Rule No. 1: Be honest about your capabilities.
One of the best ways for a small construction company to grow is by partnering with a larger firm on projects. And while these jobs can lead to increased income, they also open the door to other benefits, too.
“It’s a learning opportunity,” said Marvin Carolina, the vice president of diversity at JE Dunn Construction. “I think that’s the biggest thing.”
Partnerships allow smaller construction firms to be part of huge projects that otherwise would be beyond their reach. It’s a great way for contractors to expand their knowledge base and “up their game.”
How can small contractors make themselves attractive partners for larger companies?
“First and foremost is be honest,” said Jason Lofton, the president of QTI Inc., an Olathe-based general contracting services provider. The company has won a series of important jobs from major clients such as Kansas City Power & Light and Burns & McDonnell.
Sometimes smaller firms aren’t as up front as they should be about possible concerns—for example, a less-than-perfect OSHA experience modification rating—because they fear the larger firm will cut them loose. But the truth almost always comes out, and when it does, the smaller company will look dishonest, a death blow to their credibility.
In many cases, the larger company will be willing to help the smaller partner through a problem. For example, a smaller contractor might face a cash-flow issue. As a solution, the bigger company could pay its invoices in 10 or 15 days instead of the traditional 30 to 60.
Construction entrepreneurs also should be honest with themselves before pursuing a subcontracting opportunity with a larger firm. Does their company really have the capacity to do the job and do it well?
“Because sometimes,” Lofton said, “it’s just not possible.”
Smaller contractors might not have the resources of their larger partners, but the best ones will adopt the behaviors of a big company. They’ll be organized. They’ll have procedures for starting and closing out jobs, and other standard tasks.
“You understand construction terms when people start talking in this language,” Carolina said.
Larger construction companies like doing business with smaller firms. In some cases, the junior partner can supply badly needed manpower. In others, these contracts can help the larger firm meet its goals for doing business with small or disadvantaged companies.
And many large firms want to see small businesses succeed because, once upon a time, they were small businesses, too, Carolina said. “They’ve been there.”
