A plumbing contractor can reach a point where the work available to him is too big for his business to handle alone. A developer wants plumbing, heating and drainage all under one contract. A main contractor needs a subcontractor who can provide labour across multiple plots. A housing association asks if in addition to installation you can also provide maintenance. It is hard to say “yes” to everything, but “no” to everything stalls development.
Strategic partnerships can provide a middle way. By collaborating with the right businesses, a plumbing contractor can take on more, bigger or varied work, share risk, and build a reliable reputation. The challenge is finding, testing and structuring relationships with suitable partners.
What is a Strategic Partner?
A strategic partnership is not just another subcontracting opportunity; it is a relationship with another business that has complementary strengths and shared commercial interests.
It can take many shapes and sizes: an informal understanding with a heating engineer to introduce each other to relevant work; a more formal subcontracting relationship with a mechanical contractor; or a joint venture to bid for a specific contract that neither could manage alone. The most appropriate models will be determined by the sort of work needed, the appetite for risk, and the level of commitment required.
Working out Your Needs
Before looking for strategic partners it is helpful to have a clear idea of what you are looking for. The sorts of partnerships that make most sense for a plumbing contractor fall into a few categories:
those that provide additional skills such as heating, drainage, gas, fire protection or water treatment so that more integrated packages can be offered;
those that provide extra capacity at busier times of the year;
those that help get work from new clients such as large contractors, housing associations or developers;
and those that offer shared resources such as plant, equipment or administrative support.
You may find it helpful to identify what category is most pertinent to your needs. A plumbing contractor who is looking to offer heating as an adjunct to his services will have different needs to one seeking to get work from larger developers.
Who Are Strategic Partners?
Strategic partners are more likely to be found among your existing contacts rather than cold calling among businesses you have never met. Useful leads can be found by considering:
what other trades are you working with on site? Heating engineers, electricians, drainage contractors, ventilation specialists;
subcontractors and suppliers you already use who understand the market and find work for you;
main contractors, both large and small, who regularly need subcontracted plumbing works;
property managers, housing associations or facilities management organisations who need a range of building services;
and other local tradespeople, at similar levels in the supply chains, may be found through trade associations, suppliers or training organisations.
One of the best forms of due diligence is seeing how partners operate for yourself on site. Watching carefully will demonstrate who communicates well, who leaves sites tidy, and who disappears when things go wrong.
What to Look For in a Strategic Partner
Ideally, seek partners that offer complementary strengths and do not compete directly with you. The best strategic partnerships often turn out to be between organisations with quite different skills sets. A plumbing contractor who specialises in domestic and commercial building works could team up with a heating contractor who has an excellent reputation for boilers and renewables. A new build first fix plumbing contractor might connect with a second fix and snagging specialist.
Similar values and standards of work are also likely to be important. Differences in attitudes to health and safety, programme management, and customer care, for example, will become apparent during the partnership, and it may be challenging to resolve disagreements once contracts are signed.
Checking References
It is worth taking time to carry out due diligence on any prospective strategic partner. Ask to see their insurance and other relevant accreditations and check their track record. Different clients will have different requirements, so find out what they expect from potential partners and ask what they in turn require from you.
It is always worth checking references if you can, speaking with other contractors, suppliers or subcontractors who have worked with your prospective partner. Ask about their financial reliability as well, for example, whether they pay their subcontractors and suppliers on time, as cash flow issues further down the supply chain can soon affect you.
How Larger Contractors Procure Works
Many strategic partnerships are aimed at securing work from larger clients, so it is worth understanding how big contractors procure works. Larger clients will often have preferred supplier lists, and will use formal procurement routes including pre-qualification questionnaires for subcontractors.
If you are thinking how to then a strategic partner who already has a relationship with them can be invaluable, although you will still need to meet their requirements directly. You may find it helpful to ask how prospective partners were appointed, and what the expectations are from organisations on their supply chains.
How to Connect With Construction Companies
Making introductions, wherever possible, is likely to be more effective than cold calling. If an electrician or site manager you know can recommend you to a strategic partner then you both begin the relationship with some goodwill. Tools such as the also make it possible to keep in touch with potential partners, and highlight completed works, to make it easier for others to contact you when the opportunity arises. This sort of resource supports collaboration while still letting individuals manage their own networks, and can save significant time over trying to contact people via conventional means.
Test Before You Commit
Before committing to a strategic partnership it is helpful to test the relationship out on a smaller job, if possible. This allows you to see how the other business operates, how they communicate, handle variations, programme changes and client care. It also means that you can demonstrate your own strengths and how you operate. If your potential strategic partner pulls out at the first opportunity, it is probably best to move on.
It is also a good idea to put any agreement in writing, even if it is only an outline of how the partnership will operate. This can include issues such as how money will be paid, who will handle variations to the work, how programme and other matters will be handled, insurance arrangements, client relationships and dispute resolution. It is often worth getting legal and financial advice if you are entering a formal joint venture or bidding for work as a consortium, as there may be complex liabilities and obligations on both sides.
Understanding the Industry
The construction industry is slower to adopt many technologies than other sectors, and many relationships are built on traditional methods, face-to-face meetings and personal recommendations. Looking at the reasons why the is slow to digitalise gives an insight into how many partnerships are formed in the sector.
This means that a plumbing contractor should always bear in mind the importance of developing personal relationships, and the value of word of mouth, when thinking about strategic partnerships.
Looking After Yourself
A strategic partnership can be beneficial to both sides, but it is easy to become too reliant on one partner, so bear in mind that it is always best to secure your own work and retain your independence. At the same time, remember that if something goes wrong with your strategic partner it will reflect on you as well, so it is always worth choosing partners carefully and managing the relationship thoughtfully.
A Next Step For You
Think about the biggest limitation on your ability to take on work at the moment. This could be a lack of skills in another area, such as heating or drainage, the need for more capacity, or the need to get work from larger clients. Make a note of the three firms you have seen working effectively that could help you overcome this challenge. Contact one of them this week and suggest a joint venture that will help you both; use the work as a way of testing the relationship and seeing if something bigger can develop in future.
