By Jacqueline Hall Kelly, Ph.D., Dennis Cesari and John Neal
This article appears courtesy of Kansas City Small Business Monthly.
In an increasingly competitive environment, minority and women-owned business enterprises (M/WBEs) must be adept in the people (softer) side of business, as well as the more technical side. Construction businesses must work with numerous players--general contractors and major subcontractors, M/WBEs, mainstream subcontractors, laborers and others--that all have different roles, expectations and requirements.
One of the challenges for M/WBEs is to build communications and strong business alliances, particularly with general contractors and subcontractors. The ultimate goal is increased M/WBE participation on construction projects. What specifically might M/WBEs do to improve communications and build strong business alliances with general contractors and major subcontractors?
The foundation for communications and strong business alliances is to establish good relationships prior to attempting to win a contract for a particular project. Don't wait for a project or bid opening to do so. Seeking relationship-building opportunities allows the general contractors and major subcontractors to get to know the leadership of the M/WBE firm, its capabilities and qualifications.
When general contractors or major subcontractors have to make decisions about which M/WBEs or subcontractors to use on a project, they first think of those with whom they have a prior relationship. An established relationship also allows the M/WBE to learn the specific qualities prime contractors and major subcontractors look for in subcontractors. Position your company so that you are able to win over general contractors and major subcontractors with your capability, professionalism and willingness to work as a team member.
M/WBEs benefit by marketing directly to general contractors and major subcontractors, independent of any particular project in which they are interested. M/WBEs should let general contractors know who they are, major projects they have completed and for whom these projects have been done. Don't assume that if you build a better mousetrap, the world automatically will beat a path to your door. Marketing should be an ongoing process.
Seek mentoring relationships with general contractors and major subcontractors whom you trust and respect. Participation in mentoring relationships enables you to capitalize on the administrative infrastructures, acquire skills and learn from the experiences of sage general contractors and subcontractors. Large companies, for instance, often have computer software that can help M/WBE firms with project management decisions.
Attend scheduled pre-bid meetings and special sessions held by the owners of projects to encourage networking and M/WBE participation on a given project. Presence at the meetings provides the opportunity to interact with general contractors and major subcontractors that are considering the project. Make sure you are equipped with business cards and literature about your company. Take advantage of a captive audience.
When given an opportunity, you must prove your competency, your ability to complete the work without additional costs to the general or subcontractor and dispel any preconceived notions by general contractors and major subcontractors about your abilities to perform.
M/WBEs should gradually increase the size and complexity of projects they undertake. Take on smaller projects initially, perform them well and then progress to larger, more complex jobs. Build a strong track record, one step at a time.
Ask for specific feedback on job performance during the project, as well as upon completion. Likewise, you should let general contractors and major subcontractors know how their actions contributed to your success. Communication is a two-way street.
Build networks (social capital) with those who can connect you to the right resources. M/WBEs benefit not only from building networks with general contractors and major subcontractors, but also with others who have relevant skill sets, power and influence that can assist them in achieving their mission, such as access to capital, insurance and legal assistance.
You might want to partner with other M/WBEs, general contractors and subcontractors to compete for larger projects. These partnerships might also allay concerns about your capacity to undertake larger projects.
In today's increasingly competitive construction industry, it is not enough for M/WBE subcontractors to concern themselves solely with their trades. M/WBEs also must be proficient with the softer side of the enterprise--building relationships, networking and communications. In the last-minute rush when general contractors and major subcontractors have to make decisions about which subcontractors to use for specific projects, who they know and are comfortable with often makes the difference.
Jacqueline Hall Kelly, Ph.D. is director, Minority Business Development; Dennis Cesari is associate vice president, Management Services; and John Neal is associate director, Construction Management at the University of Missouri. They can be reached at (573) 882-2707.