Construction trades have always been about learning on the job, however, none of those practical skills prepared me for the reality of running a subcontracting business. It meant that on top of long days on-site in all types of weather, my brothers and I would be putting in the mental hard yards of doing the books, planning schedules, and making endless phone calls to clients, suppliers, and staff. This is what it takes to build and grow a successful subcontracting business in commercial construction, and it is a challenge navigating the kind of financial, legal, and logistical complexities you encounter.
A subcontractor also has to keep pace with evolutions in design, shifting supply chains, new client expectations, regulatory shifts and be always on top of quality, safety, and environmental requirements. In just the past couple of years we’ve seen new requirements emerging around digital lodgement of designs and plans by subcontractors, tighter requirements around quality assurance, a rising number of projects specifying for low-carbon concretes, and the implementation of Security of Payments legislation.
Of course, every bit of that effort is worth it to know that along with building projects, a business is creating a solid reputation for quality and reliability and generating a steady flow of work for staff. I learned through experience there are a few ways to trim the midnight oil involved while also improving the fundamentals of how the business, its people and its projects are managed.
Lesson #1 – Reinforce the foundations
Being a successful trade subcontracting business owner means mastering more than just the trade skills. It means having financial acumen, human resources acumen, great organisational skills, and an element of marketing savvy. These are not always skills you pick up at TAFE during an apprenticeship, or in your early years on the tools and on-site.
It’s important to get advice from organisations and individuals who ‘get it’, particularly in areas like educating yourself on contracts and negotiation skills, developing a pricing schedule, and managing business financials. It’s always going to be better to build the capacity internally to manage the cashflow and outgoings than it will be to outsource, because being invested in the success of a business on a personal level gives people an edge when it comes to finding smarter ways to get things done without cutting corners.
Aside from financial management, other operational areas you might want to grow your skills in include operations planning, relevant codes and standards, digital skills and customer relationship management.
There are many different options for bench-testing what you might need to brush up on. For example, the Fair Work Ombudsman has numerous resources and free training in staff-related matters; the NSW Government and Victoria Government offers resources including business advice (and other states also have similar programs); and the Australian Building Codes Board provides free access to all parts of the National Construction Code plus other resources.
For the most effective planning and goal-setting process, digital packages will give you the most efficient options for integrating all the different elements. They are also the core skill for activities such as setting up a social media presence for your business, establishing seamless staff communications and for linking your site activities and your back-end, office functions. Construction operations management software can be a terrific way to both hone your digital skills, and then put them into practice in a way that delivers immediate efficiency gains.
Lesson #2: People are the greatest asset
While expanding your team is a positive sign of a business doing well, when we say ‘growing’ your team we don’t just mean numbers on the payroll. It’s also about enhancing the skills, abilities, and competencies of all your people and creating the right culture. You want people that will do their best work on every project, who are committed to quality, compliance, safety, and ongoing learning.
This kind of culture also helps you recruit and retain the best staff.
The competition for talent is real in the construction industry, and with construction still seen as somehow less attractive by school career advisers than university-based career paths, the number of young people leaving school and entering the trades remains small.
Couple that with entrenched attitudes around whether women have the capability of pursuing a construction trade, and unclear career pathways for older workers, and it’s tough to recruit at apprentice level, and even tougher to find experienced, capable qualified people.
So, ensuring you provide continuous training, skill development and advancement opportunities for your existing staff is crucial. For new recruits, this means you can develop in them the habits of quality, workmanship, code compliance and safety awareness and the innovation mindset you want your people to have.
For your senior staff, ongoing opportunities to evolve and progress keeps things interesting and encourages them to find better ways to deliver exceptional results – and that’s a win for the whole business.
Lesson #3: Get smart about goals
You’d be familiar with forecasting as a crucial tool for planning works, staging, staff management and financial management. But when it comes to finding efficiencies, I have found ‘backcasting’ can be a very useful way to rethink processes you may have been taking a ‘set and forget’ approach to.
