“No man is an island”, as the saying goes. It’s a way of stating that no one is totally self-sufficient, and everyone needs the help of others at times.
This is especially true in the world of construction! As you drive down the street and notice houses and buildings all around you, you can be sure of one thing…they didn’t get that way without the efforts of several people.
In construction, those people are known as subcontractors. And because there are many different skills needed to get a project completed, there are many different types of subcontractors.
In this post, we’ll explore some of the various types of subcontractors you’re likely to encounter and how they can help you grow your contracting business.
What Is A Subcontractor?
Typically, the owner of a project will hire a “General Contractor,” commonly referred to as a “GC.” (More than likely that’s you if you’ve found this post and are wondering what types of subcontractors you should hire.)
Your role as a GC is usually that of a project manager, although many GC’s are hands-on in completing parts of the job themselves. The main goal of the GC is to make sure the house/school/office/bridge/whatever gets finished on time and within budget.
While it is technically possible for one person to do everything in a building project, going solo definitely takes longer and costs more in the long run. In order to get the job done affordably and in a reasonable amount of time, GCs need to hire subcontractors.
A subcontractor is defined by the IRS as “a worker who is not your employee.” In construction, they are generally specialists hired by the GC to focus on certain aspects of the project.
Another word for a subcontractor as it relates to the IRS and future taxes could also be “independent contractor.” An important note of caution here is to make sure that you understand and maintain the distinction between an independent contractor and an employee.
For more on that, take a look back at a previous post we did on “Employee vs Contractor…And Why You’d Better Know The Difference.” Also, see this informative Powerpoint presentation the IRS put together on subcontractors for even more details.
Different Types of Subcontractors
Here are the most common types of subcontractors you are likely to encounter in the construction industry. We’ll build our list like you’d build a house:
- Tree Removal – If you’re starting with a wooded lot, you may need to bring in a tree company with a certified arborist before you can do anything else. They’ll be able to safely drop any unwanted trees and remove them for you.
- Excavation – Most GCs don’t have the heavy equipment necessary to clear trees, move dirt, and level the job site. Calling in someone who does that kind of thing all the time and owns the right equipment will make sure you get off to a good start.
- Concrete – If the foundation isn’t right, nothing you build above it will be either. It’s also crucial that any footings or supports be done correctly. There are several types of concrete contractors, so make sure whoever you’re looking to hire can do what you need done.
- Framing – Many GCs choose to do part or all of the framing themselves. But a specialized framing contractor can save you time and money…especially if you are managing multiple projects or need to focus on keeping other crews on target.
- Roofing/Siding – These crews can quickly complete the envelope of the structure by adding the roof and exterior shell, making the project dry enough to begin interior work.
- Masonry/Stone Work – If the exterior of your building involves bricks or stones, hiring an experienced contractor can make all the difference. Since this will be the part of the project that the world sees for as long as it’s standing, you want to make sure whoever you work with can do the job well.
- Plumbing – GCs usually aren’t licensed plumbers, so this is best left to the pros. They’ll be with you throughout the project, so be sure to partner with someone you are able to work well with.
- HVAC – Keeping a building comfortable in an efficient way can be complicated. GCs don’t typically have the knowledge and experience necessary to do this effectively.
- Electrical – This is another area that requires a license and cannot be skimped on. Make sure this is done properly before moving forward.
- Finish Carpentry – This is a job you might do yourself, but hiring it out can speed up your process
- Drywall – If this isn’t done right, your homeowner will be reminded of it every single day. Don’t let sloppy drywall turn your name into a curse word.
- Paint/Wallpaper – Another task you can handle—but is your time better spent elsewhere?
- Flooring/Tile – Unless you have the right tools and experience, this can take a while. And since time is money in construction, hire a good pro.
These are just some of the more common types of subcontractors you may work with on a typical building project such as a residential house. Larger projects, commercial buildings, or jobs with unusual requirements may call for other highly specialized subcontractors. You may have to oversee pool installers, landscapers, audio/visual technicians, security specialists, etc. depending on what the job calls for.
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Can a Company Be An Independent Contractor?
Yes, you may hire a subcontractor that is operating as an LLC. It could be an individual carpenter, plumber, or electrician who is a Single Member LLC (SMLLC) or a larger company that does tree removal, roofing, or concrete work.
Regardless of the structure of their company, if they aren’t a direct employee of your company they are an independent contractor. According to the IRS Independent Contractor Definition, “an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done.”
As with any freelancer or independent contractor you hire, you’ll be responsible for providing them with a 1099-MISC or 1099-NEC form at the end of the year, so be sure to keep good records to avoid a tax headache later on!
We Know How to Help You Win as A One Person Construction Company
A lot of GCs work alone as a sole proprietor or a SMLLC. When you’re one person trying to orchestrate all these subcontractors, it can feel like you’re herding cats sometimes.
Instead of being overwhelmed by your next project, partner with a team that can give you the tools you need to win. Our clients have learned how to “expect more from your CPA”, and you might be surprised how much experience we have working alongside construction companies.
Schedule a call today to find out what we can do to help you succeed!