aspects of their lives as possible. This holds true in the landscaping profession as well, where contractors find it extremely difficult to give up part of a hard-earned contract to a subcontractor. But thinking about the numerous potential benefits of subcontracting, including finishing a job more quickly, may make letting go easier.
"I think it's a great way to grow your business," says Kurt Kluznik, President of Yardmaster, Inc. of Painesville, OH.
Expand your opportunities
Yardmaster has partnered with subcontractors to venture into new areas of landscape design/build without all of the normal expenses of expansion. By hiring competent subs in areas such as carpentry, concrete work and outdoor water features, the company has not only expanded its clientele but learned valuable new skills. Yardmaster's projects are often completed with help from subs. |
His firm has since hired employees skilled in those areas - some trained by subcontracted tradesmen working with company crews - so he now hires subs less frequently.
When doing pools, fencing, excavation and jobs requiring a crane, Kluznik isn't reluctant to hire subs. "We don't have the ability to do that kind of work," he says.
In addition, though his company grows to about 250 employees in the summer, he often contracts subs to do some "core work" as well as to expand his geographic reach. For example, he has a Sears maintenance account, and he has been able to expand that into other cities by subbing it out.
 Kurt Kluznik see's the need for subs. |
"They get one bill without having to deal with different vendors," Kluznik says of Sears. He compares it to hiring a consultant, and says it helps him avoid the gearing up and gearing down necessary to expand the company for new jobs and laying people off afterward. "You pay a premium for something like that," Kluznik remarks.
Kluznik says he makes less profit on subcontracted work, but also doesn't have the overhead that would be required to do it in-house.
He estimates that from year to year, about 20% of his work is subbed out, though some of that is for snow removal. He can't afford enough trucks to do all the snow work in the winter.
 Mike Wheat see's the need for subs. |
Keeping it under control
Mike Wheat, owner of Wheat's Lawn & Custom Landscape, Inc., Vienna, VA, only lets out about 10% of his work to subs, and is reluctant to do that because of fears of being unable to control quality. His company is not strong on electrical or concrete foundation work, however."We find it's more cost-effective to subcontract that out," says Wheat, who has 110 employees and focuses on residential work. Quality control is important in the custom home business, and Wheat makes sure the sub is doing it right. That means sending a field manager to the job to make sure everything from proper parking to the cleanup afterward is done to company standards.
Yardmaster insures quality control in various ways, but the primary one is to create long-term relationships with good subcontractors. "Hire good ones (using ALCA members has proven helpful) and build a history of trust," Kluznik says.
Communication is another huge necessity. "The communication between the sub, our crew and the client is crucial," Kluznik points out, because the subcontractor may be on the job with or without a Yardmaster crew. In these instances, quality control is built upon a foundation of proper planning and day-to-day coordination. Every Yardmaster project manager, designer and supervisor communicates directly and often with subs.
 Supervision of subs ensures the quality projects, like this one by Wheats. |
Even so, Kluznik notes, don't be overbearing with subs. Treat them the same as you would your own crews, and they'll respect you for it. That respect will be reflected in their work. Still, he makes sure they are aware of company standards and on-the-job etiquette.
"The biggest thing is that satisfaction is tied to payment," Kluznik emphasizes. That will be written in the contract for the sub. Wheat agrees.
"Pay the sub on time," Wheat says. In fact, his policy is to pay the sub even before his company is paid. That keeps them happy. That's vital to establishing a mutually profitable relationship, but no less so than making sure that work orders are clear and understandable. That keeps subs focused on their responsibilities.
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