Contractor Cuts
Join the ProStruct360 team on the Contractor Cuts podcast as we delve into the ins and outs of building and sustaining a thriving contracting business. Gain valuable insights and actionable tips from our experts who have successfully grown their own contracting company from the ground up.
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Contractor Cuts
Why Your Contracting Business Needs a Work Order System | Coaching Cuts
We deliver essential insights on implementing a work order system that creates financial accountability and sets clear expectations between contractors and subcontractors. This system eliminates the costly "expectation gap" that occurs when client promises don't precisely match subcontractor instructions.
• Work orders transform verbal agreements into documented commitments
• Creating work orders directly from approved client estimates ensures perfect alignment
• The system locks in labor costs and eliminates costly miscommunications
• Transitioning existing crews requires explaining benefits to their bottom line
• Present yourself as a business partner who handles administrative burdens
• Coach subs on efficiency practices like planning material needs to maximize earnings
• The ideal sub wants to complete quality work efficiently without client interaction
• A proper system enables scaling beyond dependence on a single trusted crew
If you're interested in learning more about implementing these systems, visit ProStruct360.com to schedule a coaching call or reach out through our contact page.
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Welcome to Contractor Cuts, where we cover the good, the bad and the ugly of growing a successful contracting company. Welcome back to Contractor Cuts. My name is Clark Turner. Thanks for joining us again this week. So today we're doing a coaching cut. And what the coaching cut is, it's me on my own James isn't here today and what we do is dive deep into a single issue that I coach guys on.
Speaker 1:Often, whenever I'm going through coaching, I've got a bunch of different coaching appointments of new guys coming in. I take note of questions that they have, what they want, help understanding more, and boil these down into these short 10-15 minute clips of coaching cuts. So today's a shorter one, not a full podcast, but we're going to dive into the topic of work orders and sub management. So a lot of guys coming into coaching have questions about this. Right, how do I bring guys on, find new guys and this work order system that you're trying to push? How do I switch guys over? Because right now I kind of text them numbers. You know I'll shoot them what I'm looking for them to do. I'll shoot them an email or a text message with a list of everything. Then we kind of talk about a number. They send me an invoice at the end and I just pay whatever I owe them. We want to get away from that. We are trying to get guys into a work order system, to where I create my estimate inside of the ProStruck 360 software. I then send the estimate to the homeowner. Once it's approved, I'm going line by line and assigning each line to one guy. Or you can do 10 lines all to one guy, it doesn't matter. You select the lines that you want for your crew. I take those lines and what I'm doing with that crew and I'm sending it over as a work order to that crew. They will get a piece of paper. It's got everything listed on, what they're supposed to do with the total of how much I'm paying them at the bottom. They need to negotiate If I missed anything, if I add anything to the scope. If they get there and we also decide to do something else, I'm going to go back to my software. I'm going to update what the scope is, update the items that they have assigned to them, resend it. They're going to get a new work order, new dollars, new scope, everything's brand new. Whatever's, the latest work order that I send them is what we're working off of. So that's kind of the main start to finish of it.
Speaker 1:We do this for many, many different reasons. The main reason financial management, accountability with dollars, and so you're not stuck in the middle. The problem with contracting and where guys get in trouble is I promise A to the client and then the scope that I tell the guys is B right, and so it's not exactly A right. I didn't take word for word what I promised the client and give it to the sub or my vendor or my labor or my crew. Instead, what I'm doing is telling the client hey, we're going to do this bathroom, it's going to look nice, we're going to change that, we're going to move this. Then I go to my sub and say the same thing, but it's not defined, so there's no set scope of exactly where we're moving it, exactly what we're doing in that bathroom, exactly what's happening to where that in-between space is where we lose money, right. So the client expectation is that something's getting done and the crew was never told to do that, and so who's going to have to pay them to do that? Me, I'm losing the money out of my profits, so we're eliminating that. This is one of the biggest leaky buckets that contractors have is mismanagement of the subs and also what they should be doing on the job site for the dollars I'm paying them. So what we want to do, going back to it, is creating a work order.
Speaker 1:With that work order, getting guys switched over is the most difficult part, especially if they've been with you for a while and you kind of have a way of working. I get it. That first crew that you're working with and the guys that you're subbing to or the that are labor on your job sites, there's a way that you guys transact right now. There's a way that that happens, um, and it's comfortable for both sides because you trust the guys. You know the guys are your buds or your your. Your crew that you've been with for five, six, seven years.