Backcasting starts with identifying where you want to be, then identifying what steps you would need to have taken to get there. It breaks a goal down into measurable actions, rather than building towards it from a zero start.
For example, if your goal is to grow the business profits by a specific amount, then using backcasting you could identify how that amount was achieved, for example, labour hours saved on administration, over-ordering of materials cut by a specific percentage, reduction in cash lost to defects or rework, and variations or scope creep occurring less often.
Then you look at ways you achieve those specific things, for example, switching from paper-based systems to an integrated digital timesheets, payroll and accounts system; shifting to digital forms and site diary entries to improve compliance and safety, and reducing the risk of disputes or improving your negotiating stage with clients to reduce their enthusiasm for variations (such as introducing clear pricing and processes for them).
This is different to a forecasting approach, as it clearly highlights areas of the business where a strategic improvement in your operational approaches can get you to the goal of a more solid bottom line.
Lesson #4: Do risk management planning
On every job, we fill out Safe Work Method Statements that identify risks and appropriate mitigations – but we may not do the same for our business, and that’s an Achilles heel. There are multiple areas of risk to consider: financial, legal, reputational and regulatory, just to name a few.
A comprehensive risk management strategy helps reduce the anxiety level by mapping out what the threats are, and how you can navigate them. You can rate risks according to both likelihood, and severity. Those requiring the most attention are the ones with the most severe impacts and the highest likelihood of occurrence – but don’t discount those that are extremely severe but less likely.
Take a measured approach and look into your options for appropriate insurances beyond the usual insurance for workers compensation, professional indemnity and your office, plant and equipment. Check also that any existing policies do cover you for any items identified in your risk matrix, for example, worker injury during travel to or from site.
Contracts are another area where a cool head and a critical eye is essential. It may be worth investing in some outside advice to eye-over any contracts with new clients – keeping in mind that advice is a deductible expense. You can be sure that the head contractor has lawyers on fast-dial – it makes sense for subcontractors to ensure they are accessing resources to level the playing field.
Lesson #5: Grow your network
In this sink or swim industry where clients look at subcontractors with an eye to saving on costs, being on top of the latest industry approaches and trends is essential. It just might be the thing that helps your existing clients stay loyal – and make your tenders for new clients stand out from the pack.
One of the best ways to do this is to be actively involved with relevant industry associations including specific trade associations, local chambers of commerce, local business networking groups and the national organisations such as the Australian Construction Industry Forum (ACIF), Supply Chain Sustainability School or the Building Products Industry Council.
Being on the mailing list for these kinds of organisations also means you get the latest news from the source, have opportunities to attend events and can cement your reputation in your region and within your industry sector.
The Supply Chain Sustainability School also offers free training and CPD on all the major environmentally sustainable design requirements and approaches that are increasingly becoming standard in the industry. This can also become something you encourage your people to engage with as part of your staff growth and retention strategy.
Onwards and upwards
About the author
Daniel Ouliaris, Founder and CEO of Neo Intelligence, is a visionary leader with a deep understanding of the subcontracting industry. With a background in construction and a knack for innovation, he has been instrumental in revolutionising how subcontractors operate in the digital age.
Faced with operational challenges within his family’s subcontracting business, Daniel conceived Neo Intelligence as a solution to not only address immediate needs but also lay a strong foundation for the future. His innovative mindset and construction background have been the driving force behind our company’s mission.
Daniel’s intimate knowledge of the subcontracting industry sets Neo Intelligence apart. He leads the charge in introducing cutting-edge features to our operation management software, helping clients navigate their digital transformation journey. His unwavering dedication to empowering subcontractors and advancing the construction industry underscores our commitment to excellence.
As a visionary entrepreneur and industry expert, Daniel Ouliaris continues to shape the future of subcontracting, making operations more efficient, profitable, and sustainable.
If you are interested to discuss this topic or other matters related to digital experience in the commercial subcontracting industry, please reach out to connect with Daniel on LinkedIn or email him at daniel@neointelligence.com.au
