I had a call yesterday with a builder buddy of mine who has a project going sideways with a client. He’s a good builder, also. I hear this stuff all the time. I won’t go into the details, but I was reminded of a few often overlooked policies that may have helped prevent the sour outcome. This is by no means an exhaustive list. These are just a few on my mind…
Only Use Your Vendor Relationships
At some point a client will ask to use their nephew’s ex-brother-in-law’s step father’s friend, who owns a commercial flooring company in [insert a city 172 miles from where you build], and this dude is going to give them an insider’s price.
This is almost never is a good decision…for anybody, including the clients.
You are a manufacturer, whether you think of yourself as that or not. You work hard to build your relationships, and hopefully they are relationships that are reliable and provide you good value for the price, which gets extended to your client as you “manufacture” their home.
Each of your vendors is a part of your manufacturing process, and when you change out one of those important components for a new, unknown variable (this new flooring company, for example), all kinds of things get messy. Here are a select few:
- You need to get brand new paperwork in place, including a base agreement with the new vendor, his tax information, and his insurance information. You need to get added on as an additional-insured. This is a lot of work for everyone for what’s likely to be a one-and-done deal.
- You need to invest the time getting to know this new vendor and his specs, his work, etc. Is it in line with yours? He needs to get to know your requirements. A mutual on-boarding needs to happen, just like with any new relationship.
- Often, when the new vendor relationship is from your client, the line of communication and responsibility blurs between the three parties, and misalignment of who’s working for who, and who’s answering to who get’s confusing.
It can easily become, as the great scholars call it, a major cluster f%$k.
By the way, every once in a while it may make sense to break this rule. If and when you do, though, it’s easier to break this rule for a client than to enforce this without a written policy to back you up.
Set Regular Meetings or Calls
Establish a consistent, predictable communication system with clients up front. Once weekly on-site meetings, or whatever you and your client mutually feel is best. Stick to this even when it doesn’t feel like there is a lot to meet about, because the client may feel differently. And, clients letting issues fester and feeling like they aren’t being heard is a cause of unnecessary friction.
Set Your Hours of Availability
Establish expectations as to when you and representatives from your company are available. You are a business, not a 911 operator, but if you set no expectations and you respond to texts and emails any time of day, night, or holiday, you can be sure you will be expected to always be available and responsive.
On the other hand, if you set up your communications like any other business, with understood hours as to when you are available, everyone will be on the same page and happier.
Educate Your Clients Not to Instruct Your Contractors on the Job Site
Several contract templates include this language. Ensure your clients know not to issue direct orders to subcontractors or vendors on the job site. It causes major confusion. The worker on the job site may act on the direction of the client, which in turn can cause unapproved costs and change orders and downstream implications that weren’t considered on the spot.
Give your clients an easy outlet through which to voice their requests and concerns, but as the general contractor, those should route through you and not the subcontractors with whom you are contracting.
The exception here would be when the client is directly contracting with someone, such at the architect or engineer, etc.
Best practice is that a representative of the builder is always present during job site walk throughs, vendor appointments, etc. Something is more likely to get miscommunicated when a builder representative isn’t there.
This isn’t an exhaustive list. There are many more, but these are a few valuable policies. We like the idea of having these in a manual you can give your client sometime before signing the construction agreement. Some or all could be added into your contract template instead of a manual, but there are some pros/cons to each. Consult your attorney to decide.
Good luck out there! We’re with you.