A contractor's journey to self-mastery requires discipline, integrity, and respect. Welcome to Hammer and Grind. Welcome to Hammer and Grind, the podcast built for contractors. Real contractors, true stories, real solutions. My name is Brad Hebner, and I will guide you on your journey to mastery of your construction business. You can find Hammer and Grind on all the social media platforms. Just search for Hammer and Grind Podcast. Now, if you're looking for more help, you can check out our free Facebook group called The Contractor Profit Group. I do free trainings in there and it's a great community to be a part of. Now, if you're serious about making more money, saving more time, and creating a business that supports your lifestyle, check out my paid coaching group called The Profit Club. I've put together a proven system for creating a winning business. Now listen, I'm so confident that you will succeed in my program. I'm now offering a 10x ROI guarantee. That means if you don't make at least a 10x return on your investment within a 12-month period, I will refund you the full amount. You can find out more information about The Profit Club at hammerandgrind. com forward slash The Profit Club. All right, on this podcast, we're going to be talking about subcontractor loyalty. In other words, how to create subcontractor loyalty. I had this question come in to me this week, and I thought it was an interesting question. I've touched on this a little bit in the past, but I want to really deep dive into this concept of subcontractor loyalty. And really, this applies evenly to your employees. Most of the information that I'm going to share will also apply to your employees, but I'm going to talk specifically about subcontractors. So if you're a general contractor, Or maybe just a contractor who uses a subcontractor for various things of your business. Maybe you're a remodeler and you use an electrician and a plumber exclusively, whereas a general contractor is going to use all subs for everything. Regardless, if you use subcontractors, this should apply to you. Conversely, if you're a subcontractor, and you're working for a general contractor or working for a contractor, this also applies to you in the complete opposite. Just reverse everything that I'm saying, and it will apply to you as well. Because ultimately, at the end of the day, what we're doing is figuring out how to help each other. Now, there's going to be some things that I talk about in here that I also mentioned on previous podcasts, like effective communication. It's a really good podcast you should go listen to. And so we're going to kind of dive into this now. So the overarching theme of this podcast is simply put yourself in their shoes. I think a lot of times we get caught up in this idea that we're like trying to control someone's output by controlling them and their situation, right? For some reason, and I haven't quite figured this out, this applies to the contractors more so than other professions. And I think it's simply because a lot of us who are blue-collar employees, blue-collar workers, blue-collar businessmen, we lack a little bit on the emotional side of business. We lack a little bit on the communication side. We lack a little bit of some of these personal skills that are more prevalent or more important. in, let's say, corporate America. It's funny, I did a post. I did a sarcastic post on my personal Facebook page today about communicating directly with people. And it kind of hits home with what we're talking about today. But whenever we are trying to work with subs, this applies with customers as well, the point I was getting to with blue-collar people. We approach it like, A lead calls us or we find a subcontractor. We have these people in our sites. Now, I need to convert them. I need to mold them. I need to manage and control them to get the desired output that I want. So in other words, a lot of us with leads, a lead comes in. We go through our rigmarole. And there's all kinds of red flags of like this customer, this lead is not going to be a good customer. Okay. We work with them anyways. And then halfway through the process, we run into problems. We go to Facebook and we go, Hey, I got this customer. I told him that I would do it by the hour. And now we're three days in and we're, you know, I had to work overtime and now they're complaining. They're not going to pay us overtime. And I sent them a link to our website that has all of our contracts. And, you know, it's just like. nonsense. It's like you didn't do a good job initially. And now you're trying to control the situation by using contracts and using certain words and phrases and language and things to try and control the outcome that you're wanting. And you have no control over that person. You have no control over your subcontractors in that capacity, meaning they're not employees. They're not your kids. Right. I think that might even be a better way of addressing this. I think a lot of times we approach our leads and our subcontractors and our employees as if they are our own kids. Right. Kids that we raise, like we have authority over them. And so therefore, if we say, hey, you know, eat your green beans or you're not getting up from the table or clean up your room or you're not going to get to watch TV later. Like we have this authority over them. And so therefore, we can control their