Choosing a General Contractor

September 1, 2004

6 Min Read
Choosing a General Contractor

Choosing a General Contractor

A new attitude for a new market

By L. Bruce McCardle

I was recently reminiscing with an industry colleague about thegood old days in the steel business. The punch line was, those days wereabout six months ago. To put things in the terms of Dr. Spencer Johnson, the cheesehas not just been moved, it has become hard to find and very expensive.

Since the crisis in the availability and cost of steel, thedaily routines of many self-storage suppliers have changed. Some things we usedto take for granted are no longer. We have to work harder to accomplish whatused to be simple to achieve. We have to pay more attention to every task. The industry haschanged significantly, and to not make proper adjustments in the way that wethink and conduct business would be detrimental to our companies and ourcustomers. To continue doing business as usual would simply not be wise.

The bottom line is, you can put whatever spin you want onrecent events in our industry, but no amount of catchy advertising or thistoo shall pass thinking is going to make this one go away. There areshortages and price increases in steel, concrete and lumber. Fuel surcharges arethrough the roof, and shipping has become a problem. At some point in the nearfuture, interest rates will start to rise. Whether we like it or not, andwhether we choose to recognize it as relevant, the commercial constructionindustry and its market have changed, and more changes are coming.

As I shared this list of woes with my colleague, a friend andcustomer of mine, his reply was, Thats your problem. I just need to getbuildings from you. He makes a good point. The American public is still goingto buy stuff and will still need to store it. And developers are going tocontinue to build. Selfstorage facilities are still a sound investment thatprovides a great return.

With all of this in mind, it is obvious the same old routinefor selecting a general contractor is not going to cut it. To excel in ourbusinesses in this altered market, a new attitude is a must. Therefore, a novel approach when selecting a generalcontractor for your self-storage project is paramount.

Such a Deal!

Instead of looking at theoretical or academic reasons forchoosing a contractor, lets look at the most common deciding factor: price. Until about six months ago, every builders goal seemed tobe to have the lowest price, usually topped off with an unreasonably shortconstruction schedule. Customers said, I want the best, I want it cheap, andI want it fast. We laugh at this now, but it is exactly what was driving thecommercial construction market. These days, however, with the costs of somematerials having doubled and some lead times exceeding 12 weeks, this is nolonger a realistic expectation.

I am always amazed when successful, intelligent businesspeopleevaluate bids for construction and respond by saying, These three bids arereally close, but this one company is 30 percent cheaper. Wow, am I getting adeal! Usually, theyre not. Even in this dynamic business environment, youstill get what you pay for. If you shop construction as a commodity, you willend up with materials and labor. If you hire a general contractor to provideprofessional services, you will likely end up with money in the bank.

Dont Should on Yourself

Keep in mind the final result of the construction process willbe a product you are going to have to live with every day, as long as you ownthe facility. How many times have you made a major purchase or completed asignificant project, having skimped a little here, cut a corner there, or madedo with something, and later thought, I should have . . .?

Of course you have a budget to consider. Also consider that paying for the services of a good generalcontractor can result in getting more for the money you spend. A contractor withexperience in building selfstorage will save you time, help you avoid commonmistakes, and assist you to planning and coordinating with other components ofthe industry that are key in making a facility work.

When hiring a general contractor, the most important thing isto make an informed decision. I shouldnt have to say it, but I am going to:Check as many references as possible, old and new. It surprises me how oftenowners choose their hired professionals without talking to those who have workedwith them. Also check a contractors credit. Ask subcontractors and suppliersabout their experiences working with the company. This advice seems basic, butmany people tend to overlook the obvious.

A Wise Decision

Maybe choosing the right contractor has more to do with youthan it does the service provider. Maybe there are some questions you should askyourself before you start interviewing potential hires. Here are three keyquestions to address up front:

1. How much money do I have?

2. How much expertise do I have?

3. How much time do I have?

Most of you have careers or other businesses. You have family and friends and hobbies, and now you areconsidering whether you can be your own general contractor, build your ownstorage facility and save a ton of money. Over the years, I have watched alot of people try to save money this way; usually, it costs them more in theend. General contracting is a profession and more than a full-time job. You may be very sharp and good atwhat you do, but think of how many years, how many hard knocks it took foryou to get to your level of success.

Decide what expertise you can lend to the construction processand how much time you can truly commit. When you have honestly answered thesetwo questions, negotiate with a contractor and determine what your contributionsare worth. A construction budget should include more than materials and labor.If you are going to be involved in the project, decide how much you are going todo, where you are going to need professional services, and budget accordingly.You may find the time you take away from other endeavors will cost you more thanyou can save by doing things on your own.

Building Relationships

In business, our success is usually due in part to our abilityto judge peoples characters. In choosing a contractor, you are about to entera relationship. You dont necessarily have to like this person, and youprobably dont want to choose someone who is just like you.

As in any relationship, there are going to be good times andchallenging moments. Choose someone you feel you can trust, someone with whom youcan be upfront, and who will be straight with you in return. Choose someone with whom you feel comfortable dealing. One ofmy mentors always said to new clients, I want us to be as good of friendswhen this project is over as we are now before it starts.

In the end, the lowest price wont ensure a contractor canaddress all the other essential issues. Look past the slick sales presentation,the we are better than them marketing, the weve been doing it thisway for 40 years spiel, and the no problem reassurances. If it was myproject, my choice for a contractor, subcontractor or supplier would be the onewho said, The construction market is changing and can be really volatileright now. We are going to do all we can to stay on top of it, quickly adjustand respond accordingly, and keep you involved and informed at every step.

L. Bruce McCardle is the eastern division manager for MakoSteel Inc., a nationwide supplier and installer of self-storage buildings thatdraws more than 80 percent of its business from repeat customers or referrals. Mr. McCardle has been involved in the metal-building andconstruction industry for more than 20 years. Look for his presentation at theupcoming ISS expo in Miami. For more information, call 888.795.7594;

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