Operating a construction business is no easy task. Between finding clients, coordinating with suppliers and subcontractors, managing employees, keeping up with industry standards, and more, it can be difficult to find the time for any other work you may need to do. While hiring employees is an option, it’s not always the most appealing choice. You’ll have to take on additional costs and complete more paperwork. Another option is to hire a subcontractor when you need help with certain jobs. This can be cheaper than hiring an employee, and they can better suit long-term or temporary projects, such as excavation work.
What is a construction subcontractor
A construction subcontractor is a company that provides additional labor and materials to complete a job. Hiring a subcontractor can be better than hiring employees because the subcontractors themselves will handle much of the responsibility, such as insurance and permits. Your business won’t have to deal with these costs or liabilities which means you’ll pay less in taxes and stay compliant with all regulations.
The benefits of hiring a subcontractor
Working with a construction business subcontractor can have huge financial benefits for your company. You’ll pay less in taxes and avoid costly paperwork, permits, and insurance. By letting an independent contractor work on-site, you also won’t have to worry about paying them any benefits or taking on any other legal liabilities. You can even require a subcontractor to have their own liability insurance as well as workman’s compensation, which will still save you money and time.
Additionally, if you need help for a short-term project, hiring a subcontractor may be the best option to get your job done quickly and correctly.
The drawbacks of hiring a subcontractor
One disadvantage often comes from the short-term nature of some projects, such as excavation work. You may need extra hands on-site for just a few days or weeks, and then they’re gone. This can lead to increased costs if you have to hire employees once the subcontractors are gone. It can also be difficult to plan your budget and estimate job costs if you don’t know exactly how long the subcontractor will need to complete the work.
What’s more, hiring a construction business subcontractor can sometimes limit your control over who is working on-site and what they’re doing. If you hire an employee, you have the right to set specific requirements for a job and can ensure they meet those requirements to stay on-site. This is not so with subcontractors. You’ll need to rely on their experience and expertise as well as the reviews from past clients to make sure they’re doing a good job.
There are several other things to consider before hiring a subcontractor. If you hire someone from out of town, make sure they have the necessary work permits and registration for your state or local area. You can also purchase workers’ compensation insurance from a third-party provider to protect yourself if anyone gets injured on-site. This way, you won’t get stuck with unexpected medical bills. Additionally, you’ll want to do your due diligence and check references if you hire someone with no previous job experience.
How to find the right subcontractor for your project
If you’re looking for a subcontractor, consider hiring one who works in the same industry as you. They will likely have more experience than someone who exclusively does masonry work. A company that has experience with commercial construction projects may be better for office renovation work than a contractor that focuses on residential homes.
When you do hire someone, ask to see their insurance certificates, permits, and licenses beforehand. Make sure they have all the necessary certifications to perform the job correctly and legally before you allow them on-site.
Tips for avoiding problems with your subcontractor
Before hiring a subcontractor, you must already have a good idea about the project at hand. Thoroughly understanding what the project entails will allow you to make more informed decisions.
For instance, if your construction project requires excavation, do you think it would be beneficial to your business to hire a subcontractor to do the job, or would it be better to purchase an excavator yourself? Having your own equipment is an investment, but do you have the ability to purchase it? And if you do purchase an excavator, would it be more beneficial for your business if you hire a subcontractor to operate the machine instead of purchasing a construction business operator’s license yourself?
These are all important things to consider before hiring a subcontractor. Consider the types of jobs they have done previously and find out what they specialize in.
Hiring a subcontractor can be an excellent way to save money and time over hiring employees for short-term projects. However, you’ll want to earn as much information about the contractor before you hire them so that you can ensure they’re doing good work and protecting your business’ interests. For