The only national magazine for all Specialist Contractors
Contract Clauses DO YOU UNDERSTAND THEM?
The Four P’s 7 Key Things to Check Before You Sign That Contract!
Why Subbies need their own Project Insurance
ISO Certification helps deliver your business goals improve your cashflow now
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StreetwiseSubbie.com Limited
ISSUE 24
The Four P’s that will define your sucess A NOTE FROM THE EDITOR
WELCOME TO THIS SPECIAL ISSUE OF SUBCONTRACTING TODAY. It is the first issue of a national publication for a dedicated audience of over 8,000 Trade Contractors, Specialist Contractors and Specialist SubContractors.
With Crossrail delayed, the future of HS2 in doubt and the problems experienced by main contractors, you might think it an odd time to launch a new magazine for the Construction industry. On the contrary, SubContracting TODAY is not just the ‘same old’ news or product information. Instead, it combines key topics, in-depth analysis, consultant and partner contributions, all designed to help senior managers, directors and owners of subcontracting organisations in the dayto-day running of their businesses. I hope you like the new SubContracting TODAY and will enjoy reading it. If you do enjoy it, please tell us. Equally, if there are things you would like to see please let us know. Just e-mail your comments to info@streetwisesubbie.com.
WHEN MOST PEOPLE THINK OF ‘MARKETING’ THEY THINK OF ‘PROMOTION’ OR ‘ADVERTISING’. THAT’S JUST PART OF MARKETING. THERE IS MUCH MORE. Usually, marketing professionals talk about ‘the four Ps of marketing’ – product, place, price and promotion. Promotion is at the end of the list for a reason. Unless you get the other three things right, promoting what you do is a waste of time. The best promotional campaign in the world will only get a customer to try you once – if the product, place or price are cr*p, the customer won’t come back.
So, what are the four ‘Ps’ all about? Product - This is pretty obvious really. It is what you do (for most Subbies, it really should be ‘service’ rather than ‘product’ but don’t let’s split hairs – it
You also need to get the paperwork right. Sometimes marketing folk actually make a fifth ‘P’ of this – ‘process’. If you don’t submit claims and invoices in the way you should, you won’t get paid. And if you don’t submit your quote or tender in the way you should, you won’t get the job in the first place! (Maybe this ‘P’ should be ‘Paperwork’?)
Place - Maybe not so obvious. It’s not where you do the work, it’s where the sale is made. That may not be a physical place at all – it may be on the phone or on the internet, for example. But if you don’t answer the phone or reply to emails, you’re not going to be doing business at all. So getting the ‘place’ right is important. Price - This is pretty important, too. But it may not be as important as you think. Promotion - Running a business without promoting it... what’s the point if nobody knows what you are doing?
DON’T GET ANGRY. GET PAID! Getting angry won’t help you get paid. But, downloading your FREE “How To Get Paid” Report or calling 01773 712116 will. £££millions pounds recovered Cost effective expertise Nationwide team of contractual experts 28 years dedicated to helping Specialist Contractors
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spoils the look of the list if they don’t all begin with P). For a typical Subbie, what you need to look at in your ‘product’ are things such as quality of work and materials, delivering on time, the way your people behave on site, etc.
Email: info@streetwisesubbie.com
www.streetwisesubbie.com
www.subcontractingtoday.co.uk
7 Key Things to Check Before You Sign That Contract! ONCE YOU HAVE SIGNED THE CONTRACT, YOU ARE LEGALLY BOUND BY ITS TERMS. HERE ARE OUR 7 KEY THINGS TO CONSIDER BEFORE YOU PUT PEN TO PAPER. Here are a few things to watch out for in any contract before you sign it. 1. Who Are You Actually Contracting With? • Hundreds of Contractors will become insolvent this year. • If the Contractor you’re working for goes bust you will get nothing! • Watch out for contracts that allow the Contractor not to pay you if the Employer becomes insolvent. 2. Scope of the Works • It’s a chore but you should carefully check that the scope of works in the contract matches what you have priced. • At best Contractors don’t care if you get it wrong – their terms will protect them. • At worst some Contractors will deliberately manipulate the scope of works to increase their profits. Make sure the contract period is agreed
3. Time/Programme • Make sure the contract period is agreed and properly documented before you start the works. • Don’t agree to work “in accordance with the Contractor’s programme” or “in accordance with his directions.” • Failing to protect your interests in respect to time can prove extremely costly! 4. Price and Discount • If you have made important qualifications in your tender make sure they are not lost when the contract is formed. • Make sure you know the fundamental basis of the contract (e.g. lump sum, re-measurable, cost plus) and therefore who is taking the risk of quantifying the scope of the works. • Don’t allow one off discounts to be applied to variations.
