Like many remodeling contractors, I got my start as a carpenter. The knowledge of craft seemed to me to be an advantage as my carpentry job led to me starting a business. I knew how buildings went together and that is what we did, right?

Over time I realized that as a remodeling contractor I had to become a business person. My knowledge of craft was now secondary in importance to my knowledge (woefully little, initially) of how to run a business.

Because I was founding the business based on the strength of the company’s knowledge of craft, I thought it would be best to do a significant amount of the work with in-house employees. Initially, our employees did foundations, rough carpentry and finish carpentry, plus site maintenance, supervision, and generally tuning up the projects.

Over time our company decided to stop doing foundations. Why? We didn’t do them frequently enough to become really adept at this type of work. We could never estimate the work correctly. There always seemed to be a bit more work than had been evident from the plans. Dealing with site issues, such as stepping the foundation to accommodate changes in grade, was never handled as well as I thought they should have been.

So we made a change: We would work with trade contractors to do get the foundation work done.

Was it wonderful doing so? No. Things like site cleanliness and general care for the property were not strong points of the trade contractors we tried. Just like when we did the foundation work, there was always a bit more work needed than what had been included in the trade contractor’s proposal.

How did we respond? We learned we had to teach the trade contractors what was non-negotiable when working with our company. That was done in a several ways.

  • We met one-on-one with a number of trade contractors to share perspectives and to consider ways to improve the success of the parties who were working together.
  • Once a year, we did a training session with all the trade contractors we worked with to help them understand what our company promised to our clients, what our company promised to our trade contractor partners, and what we needed our trade contractor partners to promise to us. This was a powerful way to get the overall message across.
  • We added contingencies to our trade contractor partners’ proposals on an as-needed basis. Concrete work required about a 7% contingency, for example.

As time went by, our company did less and less in-house. For example, we decided to work with framing contractors if we had a new home or a substantial addition to frame.
Our in-house work force became smaller as a result. Our estimates became more accurate because we were working primarily with fixed prices from trade contractors instead of hoping our employees would take as long as we had estimated.

Our sales and profit dollars grew. And the company actually did better work then when we were doing more in-house because we were working with trade partners who had more skill at their respective crafts than we did.

I believe that the shift to trade contractor partners instead of a large workforce of in-house employees will become the norm as time passes. Consequently, companies having a large in-house work force will become less and less numerous.

Invest in training yourself and your in-house employees on becoming better managers of people and information. Then all of you will become more successful working with your trade contractor partners. Your problems managing in-house employees will be reduced to a minimum.

If it is the future, why not start making the changes now?