behavior and outcomes. simply by using this authority over them. And that can't be further from the truth. A lot of you are saying that that's not really what I do. I don't treat my subs as kids. And that's probably true for most of you. But I think there's some mental thoughts. There's some mindset around this that we may not fully acknowledge or understand what's happening. So I want to get that out of the way ahead of time. Like that's the woofoo, you know, mindset science stuff. You have to understand that just because a lead calls you does not mean that they're going to be a good fit. Just because a subcontractor is in your city and he's an electrician and you need an electrician does not mean that they're going to be a good fit for you. Just because they do high quality work does not mean they're going to be a good fit for you. Just because they're available on their schedule to work you into your job. does not mean they're going to be a good fit for you. So you have to understand that just because someone's available does not necessarily mean that they're a good fit. That being said, taking all that and throwing it out, let's say you have a subcontractor who you really like, does a good job, and you want to keep them busy and you want them to work for you most of the time. Let's say you have a tile setter who's... Tile setters are kind of like unicorns around here right now as far as trying to find them that are available. And they're like, yeah, man, I can help you, but it's going to be, I can't get to it for six weeks because I'm doing work for this other contractor. And you're like, man, I'm doing three jobs a month where I need tile. I could keep this tile setter busy three out of the four weeks every month. I really need him to work for me. How can I get him to come and work for me more so than anyone else? Well, there's lots of things you can do for this. There's lots of different ways that you can help to increase your chances of retaining them. But again, you can't control them to the point to where they have to work for you. Meaning, if you try to do stupid stuff like have non-compete clauses and all this other dumb legalistic stuff that you're going to force them to work for you, this podcast ain't for you. I mean, it's just not because that's not reality. Right. This idea that you're going to say, well, if you work for me, you're not allowed to work for anyone else. That's just bonkers. If you're, excuse me, if you're doing that, don't, don't do that. That's, that's just ridiculous, right? Everybody has opportunities. Everybody has choices. Everybody can do what they want. It's their business, right? So how do you create this subcontractor loyalty? Like I said earlier, you just put yourself in their shoes. If you were a subcontractor working for a contractor, what would you want? I mean, really, what would you want? So here's some things that you can do. There's payment, right? Like how much you pay, anything around payments. There are removing roadblocks for them. And we'll get into these here in a second. So there's payment issues, there's roadblock issues, and then there's communication issues, right? Roadblocks kind of in communication kind of go hand in hand. But those are kind of the three topics. So payment issues. The very first thing I would do if I'm a general contractor and I hire a subcontractor is the second they, and it obviously depends on your arrangement. Maybe they invoice you, they invoice you before they start and just ask you to pay when you're done, whatever that arrangement is. The second they're done with their job and either they invoice me or if I already have arrangements, I'm paying them immediately. I'm not dragging their money out. I'm going to pay them immediately because I'm using proper cash flow techniques. In other words, I already have the money, right? A lot of you put yourself in situations because you don't charge enough and you don't collect enough during the process. So when the job's over, you get an invoice from your plumber for $2,500 and you're waiting for the customer to pay you so that you can pay the plumber. Don't do that, right? Have the money. so that the second the plumber hands you an invoice for $2,500, you pay him. If you write checks and you're on the job site and he's like, hey, I'm going to be done today at three o 'clock and you go by there at three o 'clock and he's finishing up and cleaning up. He says, here's the invoice. If he hands you a paper invoice or if he emails it to you right then, you write him a check for $2,500 and you hand it to him right that second. obviously you're some due diligence. You got to make sure the job's done, all that stuff. We're assuming that that's a-okay. All right. You're going to pay him immediately. Why? Because you're training him that when you work for me, you will get paid immediately. You don't have to wait until I get paid because that is a real problem for subcontractors. A lot of subcontractors who are not, you know, A lot of the information that I give out is directed towards contractors, remodelers, general contractors, landscapers, people that are running the big shows, not specifically subcontractors. Now, I do have some subcontractors in the profit club, but that's not what I'm saying. A lot of times, if you're a subcontractor, you're not doing branding. You don't have vehicle wraps. You don't have