building relationships | Boots on the Ground

July 5, 2014

Outstanding Subcontractors

The closing speaker at the annual meeting of the North Carolina Subcontractors Alliance was Rick Handford, president of Myers and Chapman, Inc. Myers and Chapman is one of the larger general contractors based in Charlotte and serves North Carolina and the surrounding states. Mr. Handford has been and is very supportive of subcontractors in general and the NCSA in particular, which endowed him with their Golden Boot award in November, 2013.

Mr. Handford began by stating that Myers and Chapman, like most commercial general contractors today, does not do any of the work. Their function is to facilitate the construction of a building. They put together the bid, negotiate the contracts, manage the actual construction and manage the risks. The actual work is done by subcontractors and their suppliers. Without subcontractors, the general contractors would be unable to perform their job. And, without outstanding subcontractors, the jobs can’t be performed on time, as specified and profitable.

He said that Myers and Chapman believes that the Charlotte market has depleted its inventory of desirable commercial properties and is predicting a ten year period of continuous growth. He also believes, based on past experience, that this will be a perilous time for subcontractors and encouraged the NCSA to reach out to the small subcontractors that will attempt to perform larger work and residential subcontractors that attempt to move up to commercial work without the proper knowledge.

He also cautions subcontractors to not try to take on more work than they can do comfortably. There is a shortage of skilled tradesmen, and vendors have longer lead times and are raising prices. And, the big thing is you may end up with all your working capital tied up in inventory and retainage. Without available working capital, you are out of business.

Mr. Handford also presented a poster that hangs in Myers & Chapman jobsite trailers. It details what Myers and Chapman expects from subcontractors and what it takes to be on their team:

1. Are committed to safety. – The costs of safety and insurance can be substantial.
2. Communicate well with the team. – Advise them if there are delivery or money problems, they may be able to help you through a temporary condition.
3. Meet schedules. – The schedule is important to the profitability of the job and the failure to meet them impacts everyone who comes after you.
4. Know the job. – Your workmen should arrive with drawings and all the tools and equipment to do their job.
5. Do it right the first time. – The cost of doing it right is always less than re-doing defective work.
6. Represent us well with our clients. – Workmen should always be presentable and respectful on the job. They not only represent the subcontractor, but Myers and Chapman as well.

I put a copy of these in my company’s conference/training room and I strongly advise everyone to do likewise.

June 28, 2014

Report on National Affiliation

The following report on National Affiliation was delivered my me (Art Rouse) at the NCSA Annual Business Meeting on June 18, 2014:

North Carolina Subcontractors Alliance, Inc.

Annual Meeting – June 18, 2014

Topic: National Affiliation

One year ago, the ASAC Charlotte Chapter changed its name and disaffiliated with the American Subcontractors Association and ASA of the Carolinas. At the Board of Directors meeting about a week later, I was asked as Past President, to investigate the possibilities of national affiliation and make a recommendation.

My first meeting was with ASA. Since my company had already paid for the ASAC Convention and July dues, I attended the convention. During the course of the convention, I was able to have a meeting with Walter Bazan, outgoing ASA president, Jack Austhof, incoming ASA president, Brian Johnson, incoming ASA vice president and Marty Swain, ASAC president. During the course of this meeting, we had a frank discussion of the reasons leading up to our decision to leave ASAC and our intention to affiliate with a national organization after NCSA stabilized its finances. I made it clear that an affiliation with ASA would need to be direct and not with ASAC. Bazan and Austhof asked to have further discussions when that happened to see if a direct membership would be available. Ensuing phone calls with Jack Austhof did not lead to an offer of direct affiliation, only an offer to review the charter with ASAC to see if it could be done in the Carolinas.

My next contact was to the National Subcontractors Alliance. I spoke to Lynne Black, executive director of NSA for several hours over the course of two days and for a couple hours more with Pete Snider, executive director of the Subcontractors Association of the Metroplex (Dallas-Fort Worth.) I got a good feeling for how NSA operates and how it differs from ASA.

The NSA has two meetings per year. One is the Executive Directors Meeting in Chicago in the fall. They invited us to send our ED to the meeting to get to know the other ED’s and how the NSA functions. We sent Margaret to the meeting and she came back with a very favorable report.