5. Payment Terms • Make sure the payment terms are clear and unambiguous. • Watch out for pay when paid, or pay when certified type abuses. • If the payment process is linked to valuation dates make sure these are agreed and recorded and go beyond the end of the anticipated contract period. 6. Design Liability • It is very easy to acquire design liability even when you think you haven’t got any responsibility for design. • If the contract does not expressly limit your design liability to “reasonable skill and care” you will get the more onerous liability of “fitness for purpose.”
• Fitness for purpose obligations will void your professional indemnity or product liability insurance cover! 7. Dispute Resolution! • Being able to suspend performance for non payment is a very effective remedy. • Adjudication (used correctly) is a very effective legal solution. • Neither remedy is automatically available and you need to ensure that these rights are not taken away by onerous drafting of the contract.
AND REMEMBER, IF YOU DO RUN INTO CONTRACTUAL OR PAYMENT PROBLEMS, DO NOT LEAVE THINGS UNTIL IT’S TOO LATE. ACT IMMEDIATELY – STREETWISESUBBIE HAS A NATIONWIDE NETWORK OF CONSULTANTS TO HELP YOU SOLVE THEM. SubContracting TODAY | 03
Project Policies. Do Sub-Contractors Need Their Own Insurance? A recent High Court’s decision that a roofing firm that caused a fire at a high school in London was not protected by a project policy, has raised serious questions over the reliance by subcontractors on these types of insurance policies. Mike Dickinson, sales and marketing director at Nottingham-based independent insurance brokers, Russell Scanlan, explains how subcontractors could be vulnerable as a result of the ruling and what steps
you can take to protect your business from higher risks. “Traditionally, main contractors on larger construction projects take out a project policy to cover damage to the existing structure and possibly the contract works being undertaken by the subcontractors working on site. In the event of damage to the property, the project policy insurer would simply cover the loss rather than each subcontractor going to their
own insurers to recover the cost of their own damaged contract works; avoiding lengthy delays in the completion of the construction.
insurance to cover their own contract works, along with Employers Liability and Public Liability. This is even if there is a project policy in place.
“However, in a recent case, the High Court found the roofing firm wasn’t protected by the project policy because the terms of the sub-contract required that they should maintain their own insurance. Usually, a construction contract contains a clause requiring individual subcontractors to take out
“The difference with this case was that the project policy insurer dealt with the property loss, but then sought to recover their outlay from the subcontractor that caused the damage. The Court allowed the project insurer to recover the loss from the sub-contractor, as the construction contract had
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www.subcontractingtoday.co.uk required that the subcontractor take out their own insurance. “This ruling has really called into question the effectiveness of project insurance. It has wide ramifications for subcontractors as you can no longer rely upon a project insurer to pick up a loss in the event of damage you cause to a property. It’s essential therefore that you ensure adequate cover is taken out to cover potential liabilities. “At the start of a project, check the contract carefully. It often stipulates that the sub-contractor must be insured, and if so, it’ll say what insurance you are required to have. Generally, the main
contractor will require the sub-contractor to have public liability insurance and will specify the indemnity limit that the policy needs to have. The indemnity limit is the maximum that the insurance will pay in the event of a claim. The standard indemnity limit in a public liability insurance policy is usually ÂŁ2m but often contracts will insist on ÂŁ5m or even higher. “Even if the main contractor is insuring the project, they won’t be insuring all of the risks that a sub-contractor faces. A project policy is unlikely to cover your plant, machinery, tools and equipment, so you will
need an insurance policy to cover those. “It is more important than ever for subcontractors to understand the risks attached to their works and the potential losses they could face and ensure adequate insurance cover is in place to cover any eventuality. Just as you employ an accountant for your accounts and a lawyer to deal with your legal issues, an insurance broker will help you understand and identify all the potential risks and ensure you have the right level of cover to protect your business.�
Mike Dickinson. Russell Scanlon Insurance Brokers http://russellscanlan.com
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SubContracting TODAY | 05
The Streetwise Guide to Payment Notices
