Are you thinking about starting your own construction company? You may be experienced in your trade, but establishing yourself as an independent subcontractor can take a different set of skills and industry knowledge than working as an employee for a larger business.
Learn how subcontractors differ from general contractors and discover the advantages and disadvantages of owning your own subcontracting business.
General contractor vs. Subcontractor–What’s the difference?
In construction, general contractors–or GCs–are responsible for ensuring the overall success of a project. A project owner will hire a general contracting firm to manage the project’s budget, schedule, and day-to-day operations.
Subcontractors perform specific work-related tasks. Most specialize in one or more types of service, like excavation, concrete, steel work, carpentry, plumbing, or heating. Some subcontractors operate fully independently, or they may own or be part of a business that employs a number of workers.
A GC coordinates with all the different subcontractors needed for the project to make sure the scope of their work is clearly defined and completed in accordance with the contract.
Depending on the size and complexity of a project, the exact roles of GCs and subcontractors can vary. Additionally, some GCs are self-performing, meaning they not only manage projects, they also complete some or all of the labor internally.
Advantages of being a subcontractor
Starting your own business and working independently as a subcontractor has some obvious advantages.
These are the pros of being an independent subcontractor.
Your work is focused
As a subcontractor, the focus of your work is your chosen trade. Instead of learning to manage all the diverse aspects of the construction process, you can become a master craftsman that GCs and project owners rely on to expertly execute specific tasks.
If you’re passionate about your trade and can envision yourself working in the same space for at least several more years, this freedom to concentrate on your construction skills is a major advantage.
You are not responsible for an entire project
While subcontractors do have their own contracts and legal obligations, they are generally only required to manage their portion of work on a project and do not assume as much responsibility for overall performance as general contractors.
For many people, overseeing projects from start to finish can be overwhelming, especially if they don’t have any training or interest in project management.
You have greater flexibility
When you own your own business, you’ll have greater flexibility than your average worker. You can set your own schedule, choose your own service area, and decide what your rate of pay should be. You can also choose your own clients.
There are limitations to this flexibility, as you’ll have to work within industry and local standards. But, overall, as an independent subcontractor you can dictate how you and your business operate.
Disadvantages of being a subcontractor
Despite the advantages, becoming an independent subcontractor is not the right decision for everyone. Depending on your goals and your personal skill set, the disadvantages may be deal breakers.
These are the cons of being a subcontractor.
You depend on GCs for jobs
Because many project owners don’t collaborate directly with subcontractors, you’ll rely on general contractors for work. You may need to establish professional relationships with GCs and market yourself before your subcontracting business is successful.
You experience the pains of freelance work
An independent subcontractor won’t have the same benefits as an employee working for a larger construction firm. You’ll need to provide your own health insurance and make sure you pay the necessary taxes.
You pay may be inconsistent
Not only will you be responsible for finding your own work, which can be less consistent, you’ll also potentially experience inconsistencies in how much you are paid for each job.
While you can set your own rates, you are also most likely going to be working for a general contractor that has a say in how the project budget should be allocated.
How Raken helps subcontractors
Raken is a web and mobile app for documenting and sharing daily progress.
Our smart tools are easy to use and designed for the field, so subcontractors can accurately track performance and keep GCs and other stakeholders informed without adding extra hours to the workday.
We offer:
Daily progress reporting - Quickly capture daily reports and attach notes, jobsite photos, and videos.
Time & production tracking - Get fast, flexible time tracking and measure performance against estimates with automated production insights
Safety & quality management - Quickly identify and resolve potential issues in the field with managed checklists and observations
Document management - Easily access forms and documents and keep your files organized
Automate repetitive tasks and save more time for the work that really matters.