Subcontracting benefits businesses

Published On: January 1, 1970Categories: News

It’s not so complicated: there are certain things your company does very well, and there are other things that could be done more expediently by someone else. It could be a matter of expertise, time available, or any number of factors influencing workflow. The bottom line is that contracting arrangements are a fact of life in business—and getting more important, not less, as the digital age develops. Partnering with other businesses—both as contractor and subcontractor—can offer workable solutions for everyday tasks, and indications are good that there are plenty of opportunities to go around.

Many highly successful businesses simply don’t try to do it all. Spencer Etzel, president of The SEC Group, Wilsonville, Ore., says it is more important to do what you do well.

“We find it more efficient and price competitive to use various contractors, because you can’t be good at everything,” Etzel says. The SEC Group does the design, technical work and management for a variety of product lines in the tent industry. The secret, he says, is having the contractors you need, and knowing them well.

Roy Chism, president of The Chism Company, San Antonio, Texas, says subcontracting allows fabricators to utilize resources “absent the investment and learning curve associated with ownership, and otherwise simply not available in-house.” In his company, which makes fabric shade, shelter and identity products, “subcontracting eliminates substantial waste from the fabrication process, allowing fabricators to concentrate on better serving the customer with enhanced design, sales and service emphasis,” Chism says.

There can be many essential tasks associated with a single project that need to be subcontracted. Don Araiza, president of Eide Industries Inc., Cerritos, Calif., says they subcontract engineers, for example, who must be licensed in the state where the project is done. Araiza’s company makes shade structures, awnings and canopies, and industrial canvas products, and regularly hires subcontractors for landscape surveys, concrete footings, electrical systems and permits “that can be a drive down to city hall in a small town, but can take tons of time in larger cities,” Araiza says. Granting a subcontractor the power to act on your behalf can be a crucial time-saver.

Deciding when, what and with whom to contract boils down to who can do what, and according to Etzel, if two contractors are good at doing the same thing, “then it becomes [an issue of] who has production time.”

Already established relationships, built on trust and a working knowledge of each other, are ideal partnerships, but that’s not always possible. An entity “that is just so low-priced that it is difficult not to consider them” might offer a good alternative, says Mike Coffrin, director of sales and marketing at Visual Impact Signs Inc., Minneapolis, Minn., but in the printing business, he says, “there are lots of specialty tricks of the trade that come into play. The learning curve could get you in trouble.”

“In picking your subcontractors, they have to understand the business from day one. It’s going to be a lot of on-demand work on a short timeline,” Etzel says. “You’ve got to know your manufacturing source basis and your subcontractor’s strengths and weaknesses so the components come together with the right degree of integrity.”

“Primarily, we look for a match between the project’s requirements and the effective utilization of our equipment, software and expertise in support of that fabricator and the shop personnel,” Chism says. Subcontracting for awning, marine and tension structure fabricators is a rapidly growing segment of Chism’s business.