It would be impractical for a single company to handle all of the works especially in construction industry or bid projects in supply chain. Consequently, general contractors outsource much of the work to subcontractors and manage projects at a higher level on behalf of the client.
In the construction industry, subcontractors are individuals or companies hired to handle various aspects of larger projects. For example, one subcontractor may be responsible for pouring a skyscraper’s foundation while others install the steel frame, windows, and bricks.
How to become a subcontractor
The exact process for becoming a subcontractor depends on the services you’re looking to provide ( in which industry) especially if your company is young and does not have enough experience to bid for big tenders (projects) . Here are the steps at a high level
– GAIN RELEVANT CONSTRUCTION EXPERIENCE OR OTHER FIELD EXPERIENCE THAT YOUR COMPANY IS ENGAGED IN
General contractors need faith in your ability to handle whatever aspect of the job they’ve sent your way. Consequently, you’ll have an easier time finding work as a subcontractor if your resumé demonstrates extensive experience.
Subcontractors often gain this experience by:
- completing an apprenticeship
- attending a technical college or warshas and workshops in a particular field
- working for a larger subcontracting firm before venturing out on your own company
– OBTAIN THE NECESSARY LICENSES AND CERTIFICATIONS
Depending on your location and intended area of specialization, you may need licensing to operate as a subcontractor. In the Tanzania, you’ll need to find out in the board that is responsible for that field i.e CRB board for Construction activites
Any reputable general contractor will only hire subcontractors operating legally according to United Republic of Tanzania laws and local laws.
– CREATE YOUR COMPANY’S FINANCIAL STRUCTURE
Next, it’s important to plan your financial structure in a tax-efficient manner. Subcontractors are generally considered self-employed, or young companies (of less than 5 years in operations), although it may be worth setting up a corporate structure if you intend to hire other workers as part of your service.
-BEGIN SEEKING CLIENTS
Once you have the appropriate experience, licensing, company structure, it’s time to begin finding work as a subcontractor to nurture you’re your company CV and ready for bid adventures in the future.
Don’t underestimate how much of your time as a subcontractor will be spent finding opportunities. After all, you’re operating a business. That comes with administrative tasks
-ESTABLISH A BIDDING STRATEGY AND START SUBMITTING APPLICATIONS
Once you’ve found suitable projects, it’s time to start bidding by putting the following into considerations;
- Understand a given project’s needs before submitting your bid
- Effectively estimate your costs to ensure a suitable profit margin
- Format your bid based on the general contractor’s specifications
- Build a strong case regarding your suitability for the project