There are three harsh realities about payment that you should be aware of; 1 The idea that the Main Contractor, the Client, or even the Government cares a jot about whether or not you get paid on time is simply not true. Trust us, they don’t. 2 Even your own Trade Association may be powerless to help you. We have the proof. 3 There is no simple one-size-fits-all solution. It takes a bit of effort, but by applying some fairly straightforward techniques, which we can show you, you can massively reduce your payment problems. Without them, you are probably losing a lot of money. So, Take Action To Get Paid Now! Your financial future depends on getting paid. http://streetwisesubbie. gold.co.uk
06 | SubContracting TODAY
Is your website doing your business more harm than good? Y
our website is one of your company’s most valuable assets, and only gets one chance to make a first impression. Whilst you get to go home and change into comfortable clothes for the evening, your website doesn’t. It’s open 24/7 and here are some stats that may make you rethink whether it’s dressed to impress:
• It takes less than 0.5 second for a visitor to form a first impression on your website • 38% of people will stop engaging with a website if the content/layout is unattractive • 75% of users admit to making judgements on a company’s credibility based on their website
So, if it’s time to rethink what your website says about your company, here are some things to consider: Look and feel - does your website give the right impression? Does it look professional or as though you built it yourself using a free template? Does it portray the right image of your company? Are visitors leaving your website in the first 3 seconds and going to another supplier? Are you confident that it showcases your work in an impressive way? Easy Navigation - is it quick and easy for visitors to find the products or services they’re looking for? It’s generally considered a visitor should ideally be ‘2 clicks’ away from what they want to see. Do you have an inviting home page that makes them want to delve further? The more complicated a website, the quicker your prospects will leave. Contact details - Make it easy for the visitor to contact you, don’t bury your contact details deep in the site, where people won’t find them. We have even found one website for a Specialist Contractor that had no contact details! That is unbelievable, but is absolutely true. Your offer - does your website clearly tell customers exactly what products and services you offer - at first glance? Your
goal is to get them to click deeper into your site, so it’s imperative they see this straight away. Fail to engage them in the first few seconds and your competitors are only a click away. Information - is the information you provide useful and helpful when visitors find it? Is your content written clearly or does it ramble and spout jargon? Use Google Analytics to look at how long potential customers are staying on your site and this could tell you. Your audience - have you carefully considered exactly who will be looking at your website? It’s essential to engage visitors by talking their language - using the right tone and style for them. Does your content talk about them, the customer - or is it all about you?
www.subcontractingtoday.co.uk
Testimonials - testimonials can work really hard for your business and build your credibility. So ensure you have a varied selection with specific and relevant comments - and that they’re not 10 years old! Mobile friendly – figures vary, but up to 74% of traffic to websites is on mobile devices, and this is growing each month. Do check your website is ‘mobile friendly’ and check out how it looks on phones and tablets. Search engine optimisation - another reason to make sure your website is mobile-friendly, because if it isn’t, it now won’t rank anywhere on Google. A well optimised website, in terms of design and content, will make all the difference as to whether your business gets seen, gets traffic to its website and gets enquiries.
YOUR WEBSITE IS YOUR CHANCE TO SHINE AND SHOW YOUR CUSTOMERS WHAT YOU CAN OFFER. IT’S YOUR OPPORTUNITY TO ENGAGE YOUR PROSPECTS AND MAKE THEM WANT TO KNOW MORE. SO, STAY COMPETITIVE, BY MAKING SURE YOUR WEBSITE LOOKS FRESH AND INVITING AND IS WELL OPTIMISED FOR SEARCH ENGINES. AND WITH THE SUBSTANTIAL INCREASE IN PEOPLE LOOKING AT WEBSITES ON MOBILE DEVICES, THIS IS NOW DRIVING SOME OF THE BIGGEST CHANGES WE HAVE SEEN IN ONLINE MARKETING FOR A DECADE. YOUR WEBSITE NEEDS TO BE READY TO MEET AND BENEFIT FROM THESE CHANGES.
NEEDING TO UPDATE YOUR WEBSITE?
StreetwiseSubbie
can help you with this. SubContracting TODAY | 07
ISO Certification Helps Deliver Your Business Goals What ambitions do you have for your business this year? Is it where you want it to be? What opportunities are available to you? More particularly, is your management system – the way you run your business – hindering your ambitions or helping them? Did you know that ISO Certification is about creating a management system that will deliver your business goals, asks Andrew Foy, of Foy Certification. ISO is so shrouded in myths and misconceptions that maybe there are other things you didn’t realise:
• Embracing ISO
Certification will, as proven by international studies, increase your profitability!
