Do I Need a General Contractor?

Starting a construction project at your business is a large and stressful undertaking. Perhaps a new facility is required, or it's time for a renovation. One of the first steps is to decide who will manage the project.

There are different times when managing internally or hiring a general contractor (GC) makes the most sense. We know these scenarios well because we have been working on customer-led, Kraun-led, and general contractor-led projects for almost three decades!

While acting as your own general contractor might seem like a good way to save time and money, this is recommended only under a few circumstances. If you try to manage a complex project yourself, it can result in increased costs and significant delays.

Hiring a general contractor can reduce the stress of a construction project and ensure the appropriate expertise is in place. If your project scope focuses on one type of trade, it may be possible to use the expertise of a specialized contractor as the prime contractor for your project.

So what should you do? This blog intends to help you make the project management decision by explaining the different scenarios and identifying when hiring a general contractor adds the most value.

Hiring a general contractor vs specialized contractor

In most cases, hiring a general contractor is the correct choice. However, sometimes projects lend themselves to alternative management scenarios.

If you have an internal project management person or team who knows the industry, they may be able to lead the project. This would require appropriate knowledge about the specific scope of work and familiarity with prospective contractor partners.

When a project is relatively small and focuses on the work of one type of trade and is supplemented by other trades, it may be possible to oversee the project and use a specialized contractor as the prime contractor for the project.

For example, if you need to install parking lot lights at your business, a licensed electrical contractor can be your prime contractor because it is primarily an electrical job. They can help keep the project's pace and source other trades, like civil contractors. Another example is a lighting retrofit that requires minimal drywall and painting after the electrical work is completed.

While there is an appropriate time to hire specialized contractors directly and realize cost efficiencies, more often than not, hiring a GC is the way to go.

Typical organizations for managing a project

When to hire a general contractor

Hiring a GC is wise if any of the following are true.

Your business has:

a large project,
little construction project management experience,
few to no subcontractor or vendor relationships, or
capacity restraints.

When projects are larger and complex, there are more responsibilities. These responsibilities can be managed by a general contractor. Yes, they will increase the project's cost but will also reduce burdens and stress for you and your business. Without a GC, mismanagement mistakes are more likely, which can drive up the price quickly.

A quality GC will bring extensive project management and planning capabilities. Their experience can make a project run smoothly and avoid costly mistakes. They will also understand the type of permitting required and perform other administrative footwork necessary to bring your project to.

As for cost, you will receive a proposal from the GC. Fortunately for you, any incurred mismanagement costs beyond that are their responsibility. They will also have insurance and WSIB coverage if people are injured, or property is damaged during the project.

Established relationships with subcontracting companies are another added value of hired help. Finding and hiring the right subcontractors can make all the difference. This is especially helpful for projects requiring technical or niche expertise.

One last asset that a GC brings to the table is supplier relationships. Since GCs work on many projects at a time, they have better buying power through bulk ordering and preferred pricing with suppliers. This is hard to compete with as a single project.

Take the time to review the contractor and make sure you feel good about whom you hire. Choosing a well-qualified contractor that fits your needs over hiring based solely on price can actually save you money in the long run (whether it’s a GC or a specialized contractor). The risk of hiring the cheapest option often results in more time, stress, costs, mistakes, and problems for you and your company.

If you are considering a project of any size, please get in touch with us to help you get started. With our planning and project management departments, and longstanding relationships with various general contractors, we can help you get one step closer to breaking ground! You can contact us at estimating@kraun.ca or by using the phone number or form below.

Let's start a job together.

1-844-667-6937

Serving the Hamilton and Niagara area.