uniforms. You're just a guy with a pickup truck and tools, and you do a trade, and you're a subcontractor, and you rely 100% on general contractors. to provide you with work. You don't work for the general public. That's what I mean by a subcontractor. Those people deal with contractors all the time who don't pay until they get paid. You have a contract, you have a subcontractor agreement, and in the agreement it says, you will get paid whenever I get paid. That is ridiculous. It's absolutely ridiculous. Are there certain circumstances where you can't always pay directly when the job's done? Absolutely. There may be some discrepancies. There may be situations. But when we're talking about normal operating procedures, right, the job's done, they get paid immediately. Now, if you pay direct deposit, that's fine. If you send a check in the mail, okay. If you pay in cash, whatever, it doesn't matter. But keep in mind, That if your subcontractor is not this super intelligent businessman, he's just a subcontractor. And this is not a dig on subcontractors. I'm not saying that subcontractors are not intelligent. What I'm saying is they don't have as much business acumen as someone who's running a general contracting business. There's a lot more business acumen that's required. Some of these subcontractors live paycheck to paycheck. They work for a case of beer and they're happy. That's a reality. Okay. Not always, not everyone. I'm not trying to generalize or stereotype. I'm just telling you that there's a lot of people like that. And if you say, Hey, you know, they get done. The plumber gets done. Hey man, Brad, I just got done. I sent you over the invoice. When can I get paid? And you go, Hey man, that's great. I, uh, I will put it in. I will pay you right now. I'll jump on the computer and I'll, uh, I'll send you a check from my bank account because it's easier for me that way. Well, that check's not going to get there for six, seven days. So now the subcontractor has to wait six to seven days to get his money. It's easier for you. It's not easier for them. That's a roadblock for them. So remove that roadblock. What I'm trying to tell you here is that you're going to have to inconvenience yourself in order to build up this established SOP of how you do things and how you treat your subs. So you got to pay them frequently. You got to pay them quickly and you typically have to pay them more. The easiest way is simply pay them more. If some of you are like, I don't want to pay my subs more because then that's less money I make. Dude, that's a scarcity mindset. There's plenty of money out there. I have contractors in the profit club that have raised their profits, right? They've raised their profit margins by raising their price. And then they go and they find subcontractors. And the sub comes and says, oh, here's a, you know, here's, I'll do this shower for you. I'll tile a shower for you for $5,000. And they're saying, dude, that's not even enough money. Like, how are you making money with $5,000? How about I pay you $6,000 to do this shower? And do you think that subcontractor is going to be pissed off? Like, oh man, no, I don't want to work for an extra thousand dollars. This other subcontractor, this other general contractor over here, he's paying me, he's paying me 4,500. You know, he's paying me 5,000. I'm going to go work for him. No, they're going to want to work for you because you're the highest paying general contractor in the area. That's the name of the game, guys. Everybody gets paid more, right? If you have to add an extra two grand on your pricing to give your child guy a thousand dollar raise because you know that he's not charging enough and he's barely scraping by, you're going to build loyalty because every time they do work for you, they're going to make an extra thousand dollars versus working for the other general contractor. This across the board will raise prices for everyone. It's a mutual benefit across the board. So pay them more. Other things you can do. This is an idea that I had and I've never fully implemented this. I've never had the opportunity to implement it. But one thing you could do is incentivize them. I mean, I know contractors that do similar things in their business and it works. So this isn't like some theory that's never been used. I've just never actually implemented this in my business. But I like the idea of it. And that is you incentivize them by giving them a bonus. if they hit their milestones and or they get done earlier. So let's say you're in a time crunch, right? They're telling you it's going to take a week to do their job, like seven days, and you really want it done in five days so that this weekend you can do whatever, get the next guy in or whatever it is you really need it done. You could say, okay, Chris, what's your time frame on this? $7. Okay, what's the cost? You know, five grand. Okay, here's what I'll do for you. If you get it done in seven days, you get your five grand, no worries. If you get it done in five days, I'll give you a whatever, $600 bonus. But it's got to be the same quality. It's got to be everything's got to be the same, right? That's probably going to involve you either working longer days or you may have to bring in some help to get it done. I really need this job done quickly, right? So here's if you get it done in five days. Here's a $600 bonus. If you get