• Furthermore, ISO
Certification is a very public declaration that you intend your business to be the best it possibly can be.This will not only differentiate you, but assure your customers (Main Contractors and Local Authorities are increasingly denuding that their supply chain is ISO Certified) and open up new markets, as well as managing your risks.
Certification will improve your business over time and substantially add to its value if or when you decide to exit.
• Most importantly,
08 | SubContracting TODAY
This is because the ISO Standards for quality, H&S and environmental management, applied properly and appropriately to your business, offer a complete framework for quality delivery and enhancing Customer Satisfaction.They require you to show that you fully understand your business environment and demonstrate your ability to meet the needs of your customers. For specialist contractors, the ISO process will assist you more than ever in setting your businesses up to perform effectively, defining your Best Practice, in the markets in which you want to operate. Any business of any size can achieve Certification quickly and cost-effectively. Whatever you have heard, ISO is not about paperwork and bureaucracy it is about results and it can be done in bite-size chunks without diverting you or anyone else from your everyday business needs. Are your current management processes consistently achieving the desired results? Can your management system deliver your business goals? What does your business need to be and do to succeed in your chosen markets? Are all the factors that influence the successful delivery of your products clear to everyone in your organisation? Does your quality or integrated management system align with your strategic direction? Your management system should be integral to achieving your business
plan and your business plan should be based on an effective implementation of your management system! ISO calls for “active” and responsible leadership. Given your quality management system’s pivotal role in your business success, how are you going to demonstrate leadership and where are you going to define other leadership responsibilities throughout your system? Leadership by example in driving your quality management system aids buy-in and effective implementation at all levels.Why not enshrine it in your definitions of roles and responsibilities so that your management system smoothly guides everyday business activities? Any effective management system has always been concerned with risk management and “risk-based thinking”courses through the new Standards and is allied with concurrently thinking about opportunities. Real business benefits are there for the taking by extending this approach to all your individual processes and activities.
issues or problems that you may have in your business (for example, do you really know the true costs of poor quality?) and commence all the improvement initiatives you have always wanted to do but never had the time because you have been in the trenches. Ask yourself, what would your business look like if it continually improved into the best it could be? Continual improvement is certainly feasible and ISO Certification will not only instil ongoing improvement processes but will build long-term value for you (it is a fact that ISO Certification will increase the value of your business). So yes, ISO Certification offers the opportunity to create the most effective and practical management system that will underpin all the ambition you have ever had for your business! Why not start the process now?
Quite simply, properly thought-out processes for all your activities, if managed well, will achieve your desired results! Better process control leads to improved delivery, enhanced customer satisfaction (and retention and loyalty), and improved image, reputation and credibility. In addition, when you embark on an ISO journey it is a chance to solve any
Andrew Foy Foy Certification http://foycertification.com
FA I R PAY M E N T S P E C I A L F E AT U R E
I
t’s time to stop ignoring the shameful way Specialist SubContractors continue to go unpaid or under paid and fight for fair payment.
where the government and other bodies choose to ignore the shameful way that Specialist SubContractors continue to go unpaid or under paid, for work properly and professionally carried out.
Whether you are a sole trader, a business employing a small number of people, or a £10m plus company, it seems that, as a Specialist Contractor, you always seem to get the ‘mucky end of the stick’, particularly when it comes to getting paid. And you struggle to change things as nobody seems to be listening to what’s really wrong with the industry.
StreetwiseSubbie.com, is a national organisation that exclusively helps the Specialist Contractors fight back against poor payment practices and is almost a lone voice in trying to change the status quo. Time after time our consultants are called in to help Specialist Contractors who are owed tens or hundreds of thousands of pounds, wrongly held back by main contractors.
No more is this so than in the construction industry
Millions of pounds, including tax payer’s money, goes unpaid, often, forcing the Subbies to fight disputes and contest onerous claims, as certain Main Contractors unfairly retain monies paid to them by their clients and the tax payer!
We have carried out payment surveys, given evidence to a Parliamentary inquiry and appeared on local and national radio, but despite Government and BuildUK claims to the contrary, the late payment situation has gone from bad to worse. In a bid to help more Specialist Contractors resolve payment and related business problems, StreetwiseSubbie has extended its range of expert industry consultants who can help them to find solutions to all sorts of business problems.
