Whether you need an independent contractor or subcontractor, knowing the difference between the two will help you make smarter hiring decisions for your construction project. In this article, the team at My Site Plan explores key differences and responsibilities that set general contractors apart from subcontractors and independent contractors.
General Contractor Lexington KY are responsible for planning construction projects and ensuring work is completed according to plan. They also handle sourcing materials, managing inspections, and coordinating with other contractors.
1. GCs Have More Control
As the name suggests, a general contractor oversees all aspects of a construction project. This includes hiring laborers, acquiring materials, and more. In addition, GCs often work with subcontractors who specialize in different areas of the build. In this way, a GC can assemble the best team for a job and ensure that the overall plan is executed efficiently and effectively.
In other words, GCs have more control over the entire process, which gives them an edge when it comes to winning contracts. They can also take on projects that require them to self-perform specific tasks, which increases their profit margin. However, GC firms need to carefully weigh the advantages and disadvantages of taking this approach. For example, if the firm is able to earn more by self-performing certain tasks, the GC may have to sacrifice its staff’s availability.
This means that the GC has to carefully choose projects and tasks, ensuring high-priced employees are allocated to higher-margin jobs. In addition, if something goes wrong with self-performed work, the GC can’t pass liability to the subcontractor.
By contrast, a GC that hires subcontractors for specific tasks can pass liability to the trade contractors. This allows the GC to save money on labor and ensures that the job is done correctly.
Lastly, GCs who utilize subcontractors can avoid the hassle of juggling multiple project managers and trade contractors. This can help streamline communication and reduce the risk of miscommunication.
In addition, GCs can leverage their established relationships with suppliers to secure lower prices on materials, further saving money. This is particularly important for larger projects that require a lot of materials.
While it is true that GCs can spend more time finding, vetting, and managing subcontractors than other types of contracting companies, the added benefits of a GC’s experience and expertise are well worth the additional effort. Ultimately, this is why many firms choose to work with general contractors.
2. GCs Have More Experience
The general contractor is responsible for managing the overall project, including coordinating with all team members, managing vendors, and procuring equipment. GCs must also communicate with the people paying for the construction project and work with the specialists that complete the hands-on labor. This juggling act requires years of experience to master.
As a subcontractor, you want to partner with GCs who value quality and are familiar with the process of working with trade partners. When you’re interviewing for jobs, evaluate whether a potential GC will easily answer questions about how to get paid on time, how to meet deadlines, and other important details that ensure your job runs smoothly. If a GC isn’t prepared for the demands of a construction project, they may not be able to keep the train on track.
In addition, a GC should be able to communicate effectively with the project manager, architect, engineers, and other professionals involved in a construction project. This is critical to ensuring everyone understands the goals of a project and how each party’s role fits into the bigger picture.
A GC should also be able to make sure that all projects adhere to quality standards, regulatory requirements, and safety protocols. This is especially true for government contracts. A GC should have an extensive network of subcontractors to help them execute their tasks and remain on top of the daily progress of the project.
To ensure that all parties are satisfied, a GC should also be able to pay subcontractors quickly and accurately. In the industry, slow and confusing payments can destroy relationships, create frustration, and even damage a company’s reputation. Using technology that simplifies and streamlines the payment process helps to build trust between contractors. When a GC makes it easy for their trade partners to submit their pay apps, communicate with each other, and receive payments on time, they’re the type of GC that subcontractors want to partner with again in the future.
Choosing the right GC for your next project can make all the difference in the success of your business. Take the time to research companies in your area that specialize in your specific skill set and have a good track record of partnering with subcontractors. Attend GC-hosted events to connect with potential GCs and show them your portfolio. Be ready to provide your OSHA 300 information and explain your strong safety record, as GCs are looking for subcontractors with a solid history of health and safety on the jobsite.
3. GCs Have More Resources
A general contractor oversees a construction project, and their job involves assessing the project site, coordinating with subcontractors on specific aspects of the project, hiring employees to perform hands-on labor, managing vendors, and ensuring that the entire team is working within a set of budget parameters that are determined by the client funding the project. It’s an intensely demanding position that requires significant management and organizational skills to be successful.
A GC firm is also responsible for tracking the status of all projects, which is why it makes sense to invest in robust budget tracking software that combines with a project management platform. With this tool, a GC can quickly view project progress from any device, and the system can alert them to spend overages or large disparities between percent complete and cost incurred.
In the construction industry, a GC is also in charge of sourcing materials, arranging for permits, and handling inspections. All of these tasks are incredibly important to the overall success of a project, and can lead to serious consequences if they aren’t handled properly. That’s why many GC firms work closely with supply chain partners to ensure that they have the proper resources to meet their clients’ expectations.
The same principle applies to a GC’s role at a growing business or startup. These positions provide leadership from Day One, and a GC can have a profound impact on the organisation’s growth and its well-being. It’s therefore crucial for GCs to keep abreast of marketplace, legal, and regulatory developments to ensure that their teams are well-equipped to support fast-paced growth strategies.
Managing the demands of a GC position at a growing business can be challenging, especially when trying to maintain a strong risk-management culture. While it’s impossible to eliminate all risks, GCs can mitigate risks by developing effective policies and procedures, implementing new technology, creating an open communication culture, and promoting a healthy work-life balance for their team members. This will help to reduce the risk of human error and increase the chances of completing projects on time and within budget.
4. GCs Have More Reputation
A GC’s reputation as an effective leader is built upon a foundation of solid business relationships, which in turn is bolstered by delivering high-quality projects on time and within budget. Those that do so establish themselves as reliable partners, which is essential to winning new work.
GCs must also build strong business partnerships with the sub-contractors they hire. Pleasing the owner/developer and gaining a solid reputation in this way is at least partially dependent on the quality of the work delivered by the contractor’s lower-tiered suppliers. Constantly forcing unfair contract provisions down the chain or churning through large pools of subs may be financially rewarding in the short term, but it doesn’t sustain a business relationship, it’s not sustainable, and it’s not fair.
Keeping lines of communication open with business colleagues, and demystifying complex legal concepts when the opportunity arises, can help GCs maintain a solid reputation and enhance their value to their employer’s board members. If a GC is able to make a presentation to the board or contribute to a panel discussion on an issue relevant to the company, it can further establish their credibility as a strategic executive and provide invaluable guidance for future boardroom discussions.
In addition, GCs that have the interest and ability to participate on the board of a public company should consider seeking NACD certification as a way to learn how to navigate real-life board issues and gain valuable experience. It is not uncommon for a GC to develop an interest in becoming a board member of a public company, but it is important that they carefully consider whether this is the right fit given their existing role and career goals. As they do so, GCs should seek out opportunities to enter the boardroom and observe dynamics and participate in real-time conversation to gauge if it’s the right fit for them. They should also start building their expertise on topics that are relevant to a company’s board such as AI, ESG, or compensation committees to further enhance their value. Finally, GCs should seek out opportunities to become mentors to the next generation of lawyers to support them in their careers and continue to build a positive reputation in the industry.