How to Be an Effective Contractor

Being a contractor is tough work. Whether you’re organizing the construction of your own home, or moving into property development as a career, there are certain things you’ll always want to do. Follow the steps below to increase your chances of a successful development.

Instructions

Difficulty: Moderately Challenging

1. Know your budget and stick to it. One of the fastest ways a development can go under is by over-extending the budget. Cap the amount of money you’ll spend on the initial property and do not go over, no matter what.
2. Keep a reserve of 15 percent. When constructing your budget, include a reserve of 15 percent that will be used for unforeseen circumstances. That means 15 percent of your total budget. Many surprises occur during any construction project. The most you can do is prepare by having funds available, should problems arise.
3. Make your objectives clear. If you are building from scratch, have a clear understanding of what you can and cannot do on your budget. If you’re renovating, be sure to get strong estimates on how much the costs will be.
4. Get at least three quotes from each subcontractor and haggle. Make certain that you have itemized quotes from plumbers, electricians, carpenters and any other trades-people, that you can compare. Know what each is offering for the money, and talk with them to see if there is any room for improvement.
5. Put all agreements in writing before work begins. Make sure that a written contract is in place itemizing the specific tasks of each individual (who will buy supplies, for example) before anyone lifts a tool. This will keep misunderstandings at a minimum.
6. If you are providing supplies, get itemized lists from each subcontractor as soon as possible. Make sure the materials are on site when they are needed so as not to slow up the construction process.
7. Always have up-to-date plans. Projects change as the property develops. Make sure everyone always has the most current plans to work from.
8. Be on site as frequently as possible to answer questions and oversee the project. You don’t want things put in the wrong place, or painted the wrong color simply because you weren’t there to answer a question.

Tips & Warnings

• Talk with your subcontractors and crew. Always be sure that you know what is going on, and that they know what is going on. Open communication is the key to any successful project.
• Construction is not for the faint-hearted. It requires tenacity, long hours, and a lot of hands on work.
• Don’t be over-aggressive with subcontractors or try to micro-manage. Hire people that you trust, and let them do the job that they have been hired to do.
• Don’t cut corners because of your budget--it will always come to haunt you in the end.