done in six days, you don't get a bonus. You get done in seven, you get what you normally pay. So you're incentivizing them to get it done. Or it could be starting. Hey, I can do your job. It's going to be seven days, but I can't start for two weeks. Oh man, I really need you to start next week. What's the price? It's $5,000. Listen, if you can start next week, I'll give you an extra $600. If you can start on Monday and get it done in seven days, I'll give you an extra $600. So you can incentivize them by paying them more instead of penalizing them by not getting done. See, a lot of guys want to use, they want to penalize everybody instead of incentivizing them. There's contracts that say, if you don't get done by this deadline, you're going to get penalized $100 a day for every day over. I don't know a single person who likes working under those conditions. Whereas it says for every day that you get done early, you get a $100 bonus. That's going to motivate me to want to get done. So use money to motivate them in that capacity. Whether it's a get done early, I'll give you a bonus, or start the job earlier, I'll give you a bonus. People will start to want to come to you because you're the one that's paying quick and you're paying more. That's the main thing is around payment. Because a lot of subcontractors deal with general contractors who are terrible, absolutely terrible with cash flow, absolutely terrible with finances, and they make the subcontractor suffer because of it. I mean, if that's all you did, that's all you took away from this podcast, you'll be attracting the right subcontractors, right? Now, what's the second part of that? It's keeping them busy, right? If you can keep them busy. they're more likely to want to work for you. If you're only using a sub once every three months, you're probably not going to be able to incentivize them to want to work for you more. But if you're competing with another general contractor to keep these subs busy because you're using them a lot, these are the techniques you're going to want to use. So remove roadblocks. How do we remove roadblocks? This is part of the effective communication that I talked about on that podcast, number 79, effective communication. Removing roadblocks. Now, it's not just roadblocks in communication. It's actually roadblocks in what they do in their jobs. So, for example, let's say the tile guy is coming into work. And because of the stage of where you're at in the project, and I'm making some of this stuff up because it's going to depend on your processes, where you're at in the country, what all you do. But let's say, usually with tile, the house may or may not be conditioned yet, right? It's usually going to have drywall up, maybe painted, again, depending on where you're at in the process and how you do things. But let's say the house is not conditioned, but you make sure that every time a towel guy comes in, the house is always conditioned because you want them to be comfortable. If it's in the middle of the summer and it's 100 degrees out, And they're working in a house with no heat or air, like it's the summer, so they wouldn't have heat, but there's no air conditioning. And they got the windows open. It's like 110% humidity in the house. Again, it depends on where you're at in the process. So don't start sending me hate mail and all that. But I'm using it as an example. And your house is ready to go and you have air conditioning on and it's nice,68 degrees in there or 72 or 75, whatever you keep it at. Who do you think they're going to want to go work at? Right. They're going to want to go work for you because your house is air conditioned versus not. Now, some of them, if it's earlier in the process and there's no like electricians are doing rough ends, obviously that doesn't matter. But let's say it's the middle of the winter. Could you provide them with heat? Right. Could you heat the house so that they're not freezing to death while they're in there? Could you make it more comfortable for them? A lot of subcontractors, a lot of general contractors. I mean, you guys really are terrible with running job sites, like really terrible, especially like home builders. Home builders are probably the worst that I've ever seen in terms of running job sites and not really giving a crap about their subs. To you, it's just money making, right? And you haven't priced your houses enough accordingly. So now you're like everyone else. We got to hurry up and get this done. We got to hurry up and get this done. We're going to run out of money. We're costing money every day. We got to hurry up and get this done. If that's you on every project, if you got to hurry up and get it done every project, you're not doing construction right. You're not running the right business. I'm just telling you right now. If that's you, every time we do a project, we got to hurry up and get done. Then you do not know how to run a business. Okay. That may stink for some of you, but you have to make sure that. The subs are given plenty of time that they're not, you know, don't have four trades working in the house at the same time because you're trying to get stuff done. My in-laws built a house a few years ago and they wanted me to do all the tile work for them. Now, I'm not, I don't consider myself a professional tile setter, but I'm pretty good at tile. And so I did all the tile in