IMPROVING TRADE CONTRACTOR RELATIONSHIPS From Good to GREAT!!! Richard Pagotto, CGR, CGB

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Shana Park
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1 IMPROVING TRADE CONTRACTOR RELATIONSHIPS From Good to GREAT!!! Richard Pagotto, CGR, CGB

2 Let s Look at your problems Not enough hours in the day to organize everything. Good Trades are too busy and too expensive. I can t keep them busy enough on just my jobs. I can t pay them fast enough. They never show up on time. They don t work efficiently. They lose their blueprints or forget them. They mark up the materials too high. They won t submit their Proposals fast enough. Their invoices are always incomplete. They never send the same crew back to finish.

3 Your Top Ten Priorities 1. Family First a. spouse b. children c. yourself 2. Vacation time 3. Highlight Special Dates 4. Financial Commitments 5. Financial Budgets 6. Business Plan 7. Talk to your CPA 8. Talk to your Attorney 9. Semi-Annual reviews 10. Put it in writing and give it to everyone

4 Top Ten Trade Contractor Priorities 10. Finding enough good Builders to work with. 9. Finding Builders who speak their language. 8. Scheduling issues. 7. Jobsites are ready when they arrive to work. 6. Communications. 5. Builders who pay on time, all the time. 4. Skilled Labor. 3. Invoicing on a regular basis. 2. Proposal and Estimates. And our most important Trade Contractor priority is 1. Finding enough GOOD Builders to work with.

5 Much Better Trade Scheduling TO: Sweatajoint Plumbing Contracting FROM: Richard Pagotto, Purchasing RE: Update Scheduling for Morrisville Site Prepared on January 22, 2010 Revised March 15, 2010 Revised May 22, 2010 START UNIT # STAGE PRICE BALANCE five four six five two two seven six three final

6 The Zero Defect Plan YOU must set the example Make this a goal with an incentive Everyone must be a part of the plan Communications are key factors Clearly state the objectives to all Clearly state the responsibilities too Clearly state the consequences Establish weekly walk-through meetings Pre-drywall is the most important Written inspection reports must be filed Pre-pre-settlement walk is mandatory

7 The Happy Contractor You must set the example SMILE!! You MUST say good morning every day Know their special dates (birthday, etc.) Know about their families Pay them well (above standards) Give increases before they ask Empower them daily Give them flexible hours Vacation time must be planned before hand Have a suggestion box on your door INFORM them and LISTEN to them! Monitor and reward them

8 Trades vs. Employees??? What is the goal of your Company? What is the size of your Company? Can you easily find GREAT Trades? What type of headaches do you prefer? Are you caring and compassionate? Do you employee Superintendents? Are you a hands-on leader? If so do you enjoy hand-holding 24/7? Let s talk about the financial advantages. and disadvantages.

9 Top Ten Menial Tasks To Eliminate 1. Estimating 2. Proposals 3. Invoicing 4. Scheduling 5. Advertising 6. Takeoffs 7. Contracts 8. Specifications 9. Change orders 10. Office Hours

10 Increase the Need for On-site Supervision One Super on multiple job sites Use Trades to supervise other Trades Better Trades require less supervision Keep supervision to one hour per day Hire the experienced Superintendent? Can the Owner be the Superintendent? Can you consider off-site supervision? Consider video supervision Save the cost of the trailer / compound Can you sub-contract the Supervision? Create incentives for the Trades

11 Pre-Qualification Form (Sample) Your Name & Co., Inc. 123 Your Back Road, Front Town, NJ Phone: (555) Fax: (555) TRADE CONTRACTOR S PREQUALIFICATION FORM TRADE: NAME OF COMPANY: PRINCIPALS: ADDRESS: PHONE NUMBER: E.I. OR SOCIAL SECURITY # OF PRINCIPAL: YEARS IN BUSINESS: $ VOLUME: (projected) PRESENT # OF EMPLOYEES: LIABILITY INSURANCE LIMITS: DO YOU SUBCONTRACT ANY PORTIONS OF YOUR WORK? WHEN ON THE JOB, IS YOUR FOREMAN PRESENT? ARE YOU PRESENTLY WORKING ON SIMILAR PROJECTS? PLEASE LIST AT LEAST 3 JOBS YOU ARE PRESENTLY WORKING ON OR HAVE COMPLETED: BUILDER COMMUNITY SIZE OF JOB LOCATION PHONE # CONTACT PLEASE LIST VARIOUS MATERIAL SUPPLIERS YOU USE AT THE PRESENT TIME: SUPPLIER ADDRESS PHONE # CONTACT SIGNATURE: TITLE: DATE:

12 Top Ten Where to Find Good Trade Contractors 1. Building Inspectors 2. Township Offices 3. Banks 4. Vocational Technical Schools 5. Vendors and Suppliers 6. Architects and Engineers 7. Drive Through Other Job Sites 8. The Local HBA Offices 9. Other Good Trades 10. Trade Shows

13 How do we get better quality, more often, at a lower cost? Pay promptly Quality in quality out Compare at least three other Bids Reconsider the highest and lowest bids carefully Provide clear specifications during the bidding process Provide ALL Trades with the latest set of drawings Eliminate all questions and concerns up front Always schedule a pre-con meeting with the Trades Search for volume discounts Faster payment schedules Give the Trades opportunities to make more money Ask for all rebates from suppliers and vendors Consider profit sharing with the Trades

14 They will want to work for you first if you pay them promptly you schedule them well in advance your jobsites are clean and ready for them all materials are on site and complete you pay them promptly they have full and complete drawings they have clear and concise specifications you issue timely work orders in advance you pay them promptly you allow them time to get their work done you give them an empty house to work in you compliment them for a job well done you pay them promptly!

