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Addition by sub-traction

  • SIMA
- Posted: November 4, 2017

By Thomas Skernivitz

Belknap Landscape in Gilford, NH, capped the snow season by throwing its annual winter appreciation party. Employees, as always, were invited. So, too, for the first time, were the subcontractors who had just partnered with the New Hampshire-based company.

“Last year was our first year including subcontractors, but it won’t be the last. It was very successful,” Jay Rotonnelli, ASM, an account manager with Belknap Landscape, says. “We didn’t realize how much it meant to them to be a partner, not only through the winter but also the other parts of the year. But we sure do now.”

From a contractor’s standpoint, great relationships with subcontractors are fostered when contractors make them part of the game, Rotonnelli says. That means not fearing the possibility that they might steal their accounts or ascertain their numbers, he says. “If the relationship is solid, and the contractual agreement is sound, there should never be an issue.”

So, how do subcontractors make the contractor invite list? Rotonnelli poses several requisites:

  1. Do they have the proper equipment?
  2. Is the company safe?
  3. Can they staff accordingly?
  4. Can they commit for any and all hours of the day or night? If not, what are they truly able to commit to?

“We never make our subs feel as though they have to take all of the accounts we offer them,” Rotonnelli says. “From my perspective, this would only set them up to fail if we pressured them beyond their true capabilities and resources. We want this to be a partnership; have them be successful and profitable as well. We feel this is a win-win for both parties.”

Justin Hauge, a commercial account manager with Curbside Landscape and Irrigation, outside Minneapolis-St. Paul, MN, says good subcontractors self-perform all aspects of service needed on a site. “We look for subcontractors in different industries who usually have the needed equipment to complete the demanding workloads that would otherwise sit unused during the winter,” he says.

Selling strategies
Subcontractors, meanwhile, sell their services to contractors in various ways.

Phoenix Enterprises, in Liberty, NY, eschews marketing in favor of pursuing contractors. “When we see much larger companies or companies that are not necessarily local providing services in our area, we take the initiative to contact them and see if they may be open to the idea of subbing,” Owner/Operator Daniel Ratner Jr. says. “In addition, we have carved out a very nice niche for commercial snow plowing in our area. Generally, the very large companies who primarily only use subcontractors find us easily on the internet or in the phone book.”

Justin Walkow, ASM, the owner of 24/7 Snow Removal in Cumberland, RI, says unique marketing techniques typically prompt inquiries from 10 to 15 new property management companies each year. “We use tactics that make us approachable, qualified and competitive on pricing,” he says.

Trade shows do wonders, according to John Langton, the co-owner of the Langton Group in Woodstock, IL. Jeremy Gildow, the owner of Big Green’s Lawn Service and Snow Plowing, leaves it to his company’s website, the Yellow Pages, and word of mouth to market his Lima, OH-based firm. “We’ve put our brand on all our equipment and our people,” Gildow says. “When we provide quality service, it is recognized.”

Curbside Landscape and Irrigation hires most of its subcontractors through networking and long-standing relationships, Hauge says, while noting that subcontracts represent, on average, about 30% of his company’s portfolio. “We start our hiring/vetting with a questionnaire, which leads to multiple interviews between key personnel of both parties. We then assess the equipment being used, followed by training of operational procedures and our field management software,” he says.

For Belknap Landscape, its subcontractors who work in the winter frequently do so in the summer. Some are excavation companies, some are asphalt paving companies and one is even another landscape contractor. “We maintain and nurture the relationships all year long,” Rotonnelli says, adding that about 20% of his firm’s revenue is supported by subcontractors. “It’s a good fit for them, and it’s a good fit for us.”

Subbing pros/cons
The best aspect of being a subcontractor, Ratner says, is access. “There are times when it certainly is a positive to deal directly with another contractor rather than the property owner, especially when that contractor has worked with that person for a long time,” he says. “They have an established relationship. All we are trying to do is keep that going and keep everyone happy.”

Generally, it is easier to deal with other contractors when an issue arises, Ratner adds, “because they have firsthand knowledge of how things actually work.” In addition, from an insurance standpoint, it can help to be a sub because liability is then passed among more people should an issue arise, he says. “We all know how important insurance and protection are in the winter maintenance world.”

The success of Big Green’s Lawn Service and Snow Plowing in Bellefontaine, OH, has gone to another level, Gildow says, because the company does not have to hunt for jobs as a subcontractor. The contractor has its own sales force. “It’s almost like having a free salesman,” Langton says. In addition, subcontracting also creates increased route density for the Langton Group, its owner notes.

On the downside, subcontracting means less profit and an extra layer of communication, Ratner says. “The customer calls the contractor to state an issue they may be having; that person then calls you to relay the issue. It is amazing how much information can be misconstrued in one extra phone call,” he says. “But good records, photos, etc., always quickly defuse those situations.”

Langton laments slower payments to subcontractors as well as having to work off multiple platforms. “You still need to use whatever recording program you’re used to but also theirs,” he says.

Finally, “not every contractor is great to work with,” Gildow says. Establishing relationships with contractors goes a long way, he adds, especially their regional managers, “who go above and beyond with me to establish solutions to the problems we come across.”

State of the Industry 2017

  • 71% - Respondents who do not work as a subcontractor.
  • 51% - Of the 71%, respondents who say they plan to increase their presence in snow and ice.
  • 39% - Contractors who plan to grow their presence but have less than $250,000 in snow and ice revenue. Subcontracting can be a great first step to growth.

Tom Skernivitz is a veteran trade publication journalist based in Cleveland.

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