Not fully vetting the general contractor in advance
Even if you’ve established a good working relationship with a general contractor (GC) and worked with the firm many times, with each new project, that GC is working for a new owner with new contract language. Whether you realize it or not, that language will undoubtedly trickle down to you as the subcontractor. So don’t be afraid to push back on terms weighted heavily in the GC’s favor — identify potential concerns early and negotiate any disagreements up-front.
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Treating routine expenses and insurable risk as losses
It’s easy but not prudent to rationalize the argument, “That’s what we have insurance for.” Sure, you can write off equipment as a business expense, but why pay for those lost tools — or the higher insurance premiums that come with claims — when you can manage the risk ahead of time by avoiding the loss in the first place.
Working with a supply house that routinely under-delivers
Sure, you may not miss an item here or an item there in that thousand-item order, but one of these days, that one missing item will inevitably create a major work stoppage issue, which will end up costing you big time in lost production and downtime.
Going with your gut when managing risk
You might get lucky once or twice — or even several times — but the law of averages will eventually catch up to you. The more data you can use to make a decision, the better. So refrain from relying solely on your instincts when it comes to risk management in construction. A proactive and proven risk management approach will serve you much better in the long run.
Accepting verbal agreements
Sometimes work moves so fast that getting the terms of a change-order on paper can be difficult. But no paper trail means no proof of what you’re owed — and that’s just bad business. So document everything, and get it in writing each time, every time. There’s too much at stake not to.