15 Creating and Improving a Business Relationship with your Trade Contractors STOP calling them SUBS Develop a Trade Contractor Manual If you already have one, update it now Give it to them ASAP! In person. It must include Policies and Procedures Include a copy of your Mission Statement Attach your Warranty Program Guidelines Prepare a Scope of Work for all Trades Prioritize the Change Order procedure Have them sign off on a file copy Update it as often as necessary

16 How to Improve the Quality of Your Trade Contractors Communicate with them on a regular basis Make sure they are members of the HBA If not sponsor them immediately Give them autonomy Make them accountable Be a mentor to them Sign them up for educational seminars Help them to attend trade shows Get to know them on a personal basis Find out what YOU can do for them A happy Trade is a GREAT Trade!

17 Trade Contractor Improvement/Suggestion Sheet To: Richard Pagotto From: Copperhead Plumbing Date: Re: Jobsite We worked on this site on date The Superintendent was We worked on lot/house/unit # On a scale of 1-5 (5 being highest) we determined: We received the Work Order prior to starting We had complete drawings and specifications The site was ready for us to work The site was clean and prepared The Superintendent was courteous All materials were on site and complete There were no other Trades in our way We had ample time to complete our work Payment was received promptly

18 Daily/Weekly Fax Checklist for the Trade Contractors Date Good morning Your services are needed on this site Your service are needed on this date Our Superintendent will be Please contact him to confirm at Please see Work Order # You will have days to complete. We have agreed to a price of Please sign here below and FAX back today: Approved by Date

19 Top Ten for the Policy Handbook 1. Keep it short. Six pages at most. 2. Write it in at least two languages. 3. Review the main points at the meeting. Payment schedules Estimating and Proposals Price Coverage Rebates and Model Home discounts Work Order System Invoicing Clean-Up Insurance and Workers Comp Work Hours (Days) Scheduling Article Five

20 Top Ten for the Policy Handbook continued 4. Ask them to sign it before they leave. 5. Some will. Some won t. That s okay. 6. Explain how they will get paid promptly. 7. Offer Incentives and Bonus Packages. 8. Give them an opportunity to contribute to it. 9. Update the Handbook throughout the year. 10. Thank them for their contributions.

21 You Must Always Consider the Trade Contractor DNA First T ough as nails R are breed A nticipates problems D ynamic in personality E asy to please C onscientious O wns the business N ice person to work with T rustworthy R esponsible A lways there when needed C lean and neat appearance T horough O rganized R espectful

22 Top Ten for Great Suppliers/Vendors They know all the good Trade Contractors. Allow them to complete the take-off lists for materials. Are you aware of all rebate programs they offer? Also Model Home incentives, FREE gifts, etc. Service after the sale is paramount. Good source for financing if needed (60 days to pay). Underwrite the Breakfast meeting. Free trips as incentives for Trades. Unfortunately you won t be seeing as much of them anymore. Unless it is on the golf course!

23 Trim Your Costs Checklist Insurance premiums (liability, etc.) healthcare costs salaries employee benefits vehicles fuel costs auto/truck insurance office expenses soft costs / overhead advertising supervision punch list warranty work service work call-backs plan reproduction phone service internet costs safety / accident prevention waste / recycle scheduling carrying costs / interest payments financing

24 Watch as you Grow Together 1. Plant the seed early. 2. If at first you don t succeed, don t give up. 3. Never burn a Good Trade Contractor bridge. 4. Use them as a great Trade Resource and vice-versa. 5. Lean on them when times are tough. 6. Stay in touch at least once per month. 7. Determine their goals and help them achieve them. 8. Consider a small business loan if necessary. 9. Be a mentor. 10. Recognize their success.

25 Top Ten We Must Change Tomorrow Better estimating completed sooner Better plans finalized sooner ALL Trades on board early in the Project All bids in before presenting your price Better specifications and scope of work Budgets must be entered before work starts Tracking system in place early on Work Orders issued for ALL purchases Monitor, Monitor, Monitor And I promise to change one thing starting tomorrow!!!

Right from the Start Importance of a Pre-Construction Meeting To Minimize Risk. Presented By: Norb Slowikowski

Right from the Start Importance of a Pre-Construction Meeting To Minimize Risk Presented By: Norb Slowikowski Importance of Pre Construction Meeting Learn How to Align Expectations Develop Win/Win Relationships