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Sub Contracting: The Perils.

Sub Contracting for jobs is only better in a sense that you have a chance to earn more and that’s about all the incentive you are going to get if you decide on being a sub contractor. Don’t get the notion that once you are a sub contractor, you are going to have it easy because now you are the boss and you have workers doing all the dirty jobs for you. It does not work that way. In fact, you will probably have to work twice as a hard.

Being a wage earner, your job is done when the clock strikes 5. Being a contractor, your job has just started. You have to take stock of what has been done that day. You got to plan for tomorrow, you have to check if material for the next day are available. You have to make sure the job is progressing smoothly to meet the deadline. In short there are a thousand and one things to consider once your workers goes home. If everything does not goes accordingly, you might loose money for that project.

Then there is the matter of non payments from you Main Contractor. This is one major concern. Many sub contractors went bust because the Main Contractors failed to pay them on time. Being a sub contractor your very survival depends on smooth payments. You have to pay your workers and your suppliers on time. While some suppliers might be sympathetic and allows you to delay your payments to them, your workers are not going to be that patient. They depend on their wages to feed their families. When you don’t receive any money from your Main Contractor, you will have to fork out the money from your own savings. That is bad. It’s like using your money to finance your Main Contractor.

The normal practise these days is to ask for 10 or 20% payment before work starts. At least you will have some capital up front to purchase the neccasary materials to start the project. Then request for payment as the project progresses. If you feel the payments are not on par with the work that you have done, it is wise to stop work on the project first. It might cause some uproar, that you are being unprofessional and all, but that’s the reality of things these days. No one wants to loose money.

However, if indeed your Main Contractors pays you progressively, you are in luck and you better make sure you make him happy lest to turns to someone else. Give him a little more than he asked for. Don’t charge him for every little favors. He might have a leaking tap or a faulty light in his office. Do it free for him. It’s not everyday you come across a good paymaster these days.