Subcontracting in the fire protection industry can be a powerful way to expand your service offerings, meet customer demands, stand out from your competitors, and grow your business. However, it requires careful planning, clear communication, and a solid strategy to ensure success.
Whether you’re new to subcontracting or looking to refine your approach, understanding how to effectively manage these relationships and workflows is crucial.
Below, we’ll explore five essential tips to help you navigate subcontracting in fire protection – from vetting the right subcontractors to ensuring transparent invoicing and clear communication with your customers.
1. Vet your subcontractors appropriately
In many ways, your subcontractors are an extension of your business. That’s why it’s important to choose them carefully to ensure you maintain the customer relationships you’ve worked hard to cultivate. If you don’t already have an established network of vendors, you can start by looking for contractors in your area who are members of trade organizations like NFPA, AFSA, NFSA, or NAFED, for example.
Once you’ve landed on a shortlist of vendors, don’t hesitate to vet them by verifying their credentials, licenses, and insurance, and asking about their previous experience and how similar projects have gone for them. Again, your subcontractors will be a reflection of you and your business, so it’s imperative you choose wisely.
With that said, also keep in mind that your subcontractors have every right to do the same before committing to working for you, so you’ll also want to make sure your business is in good standing when you’re sourcing your vendors.
2. Price your services strategically
Sometimes, subcontracting out work is less about making a large profit and more about maintaining relationships with customers who need services beyond what the primary contractor can provide.
Either way, it’s important to make sure you’re not taking a loss at the end of the day. Some contractors simply add a 10-15% administrative overhead on top of the bill they receive from their subcontractor; others may have more complex pricing strategies. And, as we’ll discuss below, don’t underestimate the administrative overhead it can take to subcontract out just one small job successfully. Ultimately, taking a little extra time to ensure you’re staying in the green and accounting for technician time, office time and materials is worthwhile, especially before you start subcontracting out at scale.
3. Align on how you’ll approach invoicing
In the same vein, establishing early on – both with your customer, and your subcontractor – on how you’ll handle invoicing is a smart move. Many subcontractors prefer “progress payments,” where the subcontractor is paid incrementally at certain milestones of a project, in line with the AIA (American Institute of Architects) billing processes. This ensures they have the cash flow necessary to keep materials and labor on track without having to wait until the project is fully completed.
Before proceeding with a job, make sure all parties are clear on when they’ll need to make a payment or get paid. Clear communication here can help avoid misunderstandings and payment delays down the line. By setting these expectations up front, you reduce the risk of payment-related issues, ensure a more collaborative working environment, and build trust between yourself and your customers and subcontractors. That brings us to our next point …
4. Consider transparency with your customers
While communication around subcontracting can vary in the industry, in the cases where you’re subcontracting out a specialty inspection or repair – let’s say your long-time customer needs a fire door inspection, and you don’t have the in-house manpower to get that done – transparency can make the most sense.
Being upfront with your customer about who to expect can mitigate confusion and even unnecessary calls. That way, when someone whose van or shirt has a different logo than your business rolls up to their door, they’ll understand why they’re there. Once again, doing so is a signal to your customers that you’re trustworthy and working in their best interest, which will increase your chances of repeat business in the future.
5. Clarify the workflow upfront
Whether you’re working as a primary contractor or a sub, inevitably, lots of communication (and documents!) are going to be flowing back and forth. Likely, you already know all the steps this entails – from selecting a subcontractor to getting the job assigned, sending customer, building, and system information to them, receiving an inspection report, deficiency information, and invoice back from them, and getting the report, invoice and possibly a proposal out to your customer… The list goes on!
Get a plan in place for how you’ll facilitate this workflow. Will you rely on email, calls or fax to get the job done? Or, will you use software to streamline the subcontracting process for you, your customers and your subcontractors?
It’s also important to consider who’s communicating with the customer and what updates and documents will come from you as opposed to your subcontractor. Whatever you decide, make sure your office and field staff are updated, too.
The Takeaway
Subcontracting in the fire protection industry offers a valuable opportunity to enhance your service capabilities and drive business growth. However, to truly reap the benefits, it’s essential to approach the process strategically. By carefully vetting subcontractors, pricing your services wisely, aligning on invoicing methods, maintaining transparency with customers, and establishing clear workflows, you can create a seamless subcontracting experience.
Implementing these five essential tips not only strengthens your relationships with subcontractors and customers but also helps position your business for long-term success in a competitive landscape.
If you’re ready to elevate your subcontracting strategy and improve your operational efficiency, consider leveraging specialized software solutions to streamline your workflows and ensure seamless communication and project alignment between all parties.