their house. This was a new construction. I never, ever, ever, ever, ever did new construction in my business. I always did remodels. But because it was my in-laws, I said, okay, I'll do it. So I go in there, and it's the middle of the summer, and it's like 100 freaking degrees in there, hot as balls, and you can't eat. It's just like you sit there and you're sweating, right? It sucks. On top of that, we had to do it in a couple stages because of what was going on. Whenever we were coming back to do the – well, whenever we were going the first time, rather, I'm sorry, to start, the painter was in there. He was getting ready to start spraying everything. And the agreement was that the painter was going to one coat and prime. I'm sorry, not prime. Was going to prime and one coat the walls. We were going to come in, do some of the tile, the floor and stuff. And then they would come back and do that. And then blah, blah, blah. It was going to be like a two phase type thing. The day we show up, the painter's there. And he's like, no, man, we can't get this done. Because the thought was. They would start on one side of the house while we were doing it and then switch and blah, blah, blah. And they're like, yeah, we can't do that. We primed the whole house and blah. I said, fine, I'm leaving. So I left. I was pissed because I lost the whole day of production that one day. And plus that week, it was all screwed up because I had figured like four days the first time. That's one thing. Then we got to how it worked out. Then I'm working on the job. I come back a second time. We're working on the job. And they want to come in and install the flooring, all the hardwood flooring. They engineered hardwood flooring. Now, they're laying flooring in all of the doorways. It's all flooring. Hardwood flooring everywhere you walk. How am I supposed to get in the house and cut and go in and out and do all this stuff if they're laying flooring? And that was the only time the flooring guys could be there. So guess what happened to me again? I had to leave. I called my father-in-law and said, hey, I can't. There's no way we can work together. He's like, oh, why can't you guys just work together? I was like, there's no way. It's physically not possible. So again, we left and pulled off for another week so they could lay the floors in there before we can come back. And so my point of the story is that twice in one project, I was inconvenienced, which cost me money because I had days planned, couldn't execute on those days. And then I had to figure out what else to do. When you do that kind of stuff with your subcontractors, why would they want to work for you? Yes, you can have multiple subs in there depending on what it is, but you really can't have an electrician and the plumber working at the same time. You really can't have a plumber and the heating and air guys working at the same time. Some of those trades just don't work together because they're going to be in each other's way. So whenever you remove roadblocks for them, make it easy for them to work for you. They're going to want to work for the company that makes it as easy as possible. that pays quickly, and that incentivizes. This is like a no-brainer stuff. It may seem like common sense, but we get caught up in this idea that we're helping them out. I mean, they need the work. We're helping them out by giving them work. Get rid of that mindset completely. Approach the mindset from how can I help them? What can I do to make your job easier? I can't tell you. I mean, I can go on for days about all the dumb stuff I've seen that general contractors do to make their subcontractors' life so much harder. And then they wonder why they don't want to work for them. My plumber that I use, he always told me, he's like, I like working for you because you're one of the easiest people to work for. I know when I come to your job, all the materials are there that I need if you're providing them. All of the information as far as where things go, the locations of the, you know, the drains for the vanity, the stuff for the shower, like all that stuff's already there. It's done. Like you have it, you have all of the flooring protection down. I don't have to worry about where my booty's coming in and out all the time and doing stuff. If there's carpet and things, that's what I'm trying to tell you. He likes working for me because I make it as easy as possible to work for me. And some of you are like, well, I don't have time to do that, Brad. I don't have time to babysit plumbers and do all this crap. Okay. Then keep complaining that you can't find loyal subcontractors. Keep complaining that there's not good subcontractors out there. I mean, that's the alternative. You can either listen to what I'm saying or you can just complain about it and not do anything. When both sides, when the subcontractor and the general contractor... both approach this agreement as how can we benefit each other? How can we make each other's jobs easier? How can we remove roadblocks? Then you will start to see major, major improvements in how that works, right? I go to my plumber and I say, hey, Steve, hey, man, what can I do to make your job easier? Simple question. What can I do as a general contractor? to make your job easier when you come to my jobs? That may not seem like a big question, but it is a massive question to ask. And whatever