Speaker 1:Potentially switching over to the work order system allows you to scale. That's the basics of it. If we are sticking with one crew and you just your buddy that you know, you don't need a work order because you guys can work it out. If you're scaling and you're bringing on a second, a third, a fourth crew, you're hiring a project manager to come in, we can't bank on. I hope this guy gets it right. I hope this guy has the same relationship. I hope this new crew I brought on has the same amount of trust in me as the last guy and stands behind their word. You can't build a company that way you is the last guy and stands behind their word. You can't. You can't build a company that way. You can't build it on hopes and dreams that the next crew is going to act like the first crew. So this new work order system switching your current guys over is difficult, but the goal of doing it is to help make them more money and help them know exactly what they're doing on the job site, right?
Speaker 1:So when I'm switching over a crew, I sit them down and we have a conversation. Or when I'm onboarding a new crew, let's, let's go through an onboarding in a second. But when I'm talking to my current crews, I'm sending them down, saying listen, our company's growing. You've been with me for a while. We're about to start scaling. I'm about to eventually bring on a project manager that's working for me. To be able to scale, I need to organize this better.
Speaker 1:So the way we're doing that is, I'm switching some of my systems around Every single time I have a job for you. You're going to get a work order from me. On that work order, it's going to be the scope that we're doing and the dollar at the bottom and the dollar at the bottom. I need you to abide by this work order. I need you to look at it, I need you to approve it, because once you start working, this work order is locked in and this is what you're getting paid to do, this amount of work, right? And so I'm talking to the guys about that. But I'm also saying hey, listen, I want you to make more money. I want you to get in and out. I don't want you to come back six, seven, eight times after we think we're done for punch out items or for other items that you need to be working on. That I didn't tell you, but you thought you shouldn't do and I thought you were gonna do. And now there's this in-between spot that now you have to come back and work for free. So we're trying to eliminate that number one. Once I get the current guys up, onboarded, up to speed, wanting to do it this way, then it's holding them to it. It to speed wanting to do it this way, then it's holding them to it, it's sending them the work orders, it's staying on top of them, it's paying what we agreed upon on the work order and ensuring that the full job is managed through the paperwork. So I can then scale it to new crews and as well as new hires or potential project managers. So that's converting your current guys.
Speaker 1:Now, if you are bringing on new crews as you're growing your company, you always have to be bringing on vendors, subs and labor. Doing that, let me walk you through how we're going to explain them our systems, our processes and how they make money with us. I'm going to run into a guy. I'm going to go into Sherwin-Williams and say, hey, I'm looking for a painter. Do you guys know of any painters that are looking to work with contractors? They're going to have three guys that they talked with that morning that they'll give to you Go find some crews, go find some subs. Give them a call and say, hey, listen, I'm growing what I'm doing. I'm looking for additional labor. I wanted to see if you wanted to partner up with me. Come on and do some work with our company. They say, yeah, let's, let's sit down. I bring them into our office and we sit down. Don't have an office. I mean, I'm at Starbucks, it doesn't matter, we're going to have some paperwork printed out for this meeting. All right, the first piece of paperwork that I'm printing out is what I call a job timeline, and this is for me to sell them on, us being partners.
Speaker 1:The way we view subs is they are our partners in doing the work. There's two jobs on the job site. There is the organization, the paperwork, the estimates, the material selection, dealing with inspectors, calling in inspections. The other side of it is the labor, actually physically doing the work. And so I sit down with these guys and say, listen, we're going to partner on this. I'm doing all of this stuff on this on this spreadsheet. You were doing just a little bit of labor, so I'm going to go find them, do all the marketing, land them, talk with them, do an estimate, then try to convert the estimate for a signature, then sit down and work with them on selections, then pull their permits, and then you show up and you're there for a week doing your job and you go home and you get paid right away and I'm doing collections, I'm making sure everything gets done, I'm signing off on final inspections. So I'm telling my crew I'm doing a lot of the work that normally you're doing if you're just working for a homeowner, so you're going to work.
Speaker 1:When you walk into a house and say hey, I'm going to charge five thousand dollars for this house, I say yes, we are charging 5,000. I'm taking 2000 of that, you're taking 3000. I'm doing this portion of the job, you're doing that portion. And so I want them to understand I'm taking some of the work on their jobs off their plate, all the front end, all the back end, all the estimating they are paying me for, right, that $2,000 that I'm making out of that five. I'm doing work on that job. I found the client, landed the client, did the estimate, sold the job, did all of that work and you, as a sub, you're paying me $2,000 of the five and the other $3,000 is for your labor that you're doing right. So explaining to the sub how the money works on that side and say, listen, I know you would charge five grand to paint what I've asked you to paint.
Speaker 1:If you go out and hunt the client and go do estimates and do three estimates to land one and all that stuff, you should charge $5,000. I'm giving you a work order. You show up on Monday, you're done by Thursday. You made three grand. You should be happy because now you can go on to another job on Friday. You don't have to land stuff and do all the other work.
