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Updated: July 8th, 2008 05:26 PM EDT

The Changing Residential Market

How one successful company is managing the mega-builders

construction crew on site
Lycon concrete mixer

Scott Smith
By Scott Smith

While this may sound easy, we discovered it meant significant changes that required adjustments not only in attitude but also in business practices. We have found that today's business more often involves detailed scopes of work, contracts and purchase orders as well as other detailed reports and tracking devices. Additionally, pricing negotiations are completely different. It is not uncommon to work on a small price issue for weeks or longer without satisfactory resolution. Further, the powerful processes and guidelines that companies bring to our relationship absolutely mandate that we focus on keeping our costs and prices low. We often find ourselves at a disadvantage dealing with the relentless corporate cost-cutting culture of the mega-builder; however, adapting to these realities is critical for the contractor's success.

Creating success

Developing strong relationships with the large builder's local management is a critical factor for success. In the past, we may have nurtured relationships that lasted for decades with a local builder. The national builder representative must operate far less on personality and relationship in order to satisfy the corporate office and shareholders. In the end, you may be the company they want to work with, but if your price is not extremely competitive, you will probably not be the contractor chosen for the job. Understanding this and developing your own business strategy with this information in mind will minimize frustration and wasted energy. Working for mega-builders is truly all about business.

Although the final decision will ultimately be about our price, the mega-builder may be willing to hire, for a slightly higher price, the contractor who demonstrates true added value to the relationship. Specific suggestions you promote about construction methods, new technology or beneficial scope of work changes may result in your company having a leg up on the competition.

It may be difficult to get this kind of information to the right person, so understanding the chain of command is always important.

A real resource for the foundation contractor is the Concrete Foundations Association (CFA) — an international association dedicated to improving the quality and acceptance of cast-in-place concrete foundations. In addition to providing technical support, the CFA provides an excellent forum for foundation contractors to network with each other to learn how others have successfully cultivated strong working environments with mega-builders.

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