We might not be a big name but we pack a big punch in terms of helping Subbies get paid with millions of pounds already recovered for our Buddies. And we will carry on raising awareness of the problem as well as providing “hands on” help and advice for Specialist Contractors.” Barry J Ashmore, Barry is MD and co-founder of StreetwiseSubbie.com which provides business solutions for Specialist Contractors throughout the UK. 01773 712116 Info@streetwisesubbie.com Streetwisesubbie.com
The construction industry is a tough place to do business presently and StreetwiseSubbie provides the information they need to help them to solve business development and commercial and contractual problems, most commonly, getting paid.
SubContracting TODAY | 09
Lead Pro! - Get The Leads You Really Want Rather Than The Ones You Don’t! Lead Pro! is a new and highly cost-effective service provided by StreetwiseSubbie that helps specialist contractors to identify and sell to specifiers working on construction projects most suited to their expertise and in the locations they want to work. Finding new leads and opportunities can be a very frustrating time consuming task and tie up expensive resources. Some specialist contractors simply leave it to the hand of fate to bring in new business, whilst others have to endure working on repeat business from firms that treat them badly. Now, Lead Pro! can generate regular quality enquiries for your business. Bringing you the leads you really want rather than the ones you don’t.
and win those projects that can enhance the way they do business and opens the door to a more efficient way of doing things and greater profits.” Lead Pro! provides a focussed, easily affordable opportunity to secure the high-quality enquiries you need to sustain and improve your profits, and stops you wasting time on enquiries that aren’t exactly right for you. It enables you to identify the type, size and value of projects you want to work on, and select the geographical area you want to work in, from one county to the whole of the UK.
Lead Pro! is a unique research and telephone calling package that uses a powerful construction database to generate quality leads.The system combines high quality researched information with regular telephone calling to the companies and specifiers identified in that data, which results in high quality, wantto-win enquiries and profitmaking orders.
Lead Pro! delivers targeted business opportunities when and where it best suits you.
Barry Ashmore, managing director of StreetwiseSubbie, says:
To find out how Lead Pro! will help generate more qualified leads for your company, call Dylan Probert on 01773 712116 today, or visit streetwisesubbie. com/lead-generation, and start winning more profitable business tomorrow.
“Too many specialist contractors are happy to accept any enquiries that come in, rather than proactively going out to find those opportunities that they are best suited to win and make money from. Lead Pro! enables them to identify
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How Lead Pro! Works: 1. Lead Pro! full access licence to national database at a specially negotiated rate. 2. Initial profiling session to establish the who, what and where of the projects you want. 3. Lead Pro! makes selections based on your agreed profile - you approve them. 4. Agreed call programme commences to generate the relevant tender opportunities. 5. A Call Log will be provided after each session so you can track all progress. 6. You receive high quality, want-to-win enquiries and generate profit-making orders.
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Debt recovery
If you have problems with overdue payments, retention collection or any other issues that mean you are running short of cash through no fault of your own, then one phone call is all it takes to start getting cash in. StreetwiseSubbie’s Contractual Consultants will give you all the help you need. Just call 01773 712116 and ask to be put in touch with one of the team. If you are a StreetwiseSubbie Gold or Platinum Buddy, then the advice will be at a discounted rate and could include your free hour of consultancy time. If it’s a quick question, then it could even be free.
Payment Problem Solved “StreetwiseSubbie collected an amount that had been owed to us since 2004 Using their industry knowledge, they collected it within a week of contacting the contractor, I cannot recommend their professionalism and competence enough, the results speak for themselves.” Celia Harris, Finance Manager, Multitech Site Services Limited
“Thanks StreetwiseSubbie”
Meet the Consultant
Jo Smith joined StreetwiseSubbie last year and is now working with many of our Buddies to help them improve their contractual processes and procedures.
SubContracting TODAY is published by StreetwiseSubbie.com Limited www.streetwisesubbie.com Email: info@streetwisesubbie.com For more information about advertising or sponsorship opportunities with SubContracting TODAY, please contact steve@streetwisesubbie.com.
Coming from a Specialist Contracting background, Jo understands the business from the Subbie’s point of view and brings a wealth of experience to the mutual benefit of both the Buddies and StreetwiseSubbie. Jo is based in our Heanor, Derbyshire, head office and is there to help if you need anything. JO SMITH
Phone: 01773 712116 Email: jo@streetwisesubbie.com SubContracting TODAY | 11
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