they say, well, it would be nice if I didn't have to park my truck in the street half a block away and then have to go out there every time because the driveway is not done yet or because of this or that or blah, blah, blah. Then you figure out how to make it easier for them. Now, I'm not saying you can always accommodate every one of their requests. But if you can, why wouldn't you? Right? Why wouldn't you accommodate that? We all want to blame the other subcontractors as a general. The plumber gets there and he's like, hey, man, all of the electrician's stuff is in the way. They put all of their wire and all their equipment and stuff that they put in the shower and the bathroom and I got to rough in the shower like it's in the way. That's your fault as a general contractor. It's not the electrician's fault. That is your fault as a general contractor because you did not communicate to the electrician that the plumber needed to come in on this day and do his thing. You're just basically letting them fight it out like it's a battlefield, like the house is a battlefield. And when they get there, they have to fight it out. That's how you're treating this. And you're wondering why, oh, contractors don't want to work for me. There's no loyalty anymore for subs. No. There is loyalty. You just suck at giving them an opportunity to be loyal. That's what it boils down to. So remove all of the roadblocks that you can for them. If you pay them on time or pay them quickly and you pay them more money and you remove all of the roadblocks that make their job difficult, you're going to tell me that a subcontractor will not be loyal to you over anyone else. If you still believe that after listening to this, I don't know what to tell you. Because if I was a subcontractor, that is the general contractor that I would want to work for every time. I'd be calling them every week. Hey, man, you got any more jobs coming up? Anything else I can do to get some more work from you? I know you're building houses. I had a couple of my friends were wanting to build houses and I told them how good of a builder you were. I'll send them your way. Now it becomes this. Both sides of the party are trying to help each other win instead of both sides trying to not get screwed by the other side. It's two totally different trajectories. You guys don't understand that. It's two totally different mindsets. And if you're a subcontractor listening to this, you do the exact same thing for your general. Hey, whatever, Chris, what can I do to make your job easier? Well, I'm glad you asked, Brad. One thing that's really frustrating for me is that when you guys get done with your rough end, is you leave all your trash on the floor. And I have to have, I got to pay somebody to come in and clean that up. So if you could clean up your mess when you're done, that would be really, really helpful for me. Awesome. Yeah, we can do that. No problem. Now, here's a trick, guys. Just because you're, if you're a sub and they say that, that doesn't mean that you have to do it for free. Charge them a little extra, right? Electricians, if you're listening to this, this might, I mean, this might make you cry. Okay, electricians, if you're listening to this, you can clean up after yourself. You can sweep up when you're done. All you have to do is charge them more money to cover the time it takes you to do that. I know that's mind-blowing. If it takes you two hours to sweep up at the end of a rough end, then you just charge the general contractor for two hours of your time. And most general contractors are not going to care about the money. This is how we work together. This is how we create a team that's very loyal is by helping each other out. So that's really the end of this podcast, guys. Pay them more. Pay them often. Incentivize them. Remove the roadblocks. Keep them as busy as you can. Find out what's important to them. Find out how you can make their job easier. If you do those things, you shouldn't have any problem with subcontractor loyalty. It's a great topic. I'm glad that the contractor asked me that question this week. So we could dive into it. And as always, you can find me on all the social media platforms, Hammer and Grind Podcast, TikTok, Facebook. Guys, check out my free Facebook group. I did change the name of it. So if you go searching, it might be a little bit difficult. Used to be the Contractor Profit Group. The new name is now the Contractor Profit Blueprint. And that is because of some things that I have coming up that are exciting that I'll be sharing in that group. So if you don't want to miss out on that, make sure you join my free Facebook group. You can still search the link, the Contractor Profit Group, as of right now. But if you're listening to this in the future, that link may not work anymore. The correct term, the correct name of the group is the Contractor Profit Blueprint. So search that, join that group, because that's where I put most of my effort in terms of providing help and resources. But you can also find me on TikTok where I do a lot of videos and other platforms like Instagram. So I appreciate your time today. Look forward to helping you in your business. If you want personal help from me, reach out to me and I'll be happy to share with you what options you have to do that. So until next time, guys, you know what to do. Be the best version of you.