Speaker 1:If they get it, if they understand that and they understand that they can make more money this way as a partnership with you than on their own, they're going to be a really good crew. If they're a crew that likes to talk to homeowners right. If they like to sit, talk and visit and hey, what about this, and it'd be cool if you did If they enjoy that side of it, they're not going to be a good sub. Let them be their own contractor. Let them go out and do their own thing. They are not good subs If they want to show up, get work done and get onto the next job and they don't care about the, the personal side, the conversations, the. They are there to get work done and collect money. Those are the best subs, cause let me handle the, the communication with the client, let me handle all of the organization. You show up, you go home, you do a lot less work on my jobs and if you're out doing it on your own and you're going to get paid for it. So that's, that's the sales pitch.
Speaker 1:So, number one, going back on the job and what your part of the job is and what my part of the job is, I then pull out a work order that we have. I said this is a standard work order. Let me explain to you how it works and I lay out here's the lockbox code, here's where this is, here's where the contact information. This is everything that you need to know and where it is going to be on the work orders. I then pull out my subcontractor agreement form and if you're in the coaching program, you have a copy of this from us and we've built it out. If you're not in coaching and you want one, hit me up, let's have a conversation about it. We pull out the subcontractor agreement and this is just like our client engagement agreement. The subcontractor agreement is what I expect out of you Dress code, how you operate, how you don't talk to my clients, how you do phone sales, how you don't talk to my clients, how you do phone sales, how I purchase materials but you're going to pick them up.
Speaker 1:I talk about our front end purchases, right? So when we're starting a job, I'll walk the job with my crew. I'm going to do a front end purchase. I'm going to put a big order in a depot or Lowe's or my, depending on the supplier that I'm using and I'm going to do that front end ordering to get you the majority of your stuff Now. From there I put it on my vendors and my subs to go pick up their own materials. I'll do phone sales, I'll pay for it, but we have a process of how that works and they know part of their work order is stopping at Home Depot on the way to the job site in the morning and picking up what they need for the next day or two. I try to coach them on that because the guys that go to Home Depot five times in a day are not going to make enough money working with us If you are smart and quick and good and can assess what's happening over the next two days and they can get into the full list of what you need to get done and then you go to Home Depot, buy everything that you need. Don't forget that box of screws, because you've made a list. You now get to the job site and execute the work.
Speaker 1:Guys that are running back and forth, are spending way too much time in the truck, not earning money on the job site. So I coach them up on that, I take them through all of the agreements, of the subcontractor agreement, and my goal and I tell them this, and this is not just a blowing smoke my goal is to make them money and to make them as much money as possible, because if they're making money, I'm making money and if I can keep them busy, that means we're both making cash. So I tell them that and I say listen, let me show you how to game the system to be able to make as much money here as possible. And I show them the final walk checklist. Right, this is how we exit a job. This is your responsibility. Make sure this stuff's getting done.
Speaker 1:We talk about job site cleanliness. We talk about cut sites and how we start on pre-construction on the job. We got a whole list of what we cover with those vendors to help them understand how our job sites work. And we bring order to their lives, like if I am helping my subs become better businessmen and women and they're growing what they're doing because our systems are in place. That's a win. We're helping them grow and we're building a big loyalty with them because they're making more money with us and the other GC who's bad at communicating, bad at paying on time, bad at ordering materials, unclear on what the expectations are. If we can do all of that, we're building that loyalty with our subs.
Speaker 1:So the goal of today is to start using work orders. If you have never used work orders, if you don't want to do it or you're trying it and you have a bunch of questions, prostruck360.com, go to the contact us and reach out to me. I'd love to talk with you about how to do it, kind of guide you through in a little more detail. But that's what our coaching side does. We've got coaching that starts at 500 bucks a month. There's a bunch of different programs where you get all of our paperwork, all of our systems and processes and you get one-on-one meetings with me. So if you're interested in that, go to ProStruck360.com and sign up for a meeting with me or just hit us up on the contact us and I'd love to chat with you about it.
Speaker 1:But if you're taking something away today of what you need to do differently, it is trying to do work orders and push it to where, every single time before I start a job, I've got a price from a customer for what work I'm doing and a price from the vendor my subs that are going to be doing the labor and exact for the work that I'm asking them to do, right? So I know that it's all math in the middle. That's my profit. I'm not hoping that they get done on time. I'm using the work orders to say this is how much I've got to pay.
Speaker 1:You Look at the scope. Make sure that we're on the same page, that this scope can get done for this price. Once they agree to that and move forward, we're locked in on the labor costs. We're locked in on the cost to the client and we're making money. So it is very easy to scale this. You just have to be deliberate about how you do your numbers. You have to be very, very set in your processes and procedures and to get there, you need to put these things in place. Thanks so much for listening today and we'll talk to you guys next week. Bye.
