Most sweeping contractors have heard the stories about working with national service providers (NSPs). From missed payments to continued work on terminated contracts, some contractors have experienced the troubles that can occur when working with a NSP.
Despite the negative reputations, contractors that find a successful NSP can experience several benefits including additional work, reduced spending on marketing dollars, and the opportunity to gain larger clients. Kevin Dent, owner of Dentco, and Gary Mitchell, chief executive officer of Divisions Maintenance Group, have been in the industry for several years. They offer contractors several tips to finding and maintaining successful working relationships with service providers.
The Provider’s Process
Every service provider has its own system for hiring contractors. Some NSPs allow contractors to contact them in search of work while others search for a specific type of contractor.
Dentco, located in DeWitt, MI, was founded in 1995 after 18 years of operating as a contractor for exterior services. Dent says Dentco currently has thousands of contractors in its database with nearly 1,000 active contractors each month. Providing services in every state except Hawaii, Dent prefers to call the contractors he works with contractor partners. “Our culture at Dentco is to provide additional business to our contractors,” he says. “As long as our contractor partners are doing a good job in their market, and we pick up additional locations within their market place, we will go to them first as long as they aren’t over-extending their resources or capabilities.”
Located in Newport, KY, Divisions Maintenance Group began operating in 1999. Now, it provides services in 28 states with 1,600 active contractors using over 800 core contract providers each day. “We hand pick each provider we use,” Mitchell says. “When we decide we’re going to expand our service area, we launch into an entire process to vet our provider base and hand-select the best provider for each service industry we offer. This is a core competency of our business.”
He says the Divisions staff spends 60 days vetting an area for contractors to hire using referrals from clients and local manufacturers of parts and equipment. The process begins with a phone interview, then a scheduled meeting and tour of the potential provider’s facility. After these screening steps are completed Divisions will determine if the contractor is a successful candidate. “We’re looking for an industry expert with strong processes and procedures around key compliance requirements, human resources, supply chain and proper equipment management,” Mitchell says. “We want a professionally-run, focused provider that has passion for what they are doing.”
Added Value of an NSP
Dent and Mitchell say contractors receive several benefits when working with a service provider, including elimination of several costs whether contractors work with them for additional revenue or all of their revenue.
“They [contractors] have zero sales expense, zero marketing expense, and zero collectable and receivable issues,” Dent says. “Contractors frequently might not be able to meet the customer’s insurance requirements, but because they work through Dentco the customer accepts our insurance.”
One other significant value of the service provider is the additional work contractors can gain from a partnership. “They [contractors] can focus on growing some of the more attractive prospects in their portfolio,” Mitchell says. “We don’t compete with our providers nor do we want to be the provider’s biggest customer. We want to be regarded as one of our provider’s best customer.”
Finding the Best Fit
To avoid working with unsuccessful companies, both Dent and Mitchell believe that research is crucial for contractors.
“Contractors need to make sure the service provider has a good reputation in the marketplace, and they need to thoroughly read the agreement and fulfill their obligations,” Dent says.
Service providers with poor business skills have been known to miss contractor payments. It is important for contractors to find companies that take on the financial responsibility. Mitchell says he takes personal accountability for each payment. “We take financial accountability for every job we do, if our provider did the work we are paying the bill,” he says.
Dentco also says it assumes financially responsibility. “We have heard the horror stories, but we have never missed a contractor partner payroll,” Dent says. “As long as the contractor partner provided what is contractually necessary to get paid, he is paid whether we are or not.”
In the end, whether contractors work with a service provider or continue on their own, quality work is still important for the industry. “I would remind everyone that they are in the service business, and that they have a substantial asset,” Dent says. “They are providing a service, and it takes a service culture to be successful.”