The other meeting is the annual Spring Conference. This year it was held in Denver, Colorado. I attended on behalf of the NCSA. There were two excellent seminars, one on building your business’ brand and the other on embracing technology as tools rather than toys. An example would be utilizing video conferencing to broaden the associations’ reach and how easily it can be done with Google Hangouts.

There were also breakout groups. While the lawyers’ council was meeting, the ED’s were having their meetings and the volunteer leaders had a workshop on increasing and retaining membership. There was plenty of time to network with the other chapter leaders as well as a great dinner at a steakhouse overlooking the Denver and an entertaining tour of the ghosts and scandals of Denver. Since the NSA is for the benefit of the members, the NSA only charges the actual cost of the conference to members. It is not a profit making venture like the ASAC convention. The total cost for me, including the airfare, was less that it cost to attend the ASAC convention last year. At the end of the conference, the NSA board held a special meeting and voted to offer membership to the NCSA. After my report and recommendation to the NCSA board, it was voted to affiliate with NSA.

That is really how the NSA works. Rather than a big national organization headquartered in the most exclusive section of the Washington DC area, the NSA staff consists of only the Executive Director and her assistant. They work out of space donated by one of the member companies. What makes them great is the network of business and legal contacts across the country to lean on for advice and guidance. Almost everyone came up to introduce themselves, give me a business card and an offer of help anytime it is needed. I have been able to use those offers twice already to check out general contractors from out-of-town.

All of the NSA member chapters are disassociated ASA chapters. Unlike ASA, you are members of your local organization, not the national association. The NSA is an umbrella organization of member associations. The NSA represents over 3,500 member companies. The local association pays an annual membership fee of $800 to $2500 depending on the size of the association. The rest of the local members’ dues stays with the local association. That means the local association is solidly funded and can spend their efforts on living up to the NSA motto: “Our business is helping you do yours,” and the NCSA pledge of Advocacy, Education and Networking.
The NSA itself is a member organization of ASC, the Associated Specialty Contractors. The ASC is an umbrella organization of 9 national associations with over 25,000 members. So, when we need representation in Washington, we carry the voice of 25,000 companies.

The NSA is a stakeholder and on the governing committee of Consensus Docs. The NSA has a benefit package of negotiated discounts and special rates for UPS, Fedex, Office Max, YRC Freight and other national service vendors and suppliers.

The NSA is the antithesis of ASA. It is locally focused and low overhead. Each local association is independent and self-governing. It is low overhead so the NCSA can have the benefits of a national affiliation without breaking the bank.

September 21, 2013

In Business, Relationships Rock!

First Posted September 8, 2013

In 1988, a man named Harvey Mackay wrote a book that set the business world on fire. It was called “Swim With the Sharks Without Being Eaten Alive.” It is an entertaining and enlightening handbook to be successful in your career and personal life. It is a networking bible. It established Harvey Mackay as a respected author and columnist.

The book chronicles Mackay’s career from a recent college graduate trying to find a job, becoming successful selling envelopes, to buying a failing envelope company and turning it into a huge success. The book has been re-printed and needs to be in every businessman’s arsenal.

As a construction Subcontractor, we are losing the personal relationships we have with our customers, the General Contractors. Invitations to bid are sent out electronically. To view plans, we go onto a contractor’s FTP site or to a service like iSqFt. We download and print plans or order the prints from a third party printing service. We send our bids by fax or email. General Contractors now have a “pre-construction” department that puts the bids together before handing them off to the project manager, sometimes with a purchasing department in between. Unless you have a relationship with a contractor, or a really low price, your lines of communication with the contractor are limited.

Getting to know the people in the company you want to do business with are more important than having the lowest price. Contractors are looking for the lowest responsible bid, and when the contractor knows you, you get a seat at the table when the job is bought out. What Harvey Mackay wrote in 1988 is relevant today, except that part about a Roladex. If you use Mackay’s principles, including the “Mackay 66,” the things you should know about your client, your business relationships will be greatly improved. For you youngsters, it is even available as an e-book.