About 10 years ago, I was skiing with an old college buddy in Jackson Hole, Wyo., on a beautiful, sunny day in February. He had just been promoted to vice president and partner of a Boston-based chemical company. Not bad, I thought, for a 31-year-old ski bum like myself.
As we were going up the lift, he boasted of all the employees he would be leading and the equipment they would be using. Thats when I said, I guess youre in the construction business now.
He said, No way, I dont want to have anything to do with that. Weve already made two facility improvements since Ive been there, and they just took too much of my time. I just want to stay as far away as I can from that whole scene.
I congratulated him on his insight, then told him that as long as he and his employees were working under a roof, hed better get used to it. The aggravation he was experiencing comes with business prosperity and, with luck, will never go away. I think I ruined his vacation.
You can look at the building and expansion blues two ways: act as your own general contractor or not. Either way has its rewards and pitfalls. But knowing your expectations and the role you will play prior to project commencement can increase the rewards and eliminate the problems.
Either choice requires a keen eye and a load of diplomacy, but a business owner who wishes to act as his own general contractor for a project needs to seriously evaluate a number of concerns.
1. Review the amount of time you can devote to following a project.
If the company is going to demand your time for normal business oversight, recognize that obligation from the beginning, as it could come at a time when your time is also critical for the project. A careful analysis of the individual time constraints needs to be performed, factoring business, family and any other prior commitments that have been made, including volunteer commitments. Sacrifices will have to be made for the building project to be successful.
2. Acting as general contractor requires more than a modicum of technical and craft skill knowledge.
How the various subcontractors interact is critical in achieving an efficiently organized and sequenced order of work. Failure to consider any number of what appear to be miniscule details can increase project duration and cost. Simple considerations such as utility routing can make the difference between on-time completion and excessive downtime. And downtime can negatively impact productivity, sales and customer service, none of which is good for business.
3. Understand the availability of resources to effectively coordinate any multidisciplined building activity.
The first subcontractor on site, if left uncontrolled, can take over whatever space it needs. This can have dire consequences on subsequent subcontractors and thus, on the projects scope and results.
4. Recognize the interaction that needs to occur as your project reaches a state of testing and operation especially to maintain safety.
Good communication between all parties is an essential ingredient for success. Identifying what needs to be completed first and by whom is an absolute must.
5. Failure to provide a good plan and communicate it effectively will doom a project to failure.
As the saying goes, the devil is in the details, and general contracting success comes only with attention to detail, communicating effectively, understanding the job scope and identifying the roles and responsibility of the parties involved.
Those who want to tackle the role of general contractor must make a commitment to the project before assuming the responsibility of a major undertaking. This is not rocket science, but if things get out of hand, it can feel like it. If you decide to act as your own general contractor, remember the following:
- Know your budget. If you arent sure if your budget is realistic for the work you want done, you may be in over your head. Reconsider being your own general contractor, or at least put together a team of contractors (across all disciplines) which you know you can count on to help put a realistic budget together.
- Know your schedule. If you arent sure your schedule is realistic, get feedback from your subcontractors. If you have hired honest, capable and qualified subcontractors who know they are part of your team to get your project done, they should demonstrate as much interest in helping you make sure your schedule is realistic as you do.
- Put in the time. Understand the amount of time you will personally devote to the project.
- Understand what needs to be done. You dont have to be a structural, electrical and mechanical engineer with a keen eye for interior decorating (although it would help). But, be familiar with the scope of all of the trades.
- Dont be afraid to make decisions. Be ready to make the decisions to answer the questions you havent yet thought about. They will be asked. You have to perform if you want your team to perform.
- Dont forget the details. Keep in mind your need for permits, utility clearances (one call), drawings, scope clarifications, insurance, safety issues (barricades, clean-up, signage), trash removal, coordination of trades, inspections, testing, impact on business operations and so on.
- Buy value. Hire the subcontractors who give you the best value. The most critical contractor on your job, for example, may be the electrical contractor if your project is a manufacturing line or an office with fancy lighting and lots of computers, or the mechanical contractor if your project is replacing the rooftop equipment. Identify the critical contractor and choose someone who has the ability to perform. Choose one on whom you can rely to help assemble a strong team or assist with the details.
- Add value. If you decide to be your own general contractor, be sure you bring something to the table. Put together a quality team of contractors and rely on their ability and expertise, as they will rely on you to take an active role with decision-making and coordinating. This project will take you away from your daily activities, so if you are losing more in opportunity costs than you would spend to hire a general contractor, reconsider your role.
- Know value. As a business owner, you dont want to pay too much, but remember that its often worse to pay too little.
As my friend learned on the ski slopes, if you go into your next construction project knowing what to expect, it wont ruin your vacation.